Speaker 1: From the heart where Innovation of Money and Power Collie
Speaker 1: in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed loved Love.
Speaker 3: I'm Caroline Hide of Bloomberg's World headquarters in New York
Speaker 3: and Imed Lovelo in San Francisco.
Speaker 4: This is Bloomberg Technology coming up.
Speaker 3: Micron fools as the forecast fails to meet the loftiest
Speaker 3: AI driven expectations for coverage.
Speaker 5: Ahead, Plus SpaceX notches a two hundred and ten billion
Speaker 5: dollar valuation in its latest tender offer.
Speaker 4: Details ahead, and we go.
Speaker 6: Live to Santa Ana, California.
Speaker 3: That's as police raid a warehouse of suspected stolen merchandise
Speaker 3: bound for marketplaces like Amazon. All that and so much
Speaker 3: more ahead, But first we check in on these markets
Speaker 3: and look a little reprieve to some of the selling
Speaker 3: that we've seen earlier in the traders.
Speaker 6: Well, the bad news is good news on the macro front.
Speaker 3: Some of that jobless claim data, some of the housing
Speaker 3: sales data, some of the industrial production data weaker. That
Speaker 3: means does a FED have room to cut later this year?
Speaker 3: All eyes on macro policy. We're currently just up only
Speaker 3: thirteen points. Though on the Nasdaq are some big laggards
Speaker 3: that ED is going.
Speaker 6: To walk us through.
Speaker 3: I'm looking at a ten year yield thought a bid.
Speaker 3: We're seeing money move into the bond market on the
Speaker 3: back of that data, even as we see yet more
Speaker 3: supply coming from the seven year side of things coming
Speaker 3: a little bit later. I'm looking at the dollar actually
Speaker 3: down versus a Japanese yen. Keep an eye on the en,
Speaker 3: and we've seen such weakness where we see intervention coming
Speaker 3: from the boj We're currently training at one hundred and sixty.
Speaker 3: Move on and have a look at what's happening in
Speaker 3: the world of bitcoin, because look, we're still at about
Speaker 3: a sixty one thousand dollar handle. We've seen some significant
Speaker 3: selling going on at the moment, but for now we're
Speaker 3: at more than a percentage point, so a little bit
Speaker 3: of risk appetite coming into crypto as well.
Speaker 6: But ED, what are you watching?
Speaker 4: I'm going to do something a bit unusual.
Speaker 5: I'm going to go right to private markets and start
Speaker 5: with this big story around spacexuation of two hundred and
Speaker 5: ten billion US dollars based on the latest tender. A
Speaker 5: tender is at where the company basically lets employees and
Speaker 5: insiders sell their shares to investors for liquidity, but because
Speaker 5: you assign a price to the shares, you're able to
Speaker 5: establish evaluation. This is a custom chart on the Bloomberg
Speaker 5: terminal that we make using those Bloomberg News reports going
Speaker 5: back many quarters of many years, but also the latest
Speaker 5: data from pitchbook, and it's a big jump.
Speaker 7: Right.
Speaker 5: One hundred and eighty billion dollars was the valuation we
Speaker 5: reported in December of last year. We're up to two
Speaker 5: hundred and ten billion. Later in the show, we're going
Speaker 5: to go to Katie Ruth, who helped break that story
Speaker 5: last night. Just there's so much to discuss around this company,
Speaker 5: but also the idea that if you're a massive growth
Speaker 5: stage name, why go public? The private markets are there
Speaker 5: to support you. Microm is the big earning story. It's
Speaker 5: really interesting. They gave this sales forecast that at the
Speaker 5: midpoint was kind of bang on what the street was
Speaker 5: looking for, really high expectations. It's a story carrow about
Speaker 5: high bandwidth memory. High bandwidth memory gets coupled with AI
Speaker 5: accelerators like in Video's H two hundred and if that's
Speaker 5: doing so well, well, why is Micron not doing so well?
Speaker 5: Because of its legacy businesses d RAM and nand or
Speaker 5: flash memory and those cyclical markets and end markets that
Speaker 5: they go into two day chart with the sock down
Speaker 5: six percent in the session right now.
Speaker 3: I mean, what's the CEO to do when they're posting
Speaker 3: revenue growth of more than eighty percent. Let's dwell on
Speaker 3: it for a moment. A closer look at a Micron
Speaker 3: after the release of their earnings report and of course
Speaker 3: the follow up for what in video is currently digesting
Speaker 3: to their AGM meeting that happened on Wednesday. In King
Speaker 3: is the person we turn to for it, and Ian,
Speaker 3: I mean go to Micron first. This feels as though
Speaker 3: they just couldn't beat the highest mark out there for
Speaker 3: the estimates.
Speaker 8: No, you're absolutely right. I mean they are predicting that
Speaker 8: revenue will be ninety percent from where it was a
Speaker 8: year ago. Albeit that's a that's a pretty easy comparison given.
Speaker 4: How bad last year was.
Speaker 8: But yes, it's all about how much real demand are
Speaker 8: you getting from AI how much of that real high
Speaker 8: margin kind of product AD's favorite type of memory chip
Speaker 8: are you shifting and making money from.
Speaker 5: So it is really interesting and thanks you to that,
Speaker 5: by the way, I even managed to convince you to
Speaker 5: embed the video we made about high bandwidth memory and
Speaker 5: your story.
Speaker 4: It's now I owe you.
Speaker 5: He did some math for us, so he basically said,
Speaker 5: we know what sales are for high bandwidth memory and
Speaker 5: the quarter gone, the current period, and what they'll be
Speaker 5: in the next fiscal year.
Speaker 4: And you can see a really clear path.
Speaker 5: That as the investment in AI infrastructure ramps so to
Speaker 5: do sales of high bandwidth memory.
Speaker 9: Yeah.
Speaker 8: No, absolutely, one hundred million dollars, which is relatively small
Speaker 8: for the quarter reported, going to multiple hundreds of millions,
Speaker 8: going to multiple billions next year. So when you're a
Speaker 8: company that has about six billion dollars of sales a quarter,
Speaker 8: that's a good sign, very good sign.
Speaker 3: I mean all of this, of course, is in comparison
Speaker 3: to and video has been churning out in the high
Speaker 3: bandwidth memory is what works in lockstep with their own chips.
Speaker 3: I'm currently looking in video down one point seven percent.
Speaker 6: It's been very volatile. What happened at the agmsay.
Speaker 8: And yeah, well, first of all, we're not allowed to
Speaker 8: call it an AGM. According to my American colleagues, that's
Speaker 8: an English thing. Yeah, Shareholders meeting apparently, but yeah, they
Speaker 8: really just came out then reiterated this pitch that they've
Speaker 8: given us this new industrial or evolution, this our products
Speaker 8: are becoming more and more vital to this giant change
Speaker 8: in the economy. So we really didn't get anything new.
Speaker 8: So if there was an expectation that perhaps Jensen would
Speaker 8: pop out some new numbers, maybe those were disappointed. But
Speaker 8: really it was just him kind of beating his fist
Speaker 8: against his chest and saying, look here we are, and
Speaker 8: look how well we've done.
Speaker 5: I feel like it was almost rebatum what they said
Speaker 5: in May twenty second at earnings in the deck basically
Speaker 5: that they published. But even so, there's just so much
Speaker 5: attention on a video right now, Blue Masie and King,
Speaker 5: who leads our chip coverage, thank you so much.
Speaker 4: Let's get some more on big tech.
Speaker 5: This month's NETS selling in the tech sector has been
Speaker 5: the largest on records since twenty seventeen, with hedge funds
Speaker 5: aggressively selling tech stocks after the rise of Nvidia. Bloomberg's
Speaker 5: j just menton joins us now for more. The markets
Speaker 5: are a funny thing. I don't want to go as
Speaker 5: far as to say fickle, because I remember you coming
Speaker 5: on the show mere months ago and talking about this fomo.
Speaker 4: Trade at the beginning of the year.
Speaker 5: Now we had this net selling, explain what the markets
Speaker 5: are doing right now?
Speaker 9: Right, So how can you have this net selling and
Speaker 9: hedge funds. But then just last week we had the
Speaker 9: Bank of America EPF our data showing that we had
Speaker 9: record flows going in tech technology stocks. So the reason
Speaker 9: is if you look at a pie chart when it
Speaker 9: comes to flows data, actually if you're looking at mutual funds,
Speaker 9: it's only roughly around twenty percent there, So you can
Speaker 9: have those record inflows into there. But that other portion,
Speaker 9: if you're looking at seventy percent, that composits of say
Speaker 9: like hedge funds, insurers obviously pinsions, so you can still
Speaker 9: have both happening, but obviously hedge funds contribute a bigger
Speaker 9: portion to that. So you can still have mutual funds
Speaker 9: having that record exposure. But hedge fund's doing something else,
Speaker 9: and it's not just technology, it's specifically also more geared
Speaker 9: toward those chip stocks.
Speaker 3: Ed It does feel that maybe hedge funds are getting
Speaker 3: more risk averse. More broadly, they're coming out of momentum.
Speaker 3: That's right, is the hedge fund trying to be the
Speaker 3: canary in the coal mine here. They like, look, retail's
Speaker 3: pouring in, mutuals pouring in, we're starting to get out now.
Speaker 9: Well, it's a great point because normally if you look
Speaker 9: at what retail is doing, it can be a bit
Speaker 9: of a contrarian indicator. To your point there, because if
Speaker 9: they're piling in and then hedge funds, if you think
Speaker 9: of that as more of, may say, the smart type
Speaker 9: of money, and how they're positioning, that does show you
Speaker 9: they are definitely moving more toward defensive areas of the market.
Speaker 9: But also a part of that is utilities, and that's
Speaker 9: also been an AI type of play because usually it's
Speaker 9: typically thought of as less volatile, more diversified if you're
Speaker 9: in kind of a slower economic regime.
Speaker 2: But obviously the economy.
Speaker 9: Has been holding up well in the latest Atlanta Fed
Speaker 9: GDP numbers for the second quarter around three percent. So
Speaker 9: you are seeing hedge funds obviously pulling out when it
Speaker 9: comes to those chip in technology type shares, but even
Speaker 9: though it's more defensive, they are going to other corners
Speaker 9: that are AI plays as well, care line including utility stocks.
Speaker 4: I get the.
Speaker 5: I guess concern of how long a rally in a
Speaker 5: particular sector or name is going to last, Right, But
Speaker 5: I have to remind myself of the incredible gains either
Speaker 5: on a year to date basis twelve month basis, and
Speaker 5: at some point you have to say, like, the going
Speaker 5: has been good, but it might not last that long.
Speaker 9: Jest I feel like we were talking about this a year
Speaker 9: ago as well, after that was also a record first
Speaker 9: half that we were looking at for the S and
Speaker 9: P five hundred and NAVSDAQ one hundred two, when everyone
Speaker 9: was questioning, then how much longer can that continue? And
Speaker 9: Gina Martin Adams over at Bloomberg Intelligence had some really
Speaker 9: great data looking at breadth in how basically what they
Speaker 9: were looking at a year ago would show that this
Speaker 9: could continue for a while, and it has. And Gina's
Speaker 9: team actually just put out data this week showing that,
Speaker 9: you know, people, I think anytime something like this happens,
Speaker 9: people like to talk about bubble type behavior.
Speaker 2: They're definitely not seeing that.
Speaker 9: With that said, though, if you're looking at the side
Speaker 9: the Philadelphia Semiconductor Index relative to the S and P
Speaker 9: five hundred right now, it's actually trading at its all
Speaker 9: time hides and even higher than above that peak in
Speaker 9: March of two thousand. So sometimes when I'm talking to sources,
Speaker 9: obviously maybe things have gotten a bit of ahead of themselves.
Speaker 2: But even though people were.
Speaker 9: Talking about in video, you know, recently entering a correction
Speaker 9: or less than or obviously off of ten percent off
Speaker 9: of that most recent high there, I mean, it was
Speaker 9: trading around five hundred and fifty dollars in the middle
Speaker 9: of January, and to look at obviously it had that
Speaker 9: stock split, so it's been quite a tear here. So
Speaker 9: sometimes if you bring up sort of the correction sort
Speaker 9: of mentality with nvideo, sometimes you will obviously get some
Speaker 9: irols from traders there.
Speaker 3: Steve Weisman calling it just a blip, just menton always
Speaker 3: great to get you on.
Speaker 6: Not the hedge funds are up to l's top private market.
Speaker 3: Self Bak's Vision fund too is investing in artificial intelligence
Speaker 3: startup Perplexity AI. Self bank will invests between ten million
Speaker 3: and twenty million dollars into the US startup, but that's
Speaker 3: as part of a larger two hundred and fifteen million
Speaker 3: funding round that triples perplexities valuation to three billion dollars,
Speaker 3: making one of the industry's most highly valued companies. Meanwhile, SpaceX,
Speaker 3: it's notching a two hundred and ten billion dollar valuations
Speaker 3: insiders cell shares and one hundred and twelve dollars a
Speaker 3: piece and a tender offer that's at according to Bloomberg sources.
Speaker 3: Now the high unexpected price boosts the value of Elmusk's
Speaker 3: space and satellite company from one hundred and eighty billion
Speaker 3: back in December's ten to offer, making the company the
Speaker 3: second most valuable startup in the world, joining smore Bloomberg's
Speaker 3: Ktie roof and it's the most valuable in the US.
Speaker 1: That's right, by answer, is the most valuable in the world.
Speaker 1: But for US, SpaceX set its own record. It surpassed
Speaker 1: its own record. It's a two hundred and ten billion
Speaker 1: out up from one hundred and eighty billion in December.
Speaker 5: Katie, there's just such intense interest in SpaceX and getting
Speaker 5: a piece of it, and I think it's worthwhile for
Speaker 5: our Bloomberg Technology audience around the world. Explain the mechanics
Speaker 5: of how tender offer works, right, why us learning from
Speaker 5: sources the share price is important in the.
Speaker 1: Math, sure, and so the tender offers. That's insiders such
Speaker 1: as employees selling their shares to other private investors. And
Speaker 1: so the tender offer is different than a secondary where
Speaker 1: the people are doing one off trades. The tender offer
Speaker 1: is more meaningful because it means the company signed off
Speaker 1: on this valuation and that they're doing a large transaction.
Speaker 1: You know, we're hundreds of millions of dollars of shares,
Speaker 1: I mean hundreds of millions of dollars trade hands. And
Speaker 1: so this is you know, meaningful, you know for Silicon Valley,
Speaker 1: you know, when they're looking at prices and seeing that,
Speaker 1: you know, companies can still raise at high prices right
Speaker 1: now even if they're not AI and IT, but you know,
Speaker 1: it sets surpasses SpaceX is on record.
Speaker 5: I think that's Katie Ruth late night but important reporting
Speaker 5: from you as the headline, and thought, yep, saw this
Speaker 5: coming a little bit big one.
Speaker 4: Okay, another story.
Speaker 5: We're watching shares of Amazon right now as it plans
Speaker 5: to launch an online storefront for low price apparel and
Speaker 5: home goods, marking the company's biggest push to counter the
Speaker 5: rise of discount competitors like Timu and she In. The
Speaker 5: company's plans were outlined in slides posted to websites for
Speaker 5: third party Chinese sellers showing Amazon shipping goods directly to
Speaker 5: customers from China. Okay, some breaking news. Just moments ago,
Speaker 5: California police have raided a southern California warehouse filled with
Speaker 5: allegedly stolen merchandise they say likely would have ended up
Speaker 5: on online marketplaces run by Amazon and other retailers. Bloomberg Spencer,
Speaker 5: soaper on the ground with law enforcement, you have been
Speaker 5: witnessed to that raid, Spencer, Just give us the basics
Speaker 5: of where you are and what's happened.
Speaker 10: Yes, So, we're about thirty miles south of Los Angeles
Speaker 10: and Santa Ana, California. We're just off Interstate five at
Speaker 10: a warehouse behind me that's actually a retail liquidation center,
Speaker 10: which you know, can be legitimate businesses that get you know,
Speaker 10: scratched and dented merchandise and returns and then they go
Speaker 10: about selling it. But this rate that just happened a
Speaker 10: little more than an hour ago. California Highway Patrol's Cargo
Speaker 10: Theft Division had information that there could be stolen merchandise inside.
Speaker 10: They got a search mort and they executed that search
Speaker 10: mort this morning. So we had about a dozen officers
Speaker 10: storm on the scene, they secured the facility and what
Speaker 10: they're doing right now is going through It looks like
Speaker 10: an order house. There's like boxes from Florida ceiling of
Speaker 10: all kinds of stuff. Vacuum cleaners, had food, you know,
Speaker 10: air fryers, all kinds of things that you can imagine
Speaker 10: they're trying to sift through all that stuff to determine
Speaker 10: if anything's been stolen and if they could trace that
Speaker 10: back to a to a previous theft.
Speaker 3: I mean, this is a big operation. They've got you
Speaker 3: on board to witness it. This clear is important to them.
Speaker 6: Spencer.
Speaker 3: How economically important is it to companies that are losing
Speaker 3: the goods like this?
Speaker 10: Yeah, that's a great question. And everyone's familiar shoplifting because
Speaker 10: you see like cell phone videos of people loading up
Speaker 10: a shopping part full of stuff and running out of
Speaker 10: the store. But this is far more serious and also
Speaker 10: more sophisticated, where they're stealing entire cargo containers and one
Speaker 10: hall could be anywhere from a couple hundred thousand to
Speaker 10: up to twenty million of cargo. So the losses get
Speaker 10: very high, very quickly, and it's really been on the rise.
Speaker 10: The number of cargo thefts reported in the US in
Speaker 10: the first quarter of this year were nearly one thousand,
Speaker 10: and that was up almost fifty percent from a year earlier,
Speaker 10: and it's just been going up with no end in sight.
Speaker 10: The fees are getting more sophisticated. They're impersonating legitimate trucking companies,
Speaker 10: you know, going to warehouses picking up entire truckloads of
Speaker 10: inventory and like they're supposed to be the ones picking
Speaker 10: it up and taking off with it. And then you know,
Speaker 10: a delivery's never made where it'supp and that's when they
Speaker 10: discovered the theft was made, like days later. So it's
Speaker 10: a really big problem that folks a lot of damage.
Speaker 5: Bloomberg Spencer Sober, who is it on the ground in
Speaker 5: southern California, has just accompanied law enforcement in a raid
Speaker 5: where they seed allegedly stolen merchandise bound for Amazon. That's
Speaker 5: the first for this program, I think, in probably this network.
Speaker 5: Right coming up on the show, we're going to be
Speaker 5: joined by Jeff Thomas, executive vice president of Nasdak's Corporate
Speaker 5: Platforms business, for his read on the IPO landscape. I'm
Speaker 5: going to take a short break. Stay with us because
Speaker 5: we will be right back. This is Bloomberg Technology, Time
Speaker 5: for Talking Tech and first st up Open Ai makes
Speaker 5: a deal with Time. The maker of track GPT has
Speaker 5: partnered with the magazine in a multi year agreement that
Speaker 5: would allow access to current and historic comment. In return,
Speaker 5: Chat GPT user queries will link answers back to the
Speaker 5: original source on Time dot Com and Time will also
Speaker 5: have access to openaised tech. Plus, the US, Japan and
Speaker 5: South Korea make a pledge for stronger tech relations. The
Speaker 5: three countries say they'll work closely on building out a
Speaker 5: more resilient supply chain in order to address weaknesses in
Speaker 5: key tech sectors like semiconductors in AI. The move comes
Speaker 5: amid rapid expansion and competition from China in the chip sector,
Speaker 5: and Webtoon Comics has raised three hundred and fifteen million
Speaker 5: dollars in its USIPO, topping the marketed range. The online
Speaker 5: comics company sold fifteen million shares after marketing them for
Speaker 5: eighteen to twenty one dollars each. According to Bloomberg calculations,
Speaker 5: Webtoon has a market value of about two point seven
Speaker 5: billion dollars at.
Speaker 4: That IPO price.
Speaker 5: Bloomberg spoke with COO and CFO of webtoon David Lee.
Speaker 5: Here's what he had to say on how they'll use
Speaker 5: that cash.
Speaker 11: We'll use this to speed up and deepen the tools
Speaker 11: we give any creator globally to be a global hit.
Speaker 11: Many of the stories that you've come to see on Amazon, Primer, Netflix,
Speaker 11: the top show on Netflix today, the eighth show, is
Speaker 11: powered by our platform, and so you'll see us continue
Speaker 11: to delight more and more consumers here in the United
Speaker 11: States and the rest of the world and invest behind
Speaker 11: our creators.
Speaker 3: We want to talk more about listings right now and
Speaker 3: the international flavor of them. Jeff Thomas is with US
Speaker 3: Executive Vice president Nasdak's Corporate Platforms business. We're going to
Speaker 3: be assessing the IPO landscape, and Jeff, I mean today
Speaker 3: a big day for webtun and interestingly, South Korea base
Speaker 3: never is the company to sort of backs it, so
Speaker 3: we're see more international companies coming to.
Speaker 6: The US to list.
Speaker 12: That's right on NASZAC. This year, we've had sixty four
Speaker 12: IPOs and nearly half of those have come from international,
Speaker 12: and so we've had web Tune from Korea, we had
Speaker 12: super High out of Asia, we had Merrickside of the
Speaker 12: UK for ovial out of Spain all looking to come
Speaker 12: to the US capital markets because frankly, they can get
Speaker 12: a better valuation and the capital markets are wider and
Speaker 12: deeper here in the USA.
Speaker 5: That's not uniformly true though, right The chat around Sheian
Speaker 5: is so interesting to me. They seem to be looking
Speaker 5: at London based on the political tension between the US
Speaker 5: and China. That was a headline that I think crosswile
Speaker 5: I was on vacation. I was very surprised to see it.
Speaker 5: What would the factor in that case be to your mind?
Speaker 12: You know, I think there's always unique aspects to every deal.
Speaker 12: What we really focus on here at Nasdaq is trying
Speaker 12: to provide a great platform to support all of our
Speaker 12: companies from across the world. That includes having a great
Speaker 12: trading platform, supporting companies with our investor relations insights, and
Speaker 12: really helping them on their sustainability journeys.
Speaker 3: Are there fewer Chinese companies though, eyeing the US, I'm sorry,
Speaker 3: Are there fewer Chinese related names eyeing the US to
Speaker 3: go public?
Speaker 12: You know, I think we still see a lot of
Speaker 12: strong demand from around the globe. It's not just China
Speaker 12: over in Asia, but we have a lot of interest
Speaker 12: out of Southeast Asia, you know, not just Korea like
Speaker 12: where Webtoon is from, but Vietnam, Indonesia, Lots of other
Speaker 12: companies countries over in Asia are also looking to come
Speaker 12: to the US.
Speaker 5: Yeah, vin Fast is an interesting example of a name
Speaker 5: from that region in this market. I trying to get
Speaker 5: a bigger picture sense of what's going on, Like we
Speaker 5: had this pocket of listings in September of last year,
Speaker 5: and we started the year with some energy and we're
Speaker 5: showing a graphic on the screen now of all the
Speaker 5: VC back names that we've waiting for ages to give
Speaker 5: us a signal ongoing public Where are we in this
Speaker 5: market broadly at this moment in time, Jeff.
Speaker 12: We do have a very strong pipeline of VC backed
Speaker 12: tech companies that are looking to go public over i'd
Speaker 12: say the next twelve to eighteen months. This year, the
Speaker 12: story really has been more about private equity back companies,
Speaker 12: companies in the healthcare sector. We've had some great names
Speaker 12: out of biotech. We just had Lineage Logistics file publicly
Speaker 12: yesterday that's going to be the largest cold storage rout
Speaker 12: in the US. So a lot of the more kind
Speaker 12: of steadier growth, highly profitable companies and I think some
Speaker 12: of the venture tech companies we expect to see more
Speaker 12: activity as out of those. In twenty twenty five.
Speaker 3: We were just hearing though, how we've now got a
Speaker 3: new record setter for valuation in the US private markets,
Speaker 3: that being SpaceX. Many might think that Elon Musk would
Speaker 3: I a Texas based exchange as and when that becomes
Speaker 3: a reality, Jef, what do you think the competition?
Speaker 12: Well, I think, frankly, we endorse competition. I think the
Speaker 12: US capital markets are unique in that we not only
Speaker 12: compete for listings in the US, but we also compete
Speaker 12: for all the trading volume. That's the way the SEC
Speaker 12: has set up the market structure here in the US,
Speaker 12: so it's highly competitive. There's actually sixteen different exchanges in
Speaker 12: the US. There's dozens of different internalizers and dark pools
Speaker 12: across the US, and I think that competition is one
Speaker 12: of the things that drives such great outcomes for our
Speaker 12: listed companies. It's why we invest so much in our
Speaker 12: technology to provide a great trading platform. It's why we
Speaker 12: have to differentiate our value proposition to provide great marketing
Speaker 12: and visibility to our listed companies. And then of course
Speaker 12: all of the the data and insights to help them
Speaker 12: understand who's buying and selling their stock every day.
Speaker 5: And if you're a SpaceX y go public a tool
Speaker 5: when the private markets vacuul the way. Jeff Thomas is Acuctive,
Speaker 5: Vice President of NASDAT School for Platforms Business.
Speaker 4: Thank you so much.
Speaker 13: The deal flow is still not quite there.
Speaker 4: Creditate equity has slowed a little bit.
Speaker 14: In the activity in our pipelines, we're seeing a meaningful
Speaker 14: acceleration and deal flow.
Speaker 8: The key concern we have is well to be activity
Speaker 8: where the buyers and sellers meet them well middle and
Speaker 8: that hasn't quite happened yet, but I'm hopeful it will.
Speaker 13: For the credit markets, you still have a lot of options,
Speaker 13: whether it's a recap, a minority sale, and that's what
Speaker 13: we're seeing. So it may not be asset sale outright,
Speaker 13: but a transaction is going to occur.
Speaker 14: Now the rates of stabilize and that cuts are on
Speaker 14: the horizon. We are seeing the pipeline pick up meaningfully,
Speaker 14: which means you should start to see more deals, more
Speaker 14: of veloci and even if the base rate comes down,
Speaker 14: it's still going to offer a pretty attractive ring.
Speaker 3: Some of the top names over the last couple of
Speaker 3: days of Bloomberg invest and talking about rates stabilizing. Today
Speaker 3: we actually see a bid on rates. We see perhaps
Speaker 3: yields come down even ahead of that sen yet seven
Speaker 3: year auction. We get a little bit later today we're
Speaker 3: off by four basis points. Now some of that movement
Speaker 3: into the bomb market has just stemmed some of the
Speaker 3: anxiety around the technology play Here on the equity market
Speaker 3: as well, we're down only a tenth of fer percent,
Speaker 3: even though we have some big drawed douns in single names.
Speaker 3: But for now we're stable, off about thirty points on
Speaker 3: the Nasdaq one hundred.
Speaker 6: That is the bigger benchmark.
Speaker 3: I'm looking at the bitcoin currently off by about a
Speaker 3: percentage point, Crypto managing to push on higher as we
Speaker 3: see a little bit of well risk on sentiment. We've
Speaker 3: got it in bomb market, we've got it in the
Speaker 3: crypto market. But let's look at some of the individual
Speaker 3: names in the equity market that maybe is dragging down
Speaker 3: the overall and now's that one hundred because Micron, the
Speaker 3: key one underperformed down by more than six percent. As
Speaker 3: you'll see, look the CEO comes out spells the fact
Speaker 3: that I gues see record sales in twenty twenty five,
Speaker 3: says that revenue is climbing more than eighty percent, points
Speaker 3: to forecast of revenue up more than ninety percent.
Speaker 6: Not good enough. The market wanted to see more.
Speaker 3: This is all about, of course, the high bandwidth memory
Speaker 3: coming from Micron and his AI play.
Speaker 6: I'm looking at PDD as well, off by more than
Speaker 6: three percent.
Speaker 3: Is depository receipts traded here in the US Pindo, a
Speaker 3: duo owns Temu and Tamu. Maybe has some more competition
Speaker 3: coming from Amazon that's dragging it lower. I'm looking at
Speaker 3: Palo Alto Networks, so interesting one ed we're up more
Speaker 3: than five percent. Does the scale are doing well as well?
Speaker 3: Security companies cybersecurity? A real focus today is that because
Speaker 3: some analysts are liking it Burnstein for example, liking Palo
Speaker 3: Alto Networks, or is it more an issue of what's
Speaker 3: just happening in the UK and hacking. We're going to
Speaker 3: be discussing that a little bit later, but for now,
Speaker 3: back to investment.
Speaker 4: Yeah.
Speaker 5: Another thing that's come out of Bloomberg invests the unveiling.
Speaker 4: Of Bloomberg's Ones to Watch.
Speaker 5: List in finance and markets fintech company block known for
Speaker 5: financial services like Square and cash App, made the list,
Speaker 5: shining a light on Amrita A Hooja blocks, CFO and COO,
Speaker 5: and I'm delighted to say I'm research joins me now
Speaker 5: and set in San Francisco. In my career, I've met
Speaker 5: many actually joint CFO coos, but it's a really interesting
Speaker 5: dual role where maybe at times you conflict with yourself
Speaker 5: because you have to manage the numbers and you have
Speaker 5: to run the operations of the business.
Speaker 15: What's that like, Well, first of all, thank you so
Speaker 15: much for having me here, Ed, I really appreciate it.
Speaker 4: That's right.
Speaker 15: I have to hold both things aspiration and discipline. Aspiration
Speaker 15: because the market opportunity that we're going after is vast,
Speaker 15: over a two hundred billion dollars TAM across financial services
Speaker 15: and commerce, and discipline because we want to do that
Speaker 15: with ruthless focus on unit economics and holding ourselves accountable
Speaker 15: to returns on those outcomes. And so as a COO
Speaker 15: and as a CFO, I'm very focused on both and
Speaker 15: continue to show to demonstrate our progress towards our investment
Speaker 15: framework and financial targets of being a rule of forty
Speaker 15: company in twenty twenty six.
Speaker 5: The stock is down eighteen percent so far this year.
Speaker 5: There are multiple stories coming with block some of it
Speaker 5: very closely tied to bitcoin, and we can talk in
Speaker 5: a little bit about strategy, but where would you say
Speaker 5: the company is at right now in where you're trying
Speaker 5: to get it to.
Speaker 15: I think that we have a tremendous opportunity ahead for growth.
Speaker 15: If you look at q one at an eight billion
Speaker 15: dollars annualized gross profit, you know scale, we were growing
Speaker 15: over twenty two percent year over year. To be at
Speaker 15: that scale and to continue to demonstrate growth, we clearly
Speaker 15: are serving very important needs on behalf of our customers,
Speaker 15: whether small businesses with Square or the over fifty four
Speaker 15: million monthly actives for cash app, which are individuals. We
Speaker 15: see a significant opportunity to do more of that.
Speaker 2: We're early.
Speaker 15: We use technology and AI to underpin all of our products,
Speaker 15: and we're focused on improving our product velocity to ship
Speaker 15: more products to our customers.
Speaker 3: You are early, and in many ways, i'mri to regulation
Speaker 3: and has to play cat shop. I mean, it's not
Speaker 3: missed on many that they're trying to bring financial and
Speaker 3: technology regulation into the twenty first century.
Speaker 6: That's what the last sort of Congress vote was actually on.
Speaker 3: And I'm interested as to whether you think regulation is
Speaker 3: there in the right pace view at the moment with
Speaker 3: Block because there is lots of investigations and there's lots
Speaker 3: of people trying to get the head around the future
Speaker 3: of crypto and payments.
Speaker 15: That's right, and we welcome regulation as it appropriately serves consumers.
Speaker 2: We work with regulators.
Speaker 15: We look to build a healthy ecosystem for our customers.
Speaker 2: It's our top.
Speaker 15: Priority to maintain a safe, secure platform that builds trust
Speaker 15: over time. So ultimately that's good for Block.
Speaker 6: Trust over time.
Speaker 3: There has been some concerns around, for example, money laundering warries,
Speaker 3: trading within sanctioned countries, which of course I know is
Speaker 3: being investigated at the moment. When it comes to cash app,
Speaker 3: how are you working with regulators and that to ensure
Speaker 3: that you are bringing the level of transparency. I'm sure
Speaker 3: you have internally to those Externally, we take.
Speaker 15: Any of those allegations extremely seriously. We're working by investing
Speaker 15: in the appropriate areas that again build a healthy and
Speaker 15: safe and responsible platform for our customers, including our compliance teams,
Speaker 15: our product teams, or risk management teams. We are always
Speaker 15: open to feedback and want to create that appropriate dialogue
Speaker 15: with regulators, policymakers, and our company, along with our customers ANDRITA.
Speaker 5: When I moved to San Francisco in twenty eighteen, Jack
Speaker 5: Dorsey was probably a little bit more closely associated with
Speaker 5: what was then called Twitter, and a lot has changed
Speaker 5: since I've been here in the last six years. He's
Speaker 5: now at block And what is that like working with him,
Speaker 5: your relationship with him and the role he plays day
Speaker 5: to day in the company, And when I look at
Speaker 5: the Bitcoin news that came out recently, how much is
Speaker 5: that where he's focused.
Speaker 2: Of course, Jack is a visionary.
Speaker 15: He's now not only running our company, but also running Square,
Speaker 15: and so I would say that the vast majority of
Speaker 15: his focus and our focus is on our two mature
Speaker 15: eCos systems with Square and with Kasha. With Bitcoin, you know,
Speaker 15: we have a stake in the future where money can
Speaker 15: move at the speed of the Internet, and we think
Speaker 15: Bitcoin is the likeliest contender to enable that vision because
Speaker 15: it is resilient, it's been battle tested, it's secure, it's transparent,
Speaker 15: it's fairly liquid, and so you know what we see
Speaker 15: as we look around the world is that often the
Speaker 15: most underserved customers are the ones who have to pay
Speaker 15: the highest rates to access their money or to move
Speaker 15: money around. We think bitcoin has the opportunity to change that.
Speaker 15: You know, we of course are going to be disciplined
Speaker 15: and prudent in how we invest towards that future. Less
Speaker 15: than three percent of our op X goes towards Bitcoin
Speaker 15: experiments and initiatives, but it could be a potentially transformative one.
Speaker 3: I'm really interested in the investment side of it, Amrita,
Speaker 3: because yes, you're building products and can entirely understand why
Speaker 3: and want to experiment for the good of the consumer,
Speaker 3: But why the balance sheet? Why continue to have ten
Speaker 3: percent a gross profit going into bitcoin products as well
Speaker 3: each month and indeed keeping it as an investment on
Speaker 3: the balance sheet?
Speaker 15: Yes, only it's ten percent of bitcoin gross profit, which
Speaker 15: is less than five percent of our overall gross profit,
Speaker 15: so it's a fairly modest sum.
Speaker 2: And what it helps us do is actually learn.
Speaker 15: It helps us understand what it means to custody bitcoin,
Speaker 15: what it means for our treasury teams to be out
Speaker 15: in the market buying bitcoin, what it means with respect
Speaker 15: to insurance.
Speaker 2: There's a lot of different things.
Speaker 15: That we get to learn from this relatively modest and
Speaker 15: small investment in the scope of our much broader balance sheet.
Speaker 3: I'm sure it's great to have some time with you
Speaker 3: combat some being on the list. We appreciate your time,
Speaker 3: Amuja of block Meanwhile, coming up, we're going to be
Speaker 3: joined by Shudi Gandhi, founder of Array Ventures, to talk
Speaker 3: about the really early stage investments in AI and how
Speaker 3: a pang offer is a blue meg technology.
Speaker 6: Time now for our VC round up.
Speaker 3: First up, Andrew is in talks with Peter Teel's Founders
Speaker 3: Fund and other investors to raise one or half billion dollars.
Speaker 3: That's according to sources, this would be one of the
Speaker 3: year's largest funding rounds.
Speaker 6: One exclusively focused.
Speaker 3: On AI just AI enabled plus Sequoia Capital is leading
Speaker 3: a sixteen million dollar investment in Dust. It's a French
Speaker 3: startup building customized AI bots for companies now. The startup
Speaker 3: makes software that plugs into offerings from Open Ai, Google,
Speaker 3: Anthropic and mistrale AI and then mixed up to apps
Speaker 3: like Slack. And it's not scires only AI investment. On
Speaker 3: the day, Clay and AI startup focused on sales and
Speaker 3: marketing for businesses. Let's just raise forty six million dollars
Speaker 3: from investors like Sequoia, but also Meritech and First Rand.
Speaker 6: Capital and others.
Speaker 3: This brings the company's valuation to five hundred million dollars.
Speaker 5: In Okay, let's keep talking about investing in AI and
Speaker 5: bring in Shrudy Gandhi for more on today's VC Spotlight.
Speaker 5: She's the founder of Array Ventures, which manages one hundred
Speaker 5: and fifty million dollars in AUM and the focus is
Speaker 5: getting into AI names at the very earliest stages. And
Speaker 5: I think this is a very well timed and important conversation.
Speaker 5: Two days ago, we had the Etched founder and CEO
Speaker 5: on the show and they had this debut round one
Speaker 5: hundred and twenty million dollars.
Speaker 4: And after he'd gone off the show.
Speaker 5: Loads of people reached out to me on social media
Speaker 5: and said, great interview, but like they don't have anything
Speaker 5: to show yet. They're talking about taking on the n
Speaker 5: videos of the world, and it's a hardware play. And
Speaker 5: so that's what I want to ask you about in
Speaker 5: the first instance, getting in at the very early stages.
Speaker 5: How do you know that that's a viable business, a
Speaker 5: viable technology a viable plan.
Speaker 2: Thank you first of all for having me on this show.
Speaker 16: Very good question. Actually it's not that hard today. There
Speaker 16: is ways to invest, which is one is focused on
Speaker 16: pain points, and then there's areas to just invest because
Speaker 16: they're glamorous founders. There's also EA is kind of distributed
Speaker 16: in currently in two ways. One is model companies and
Speaker 16: then there's applications.
Speaker 2: Yes, I'm sure you've heard a lot about that.
Speaker 5: There is also just as Caroline just outlined in some
Speaker 5: of the today's news stories.
Speaker 16: Exactly so there's a whole bunch of investors going after
Speaker 16: the model companies and they're all kind of it's kind
Speaker 16: of raised to the bottom in some ways because they're
Speaker 16: all just getting better. But people and funds are feeling
Speaker 16: like they're missing out on getting into the best AI
Speaker 16: revolution just because it's being compared to the early.
Speaker 2: Days of Internet today.
Speaker 16: But then there is the application layers, and then there's
Speaker 16: real pain points that companies need to solve, be it
Speaker 16: in different form of verticals and hr it could be
Speaker 16: in CIOC. So everybody needs efficiency and today you can solve.
Speaker 2: That by not raising that much money.
Speaker 16: You can solve for that early days by testing the waters,
Speaker 16: calling your friends and figuring out what do you need
Speaker 16: to solve and how can I get started? But just
Speaker 16: a few million dollars and once you do that, then
Speaker 16: you can go raise a big amount of capital after
Speaker 16: or that. But I don't think everybody needs to raise
Speaker 16: that much money if you're not a model company.
Speaker 3: Okay, so if you're going to allocate some of your
Speaker 3: money to a company that just wants the first round
Speaker 3: to get things rolling to answer the consumer's need, how
Speaker 3: are you deciding where's the best place to put it?
Speaker 16: That's that's right, Thank you so much for asking.
Speaker 2: But I think it's what I just said. We focus
Speaker 2: on pain points.
Speaker 16: We thought, we thought we talk about this thing called
Speaker 16: agitated workforce, which is if a founder is at a
Speaker 16: big company agitated. They're really upset about trying to solve
Speaker 16: some big problems in AI, in data, in infrastructure, in cloud, insecurity.
Speaker 16: But what they cannot do is get permissions and budgets
Speaker 16: with the tight budgets today from their CIOs to go
Speaker 16: solve for that within the company because it's not mission critical.
Speaker 4: At the current company.
Speaker 16: Then they go on and go say, you know, talk
Speaker 16: to their few friends and they say, if I build this,
Speaker 16: will you buy? And their friends out there saying yes.
Speaker 16: So the three three of the five friends they talk to,
Speaker 16: they say that that's when our founders go and build,
Speaker 16: you know, get the conviction to build those companies. Frankly,
Speaker 16: you don't need that much money early days to put
Speaker 16: a team together, especially if you have a core deum
Speaker 16: of amazing engineers, to go put that team together, go
Speaker 16: solve for those problems because you've built them before. So
Speaker 16: what we yeah, what we invest in is pre seed companies.
Speaker 16: So that's first check ever into a company, and you
Speaker 16: do not need that much money to go start and
Speaker 16: validate your ideas.
Speaker 3: Your initial check size about one and a half million dollars. Shooty,
Speaker 3: how long do you then stay with the company, because,
Speaker 3: as you say, there's a sudden rush, a tussle to
Speaker 3: get in at later rounds with head evaluations. Do you
Speaker 3: have a liquidity event then or do you try and
Speaker 3: ride it out for the exit for the M and
Speaker 3: A for the IPO.
Speaker 16: That's a great question. We don't think of ourselves as
Speaker 16: a one stage investor. Usually we write it out, but
Speaker 16: we've been very fortunate in the last few years to
Speaker 16: get liquidity events at series BC plus stages of the companies.
Speaker 16: So sometimes as a prudent investor, we will sell like
Speaker 16: a tenth of our shares or less than a tenth
Speaker 16: of our shares in a company. We just did that
Speaker 16: and we returned our first fund, which was a twenty
Speaker 16: sixteen vintage. So we will consider that as a case
Speaker 16: by case basis, just as a fiducial responsibility to our lpis.
Speaker 16: But our goal is to never get out at the
Speaker 16: second or the third round of the investment.
Speaker 5: Trutier, one of our audience members, is written in on
Speaker 5: the Bloomberg Terminal VIP and say they agree with you
Speaker 5: that you know, AI can mean different things, but they
Speaker 5: add that for some investors mock ups and wireframes and
Speaker 5: not products, and for some other investors they are you know,
Speaker 5: that's an interesting point where I want to go to
Speaker 5: end is you know, you have to find these people
Speaker 5: if they're precede, where are they coming from and where
Speaker 5: are they coming up with their ideas?
Speaker 2: Yeah, so it's a great question.
Speaker 16: Oftentimes people think that you just call your other VC
Speaker 16: friends and get deal flow, but not in preceed precede.
Speaker 16: You're building networks at operators, at amazing companies that are coming.
Speaker 16: You know, people that have worked at for two to
Speaker 16: four years at a hard company.
Speaker 4: Paid maybe or maybe not.
Speaker 16: It doesn't matter. I think what matters is they've built
Speaker 16: this before. What matters is they know how to build
Speaker 16: this and when they go take it on.
Speaker 2: As a startup after.
Speaker 16: This, they're gonna go do it with very little amount
Speaker 16: of money, which is a preceed round. So that's where
Speaker 16: we invest in people coming out of different operators, coming
Speaker 16: out of different companies.
Speaker 6: Truety, so great to have you on.
Speaker 3: Come back, Truety Gandhi, founder of Array Benches.
Speaker 6: Let's talk sport.
Speaker 3: FIFA seeking to raise as much as two billion dollars
Speaker 3: for the expansion of FIFA Plus it's the free streaming
Speaker 3: service launched by the football's global governing body to offer
Speaker 3: live coverage of matches. According to people with knowledge of
Speaker 3: the matter, well let's bring in Phoenix. Do you let
Speaker 3: you like how called it football?
Speaker 4: Yes?
Speaker 6: So, Felix. It's a good time to be selling some
Speaker 6: sort of sports right.
Speaker 7: Now, it really is. I mean it's an expensive time
Speaker 7: if you're a buyer.
Speaker 17: But you know, all these stream and services have launched,
Speaker 17: these ads supported tiers. I think the biggest movement right
Speaker 17: now in the whole home entertainment world is the fact
Speaker 17: that you know, as they try and build out these
Speaker 17: advertising uh you know, ad supported part of their platforms,
Speaker 17: they're going to need more live sports, right and so
Speaker 17: every time any bit of sports rights comes up for sale,
Speaker 17: you just see the prices going up and up. You
Speaker 17: see the NBA, you know, sign these about signed these
Speaker 17: huge deals.
Speaker 7: They're getting a big bump. You know.
Speaker 17: FIFA, if they have some secondary packages, you can go
Speaker 17: out in the market, sell the rights or distribute them yourselves.
Speaker 7: Yeah, it's a great time to be selling sports rights.
Speaker 5: Phoenix, tell me a bit about FIFA Plus.
Speaker 4: I mean I have Sling, I have Paramount Plus.
Speaker 5: I watch football at the weekends on Peacock. Do I
Speaker 5: need get myself FIFA Plus as well?
Speaker 7: Depends on your level of addiction.
Speaker 17: I mean you have to go pretty yeah, you have
Speaker 17: to go pretty far down. I mean the Premiere, the
Speaker 17: best soccer, you know, the World Cup, those rights, the
Speaker 17: broadcast rights you know for twenty twenty six have been sold.
Speaker 7: You'll watch in the US, you'll watch them on Fox.
Speaker 17: But I think all of these leagues, you know, you
Speaker 17: get down to the smallest slices possible, whether it's soccer, tennis, basketball, football,
Speaker 17: you know, in some ways, I think actually the NFL
Speaker 17: has been the model for you know, you try and
Speaker 17: chop them up as you know, small pieces as possible,
Speaker 17: because every slice you can find a buyer for, or
Speaker 17: you can put them on your own streaming service and
Speaker 17: you know, get advertising advertisers or you know, sell subscribers.
Speaker 5: Indep bloom Begs Felix Jellette out of New York, thank you.
Speaker 4: A big story.
Speaker 5: Out of the United Kingdom, London hospitals are facing major
Speaker 5: consequences following a cyber attack against lab service provide a
Speaker 5: cinabus on June third, which resulted in the release of
Speaker 5: sensitive medical records and NHS patient data. Bloomberg's Ryan Gallaha
Speaker 5: joins us with more significant you know, seeing some of
Speaker 5: the UK papers covered this as well.
Speaker 4: Ryan, just explain what happened.
Speaker 18: Yeah, So what happened was on June the third, a
Speaker 18: Russian lengthd hacking criminal hacking gang that call themselves Quellen
Speaker 18: broken too Syovis's computer systems and deployed the kind of
Speaker 18: malicious software that essentially locked down So I know this
Speaker 18: as computers and so Novice is a really important company
Speaker 18: because it provides blood testing biopsy testing for a whole
Speaker 18: range of hospitals in Southeast London particular, and what it
Speaker 18: meant was that these hospitals couldn't test blood for their patients.
Speaker 18: And now into the fourth week of their sentident, the
Speaker 18: hospitals have been unable to test blood at normal capacity,
Speaker 18: which is obviously caused massive problems for them.
Speaker 3: And then there's the horror to realize that maybe your
Speaker 3: own personal information while pregnant, your own newborn, your own
Speaker 3: diagnosis of schizophrenia, might now become a more public form
Speaker 3: of information. Ryan once hearts go out to those that
Speaker 3: might well be affected, and many are. And I'm wondering
Speaker 3: what therefore the ramifications are because it seems as though
Speaker 3: the NHS knew that they were vulnerabilities.
Speaker 18: Yeah, I mean, the unfortunate thing is that the gang
Speaker 18: behind this attack actually on Friday last week published a
Speaker 18: huge amount of data that they stole from the computers
Speaker 18: before they locked them down at Cynovus, and they've now
Speaker 18: you know, dumped that all online and I had to
Speaker 18: look through some of it, and it's a huge volume
Speaker 18: of information like I've seen in myself, like forty thousand
Speaker 18: quite detailed medical records on patients from across the UK,
Speaker 18: which was the striking thing because obviously the end in
Speaker 18: itself has primarily affected London hospitals, but what I found
Speaker 18: was that said Nervous has actually been doing these tests
Speaker 18: for hospitals across the UK and Ireland, so it really
Speaker 18: is impacting. The data breach is impacting the whole UK
Speaker 18: and Ireland though, which wasn't really understood at the outset
Speaker 18: of this. So there's people across the country who are
Speaker 18: you know, their personal confidential medical information. It's potentially been
Speaker 18: put out there as a result of what's happened.
Speaker 3: Meanwhile, the NHS thing and trying to talk of their
Speaker 3: cyber resilience in the amount that they've invested, but thus
Speaker 3: far they need to keep an eye on their third parties.
Speaker 3: Ryan Allagher, great reporting, thank you for bringing it to us. Meanwhile,
Speaker 3: that does it for this edition a Bloomberg Technology A
Speaker 3: lot we got in.
Speaker 5: Yeah, incredible reporting from our colleagues and news from around
Speaker 5: the country, around the world. Actually in fact Recapple that
Speaker 5: on the podcast. You know where to find it on
Speaker 5: the Bloomberg platforms, but also an Apple Spotify and iHeart
Speaker 5: one more day to go, and it's a big one
Speaker 5: this Friday.
Speaker 4: This is Bloomberg Technology.
Speaker 14: But he didn't gi