Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. So Facebook Snap
Speaker 1: just out with Meta now, Okay, Carol, I'm watching it.
Speaker 1: It's actually after after climates perspective, perspective. Amazon just out.
Speaker 1: We're seeing that stock rally in the after hours. Pinterest
Speaker 1: is like off the charts in the after hours following
Speaker 1: it all is someone we love talking with. We're talking
Speaker 1: James Chock, Mock partner and technology Analystic Clockwise Capital. He
Speaker 1: joins us on the phone from Miami. James, James, it's
Speaker 1: great to have you with us. I want to start
Speaker 1: with with Meta here because this is obviously a big
Speaker 1: story with making reverberations. You've covered You covered Facebook, the
Speaker 1: company formerly known as Facebook for years. Talk about this
Speaker 1: inflection point that you see the company at right now. Yeah,
Speaker 1: thanks for having me. I think the we can zoom
Speaker 1: out just one level here and just look at the
Speaker 1: broader big cap companies um in the context of Facebook
Speaker 1: and realize that we're going through a paradigm shift right
Speaker 1: now in determining which companies can command and control their
Speaker 1: destinies in the post COVID world. You know, Google, Amazon, Microsoft,
Speaker 1: they all have their first party data that they can
Speaker 1: leverage in a clear path towards success. But Facebook currently
Speaker 1: still relies on third party data. And at the same time,
Speaker 1: which is why you saw the shortfall from the privacy
Speaker 1: changes that Amazon that Apple made. But further to that,
Speaker 1: they have a heavy reliance and a growing reliance on
Speaker 1: third party developers to really materialize this metaverse vision that
Speaker 1: they have. So they're stuck in this limbo state until
Speaker 1: until they get their true bearings. And and it could
Speaker 1: take some time, So James, limbo could be okay, right
Speaker 1: if you get to a better place. Um and and
Speaker 1: let's all remember, we wouldn't have built the railroads if
Speaker 1: we didn't. You know, they took time to to build
Speaker 1: way back and required a lot of money. I'm just
Speaker 1: saying that it does take time to pivot for a company.
Speaker 1: Do you think, though, the pivot to metaverse is the
Speaker 1: future destiny for Facebook? Yeah? I don't. Facebook is not
Speaker 1: going anywhere. I mean, we need to be clear about that.
Speaker 1: Facebook is here to stay, and they will. Why do
Speaker 1: you say that? Why do you say that because it
Speaker 1: connects nearly three billion people in the world, and and
Speaker 1: and has dependence on so many from people and communities
Speaker 1: and businesses. Um, it's just it's still commands a ton
Speaker 1: of attention. So it's not going anywhere. But in terms
Speaker 1: of your question, was um, it really depends on what
Speaker 1: type of timeline you have as an investor. Um. You know,
Speaker 1: if you have an indefinite timeline, then then then the
Speaker 1: homebuying and holding Facebook at these levels I think makes
Speaker 1: a ton of sense. I mean, it's cheaper than a
Speaker 1: lot of legacy companies after today's move. But you know,
Speaker 1: it really comes to that trade off on which which stocks,
Speaker 1: which companies can deliver the greatest alpha in the time
Speaker 1: horizon that you have as an investor. What it's one quarter,
Speaker 1: one year or of five plus years? So is so
Speaker 1: is Amazon? And we're gonna talk. We're gonna talk Amazon.
Speaker 1: And second, I want to stick on meta because we
Speaker 1: have a do have a little bit of time with you,
Speaker 1: which is great. James does does Facebook and meta platforms?
Speaker 1: How does it start to make money in the metaverse?
Speaker 1: I mean, if we're talking like a time horizon five
Speaker 1: fifteen years down the line here, how does it successfully
Speaker 1: make this transformation from a company that has served people
Speaker 1: ads in Facebook in Instagram and Instagram Stories. How does
Speaker 1: it make that transition to getting its revenue from the metaverse?
Speaker 1: What does that look like? That's a great question, and
Speaker 1: I don't think anybody can tell you today definitively what
Speaker 1: that looks like. It's really going to be incumbent on
Speaker 1: and what the developers and creators of these content and
Speaker 1: experiences kind of come up with. You know, what is
Speaker 1: the world going to look I mean a few years ago,
Speaker 1: you know, TikTok wasn't even a thing, and now it's
Speaker 1: it's blown up to where people spend in an ordinate
Speaker 1: amount of time on that platform. So in terms of monetization,
Speaker 1: you know, you can think of digital assets that are
Speaker 1: sold advertising opportunities within the metaverse itself, but giving a
Speaker 1: concrete UM kind of outlook on how exactly that will
Speaker 1: look at it. Quite frankly, I don't even think Marcus
Speaker 1: Zuckerberg and Facebook clearly no, I mean they for multiple quarters.
Speaker 1: You know, he's been talking about UM, the reliance on
Speaker 1: the creator community to to work with them. They can't
Speaker 1: do it alone. So I think that path forward UM
Speaker 1: is still TVD, and I think that's what's giving investors
Speaker 1: ponse with the stock, it's not so much. The results
Speaker 1: estimates only came down by four percent, so you're not
Speaker 1: talking about a huge hit. The bigger question investors have
Speaker 1: is what is your confidence level in the growth trajectory
Speaker 1: and the estimates that you have for the other companies
Speaker 1: that you're seeing that have reported so far from megacap
Speaker 1: four of the five acts, Facebook has um has done well.
Speaker 1: Because you have that visibility with Facebook, you just you
Speaker 1: can't say with a high degree of confidence that this
Speaker 1: will be the growth rate for this year and next.
Speaker 1: So it's kind of an interesting time, right James, when
Speaker 1: we're trying to figure out what is the world post
Speaker 1: pandemic For a lot of companies that benefited big time
Speaker 1: all on Netflix and others benefited during the pandemic, we
Speaker 1: just we kind of don't know. I hate to use
Speaker 1: the word normal because what the heck guy is normal anymore?
Speaker 1: But I mean, like, what is you know, what is
Speaker 1: it the growth rate after the pandemic, especially at a
Speaker 1: time when there are some companies to trying to figure
Speaker 1: out maybe what their future growth is fundamentally meeting business
Speaker 1: changes like a Facebook. That's the perfect question and the
Speaker 1: and then it's the question then I think investors don't
Speaker 1: know um and I mean you saw so we before COVID,
Speaker 1: we had a pretty good understanding of what these growth
Speaker 1: curves would look like for these companies. You can you
Speaker 1: can model that out pretty pretty well and with a
Speaker 1: pretty good degree of competence. With COVID, that growth curve
Speaker 1: steep and substantially. Um. Now we're much below that growth
Speaker 1: curve because there were lapping all of those monster quarters
Speaker 1: that we saw from last year. So with that lapping,
Speaker 1: you know, investors are trying to discern is that new normal,
Speaker 1: this new rate that we're seeing, or will we actually
Speaker 1: go back to the average that it was before COVID.
Speaker 1: And that's what we're trying to do as investors, and
Speaker 1: we believe right now is one of the most monumental
Speaker 1: buying opportunities for companies that you have confidence in that
Speaker 1: will actually and tangibly uh revert back back to that
Speaker 1: mean because you're buying them on fire sales prices. He's
Speaker 1: Amazon one of those companies we got to talk amaz on.
Speaker 1: It's up in the after hours right now. Big headline
Speaker 1: here the prime membership being raised by twenty dollars a year.
Speaker 1: That's going to be at one thirty nine year. Remember
Speaker 1: Prime came out in two thousand five. It was seventy
Speaker 1: nine dollars a year then, so seven increase since two
Speaker 1: thousand five. Amazon would say, hey, we've added a lot
Speaker 1: to that, but you know, talk about inflation there. Um
Speaker 1: what do you make of these earnings? James, Well, first
Speaker 1: of all, thank god, because it's our second biggest position
Speaker 1: that's really definitely needed Amazon to work. When Amazon has
Speaker 1: been the bottle of champagne versus a bottle of Scotch tonight,
Speaker 1: is that what it is? Exactly? It was tequila last
Speaker 1: night and probably maybe tonight. Um no, but uh jokes aside,
Speaker 1: the Amazon was the company that was left behind. You
Speaker 1: know within these megacap companies, you saw surges from last year.
Speaker 1: You know, Amazon has been a dead stock and and
Speaker 1: it's also gotten hit with the recent wave. Um we're
Speaker 1: recent down, down up in the market because I think
Speaker 1: people were just selling high pe names and the price
Speaker 1: to sales multiples we're kind of not really an issue.
Speaker 1: But um or we're not really uh incorporated into the
Speaker 1: valuation analysis. And today you're with Amazon and company that
Speaker 1: will actually on a pe basis trade about thirty forty
Speaker 1: times next year. I mean, when have we ever been
Speaker 1: able to say that it has a pe multiple of
Speaker 1: UM in the double digits versus triple digits. So it's
Speaker 1: on the it's a much much deeper growth curve in
Speaker 1: terms of its bottom line performance and it's top line.
Speaker 1: I think people will increasingly understand that as we anniversary UM,
Speaker 1: the harder comps that this is indeed one of those
Speaker 1: companies that will revert back to its original growth curve UM.
Speaker 1: And and with that being the case, that's why it's
Speaker 1: our second biggest position, because we've it and this can
Speaker 1: easily be a plus stock. Yeah, and today closing at
Speaker 1: seventy six, Hey help me out here, just got about
Speaker 1: forty seconds, So Amazon's up almost after hours, Pinterest is up,
Speaker 1: Snap is up for the invest co q q Q
Speaker 1: now up about two percent here in the after hours.
Speaker 1: Even Facebook is up in the after hours by about
Speaker 1: one percent. What's the play tomorrow potentially and just got
Speaker 1: about forty seconds tonight. Are also Pinterest and Snap also
Speaker 1: our companies that are fully in control of their own destiny.
Speaker 1: So I'm not surprised with expectations being so low, um
Speaker 1: uh for them to move the way that they are
Speaker 1: after hours. But the play for us is you have
Speaker 1: confidence in the glowth grooms like an Amazon, like a
Speaker 1: Spotify which sold off date today for no real reason.
Speaker 1: In our opinion, Um, you know there there's there should
Speaker 1: be incremental buying, and that's exactly what we're what we're doing,
Speaker 1: all right, just pulling up spot if I've seen what
Speaker 1: it's doing here in the after hours and it is
Speaker 1: up two point six. Just a f y I. James
Speaker 1: chock Mark, thank you so much. You walked us through
Speaker 1: the world of technology. We so appreciate. A partner in technology.
Speaker 1: Analyst at Clockwise Capital on the phone from Miami. What
Speaker 1: did you say, he's going to some white cloth tonight. Yeah,
Speaker 1: a little bit of white cloth tequila last night. White
Speaker 1: Cloud to night, Amazon's second biggest position for Clockwise Capital,