Speaker 1: From Mahard where Innovation, Money and power Collie in Silicon
Speaker 1: Vallet NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed loved Love.
Speaker 3: Live from New York and San Francisco. This is Bloomberg
Speaker 3: Technology coming up. Tesla shares spike on surprisingly strong earnings
Speaker 3: and lofty sales goals on twenty twenty five, and.
Speaker 4: Nvidia announces a new partnership in India. More on its
Speaker 4: plans in the new massive market.
Speaker 3: That's an exclusive interview with Greenlight Capital's David Einhorn. The
Speaker 3: first a focus on our top story, Ed.
Speaker 4: Yeah, Tesla shares of the ev maker absolutely surgeon. In fact,
Speaker 4: if this seventeen percent gain holds, it puts Tesla on
Speaker 4: track for its biggest single day jump. Going back to
Speaker 4: March of twenty twenty one, So in the quarter there
Speaker 4: was a lot that investors liked. Profit was ahead of expectations.
Speaker 4: Part of that was sales of FSD software, part of
Speaker 4: it was regulatory credits. But they're also just lowering the
Speaker 4: costs of production. And then Caro, as you know, there's
Speaker 4: the quarter that's gone, and then Elon Musk's best skill,
Speaker 4: which is the outlook and keeping investors look into the
Speaker 4: horizon and.
Speaker 3: His best guess is ed his testa CEO El Musk
Speaker 3: on his growth expectations in the next year.
Speaker 2: I do want to give some some rough estimate, which
Speaker 2: they think twenty to thirty percent vehicle growth next year,
Speaker 2: you know, notwithstanding negative external events.
Speaker 3: Craigs Truell joins us Now from London, tell us are
Speaker 3: these estimates lofty goals likely to be achieved?
Speaker 5: They're very lafty.
Speaker 6: I would agree with that assessment.
Speaker 7: I think, you know, we can't necessarily rule out the
Speaker 7: possibility that this is a company that won't actually increase
Speaker 7: deliveries this year, so you know, I think part of
Speaker 7: part of the reason for this rally was Musk's optimism
Speaker 7: that they will have a slight increase and this twenty
Speaker 7: to thirty percent outlook for next year. I guess I
Speaker 7: just would like to have a better sense, if I'm
Speaker 7: a Tesla investor, of how exactly they're going to get there,
Speaker 7: because you know, we do know that this is a
Speaker 7: company that has been talking for months now about more
Speaker 7: affordable vehicles coming in the first half of next year,
Speaker 7: but we don't know what those are. We have very
Speaker 7: little indication from the company of any specifics around there.
Speaker 7: Even last night during the conference call.
Speaker 4: You know, slight growth was the call for twenty twenty four.
Speaker 4: And if you do the math, like our colleagues at
Speaker 4: Bloomberg and he F did, they're going to have to
Speaker 4: deliver five hundred and fourteen thousand vehicles ish in the
Speaker 4: last three months of this year, which would be a record.
Speaker 4: Then there's the everything else bit. I mean, Musk was
Speaker 4: very clear about autonomous driving, but I felt that we
Speaker 4: got details or lease claims and plans about ride hailing
Speaker 4: more than we got at the Robotaxi event in the
Speaker 4: last two weeks.
Speaker 7: What do we learn Craig, Yeah, the robo taxi event
Speaker 7: was sort of concepts of a plan, and this was
Speaker 7: a plan plan right where we we got a better
Speaker 7: indication of of, you know, plans for putting together a
Speaker 7: ride hailing offering that would actually deploy next year in
Speaker 7: California and Texas. It was a little unclear to me
Speaker 7: what exactly, you know, Tesla needs from the state of
Speaker 7: California to offer that service. You know, obviously if if
Speaker 7: he wants to offer it with the ability for people
Speaker 7: to not supervise, uh, you know, the wheel, it's not
Speaker 7: really it's not really clear that that they need approval
Speaker 7: other than because of the fact that that they need
Speaker 7: you know, I guess, I guess they do need state
Speaker 7: approval for that. But but you know, in tex I
Speaker 7: think he's sounded pretty assure that that's on the way.
Speaker 7: Whether or not though this company has the technology to
Speaker 7: offer that safely, I think remains an open question.
Speaker 4: Must said he'd be shocked if he didn't get those
Speaker 4: state regulatory approvals. And as you can see on the
Speaker 4: screen when we sent those headlines, Uber and lift stock
Speaker 4: fell in after hours. They continue to be under pressure
Speaker 4: in the context of some competition in Ryde hailing to
Speaker 4: come Bloombo's creatudow in London, thank you very much. Let's
Speaker 4: get this cell side reaction and bring in William Stein.
Speaker 4: He's the managing director and senior analystitorist Securities. You actually
Speaker 4: largely cover semiconductors, and you're sort of focused on this work.
Speaker 6: Around AI that Tesla's doing.
Speaker 4: There was something that jumped out at me in the
Speaker 4: ten Q that the CFO also mentioned, which was in
Speaker 4: the quarter gone and Tesla recognized more than three hundred
Speaker 4: million dollars worth of FSD revenues now take that and
Speaker 4: tell me the story it gives you.
Speaker 8: Yeah, the story gives me is that they released FSD
Speaker 8: on the cyber truck, So for cars that they've been
Speaker 8: selling for a little while, they can suddenly recognize the
Speaker 8: revenue that they've already been paid for that technology that
Speaker 8: they've already delivered and continued to deliver. So that's great,
Speaker 8: And you know, look, I think FSD is an amazing technology.
Speaker 8: But you know, if you've read my reviews, or if
Speaker 8: you look at any of the many reviews on YouTube
Speaker 8: or other platforms, you could see that there are known
Speaker 8: failure modes for this technology.
Speaker 9: It does not work in the sense.
Speaker 8: That you can actually run it without a driver, and
Speaker 8: that continues to be a problem no matter what the
Speaker 8: ten Q says.
Speaker 9: This is a real problem for the company.
Speaker 3: Have you seen any improvements, William since last ye were
Speaker 3: on to talk about some of those failings within FSD.
Speaker 5: Yeah.
Speaker 9: So we've reviewed three different versions of this.
Speaker 8: I think the I Forget, which was the last time
Speaker 8: I was on your show to discuss it, but certainly
Speaker 8: this version twelve dot five, which is I think the
Speaker 8: latest one that's broadly available to consumers, this is still
Speaker 8: one that doesn't work.
Speaker 9: Have there been improvements?
Speaker 8: Certainly they mostly relate to the feel of the car
Speaker 8: in that it feels more human like, less herky jerky.
Speaker 8: But along with that, I think there have been some
Speaker 8: documented cases of rolling through stop signs, another let's say,
Speaker 8: minor driving infractions that are more human like, but maybe
Speaker 8: not exactly what one is shooting for for a driverless
Speaker 8: car in terms of trying to maximize the safety.
Speaker 3: Okay, not only William, does he need to improve on
Speaker 3: the technology. Therefore, it seems like you're still saying despite
Speaker 3: the improvements, and what's so notable is they need the
Speaker 3: regulatory approvals.
Speaker 10: This is where you drill in the extraordinary nature.
Speaker 3: Of one Elon Musk, because he's not only the CEO
Speaker 3: of Tesla, but he's also potentially going to have a
Speaker 3: political role and FSD regulation coming ed.
Speaker 4: Yeah, So, William, what I wrote about last night was
Speaker 4: Musk did not cite the election directly, and he did
Speaker 4: not name Donald Trump. But what he did say was
Speaker 4: that if there's going to be a Department of Government efficiency,
Speaker 4: he would like to work on nationwide or federal level
Speaker 4: rules for the deployment of autonomous technology on US roads,
Speaker 4: which is as close to commenting on the election as
Speaker 4: I think you could get in the context of an
Speaker 4: earnings call. What did you make of those comments?
Speaker 9: Well, I think he's just.
Speaker 8: Making some fairly logical comments about what would be the simplest,
Speaker 8: most logical way to pardon me, to regulate this technology,
Speaker 8: and at the federal level means you have one hurdl
Speaker 8: to clear instead of fifty individual ones. I don't interpret
Speaker 8: that as some super partisan view of the world. It's
Speaker 8: just something that would make his life easier, in the
Speaker 8: life of Tesla easier.
Speaker 9: That's that's all I take.
Speaker 4: That at worth looking at chez uber and Lyft again right,
Speaker 4: because the news for me that jumped out was this
Speaker 4: confidence that next year Tesla will offer some form of
Speaker 4: ride hailing in Texas and California. You've critiqued FSD. My
Speaker 4: question to you is, based on those headlines that came
Speaker 4: out on ride hailing, are you better understanding the jump
Speaker 4: from FSD in consumer cars to this proprietary ride haling
Speaker 4: service in the future.
Speaker 9: Oh so, a couple of things.
Speaker 8: First of all, I have a colleague that covers those
Speaker 8: ride healing stocks. I don't, but you know, I think
Speaker 8: what should be relatively clear is these issues. A ride
Speaker 8: healing service and full autonomy are not the same thing.
Speaker 8: They are fairly separate. You know, this company could turn
Speaker 8: on this ride healing service, you know, assuming they get
Speaker 8: regulatory approval for it without having FSD at all. And
Speaker 8: FSD is something that could come later and really has
Speaker 8: in a way that they're certainly complementary, and having both
Speaker 8: of them together could result in significant earnings growth for
Speaker 8: the company. But they're not perfectly linked. Ideas they are separate.
Speaker 3: With William the amount that they need to spend, I
Speaker 3: mean whether or not they ten on that switch or not,
Speaker 3: and of course that ultimately means whether you have a
Speaker 3: driver at the wheel or not. I'm interested as to
Speaker 3: whether you think the upgrade what is it to an
Speaker 3: eleven billion capex spend is what needs to be invested
Speaker 3: right now.
Speaker 10: By the business.
Speaker 8: Oh well, this is not a huge difference. Right in
Speaker 8: the prior quarter they guided this number to ten billion.
Speaker 8: Now he's saying eleven wasn't a whole lot different from
Speaker 8: our model. We have a similar capex number next year.
Speaker 8: I think in a way, the you know, this might
Speaker 8: be a sort of off the run remark, but I
Speaker 8: think The biggest winner out of this topic is in Nvidia.
Speaker 8: You know, he Musk emphasized how much they're spending on
Speaker 8: h one one hundred, h one hundred those are Hopper
Speaker 8: generation GPUs from Nvidia equivalent GPUs and what they anticipate
Speaker 8: doing over the next year.
Speaker 9: This is a big investment in Vidia.
Speaker 8: These are that this training capability does not come from
Speaker 8: their internal D one chip or their Dojo computer. It's
Speaker 8: going to be spent at least in the near term,
Speaker 8: at least for the next year, more spending within video.
Speaker 10: Wellenstein great to have your take.
Speaker 3: Managing director and Senia analyst at Trust Securities has turned
Speaker 3: our attention to a different set of earnings. IBM shares,
Speaker 3: as you'll see now off by six percent, having its
Speaker 3: worst day since April twenty twenty four, show to slow
Speaker 3: down in the numbers in consulting revenue that came out
Speaker 3: after the bell Wednesday, even though software sales look they
Speaker 3: did rise nine percent now. The CEO Arvin Krishna told
Speaker 3: me a little bit earlier that clients are facing several
Speaker 3: headwinds geopolitical, political interest rate uncertainties that should aase actually
Speaker 3: in the next six to twelve months. He also was
Speaker 3: talking about AI demand saying it's solid, but the enterprise
Speaker 3: adoption is actually kind of being.
Speaker 10: Held back by that right now because of what.
Speaker 3: William was just saying, costs, costs and ensuring that data
Speaker 3: and security is ready. However, here's what he said about
Speaker 3: optimism for next year. Twenty twenty five is going to
Speaker 3: be a good year despite headwinds. People want to scale
Speaker 3: and adapt their technology. Quite bullish and what twenty twenty
Speaker 3: five will look like for enterprise.
Speaker 4: Tech ed Okay, coming up on the program from Elon
Speaker 4: Musk influence on Technology to some more about his impact
Speaker 4: on politics. An important conversation and piece of reporting coming
Speaker 4: up next. This has been bog technology.
Speaker 3: We just want to check on some other earnings for
Speaker 3: you because shares are moving to the higher side significantly,
Speaker 3: so if T Mobile service now both at record highs.
Speaker 3: Of course, these are stories that we get on the
Speaker 3: back of T Mobile seeing strong results hit its highest
Speaker 3: interday level on record, because basically they are one of
Speaker 3: third collar results that beat expectations.
Speaker 10: They're raising their full year subscribers as well.
Speaker 3: Service now this is a story of AI out of
Speaker 3: intelligence adoption as well.
Speaker 10: They're rallying to record on yet.
Speaker 3: Also strong results after the bell and they're seeing a
Speaker 3: third called results that beat expectations, and they're giving a
Speaker 3: pretty strong outlook as well.
Speaker 10: And what have we got.
Speaker 4: We're going to go to a Bloomberg data deep dive
Speaker 4: into Elon Musk's online presence ahead of the US election.
Speaker 4: According to a large scale Bloomberg analysis, the billionaire owner
Speaker 4: has been spreading debunped theories of undocumented voters, swaying the
Speaker 4: US election and growing his influence in the process, making
Speaker 4: him the biggest promoter of anti immigrant conspiracies on X,
Speaker 4: the social media platform he owns. I want to bring
Speaker 4: in Bloomberg Sarah Fryar, who's the editor that leads our
Speaker 4: coverage of big tech. And this was a team effort
Speaker 4: of journalists and data experts, But I I think the
Speaker 4: best place to start, Sarah is what's the top line
Speaker 4: of the story.
Speaker 6: What is it that we report through.
Speaker 4: That dense body of data.
Speaker 11: Well, it was really interesting finding actually that we have
Speaker 11: seen mus on the campaign trail with Trump talk about
Speaker 11: these anti immigrant theories he has he's been promoting the
Speaker 11: idea that Democrats are shipping in immigrants to vote for them.
Speaker 11: So this idea of math election fraud that he has
Speaker 11: been talking about on the campaign trail, and you know,
Speaker 11: that seems like sort of a fringe thing until we
Speaker 11: looked into the data and it showed that immigration and
Speaker 11: election fraud and voter fraud is his top policy topic
Speaker 11: on x He actually gets more engagement on that topic
Speaker 11: than anything else that he talks about, and it has
Speaker 11: become this driver of his speed, something that he talks
Speaker 11: about ever more frequently over the past year, ever since
Speaker 11: he visited visited the border and got more involved in
Speaker 11: the state of Texas, and he has really become enmeshed
Speaker 11: with this idea of immigration leading to fraud. And what
Speaker 11: experts have told us is this narrative and the way
Speaker 11: that Musk is really laundering it for the masters is
Speaker 11: going to help Trump dispute the result of the election
Speaker 11: should he not win.
Speaker 12: So this is a very serious finding in my opinion.
Speaker 3: And the findings are serious in the nature in which
Speaker 3: you got them. You ran machine learning model basically on
Speaker 3: posts to identify the subjects he was most often citing
Speaker 3: and talking about. Thirteen hundred of Musk posts in twenty
Speaker 3: twenty four really revolving around this issue, and I just
Speaker 3: want to get to the facts, therefore, Sarah, of what
Speaker 3: actually happens, because the facts are that non citizen voting
Speaker 3: is incredibly rare.
Speaker 11: It's incredibly rarre. Non citizens cannot vote for president, that
Speaker 11: is not a thing. There is a very diffficult path
Speaker 11: to citizenship in the US. So this idea that he
Speaker 11: has been talking about is just not based in reality
Speaker 11: or any history that we know of. And this is
Speaker 11: this is something that we didn't just talk about in
Speaker 11: terms of the data. Our reporters went on the ground
Speaker 11: to aara of Colorado. Julia Luf was an Aurora, Colorado
Speaker 11: talking to immigrants who feel like their lives are unsafe
Speaker 11: now because Musk and Trump have talked publicly about the.
Speaker 12: Danger of those immigrants.
Speaker 11: They went to Butler, Pennsylvania during a rally where Trump
Speaker 11: and Muck were speaking together and talked to a different
Speaker 11: kind of victim, those who believe the misinformation that they
Speaker 11: are being told. So this is this is something that
Speaker 11: isn't just happening on the Internet. It isn't just happening
Speaker 11: on x It is happening in the daily lives of
Speaker 11: Americans right now with election just a few days away.
Speaker 4: This is dates of journalism, and the team does a
Speaker 4: great job in explaining the methodology and also chronology of
Speaker 4: what happened. But I have to ask Sarah if have
Speaker 4: we heard from Elon Musk or X actually about our
Speaker 4: reporting and how they feel about it.
Speaker 11: We haven't heard from USK X or Elon Musk, but
Speaker 11: we did hear from the Trump campaign and they doubled down.
Speaker 11: They said Elon Musk is not wrong.
Speaker 13: You know, they.
Speaker 12: Repeated some of the mids information that Musk has endorsed
Speaker 12: on X.
Speaker 11: And one more thing I'd point out from the data
Speaker 11: often it's not Musk himself saying these things. He will
Speaker 11: often quote, tweet or just put a little emoji response
Speaker 11: to something. But with his following that upwards of two
Speaker 11: hundred million strong, he has incredible influence. He's actually the
Speaker 11: top influencer on the platform that he owns and has
Speaker 11: a lot of influence over the algorithm thereof. We also
Speaker 11: found that often his posts do not get backcheck from
Speaker 11: the system that X uses to FactCheck. So very interesting
Speaker 11: findings here from our data investigation.
Speaker 3: Go read the full piece. Extraordinary, Sarah Frar, We thank
Speaker 3: you now. Microsoft co founder Bill Gates also has his
Speaker 3: eyes on the approaching US election. He spoke with Bloomberg
Speaker 3: editor in chief John Micklethwaite about the role of innovation
Speaker 3: in addressing the world's most pressing challenges. That was over
Speaker 3: at Bloomberg and New Economy at E twenty in South
Speaker 3: Paolo in Brazil yesterday. He also weighed in on what
Speaker 3: Republican candidate Donald Trump's proposed tarras will mean for American
Speaker 3: businesses and the global economy.
Speaker 10: Just take a listen.
Speaker 13: We will suffer overall, welfare will improve lass as. Not
Speaker 13: only will if you have put teiff on, of course,
Speaker 13: other people will put tariff.
Speaker 6: On as well.
Speaker 13: And the economic dynamism and speed of innovation will be significant,
Speaker 13: significantly slow.
Speaker 14: Just to push you on that dynamism point. You know,
Speaker 14: it's very easy to make the argument that this means
Speaker 14: higher prices for consumers. But this issue of dynamism, the
Speaker 14: sort of you've been involved in entrepreneurship, these things most
Speaker 14: of your life have less foreign competition, less foreign goods
Speaker 14: that must have an impact on it. I know it's
Speaker 14: back to a creed you've believed in, but in practice
Speaker 14: is that argument possible to make devices?
Speaker 13: Well, we should find articulate politicians who can make the
Speaker 13: case if you take most of the industries I think about,
Speaker 13: like you know, inventing a new drug, or writing a
Speaker 13: new piece of software, or birthing a new climate technology,
Speaker 13: you have these gigantic fixed costs, and the fact that
Speaker 13: you can do that work and then sell it on
Speaker 13: a global basis means that everybody's getting you faster innovation
Speaker 13: and lower prices. And if you start to fragmant markets
Speaker 13: because of either tariffs or regulatory barriers to that trade,
Speaker 13: it absolutely takes away the lower prices and high speed innovation.
Speaker 4: That was Microsoft co founder Bill Gates along with Bloomberg
Speaker 4: editor in chief John Mechlfwaite, it's.
Speaker 6: Time for talking tech and first start.
Speaker 4: Troubled it company Atos said its financial restructuring plan has
Speaker 4: been approved by a French commercial court, paving the way
Speaker 4: for creditors to take control. Under the plan, Atos will
Speaker 4: receive one point six to one point eight billion dollars
Speaker 4: of new money beginning in twenty twenty five, plus Shares
Speaker 4: of sk Heinix clining to a two month high this
Speaker 4: after the company posted record quarterly profit and revenue, a
Speaker 4: reflection of strong demand for its memory chips used in
Speaker 4: Nvidia AI processors. Earnings also saw a boost from robust
Speaker 4: demand for enterprise solid state drives, and Nvidia expands its
Speaker 4: AI infrastructure in India.
Speaker 6: CEO Jensen One.
Speaker 4: Has struck a deal with Asia's richest man, Maukeshambani to
Speaker 4: build out a new data center using Nvidia's Blackworld.
Speaker 6: Here's CEO Jenson Wong.
Speaker 15: In order to lead an artificial intelligence you need to
Speaker 15: have AI model technology that India has. You need to
Speaker 15: have data, massive quantities of data and using the last
Speaker 15: thing you need is AI infrastructure. And we're announcing that
Speaker 15: that reliance and in video or partnering to build AI
Speaker 15: infrastructure here in India.
Speaker 10: Let's get more on that story New magazine.
Speaker 3: King joins us, how significant is in Video's presence already
Speaker 3: in India?
Speaker 16: In yeah, I mean they've had Obviously, India has been
Speaker 16: a long term source of very good engineering and math talent,
Speaker 16: so there's been a lot of software efforts that they've
Speaker 16: been there for decades. But in terms of it being
Speaker 16: an end business for them, an n market for them,
Speaker 16: it's not particularly significant yet.
Speaker 4: Just quickly, you and I've reported a lot. Jensen want
Speaker 4: to spend a lot of time in the last year
Speaker 4: trying to do deals at the nation state level. I
Speaker 4: know this one's kind of different, but talk to me
Speaker 4: about the strategy selling things outside of America.
Speaker 16: Yeah, I mean, this is part of his world tour, right.
Speaker 16: He's in India now, He's going to Japan next and
Speaker 16: I'm sure there are going to be other of these
Speaker 16: events scheduled around the world. He's trying to basically spread
Speaker 16: the use of his technology away from the concentration in
Speaker 16: the big cloud providers and get everybody involved. And this
Speaker 16: is the big push.
Speaker 4: It continues to be a wild week in semiconductors. TSMC
Speaker 4: is top of mind. They identified a client that was
Speaker 4: funding chips to Huawei and acted on it after a
Speaker 4: Bloomberg report. Any update, what do we know?
Speaker 16: Yeah, I mean, there's been a lot of speculation about
Speaker 16: what was going on, a lot of reports and that
Speaker 16: we've seen, and finally TSMC of command and said, Yep,
Speaker 16: we found a customer who wasn't the customer we thought
Speaker 16: they were. They were supplying to Uawei and obviously that's illegal,
Speaker 16: so we've cut them off. We don't know exactly how
Speaker 16: that happened. We have to assume that there will be
Speaker 16: their investigations of that that the US government will look
Speaker 16: at that seriously, because this is something I don't want.
Speaker 3: I have a feeding that story has more room to
Speaker 3: run in King, We thank you so much. Coming up,
Speaker 3: we've got a great conversation. You don't want to miss it.
Speaker 3: Greenlight Capital's David Einholm, this is boom Bag technology.
Speaker 17: We want to now welcome our Bloomberg radio and television
Speaker 17: audiences right now, I'm Shanali Bassik.
Speaker 5: Now.
Speaker 17: Bloomberg LP, the parent company of Bloomberg Television, is working
Speaker 17: with the robin Hood Foundation for a staff picking competition
Speaker 17: for ten thousand dollars that will go to charity in
Speaker 17: order to fight poverty in New York. You pick a
Speaker 17: long and a short investment and you can register through Monday,
Speaker 17: October twenty eighth.
Speaker 5: You can sign up at Robinhood dot org.
Speaker 17: The competition is for charitable purposes only and does not
Speaker 17: constitute financial or investment advice. For more about the competition
Speaker 17: and his own investment choices, we are joined now by
Speaker 17: David Einhorn of green Light Capital, and perhaps first talk
Speaker 17: about this program for a minute. Pick a ticker. You
Speaker 17: have a sensorially gamified charity. Why did you guys do
Speaker 17: it this way? You're closely involved with the Robin Hood Foundation,
Speaker 17: and what do you expect out of the program?
Speaker 18: Yeah, we just thought it would be a little bit
Speaker 18: of a fun thing to do in conjunction with the
Speaker 18: annual investor conference that's been going on for eleven or
Speaker 18: twelve years. The idea is is anybody who wants to
Speaker 18: participate and donate ten thousand dollars, pick along, pick a short,
Speaker 18: see how it does over the next six months, and
Speaker 18: whoever wins can gets to choose which Robinhood supported organization
Speaker 18: get gets the chunk of the money.
Speaker 17: Now, did you participate? Are you picking it on a
Speaker 17: long and a short for this game?
Speaker 1: One hundred percent? Of course?
Speaker 5: What are they?
Speaker 1: Well, I'm not the shorts.
Speaker 18: People are allowed to keep confidential, and I'm going to
Speaker 18: keep mind confidential. But I'm going to pick Peloton, which
Speaker 18: is the stock that I pitched yesterday at the Robin
Speaker 18: Good Conference.
Speaker 17: Now, talk a little more about that, because from what
Speaker 17: I understand, you came dressed in full gear to make
Speaker 17: this a pitch to the audience there. What is it
Speaker 17: about Peloton that you like?
Speaker 5: Right now? I understand that you said.
Speaker 17: That it's undervalued, But what's the catalyst?
Speaker 5: Is it M and A or something else that you're
Speaker 5: looking at.
Speaker 1: Well, I think there's a lot to like with Peloton.
Speaker 18: They have a large customer base that hays forty four
Speaker 18: dollars a month and is extremely engaged. Bride's and average
Speaker 18: thirteen times a month and has very very low attrition.
Speaker 18: So most subscription type models like this trade a really
Speaker 18: high valuations. Peloton has suffered over the last number of
Speaker 18: years because they thought they were going to be a
Speaker 18: much bigger company than they've turned out to be. Maturity
Speaker 18: has hit them a little bit sooner than they expected,
Speaker 18: and they had a cost base which was entirely based
Speaker 18: on Hey, the only thing that matters to us is revenues,
Speaker 18: because you know, Wall Street values us on price to
Speaker 18: sales and stuff like that. And so, as I said
Speaker 18: at the conference yesterday, there's a lot of cost cutting
Speaker 18: for Peloton to do. Peloton probably needs to spend more
Speaker 18: time on the Peloton and if they do that, the
Speaker 18: margins will improve a lot. And the stock is relatively
Speaker 18: inexpensive relative to other types of subscription model type of companies.
Speaker 18: Decides they're going to get a new CEO who should
Speaker 18: be announced, you know, sometime relatively soon, and in the
Speaker 18: worst case, if they're not really able.
Speaker 1: To turn around.
Speaker 18: This is certainly the type of company that there's a
Speaker 18: number of larger companies I think that would be very
Speaker 18: interested in owning this if it came down to that.
Speaker 5: David, I also want you to weigh in over here.
Speaker 17: It's interesting as we speak right now, Testla had come
Speaker 17: out with earnings. Over the last twenty four hours, the
Speaker 17: stock is up more than nineteen percent at the moment.
Speaker 17: It's been a stock that you have been short before.
Speaker 17: Wondering what you think about this stock at this evaluation
Speaker 17: here and whether you would ever go short again.
Speaker 18: Yeah, we don't really comment on our positions anymore, and
Speaker 18: we stopped doing that a few years ago. And so
Speaker 18: whether Tesla is a shorter potential short, it's not something
Speaker 18: that I'm going to discuss.
Speaker 17: Can you speak to the valuation as it stands now
Speaker 17: and how it fits into the broader story around stock
Speaker 17: market valuations right.
Speaker 1: Now now, I'm really not going to go anywhere near that.
Speaker 17: So let's talk about valuations more generally, because of course,
Speaker 17: the AI trade in general has been a very hot
Speaker 17: one I'm wondering if you think that if some of
Speaker 17: these stocks have gone too far, and how you're playing
Speaker 17: the AI trade.
Speaker 18: Well, you know, the thing is is we don't have to,
Speaker 18: you know, bet against things that seem like they're expensive
Speaker 18: when there's so much excitement around them. So these stocks
Speaker 18: are very high. There's a lot of enthusiasm. There's been
Speaker 18: enthusiasm for a long time. I think the market as
Speaker 18: a whole is really, you know, quite expensive, considering we're
Speaker 18: a strong part of the economic cycle, and we're about
Speaker 18: twenty three times earnings, So it's hard to wind up
Speaker 18: for me as somebody who actually paid a lot of
Speaker 18: attention to what I.
Speaker 1: Pay for things to want to chase those things.
Speaker 18: We do have a couple of companies that you know,
Speaker 18: maybe have options on AI coming our direction. So for example,
Speaker 18: we own HP which makes PCs, and PCs are due
Speaker 18: for a regular replacement cycle because a lot we're bought
Speaker 18: after COVID in twenty twenty and twenty twenty one, and
Speaker 18: we could have a better than normal cycle if if
Speaker 18: AIPCS turn out to d a thing, but definitely trace
Speaker 18: about ten times earnings, pase a three and something percent
Speaker 18: dividend they're spending one hundred percent of recashlow returning it
Speaker 18: to shareholders, so you get about seven percent buyback. So
Speaker 18: we can see you know, mid teens high teams growth
Speaker 18: for the next couple of years, just as you go
Speaker 18: through a cycle share account reduction, and so this you're
Speaker 18: paying just ten times journeys, which is very reasonable from
Speaker 18: our perspective.
Speaker 17: You know, I totally understand that you don't want to
Speaker 17: talk about individual short wagers. However, will you kind of
Speaker 17: explain the thinking around short investing right now? There are
Speaker 17: a lot of people who feel very burned in the
Speaker 17: way that markets have really melted up in a large way.
Speaker 17: What does the environment for shorting look like to you,
Speaker 17: and what are the kind of parameters that you think around.
Speaker 18: Yeah, we're actually having a pretty decent year in our
Speaker 18: short book, particularly considering how the market has gone up.
Speaker 18: We made a change a couple of years ago in
Speaker 18: response to sort of the meme stuff, and what we
Speaker 18: basically figured out is that the right tail for your
Speaker 18: best short ideas has changed.
Speaker 6: So it used to be.
Speaker 18: I'd want to put the most money and whatever I
Speaker 18: thought my best idea is, But your best idea is
Speaker 18: probably something that you think is going to go to zero,
Speaker 18: and that's where the crazy stuff goes on. So we've
Speaker 18: kind of flipped the short portfolio in the sense that
Speaker 18: our bigger shorts tend to be more boring and our
Speaker 18: smaller shorts are tend to be a little bit more exciting,
Speaker 18: and it's enabled us to maybe manage the volatility relating
Speaker 18: to you, the occasional craziness that hits a one stock
Speaker 18: or another, particularly in the more volatile and probably going
Speaker 18: to zero part of the short bastard.
Speaker 17: While we're talking about volatility as well, I know you
Speaker 17: this year had written two investors basically saying that it
Speaker 17: doesn't really matter who would win the election when it
Speaker 17: comes down to the markets more directly.
Speaker 5: But I am still really.
Speaker 17: Curious about how you're thinking about the election less than
Speaker 17: two weeks away. Uncertainty around how long it will take
Speaker 17: to know what the votes really come out to be
Speaker 17: at the end of the day. How do you think
Speaker 17: about that uncertainty and investing around it.
Speaker 18: Yeah, Look, I don't know how to handicap, but the
Speaker 18: only real protect projection I'm going to make about the
Speaker 18: election is it's going to be held on November fifth
Speaker 18: and beyond that, it's really hard to know.
Speaker 1: The election seems to be very close.
Speaker 18: And you know, I don't know whether we'll have a
Speaker 18: winner anytime soon. I don't know whether either candidate is
Speaker 18: preparing to concede if it's a close election.
Speaker 1: So we'll just have to kind of see how that plays.
Speaker 18: I'm taking a relatively conservative posture into the election. I
Speaker 18: view this as a potentially uncertain event.
Speaker 17: Is there anything that could take off after the election?
Speaker 17: We hear over and over that investors are taking a
Speaker 17: risk off tone before that time.
Speaker 5: So what starts to take off after Well, I.
Speaker 18: Think if you have a clear winner and it's you know,
Speaker 18: in the country, it's clear what direction the country is
Speaker 18: going to go, I'm confident that investors will chase whatever's
Speaker 18: perceived to be a beneficiary of whichever candidate that happens
Speaker 18: to be.
Speaker 17: I want to get your macro view on this as well,
Speaker 17: because a lot of people are worried about the direction
Speaker 17: of inflation. You saw the ten year really a trail
Speaker 17: higher in recent days. Some people think it's a Trump trade.
Speaker 17: What do you think about the direction of travel for bonds?
Speaker 17: The macro markets more largely on the heels of this election.
Speaker 18: Yeah, Look, I think that I think we're in We
Speaker 18: moved from a secular deflation for many many years into
Speaker 18: secular inflation, and we've had a you know, a reduction
Speaker 18: in inflation from the peak from a.
Speaker 1: Couple of years ago.
Speaker 18: But I think a lot of that is kind of
Speaker 18: run its course, and so there's a decent chance we
Speaker 18: should have inflation re accelerate, probably as soon as the
Speaker 18: next inflation reading. As far as I can tell, there's
Speaker 18: still rents that have to flow through, Commodity prices are
Speaker 18: getting stronger, and I think there's some other indications, you know,
Speaker 18: labor prices still going up. You see what's going on
Speaker 18: for example with the Boeing strike. These these wage increases
Speaker 18: are relatively substantial still. So I actually think that the
Speaker 18: deflationary period is kind of the disinflationary period is kind
Speaker 18: of coming to an end. And I think that you
Speaker 18: can see it in the inflation derivatives market, and you
Speaker 18: can see it in the bond market. Additionally, regular growth
Speaker 18: is pretty good.
Speaker 1: We're running about three percent.
Speaker 18: So for that three percent growth and we've got you know,
Speaker 18: at least two and a half and maybe rising inflation
Speaker 18: from there, and that's nominal GDP of five and a
Speaker 18: half plus. It's hard to see why treasury bonds that
Speaker 18: you know, four percent are a little bit better than
Speaker 18: that our mispriced, or why rates should come down from that.
Speaker 17: Another that I know that you have had on David,
Speaker 17: it's fair to call you a gold bug. We've seen
Speaker 17: gold hit record highs this year, and I'm wondering how
Speaker 17: much further you think it'll go and why.
Speaker 1: Well I think that I think that gold.
Speaker 18: Look, we've been long gold for about you know, fifteen years,
Speaker 18: so there's nothing new about me saying something interesting about gold.
Speaker 1: But I think just to the point I was just
Speaker 1: making right.
Speaker 18: If we have the FED, it seems dependent on trying
Speaker 18: to reduce interest rates, even as inflation you know, maybe
Speaker 18: bottoming and about to reaccelerate, that should be pretty good
Speaker 18: for golds, and I think you're beginning to see that
Speaker 18: in the price of gold, and gold has had a
Speaker 18: really strong year.
Speaker 1: It's been a big help to us.
Speaker 17: Last question for you before I let you go. There's
Speaker 17: been a lot of conversation about how you've been thinking
Speaker 17: about value investing, whether the industry has died or not,
Speaker 17: But a lot of people are looking to get back
Speaker 17: into that value trade, particularly that Russell two thousand value trade.
Speaker 5: What advice would you give then, Well.
Speaker 18: I think with so many professional value investors no longer
Speaker 18: practicing their trade or having assets to manage, there's just
Speaker 18: a lot less competition, and so you can find some
Speaker 18: pretty exciting values in companies that are less talked about
Speaker 18: or less exciting than the ones that everyone wants to
Speaker 18: you know, you know, comment on every day that traded,
Speaker 18: you know, fancy mostly multiples. You have a real bifurcated market,
Speaker 18: and we can find companies that are paying large dividends
Speaker 18: and buying.
Speaker 1: Back lots of stock.
Speaker 18: We're going to make a good return just from the
Speaker 18: company giving us the money, and we don't really care
Speaker 18: whether what other investors do.
Speaker 5: David, we got to leave it hit there.
Speaker 17: Of course, that is David Einhorn Greenlight Capital talking about
Speaker 17: his favorite long pick.
Speaker 5: Right now. We thank you very much for your time.
Speaker 5: Back to you.
Speaker 4: We mentioned Ali Bassek, Thank you very much. In CEO,
Speaker 4: Ryan Roslansky says that even if you don't change your job,
Speaker 4: your job will change due to AI. He sat down
Speaker 4: with Bloomberg's has Lean that I'm in for an episode
Speaker 4: of Insight, where he talks about the platform's growth, the
Speaker 4: impact of AI on career search and development, encountering misinformation
Speaker 4: ahead of the US election.
Speaker 6: Listen to this.
Speaker 19: A couple of trends that we see right now, are
Speaker 19: you know, across the board, just just the need for
Speaker 19: you know, people to really upskill in what they're doing.
Speaker 19: AI skills but also human skills I think are really
Speaker 19: on high demand across the board. For the first time
Speaker 19: on LinkedIn, we're seeing a lot of growth outside of
Speaker 19: kind of the core knowledge worker, and that's especially happening
Speaker 19: in India and Indonesia, So small business owners, freelancers are
Speaker 19: really starting to gravitate towards the platform. So, you know,
Speaker 19: the more people that join seven per second, just the
Speaker 19: more insights we have across the globe. It's really interesting
Speaker 19: to see those patterns. But you know, for me, really
Speaker 19: the idea that again, if you're not changing your job,
Speaker 19: your job is even changing on you. It's just a
Speaker 19: really important thing we're able to grasp right now, especially
Speaker 19: as AI takes more shape in the labor market.
Speaker 5: Right now, there's a lot.
Speaker 17: Of focus on the US election and perhaps AI generated misinformation.
Speaker 19: How are you countering that on your platform. So a
Speaker 19: large extent, you know, LinkedIn exists as a platform to
Speaker 19: create economic opportunity. What you share on LinkedIn is attached
Speaker 19: to your real identity, you know, your resume online, so
Speaker 19: we don't face a lot of the issues that a
Speaker 19: lot of other platforms may face where there's not real identity.
Speaker 19: But to the extent that you know, we still have
Speaker 19: a lot of the same you know, trust in place
Speaker 19: across the board. You know, through AI and human review,
Speaker 19: things get reported. But there's not a lot of political
Speaker 19: content on LinkedIn. In fact, in twenty eighteen, we actually
Speaker 19: you know, disallowed political advertising altogether on LinkedIn, so it's
Speaker 19: not really a place where you know, politics are happening.
Speaker 3: LinkedIn CEO Ran Raslanski along with Heslinda Imin. And meanwhile,
Speaker 3: Ireland's Data Protection Commission has actually just fined LinkedIn three
Speaker 3: hundred and ten million euros that's three.
Speaker 10: Hundred and thirty five million US dollars for.
Speaker 3: Illegally processing the personal data of users within the EU
Speaker 3: to deliver targeted advertising. In a statement, Deputy Commissioner Graham
Speaker 3: Doyle called it quote a clear and serious violation of
Speaker 3: data subjects fundamental right to data protection LinkedIn said the
Speaker 3: case relates to claims from twenty eighteen and believes it
Speaker 3: is now in compliance with data regulation.
Speaker 4: This is what Tesla shares look like right now, are
Speaker 4: almost nineteen percent of session highs, but as it stands
Speaker 4: on track for the biggest single day jump since March
Speaker 4: of twenty twenty one. They beat expectations in the quarter
Speaker 4: and a lot of this is about the business of
Speaker 4: selling evs to consumers. Really big goals for next year
Speaker 4: and they're getting more.
Speaker 6: Profitable at doing it.
Speaker 4: Let's talk to Jessin a cool Well, head of insights
Speaker 4: at Edmunds, and I want to start with this idea
Speaker 4: that they see growth in the automotive business of twenty
Speaker 4: to thirty percent next year.
Speaker 6: Really interesting.
Speaker 4: What did you make of that and does your research
Speaker 4: and math support it well?
Speaker 9: That indicates if they have a high volume model coming.
Speaker 20: I mean in this market right now, I don't think
Speaker 20: any other car company is projecting.
Speaker 9: That type of growth.
Speaker 20: So they have high expectations for this lower cost electric vehicle,
Speaker 20: whether it's the three or the Y that's low cost.
Speaker 20: But yeah, that does not track with where the auto
Speaker 20: industry is heading. So of course, with Elon Muskus, promises.
Speaker 20: You never know exactly what that timeline is and if
Speaker 20: they'll actually hit those markers. But I mean, I think
Speaker 20: those sales growth projections have to indicate an incremental volume
Speaker 20: model for Tesla.
Speaker 3: So if the math doesn't seem to quite add up
Speaker 3: for what they need to achieve this quarter that we're in,
Speaker 3: point us forward to next year as well, when we
Speaker 3: see a play of catch up and ultimately what price
Speaker 3: point they have to come in at for that up
Speaker 3: to thirty percent growth. Where is the demand from real perspective.
Speaker 20: Yeah, So the interesting thing about his comments is the
Speaker 20: way he describes as a car market, and he's done
Speaker 20: this on pass calls.
Speaker 9: It feels like he assumes.
Speaker 20: That everybody out there is a very pragmatic fire He
Speaker 20: says things like if we hit the right price and
Speaker 20: the demand is infinite, something like that. He's talked about
Speaker 20: people are looking at costs per mile, and that's not
Speaker 20: the way people, especially in the United States, buy cars.
Speaker 20: I mean, if that was the case, we would not
Speaker 20: have luxury brands, we would not have large suv sports cars. So,
Speaker 20: you know, in terms of that actual volume, if there
Speaker 20: was a you know, twenty five thousand dollars ev Would
Speaker 20: everyone still want that, especially if it looked very much
Speaker 20: like what exists today.
Speaker 9: I think that is probably the biggest question I have for.
Speaker 20: Them really next year, because people like to see new things.
Speaker 20: They don't like to see the same old thing that
Speaker 20: they've seen, but now just cheaper. If you want that,
Speaker 20: you can probably go get.
Speaker 1: A used one.
Speaker 9: I mean it's not new, but you know it's it's
Speaker 9: in that price range.
Speaker 4: If you're just joining us on Bluebot Technology test. The
Speaker 4: shares are up almost nineteen percent. The S and P
Speaker 4: five hundred is down a little bit at ten five percent.
Speaker 4: Here's a fun stat for everyone. The previous biggest gain
Speaker 4: Tesla's ever posted on a day where the S and
Speaker 4: P five hundred was down was seven and a half percent.
Speaker 4: That's the state of play now and we're up nineteen percent.
Speaker 4: And Jessica, A big part of it is this autonomous future.
Speaker 4: How much have you looked into FSD and how much
Speaker 4: do you think it resonates with the consumer at large
Speaker 4: right now?
Speaker 20: I don't think it's for everybody at this point in time.
Speaker 20: I think people like the idea of a vehicle driving itself.
Speaker 9: I mean, who who want who doesn't want that?
Speaker 20: Time bag, But we're talking about the next few years
Speaker 20: and are people really ready for it. I think you're
Speaker 20: going to have a group of people that are they
Speaker 20: like it, But I think you're gonna have a lot
Speaker 20: of opposition as well, people that feel like they're on
Speaker 20: the roads being subjected to these vehicles that they didn't
Speaker 20: ask for. So I think getting the public ready is
Speaker 20: a really big hurdle that we're not really talking about.
Speaker 9: We're talking about the technology and the regulatory and all
Speaker 9: of that.
Speaker 20: I mean, that has to be solved, but also these
Speaker 20: are going to be in our streets, and I think
Speaker 20: there's gonna be a lot of concern out there if
Speaker 20: we don't start talking about how this all works.
Speaker 3: Okay, And regulation is actually something that Musk himself was
Speaker 3: talking about potentially being able to push forward if he
Speaker 3: does indeed get a role in the next administration. A
Speaker 3: lot of ifs within that. Jessica, just go back to
Speaker 3: the facts of this quarter we're currently in. Do you
Speaker 3: believe that the targets were outlined on the call will
Speaker 3: be made for this current court, let alone the thirty
Speaker 3: percent being looked out for next year.
Speaker 9: I mean, it seems likely.
Speaker 20: It seems like this quarter will probably see some sort
Speaker 20: of increase in sales overall. We know that, you know,
Speaker 20: we've had a FED cut or interest rates are a
Speaker 20: little bit a little bit easier. And then also Tesla
Speaker 20: has been pretty aggressive with their incentives, so the fact
Speaker 20: that they are offering.
Speaker 9: Good deals out there is helpful.
Speaker 20: And then also when you just think about new vehicles
Speaker 20: in general, I mean a new Evil release.
Speaker 9: Is the best deal.
Speaker 20: So I think that that is working in their favor,
Speaker 20: but it's not as nessarily going to make you know,
Speaker 20: these massive sales jumps out they're anticipating next year.
Speaker 4: Jessica, Tesla wants to change the relationship of an individual
Speaker 4: with cars.
Speaker 6: You know, I have a Tesla model. Why I believe
Speaker 6: Caro also has a Tesla. We both use FSD.
Speaker 4: But in the future that Tesla sees we don't necessarily
Speaker 4: own our own cars, and if we do, we submit
Speaker 4: them to a fleet when we're not using them in
Speaker 4: the same way we might put homes on Airbnb. You
Speaker 4: cover this industry, how are you going to cover it
Speaker 4: going forward?
Speaker 20: I mean, yeah, that's a big question, Like in terms
Speaker 20: of personal ownership, do we own these vehicles? Because I
Speaker 20: do think that there are a group of people that
Speaker 20: they want their own vehicles.
Speaker 9: They're not going to fleet it out.
Speaker 20: They don't want their vehicle coming back in whatever state
Speaker 20: that it's going to come out in ten hours when
Speaker 20: they need to use it again.
Speaker 9: But there are.
Speaker 20: People that will use this, and I think that this
Speaker 20: is going to be a you know, a real income
Speaker 20: differentiator of people that have their own vehicles and people
Speaker 20: that can get around and they're not having to worry
Speaker 20: about a monthly payment or insurance which has gone up
Speaker 20: so much recently just in the past year alone, and
Speaker 20: everything that is associated with car ownership. So it's definitely
Speaker 20: going to change, but I feel like it's going to
Speaker 20: be a bit slower than I feel like what we're promised.
Speaker 20: I mean, right now, we're promised all these hopes and
Speaker 20: dreams that are happening in the next you know, five minutes.
Speaker 20: But I think the rollout is definitely more conservative than
Speaker 20: that in reality.
Speaker 3: Just a cold well kind of insights of Edmunds. Great
Speaker 3: having you, thank you.
Speaker 10: That does it. For this addition, I'm blie big technology.
Speaker 4: Ed Yeah, big focus on Testa's earnings and a lot
Speaker 4: to recap on the podcast. You know where to find
Speaker 4: it online and on the Bloomberg platform. Shout out the
Speaker 4: team in New York and here in SSEF. This is
Speaker 4: Bloomberg Technology