Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happened Sloomberg
Speaker 1: Business Week with Carol Messier and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. Well, this past week we
Speaker 1: got too hot inflation prints. We're talking about CPI and
Speaker 1: pp I as well as the latest minutes from the
Speaker 1: f O m C, and all signs point to the
Speaker 1: Fed staying hawkish for the foreseeable future. Better reserve officials
Speaker 1: committed to raising interest rates to quote restrictive level in
Speaker 1: the near term and holding them there to curb inflation.
Speaker 1: We're going to talk about the policy and the risks
Speaker 1: involved throughout the next hour because it just hits and
Speaker 1: impacts everyone in every business. Meantime, it looks like Elon
Speaker 1: Musk's four billion dollar deal for Twitter. It is on
Speaker 1: track and the social media giant could be in for
Speaker 1: a rough fraud once it's official. That's the subject of
Speaker 1: the cover story in our special double issue. You a
Speaker 1: Bloomberg Business Week all that to come. We begin with
Speaker 1: the Remarks section of Bloomberg business Week. Bloomberg Markets magazine
Speaker 1: editor Christine Harper writes about Paul Vulker's inflation fight during
Speaker 1: the nineteen eighties and how it hints at what lies
Speaker 1: ahead for Jerome Powell. Bloomberg business Week editor Joel Webber
Speaker 1: and Christine are here to break it down. Christine also
Speaker 1: co wrote Keeping at It, The Quest for Sound Money
Speaker 1: and Good Government with the late former Fed Chair. Well.
Speaker 1: I can tell you when he was writing his memoir
Speaker 1: back in eighteen nobody was paying attention to inflation. In fact,
Speaker 1: if they were at all, it was in an effort
Speaker 1: to get more inflation right, So he was quite concerned
Speaker 1: that people were underestimating the risks, and so part of
Speaker 1: the mission of the book was to remind people of
Speaker 1: how important the central bank's role is in in keeping
Speaker 1: inflation down and maintaining that credibility that he fought so
Speaker 1: hard to maintain. I mean, he had been involved in
Speaker 1: getting the dollar off the gold standard, and after that
Speaker 1: the dollar was not it was not connected to any
Speaker 1: actual value, and so when inflation took root, he had
Speaker 1: to drive interest rates up to unprecedented levels. Caused all
Speaker 1: kinds of pain for people financial institutions, and the result
Speaker 1: was there was more credibility in the dollar. Some people
Speaker 1: talked about it when on the Vulcar standard from the
Speaker 1: gold standard, but you know, that's something you can't squander
Speaker 1: because he fought so hard. So it's kind of like
Speaker 1: having gone toward, you know, to win a battle and
Speaker 1: then discover that your future, you know, commanders are allowing
Speaker 1: you to give up the territory again. So he he
Speaker 1: would have been very upset that inflation was allowed to
Speaker 1: get to where it was. You got to know Mr
Speaker 1: Vocal very well. I'm curious what you think, if anything,
Speaker 1: Powell might have learned from him, and if not him
Speaker 1: directly than the book. Oh yeah, well, I mean, you know,
Speaker 1: as you and I have discussed, I mean, one of
Speaker 1: the things that's so interesting is how often FED Chairman
Speaker 1: Powell invokes not only Volker himself, who he says he's
Speaker 1: a great admirer of, but but the book. I mean,
Speaker 1: he's talks of out everybody should read it. And he
Speaker 1: has used this phrase keep at it, which people see
Speaker 1: as an echo of the title keeping at it. And
Speaker 1: you know, I mean one thing that Vulgar made clear
Speaker 1: was when I was speaking to him, was how much
Speaker 1: he supported Powell as FED chairman, because he liked the
Speaker 1: fact that Powell had this similar to Vulgar had this
Speaker 1: experience of having worked in the finance in a private
Speaker 1: financial institution and also working at the Treasury Department. So
Speaker 1: understanding markets, understanding the government is really important to being
Speaker 1: practical in the job and not just being an academic theorist. Christine,
Speaker 1: how tough was it for Vulcar to hike rates? Like
Speaker 1: what were some of the conversations that you all had
Speaker 1: about that? Which was going against what everybody wanted, but
Speaker 1: it was necessary in order to write the situation well
Speaker 1: to that point. I mean, he he said that when
Speaker 1: he came into the role, it was clear. I mean,
Speaker 1: the reason he he was brought in really was to
Speaker 1: do something about inflation that his predecessors hadn't really succeeded
Speaker 1: in bringing down. Even so at that point, the economist
Speaker 1: at the FED were forecasting recession, so he had to
Speaker 1: sort of ignore that and just say we're gonna raise rates.
Speaker 1: There was a split on the on the Federal Reserve
Speaker 1: Board on the second time they voted, and so the
Speaker 1: markets didn't believe there would be any stronger action. They
Speaker 1: thought the FED was going to lose their spine, and
Speaker 1: so he turned to this monitorist approach of just targeting
Speaker 1: the money supply, and that essentially told people, we're tying
Speaker 1: our hands and we're gonna let interest rates go where
Speaker 1: they have to go. And they went up to like
Speaker 1: what pent Okay, So I gotta ask a question because
Speaker 1: this this book almost had a different title. Oh yes,
Speaker 1: and we got to talk about that, because it's just
Speaker 1: this little easter egg. Can you talk to us about
Speaker 1: thet sure? Of course. Um. So he opened the book
Speaker 1: with this very funny joke about a wise parrot who's
Speaker 1: known as the Chairman. He went so far as saying
Speaker 1: he wanted to title the book the wise old Parrot
Speaker 1: Speaks Now. The marketing Department and I all agree that
Speaker 1: was not a great title for this book. So we
Speaker 1: spent weeks trying to offer him other ideas, all of
Speaker 1: which he rejected. So we were really going back and forth.
Speaker 1: It was very It was one of the most difficult
Speaker 1: things of working with him because he was so stubborn
Speaker 1: on this. And so finally one day I was going
Speaker 1: through this long list of titles I'd come up with.
Speaker 1: You know, I found a phrase from the FED sustained commitment,
Speaker 1: and he looked and he stopped and he said, keeping
Speaker 1: at it. And it was great because that really was him.
Speaker 1: You know, he believed in speaking plainly and uh, you know,
Speaker 1: so he took the kind of jargony phrase and translated it. Hey, Christine,
Speaker 1: I just want to talk a little bit, a little
Speaker 1: bit about his legacy. Given what we know about the
Speaker 1: nineteen eighties and what markets did and what inflation did
Speaker 1: after he raised rates so significantly, what's in stored this
Speaker 1: time around. I think everybody is seeing that interest rates
Speaker 1: are going to go up. Policymakers are making it very
Speaker 1: clear they're not going to back down on this um
Speaker 1: if they show any signs of, you know, weakness. I
Speaker 1: think people understand what will happen is kind of what
Speaker 1: happened to Paul Wolker's predecessor. So I think that is
Speaker 1: an example of where Powell sees he has to be steadfast.
Speaker 1: But the chapters that follow the inflation fight are a
Speaker 1: series of financial crises that m. Paul Wolkers FED had
Speaker 1: to deal with in the wake of the interest rate increases,
Speaker 1: and so you know, when you hear these experts talking
Speaker 1: about something might break, I think, you know, what we
Speaker 1: saw back in the eighties was a lot of things broke,
Speaker 1: A lot of risks were built up, everything from the
Speaker 1: Hunt Brothers speculation on silver to Continental Illinois Savings and loans,
Speaker 1: all these different banks that when when belly up. The
Speaker 1: ultimate one was the Latin American debt crisis, and that
Speaker 1: was so bad that in a D two, I think
Speaker 1: that was really what caused Volker to say, Okay, we've
Speaker 1: got it, back off and and stop the inflation fight.
Speaker 1: So ultimately, it is often that something breaks, that there's
Speaker 1: a financial crisis. That was Bloomberg Markets editor Christine Harbor,
Speaker 1: along with Business Week editor Joel Weber. Coming up, we'll
Speaker 1: look at a sector highly influenced by monetary policy, real estate.
Speaker 1: How the world's largest donor of commercial real estate is
Speaker 1: adapting to higher rates. The cohead of Blackstone real Estate
Speaker 1: is up next. You're listening to Bloomberg Business Week. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week with Carol Masser
Speaker 1: and Bloomberg Quick Takes Tim Stenovik from Bloomberg Radio. This
Speaker 1: past week, Bloomberg Live hosted invest It's an annual gathering
Speaker 1: of the leading names covering areas from crypto to credit
Speaker 1: markets and everything in between, anything that's investable. And it
Speaker 1: was in person for the first time since the pandemic.
Speaker 1: It's a time of market volatility and uncertain Yeah, I
Speaker 1: mean you can say that again, right, This is global
Speaker 1: central banks continue to raise interest rates in an effort
Speaker 1: to bring down inflation. One area of the market we're
Speaker 1: watching closely as these conditions evolve as real estate. And Carol,
Speaker 1: you caught up with an executive from the largest owner
Speaker 1: of commercial real estate globally. That's right, Tim, we're talking
Speaker 1: about Blackstone. Kathleen McCarthy is the global co head of
Speaker 1: Blackstone real Estate, which has a five hundred seventy seven
Speaker 1: billion dollar portfolio and three hundred twenty billion dollars in
Speaker 1: investor capital under management. I began though, with asking her
Speaker 1: how things are going against all these macro concerns. It
Speaker 1: is an exciting and interesting time because, as you can see,
Speaker 1: there's different signals coming through, and I think we are
Speaker 1: better positioned than anyone to know what's really happening. We
Speaker 1: have six billion dollars of real estate. We're in thirty
Speaker 1: seven different countries portfolio, though that's highly concentrated into four
Speaker 1: key themes. Eight percent of our capital is in warehouses,
Speaker 1: rental housing, lab office and hospitality investments. And what I'd
Speaker 1: say we're seeing is actually very strong fundamentals in those sectors.
Speaker 1: So when you talk about property performance, particularly for rental housing,
Speaker 1: that continues to be strong, partly because of the pressures
Speaker 1: on the for sale market with rising interest rates, logistics demands.
Speaker 1: So warehouses in the US today we are at record
Speaker 1: low vacancies, less than three percent vacancies in the markets
Speaker 1: we operate in, which are the densest, most urban kind
Speaker 1: of areas. And we're also seeing very strong rent growth.
Speaker 1: And so I think when we're thinking about the real
Speaker 1: estate market, we continue to see a lot of strength.
Speaker 1: Notwithstanding there are pressures around us in terms of interest
Speaker 1: rates and persistent inflation, but we feel really well positioned
Speaker 1: for that. And i'd also highlight that I think this
Speaker 1: moment in real estate, this cycle is quite different than
Speaker 1: others we've been different. That's a good different, I mean
Speaker 1: good different. When you think about what kind of lad
Speaker 1: to real estate downturns in the past, they're really two
Speaker 1: primary factors It was too much capital, generally in the
Speaker 1: form of debt, creating greater leverage, fueling new speculative development,
Speaker 1: and it was too many cranes, too much development. And really,
Speaker 1: when you think about what happened in the years following
Speaker 1: the financial crisis and leading up into COVID, we really
Speaker 1: never saw those excesses come into our market. And so
Speaker 1: as we head into um, you know, period where there
Speaker 1: may be more economic headwinds, real estate actually is really
Speaker 1: well positioned from a fundamental standpoint. Economic headwinds are recession.
Speaker 1: It's very hard to call, and I'm not so hard
Speaker 1: I think, you know, I think part of it is
Speaker 1: what we're seeing and and some of the things that
Speaker 1: I think the central governm us are trying to combat,
Speaker 1: which is just this continued strength that they see low unemployment,
Speaker 1: strong rent growth, and that is part of what the
Speaker 1: big challenges ahead. So I don't know if we're gonna
Speaker 1: have a recession. I'm not an economist, but I would
Speaker 1: say we've been planning for a long time, and and
Speaker 1: this comes through in the portfolio we've constructed for an
Speaker 1: environment that might have been like this in terms of
Speaker 1: higher interest rates, higher inflation, and so we really focused
Speaker 1: on trying it to be in those high cash flow
Speaker 1: growth assets. And again i'd say today we're still seeing
Speaker 1: those stronger than inflationary cash flows in our portfolio, but
Speaker 1: certainly we are always trying to position for environments that change.
Speaker 1: We've been doing this for thirty years. We've seen a
Speaker 1: lot of different environments. We thought we had seen it
Speaker 1: all and then COVID hit and hotel revenues went to zero.
Speaker 1: I'm telling you, no one underwrote that where we had
Speaker 1: a pandemic. But the great news is our portfolios are
Speaker 1: built really to try to withstand any kind of environment,
Speaker 1: and the higher than anticipated rent growth we've experienced again
Speaker 1: may kind of come down modestly, but we're we feel
Speaker 1: really well positioned for that and distressed for you guys
Speaker 1: can be opportunity big time. We saw that after the
Speaker 1: financial crisis in terms of housing. I would say, uh,
Speaker 1: environments with distress, with volatility, with a pullback in capital
Speaker 1: markets activity, and you know we're seeing in particular much
Speaker 1: more constrained capital markets today. That tends to be a
Speaker 1: great environment for us and really for any investor who
Speaker 1: is well capitalized and who has real strengths to lean on.
Speaker 1: So we have a data advantage. Our portfolio gives us
Speaker 1: more information on what's really happening. And then I'd say
Speaker 1: the combination of deep experience from a large team and
Speaker 1: capital makes us well positioned to really support situations where
Speaker 1: others may be needing to sell assets, others might need liquidity,
Speaker 1: and we were able to then get in and buy
Speaker 1: high quality real estate. I want to ask you this
Speaker 1: week on Bloomberg Grende Economic Form, sam Zel commenting retail
Speaker 1: is still very much a falling knife and that the
Speaker 1: office market will see a lot of downward repricing. And
Speaker 1: then you had Verry stern Lit at the robin Hood
Speaker 1: Investors Conference, Um of star Wood. Of course Capital in
Speaker 1: Usters says he sees incredible opportunities to find distressed investments
Speaker 1: in the real estate market. First, retail falling knife? Do
Speaker 1: you agree? I think retail has been under pressure for
Speaker 1: a long time, and that's a big part of why
Speaker 1: we have not bought a shopping mall in the US
Speaker 1: in over a decade. There are pockets that are showing
Speaker 1: greater strengths, so grossery anchor shopping centers in dense urban areas,
Speaker 1: but I'd say overall it's one of the asset classes
Speaker 1: can more under pressure. And you know, in our business
Speaker 1: we played the counterpoint of that, which was warehouse investing,
Speaker 1: so retail brick and mortar, the movement of goods online
Speaker 1: is really what started that challenge was against a backdrop
Speaker 1: of over supply and a lot of places and so being.
Speaker 1: But there's always kind of other opportunities and for us,
Speaker 1: it was, okay, how do we invest in the warehouses
Speaker 1: that are benefiting from the retail activity moving to a
Speaker 1: different format. But I'd say yea continuing continuing to see
Speaker 1: pressure in an area where we are more cautious. But
Speaker 1: like India, retails a different story because you guys are global,
Speaker 1: remember that, and I'd say there's overall been a consistency
Speaker 1: in the themes where we invest in globally. I think
Speaker 1: a market like India is a differentiated story though. So
Speaker 1: in India, we're now one of the largest owners of
Speaker 1: shopping malls in the country, but there are i'd say overall,
Speaker 1: relative to a population that has one point four billion people,
Speaker 1: there are very few of them, and so um it's
Speaker 1: a very different story. It's a country where the growing
Speaker 1: middle class, greater consumption, people looking to more toward organized
Speaker 1: retail as a place they want to go not only
Speaker 1: to shop, but eat out and have experiences and and
Speaker 1: and again not so dissimilar to what are the formats
Speaker 1: of retail that are going to thrive anywhere in the world.
Speaker 1: It's something offering more more than just a place to
Speaker 1: go buy something. UM. It's got to offer that kind
Speaker 1: of you know, experience, community, UM and and you know,
Speaker 1: a whole variety of things that will attract people to
Speaker 1: those stores. So our our investment in India has been
Speaker 1: very successful. UM. We've made it I think at a
Speaker 1: great time also where there was a lot of change
Speaker 1: happening in the retail sector. More international retailers were able
Speaker 1: to access that more market UM. And that really led
Speaker 1: to a lot of strong leasing velocity for the assets
Speaker 1: we were in. So a little bit different UM. And
Speaker 1: that's one of the great things that's so fun about
Speaker 1: our business is we have teams all over the globe
Speaker 1: and while certainly there as a classes like retail where
Speaker 1: we we have a more cautious posture, we have the
Speaker 1: opportunity to dig in and understand what's happening, regardless of
Speaker 1: whether we know at the time it's going to be
Speaker 1: kind of an area to really dig into and do more.
Speaker 1: That was an example where the team kept at it,
Speaker 1: kept thinking about standing the problem and the challenge and
Speaker 1: the opportunity on its head and said, you know, this
Speaker 1: is a very different market and I feel really proud
Speaker 1: that we have an investment committee that keeps an open
Speaker 1: mind to that and says we know where we kind
Speaker 1: of want to go, but where the other opportunities present
Speaker 1: themselves and we can invest in scale, we're going to
Speaker 1: activate that. That was Kathleen McCarthy, she's the global co
Speaker 1: head of Blackstone real Estate. Still ahead on Bloomberg Business
Speaker 1: Week while the Russia induced energy crisis and the inflationary
Speaker 1: fallout is putting the White House in a high stakes
Speaker 1: catch twenty two. For this president, it's really a matter
Speaker 1: of balancing these geopolitical concerns a very real domestic economic concerns,
Speaker 1: the growing wave of so called resource nationalism. Explained. This
Speaker 1: is Bloomberg broadcasting from the financial capital of the World
Speaker 1: Bloomberg eleven Frio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one oh six one does San
Speaker 1: Francisco Bloomberg nine six to the country, Sirius XM Chado
Speaker 1: one nine team, and around the globe, the Bloomberg Business
Speaker 1: app and Bloomberg Radio dot Com. This is Bloomberg Business Week.
Speaker 1: High energy prices are stoking inflationary pressures around the world,
Speaker 1: you know that. And here in the US they are
Speaker 1: putting the Body administration in a really difficult position. This
Speaker 1: story in the Economic section of the new double issue
Speaker 1: of Bloomberg Business Week that explains why the president is
Speaker 1: now walking a tightrope as the world hungers for US
Speaker 1: oil and gas while American consumers fret over sticker shock
Speaker 1: at the pump. For more, we turned to Bloomberg News
Speaker 1: Energy and environmental policy reporter Jennifer de Loewe. Well, really,
Speaker 1: we're seeing this kind of resource nationalism across the world
Speaker 1: as countries look to meet the needs of their own
Speaker 1: consumers UH and amid UH inflationary pressures and then also
Speaker 1: take care of other geopolitical concerns. In the case of
Speaker 1: the US and the Biden administration, really, UH, the concern
Speaker 1: is around energy. UH. The President is feeling tremendous pressure
Speaker 1: to help European allies UH deal with energy needs, especially
Speaker 1: ahead of this winter and next year. Because of the
Speaker 1: Ukraine crisis and energy concerns that have been exacerbated by
Speaker 1: that situation. But at the same time, he's also trying
Speaker 1: to deal with domestic needs and concerns by American consumers
Speaker 1: that the price of food and energy is going up.
Speaker 1: Of course, they're dealing with, you know, gasoline prices that
Speaker 1: are increasing, and in the Northeast US there are concerns
Speaker 1: about home heating oil this winter. So you know, for
Speaker 1: this president, it's really a matter of balancing these geopolitical
Speaker 1: concerns with very real domestic economic concerns. It's a you
Speaker 1: a story, but it's also a global story. I think
Speaker 1: about India bands and exports of wheat, you know, citing
Speaker 1: a risk to its food security, partly due to the
Speaker 1: war in Ukraine because it was earlier this year. I mean,
Speaker 1: this is commodity is or fossil fuel. People who remind
Speaker 1: us it's a fixed amount, right, at some point we're
Speaker 1: all going to be competing for the same stuff unless
Speaker 1: we shift to alternative modes. Right, That's absolutely true. You know,
Speaker 1: other examples palm oil Indonesia, you know, beans in Mexico.
Speaker 1: It's far bigger than just energy, energy, just happens to
Speaker 1: be in America and the United States, that happens to
Speaker 1: be just such a big political and economic pressure point,
Speaker 1: a big contributor to inflation. And of course, you know,
Speaker 1: America is an energy superpower. We are a large supplier
Speaker 1: of oil and gas to the world, and right now,
Speaker 1: that puts the President in a really unique spot. Interestingly,
Speaker 1: some of the bid to control the exports and the
Speaker 1: outflows of these products might not necessarily have the economic
Speaker 1: impact that American consumers want. But that's part of the
Speaker 1: calculus that the White House is weighing right now. Can
Speaker 1: you talk a little at bit about that, like what
Speaker 1: difference it would actually make if they were to curb
Speaker 1: some of these exports, right So the consideration is curbing
Speaker 1: really petroleum product exports gasoline or diesel, not actually crude oil,
Speaker 1: And that's that's a live discussion right now within the administration.
Speaker 1: It would have a mixed impact and it would not
Speaker 1: necessarily reduce prices across across the country. In fact, some
Speaker 1: areas of the country would see gasoline and diesel price increases. So, uh,
Speaker 1: the Gulf Coast and the Midwest, which is flushed with
Speaker 1: with priani rees, would end up being flushed with product. UH,
Speaker 1: So gasoline prices would likely decrease if you were to
Speaker 1: clamp down on exports of that product. But some areas
Speaker 1: of the country that are really restricted and and don't
Speaker 1: have enough domestic supply coming in, who are reliant on
Speaker 1: imports to meet their needs, which includes New England as
Speaker 1: well as the West Coast, those areas would likely see
Speaker 1: price increases. That's something that we're hearing universally from analysts
Speaker 1: and UH and energy experts. So, you know, this might
Speaker 1: look good, it might be a positive UH moved to
Speaker 1: some constituents, but the economic realities just don't seem to
Speaker 1: support it. All right, So what's likely because this is tricky, right, UH.
Speaker 1: Certainly the United States when it comes to energy, has
Speaker 1: to think about its own citizens, but it's also got
Speaker 1: some allies out there that are very important. What's the
Speaker 1: strategy that the US is likely to pursue. Well, we
Speaker 1: know that the administration is going to continue to turn
Speaker 1: to the Strategic Petroleum Reserve, UH, where they have already
Speaker 1: tapped you know, US stockpiles of crude in a bid
Speaker 1: to keep the market imbalance and to keep prices down.
Speaker 1: The Biden administration started unleash an unprecedented release of those
Speaker 1: crude reserves in spring of this year, and still has
Speaker 1: some latitude to draw down barrels and release those onto
Speaker 1: the market. So that's something we're gonna keep seeing. UH.
Speaker 1: And they're gonna keep exploring some of these other creative options,
Speaker 1: whether it's limiting exports or perhaps we're crying requiring refineries
Speaker 1: to hold more stockpiles in the US, and that's really
Speaker 1: a bid to UH to deal with not just the
Speaker 1: price concern, but also very real concern about stockpiles of
Speaker 1: domestic stockpiles of fuel being at incredibly low levels heading
Speaker 1: into winter UM and and particularly in New England where
Speaker 1: home heating oil and diesel supplies are at historic lows.
Speaker 1: In the meantime, we see gas prices right now at
Speaker 1: three dollars and cents on average. That's coming from the
Speaker 1: Automobile Association of America triple A UH, still though higher
Speaker 1: by more than six percent from the lows and earlier
Speaker 1: this month than or I'm wondering about these continuing to
Speaker 1: climb higher just before the midterm season. Yeah, the huge
Speaker 1: political concern and headache for the administration. UH. You know,
Speaker 1: prices hit their high in June. But but the fact
Speaker 1: that they're going up, and they're going up significantly on
Speaker 1: the West Coast, it's a real political concern for this
Speaker 1: White House big Thanks to Bloomberg News Energy and environmental
Speaker 1: policy reporter Jennifer de Lowie, be sure to check out
Speaker 1: her story in the new double issue of Bloomberg Business Week.
Speaker 1: Find it online and also on the Bloomberg terminal. You're
Speaker 1: listening to Bloomberg Business Week coming up next. Despite a
Speaker 1: brutal two for digital assets, financial heavyweight are now offering
Speaker 1: crypto services to clients and delving deeper into this space.
Speaker 1: Executives from t ro Price, Citigroup, and Susquehanna joined him
Speaker 1: for a special Bloomberg invest panel. They talk bitcoin, blockchain,
Speaker 1: and the broader business of crypto. This is Bloomberg. You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovich from Bloomberg Radio. This past week,
Speaker 1: Bank of New York Melon launched day digital asset platform
Speaker 1: in the US. It's gonna allow some clients to hold
Speaker 1: and transfer bitcoin and ether. It's just the latest example
Speaker 1: of traditional financial firms waiting into the still nascent crypto industry.
Speaker 1: I mean, we're talking about the oldest bank in the
Speaker 1: US now offering crypto custodial services, which is wild and
Speaker 1: says a lot well. As we noted earlier, the Bloomberg
Speaker 1: Live team hosting our latest Bloomberg invest event this past week,
Speaker 1: and as part of the festivities, Tim hosted a panel
Speaker 1: discussion focusing on the wider adoption of crypto among asset
Speaker 1: managers and institutions. Yeah, we three great voices on the panel,
Speaker 1: Blue Machalari, she's head of Digital Strategy at t ro Price,
Speaker 1: Punet Singhvi is City's head of Digital Assets Institutional Clients Group,
Speaker 1: and Bart Smith is the global head of Digital assets
Speaker 1: strategy for Susquehanna International Group. Timm, you began by asking
Speaker 1: Blue whether the latest crypto crash should be looked at
Speaker 1: differently from downturns of the past. With investors in the
Speaker 1: space out more than two trillion dollars collectively this year,
Speaker 1: you know, I've been in traditional finance and I left
Speaker 1: five years ago to go to a crypto native startup,
Speaker 1: and I started right at the beginning of the last
Speaker 1: crypto winter. So our first track record day was January
Speaker 1: on and within months, the whole space had just kind
Speaker 1: of a lot of it had evaporated. There were desks
Speaker 1: that were closed to banks. Um institutions pulled back dramatically.
Speaker 1: What we're seeing this time is that even though we're
Speaker 1: in another crypto winter and we've obviously had this big
Speaker 1: drop in market cap, the institutions are still committed in
Speaker 1: moving forward with plans. And we saw the announcement yesterday
Speaker 1: from Bank of New York melon which you know, everyone
Speaker 1: knew that they were working on this, but the institutional
Speaker 1: commitment is there in a way that it wasn't in
Speaker 1: and I think it's no longer an existential question. I'm like, well,
Speaker 1: will crypto cease to exist? Why is that institutional commitment
Speaker 1: here now? And it wasn't here in it was such
Speaker 1: a new technology and a new space, and we saw,
Speaker 1: you know, would look like it was a significant bubble,
Speaker 1: a run up um and when the bubble burst, and
Speaker 1: we like the floor back then was like we're talking
Speaker 1: like six thousand like as a price point for bitcoin.
Speaker 1: So it's a huge drop. You know a lot of
Speaker 1: people who were already skeptical said, okay, this is it, Like,
Speaker 1: you know, crypto is going to cease to exist. I
Speaker 1: think that institutions and the market more broadly have embraced
Speaker 1: this and continue to stick with it. And I think
Speaker 1: that there's a real generational piece that people are starting
Speaker 1: to recognize as well. Bar jump on in here, because
Speaker 1: you started in the currents that you're in, which is
Speaker 1: Global Head of Digital Assets Strategy at Susquehanna December one.
Speaker 1: So right as the air was started to come out,
Speaker 1: what were the conversations that you guys were having about
Speaker 1: sticking with this versus say, wait a second, this might
Speaker 1: not be something we should do. So I was involved
Speaker 1: in kind of seventeen phase. The firm has been involved
Speaker 1: in in in bitcoin in particular for a long time,
Speaker 1: mostly just buying it proprietarily and k Um. You know,
Speaker 1: we did have a build out in of a desk
Speaker 1: that was you know, providing liquidity for retail platforms and
Speaker 1: and some limited institutional customers, the limited few that they
Speaker 1: were there. Um and and really what we've seen is
Speaker 1: this infrastructure being built out right, So there's a lot
Speaker 1: of institutions, pensions and downlands foundations who don't want to
Speaker 1: or can't practically use crypto native infrastructure, right, So even
Speaker 1: something like coin based, which is a very well known name.
Speaker 1: It's listed, you know, on the equity market. The you
Speaker 1: if you work at a pension or you work at
Speaker 1: an endowment, getting that on as a custodian is like
Speaker 1: a Herklean task. And so when you see firms like
Speaker 1: Bank of New York, Melon and State Street, uh, you know,
Speaker 1: with black Rock announcement that they're going to have it
Speaker 1: on the Aladdin program, which the vast majority of the
Speaker 1: institutions use as a critical piece of infrastructure. I think
Speaker 1: that's the piece that in Blues comments that is different
Speaker 1: now it's I've wanted to invest in it, but I
Speaker 1: don't want to have to set up new vendors a
Speaker 1: new fixed line connectivity. I don't want to have to
Speaker 1: get new software I can't use, you know, a non
Speaker 1: you know, brand name custodian and all of those solutions,
Speaker 1: while they haven't fully fixed themselves, you can see it
Speaker 1: on the horizon of that infrastructure being usable. But bar
Speaker 1: where's the drive coming from? Is it coming internally or
Speaker 1: is it coming from clients externally? Like clients clients and
Speaker 1: then of course their clients want access to it. Is
Speaker 1: that what it is? I think that there's I think
Speaker 1: you're seeing from our perspective because we're like we obviously
Speaker 1: trade in the spot markets. We traded in equities, but
Speaker 1: you know the kind of bread and butter Susquohannah is derivatives, right,
Speaker 1: futures and options, and you're seeing a world where, you know,
Speaker 1: when you get to like a real kind of bona
Speaker 1: fide prime brokerage solution where I can not only you know,
Speaker 1: cross margin my collateral for different crypto products, by as
Speaker 1: the class and by you know, investment type like options
Speaker 1: and futures, where in the equity markets or traditional markets,
Speaker 1: they're all fungible. Now you're talking about real scale and
Speaker 1: you're seeing real institutions who can do strategies and it
Speaker 1: has liquidity that they would need for like a Brevin
Speaker 1: Howard to run a macro fund or a D. E.
Speaker 1: Shaw and these brand names. They they're not gonna messing
Speaker 1: around in an asset class where they can get like
Speaker 1: fifty million dollars in liquidity when they needed billion dollars
Speaker 1: in liquidity. And there's partners out there now ex. Susquehanna
Speaker 1: who can provide that. And so as these infrastructure things
Speaker 1: continue to get built out, you will see the the
Speaker 1: types of strategies that people can to run right now
Speaker 1: are growing, and like the whole world is driven by
Speaker 1: macro right every headline, whether it's interest rates or central
Speaker 1: bank activity, it's just driving everything. And like, what a
Speaker 1: great high beta way to express your opinion in that
Speaker 1: space than trading bitcoin derivatives and options and running strategies
Speaker 1: that you would typically run for commodities and currencies in
Speaker 1: this asta class. It's just it's a it's an amazing
Speaker 1: asset class as far as efficiency to express a view
Speaker 1: that way. And now you're seeing firms like ours who
Speaker 1: can provide liquidity that provides the infrastructure from them do it.
Speaker 1: How are you thinking about this at the city? I mean,
Speaker 1: this is you've been at this firm for what twenty
Speaker 1: years in many different roles. This is a relatively new
Speaker 1: role for you. It's very fascinating kind of how this
Speaker 1: brings everything together, from payments to trade, finance, to foreign
Speaker 1: exchange or custody and very uniquely just from a capability perspective,
Speaker 1: So one whole site, I mean obviously the whole size
Speaker 1: of a trillion dollars the global financial markets a few
Speaker 1: hundred trillion dollars. So when you think of pure capability
Speaker 1: lens of it, does it provide new set of capability
Speaker 1: which could actually enable additional efficiencies functionality into traditional markets?
Speaker 1: So do we expect, like the scripture to run in
Speaker 1: parallel do we actually see some level of overlap between
Speaker 1: the two. So you're talking about underlying technology that helps
Speaker 1: tratify as one of the components. What does that look like?
Speaker 1: So if you think of traditional component here, do you
Speaker 1: think of etherea? This is one platform where you have money,
Speaker 1: You have different forms of assets in traditional markets, we
Speaker 1: have different systems and different infrastructures supporting different components of
Speaker 1: the financial markets also, which is very distinct between different forms.
Speaker 1: So if you have one platform which could actually bring
Speaker 1: money together with securities and could actually enable new ways
Speaker 1: of settling, a new way of communicating between different institutions,
Speaker 1: that could be pretty unique. Now, obviously we're in the
Speaker 1: early stages of all of this technology. Scalabilities an issue
Speaker 1: because it is not as scalable as someone the centralized
Speaker 1: infrastructure is. It is not as robustly tested as some
Speaker 1: of the current infrastructures. But we're in the initial stages
Speaker 1: of a multiple pocs, which I call atkenization to organization
Speaker 1: of collateral organization of private funds. And you saw the
Speaker 1: announcement kk ON made recently very initial days collateral organization
Speaker 1: of real estate and a lot of real estate assets
Speaker 1: are tied up an illiquid form. Could we actually have
Speaker 1: a way in which we can drive decority in that
Speaker 1: so the bonds and typically bond sizes are very large,
Speaker 1: could we actually fractionalize them in a more efficient fashion
Speaker 1: for retail customers to access all of those are use cases?
Speaker 1: Is the government gonna let you do? This? Obviously has
Speaker 1: to be in a very well regulated format. The the
Speaker 1: risk tolerance of regulators when it comes to value transfer
Speaker 1: networks is very low, and it will be very true
Speaker 1: for issuers and investors. They want to ensure that they're
Speaker 1: really not worried about the the risk which is underlying
Speaker 1: in the infrastructure. So it's very critical that all these
Speaker 1: pieces are done in a very well thought of passion.
Speaker 1: Hey Blue, Um, you were at a crypto shop for
Speaker 1: five years before this, and now you're at a firm
Speaker 1: that's eighty five years old trying to you know, make
Speaker 1: it more digital first, focused on digital assets. Um, how
Speaker 1: do you do that. UM well, I mean I think
Speaker 1: that one of the things that sort of core to
Speaker 1: TRO D n A is growth and innovation to growth,
Speaker 1: like investing in in growth strategies. UM. So well, blockchain
Speaker 1: is a new technology. Technology itself isn't new to tros.
Speaker 1: So you know, for the past three years, we've had
Speaker 1: UM analysts who have been really building out robust foundational
Speaker 1: fundamental research across the ecosystem, try trying to understand the
Speaker 1: different pieces and how how everything comes together. And I
Speaker 1: think UM recognizing the crypto markets have gotten to a
Speaker 1: size where they will impact and interact with aditional markets
Speaker 1: is part of what led to the creation of this
Speaker 1: role UM. We have. We have one of our analysts, m.
Speaker 1: Dante Peterson, who does amazing work in this space, and
Speaker 1: the way that he sort of explained it to me
Speaker 1: is that we need to be looking at everything in
Speaker 1: the early early stages. We can't show up when something
Speaker 1: goes public and be like, let's cover it right. You
Speaker 1: have to understand how all these different pieces fit together. UM.
Speaker 1: And and that fundamental research that like drive to understand
Speaker 1: things is very cord to the way that TIRO approaches
Speaker 1: things UM. And I think that that's something that's where
Speaker 1: there's a lot of overlap with crypto, and I think
Speaker 1: it it is the right way to think about and
Speaker 1: approach crypto, right like you shouldn't start with answers, you
Speaker 1: should start with questions. That was Blue Matlari of tro Price,
Speaker 1: Pnvi of City, and Bart Smith of Susquehanna. Catch the
Speaker 1: full panel and more from some of the world's top
Speaker 1: financial executives. You can do that by going to blue
Speaker 1: Berg Live dot com and searching our Bloomberg invest event.
Speaker 1: That wraps up our first hour of the weekend edition
Speaker 1: of Bloomberg Business Week from Bloomberg Radio. I'm Carol Masser
Speaker 1: and I'm Tim Stanoback. Ahead in our next hour, we're
Speaker 1: going to dig into the state of the retail sector.
Speaker 1: We're gonna do that with Viry CEO Joe Kudla and
Speaker 1: the Torrid Company president Kenna Tory, and the CEO of
Speaker 1: Sound Exchange explains how his company uses data to get
Speaker 1: music creators paid. Plus, we've got our cover story. No
Speaker 1: matter what happened, you know Twitter, the company is going
Speaker 1: to look and feel very different. The trouble path ahead
Speaker 1: for a social media star war. This is Bloomberg This
Speaker 1: is Bloomberg Business Week Inside from the reporters and editors
Speaker 1: who bring you America's most trusted business magazine, Plus global business,
Speaker 1: finance and tech news as it happened. Bloomberg Business Week
Speaker 1: with Carol Messer and Bloomberg Quick Takes Tim Stinovic on
Speaker 1: Bloomberg Radio. Plenty ahead in our second hour of the
Speaker 1: weekend edition of Bloomberg Business Week, including the CEO of
Speaker 1: Sound Exchange on shaping the future of the music industry
Speaker 1: and the way in which creators cash in. Plus enough
Speaker 1: close look at the retail sector with the CEO Joe
Speaker 1: Kula and the Tory Company President Kenna Tory. First up
Speaker 1: this hour. This week's cover story the Tale that Keeps
Speaker 1: on Giving and it isn't over yet. Elon Musk's pursuit
Speaker 1: of Twitter. Business Week editor Joe Weber is back and
Speaker 1: Bloomberg News tech reporter Kurt Wagner joining us as well
Speaker 1: to explain why the platform faces only bad outcomes if
Speaker 1: Elon's four billion dollar deal closes. I think it became
Speaker 1: abundantly clear that no matter what happens, you know, Twitter
Speaker 1: the company is in for a crazy ride, and you
Speaker 1: know if Elon gets Twitter as we are starting to
Speaker 1: expect you know, that's going to lead the layoffs. Cost
Speaker 1: cuts are going to rescind a lot of the rules
Speaker 1: around speech and and misinformation, is the expectation. So you know,
Speaker 1: suddenly this service's incredibly important is going to look and
Speaker 1: feel very different, and the company is going to look
Speaker 1: until different. Now, for some reason, this deal falls apart.
Speaker 1: Suddenly you still have a company that you know, has
Speaker 1: in the last six to nine months just in total chaos,
Speaker 1: and they have to kind of pick up and try
Speaker 1: and pretend like nothing ever happened. And I just don't
Speaker 1: think that that's realistic either. So you know, the story
Speaker 1: was meant to kind of give people a glimpse into
Speaker 1: what the Twitter employees are feeling right now, which is
Speaker 1: a lot of which is a lot of chaos. So, Kat,
Speaker 1: we've been talking about this for months. You know, it's
Speaker 1: obviously probably the one of the biggest business stories of
Speaker 1: the year, and I'm curious, you know, one of the
Speaker 1: things that you hadn't here was even some new stuff about,
Speaker 1: you know, what the employees really felt about their potential
Speaker 1: new boss. So take us there and sort of these
Speaker 1: slacks that you were able to get well, there's there's
Speaker 1: two scenes that are in the book. The first one
Speaker 1: is from early Elon showed up at the Twitter off
Speaker 1: site with the entire company and he complained about bots,
Speaker 1: and um, you know, at that point everyone kind of
Speaker 1: just sort of shrugged it off, like here's just a
Speaker 1: popular user who has an issue. Fast forward two and
Speaker 1: a half years and suddenly Ellen is still complaining about bots.
Speaker 1: But now, you know, when he addresses employees in all
Speaker 1: Ends in June, the vibe is very different, right. It's
Speaker 1: it's no longer here's this outside kind of tech celebrity
Speaker 1: showing up to give us advice. It's here's the new
Speaker 1: boss starting to you know, lay down the future of
Speaker 1: the company. And employees were not happy. You know, he
Speaker 1: alluded to layoffs, he alluded to other cost cuts, maybe
Speaker 1: getting rid of remote work, which a lot of people
Speaker 1: at Twitter have really come to enjoy, and so on slack.
Speaker 1: They're basically mocking that there soon to be boss as
Speaker 1: he's speaking to them. You know, there's things like, hey,
Speaker 1: is it too early to get a drink? Like this
Speaker 1: guy doesn't know what he's talking about, and you know
Speaker 1: that just gives you a sense of like how unhappy
Speaker 1: a lot of Twitter employees are with this, right that
Speaker 1: they would openly mock kind of the new boss during
Speaker 1: the opening Q and A with with staff. And I
Speaker 1: just think there's only going to get worse from here,
Speaker 1: because there's a lot that's happened in the last couple
Speaker 1: of months to make him even less attractive to a
Speaker 1: lot of Twitter employees. Okay, so let's say he has
Speaker 1: to cut this check forty four million dollars, right, like
Speaker 1: he's becomes you know, owner of Twitter after all of this,
Speaker 1: what chess moves go down from there? Do we think? Yeah?
Speaker 1: I think there's a few things. Um first and foremost,
Speaker 1: I imagine he's gonna put in or probably put in
Speaker 1: his own executive team. He's he's been pretty open that
Speaker 1: he has, you know, no faith in the current leadership
Speaker 1: at Twitter. We expect that CEO Prague Agawal will probably
Speaker 1: be out. Also, the top lawyer of Vigid Gotti will
Speaker 1: probably be out, So you know, there's gonna be new
Speaker 1: new people at the top of this company. And then
Speaker 1: I think the other thing is, you know, he's talked
Speaker 1: a lot about wanting to bring quote free speech back
Speaker 1: to Twitter, right, and what does that mean? Well, for starters,
Speaker 1: it means reversing permanent bands. So we might see President
Speaker 1: Trump back on Twitter quite soon. We might see other
Speaker 1: people who have been banned back on Twitter. But I
Speaker 1: also think he sounds like he plans to get rid
Speaker 1: of a lot of the rules around harassment and hate
Speaker 1: speech and misinformation that Twitter has been building over the
Speaker 1: last couple of years. That's going to have a huge
Speaker 1: impact on just the vibe of what it feels like.
Speaker 1: The scroll for your Twitter timeline right. And I don't
Speaker 1: know exactly how quickly all that stuff can be on rattled,
Speaker 1: but I imagine, um, you know, Twitter might feel very
Speaker 1: different to people in the next couple of months. That's
Speaker 1: a really interesting point her, And that's when I really
Speaker 1: wanted to hit on because there is a you know,
Speaker 1: there's got to be a portion of people who think
Speaker 1: that this is a good thing. I've seen it play
Speaker 1: out on Twitter, and you see a lot of people say,
Speaker 1: wait a second, this is a good thing for Twitter,
Speaker 1: because you know, this is going to be more about
Speaker 1: quote unquote free speech. So what else does it look
Speaker 1: like on the other side of this If this does
Speaker 1: go through, does it actually attract more people, does become
Speaker 1: a more attractive platform, or do those protections that must
Speaker 1: potentially takes away or could take away, does that hinder
Speaker 1: people's experience on it. Well, you know what's funny is, um,
Speaker 1: there was a time, probably three or four years ago
Speaker 1: when Twitter was still very much struggling with all of
Speaker 1: this hate speech and Haraftsman stuff, and there were people
Speaker 1: leaving right like, Hey, I don't want to be on
Speaker 1: this health site. I don't wanna you know, people were
Speaker 1: saying that they were leaving right. And then Donald Trump
Speaker 1: got a band and people said, well, now everyone's gonna
Speaker 1: lead Twitter because they banned President Trump. And in both cases,
Speaker 1: the numbers didn't really reflect either of those things. Right,
Speaker 1: Like it was, it was mostly people complaining about this,
Speaker 1: But the majority of us are stuck around now. In
Speaker 1: this case, I think that's probably the same thing that's
Speaker 1: going to happen. Right. There will be people who are
Speaker 1: happy to see some of these rules rescinded, some people
Speaker 1: will be very sad, but for the most part, I
Speaker 1: imagine most people will probably stick around, at least in
Speaker 1: the near term. Hey, Kurt, one thing I'm curious about too, though,
Speaker 1: is you know, Elon Musk has a lot on his plate. Well,
Speaker 1: the ultimately how you know, have a deputy really you
Speaker 1: know running things that Twitter? How do how do we
Speaker 1: anticipate in my play out? Yeah, this is this is
Speaker 1: still an unknown. Um. You know, I mentioned that I
Speaker 1: think the current executive team is probably going to be
Speaker 1: out the door. But who does he bring in to
Speaker 1: run the day to day It doesn't seem really feasible
Speaker 1: for him to do that considering his responsibilities that SpaceX
Speaker 1: and Tesla as well. Um, but one thing he did
Speaker 1: tell employees in June, and that we mentioned the story,
Speaker 1: is he said he doesn't really care much about titles
Speaker 1: like is he the CEO, is he something else? But
Speaker 1: he wants to make the decisions. He wants people to
Speaker 1: listen to him. You know. So I do think he's
Speaker 1: going to be pretty involved at least in the direction
Speaker 1: of where this company is going now. He is he
Speaker 1: the one who's going to be, you know, answering emails
Speaker 1: all day about product tweaks? I don't know, it seems unlikely,
Speaker 1: but he does claim he wants to be heavily involved here.
Speaker 1: That was Bloomberg News technology reporter Kurt Wagner. He wrote
Speaker 1: the cover story for this week's special double issue of
Speaker 1: Bloomberg Business Week. Joe Weber with us once again as well.
Speaker 1: You're listening to Bloomberg Business Week coming up, rethinking wealth
Speaker 1: creation in the multibillion dollar music business. The CEO of
Speaker 1: Sound Exchange joins us on the other side, This is Bloomberg.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick takes Tim Stinovik from Bloomberg Radio. It is the
Speaker 1: only organization designated by the US government to administer the
Speaker 1: Section one fourteen sound recording license. Listen, listen, you'll learn
Speaker 1: more Now profit Sound Exchange collects and distributes digital performance
Speaker 1: royalties on behalf of five hundred seventy thousand music creators,
Speaker 1: and that number is growing and it's big stars names,
Speaker 1: you know. Yeah, they've got to get paid. And to
Speaker 1: help us understand that, the company helps artists collect royalties
Speaker 1: for the work that they do and the business model
Speaker 1: that supports it. Caroline I caught up with the president
Speaker 1: and CEO Sound Exchange, Michael Huppy. Well, we're a very
Speaker 1: we're a very interesting billion dollar company that a lot
Speaker 1: of your listeners probably haven't heard of, but we make
Speaker 1: a lot of the services they use work better, uh.
Speaker 1: And a big part of what we do is help
Speaker 1: connect thirty six hundred streaming services like sirius, XM and
Speaker 1: Pandora and I heart online. On the one hand, connect
Speaker 1: with them and collect payment from them for use of
Speaker 1: the recordings and the data, and then we take care
Speaker 1: of all that bad data, clean it up, fix the airs,
Speaker 1: combine it with the other thirty six hundred services, and
Speaker 1: paid out to over six hundred thousand creators. Basically, if
Speaker 1: you are an artist or a label or a studio
Speaker 1: producer who has play on any of these services, you
Speaker 1: get a check from us. Why does it have to
Speaker 1: be a non profit? Doesn't have to be a nonprofit.
Speaker 1: We were actually created by the industry to do this
Speaker 1: very thing. We are purpose built. When you say the
Speaker 1: industry who got together and created you so, uh, kind
Speaker 1: of the entire recorded industry is what came together were well.
Speaker 1: So we have major record labels, indie record labels on
Speaker 1: our board. We have the Artist Union SAG after a FM.
Speaker 1: We have artists themselves, artists, managers, trade associations. If you
Speaker 1: are an entity in the music sound recording space, you're
Speaker 1: you're represented on the board. You you did mention that. Um,
Speaker 1: you did not mention a couple of big names. You
Speaker 1: didn't mention Spotify, you didn't mention Apple Music. Uh. Those
Speaker 1: services are on demand streaming platforms that were interactive. Right.
Speaker 1: There's two two types of streaming platforms. One is we
Speaker 1: call interactive where you lean forward you make playlists, um.
Speaker 1: And then there's lean back, where it's just a stream
Speaker 1: of music to you. Uh. And we operate a lot
Speaker 1: in the non interactive space. We do to other things.
Speaker 1: We you know, we're we're music tech companies, so we
Speaker 1: have data services that we provide some folks, we administer
Speaker 1: certain settlements. But for the purpose of this discussion, it's
Speaker 1: the lean back, non interactive services that we we spend
Speaker 1: the most of the bottom one. It's tracking, you know,
Speaker 1: services that are tapping into artists content and making sure
Speaker 1: that they get paid for it exactly. And and to
Speaker 1: give you a sense of scale, Um, it's it's exploded.
Speaker 1: I mean the music industry, especially the streaming part is
Speaker 1: taken off. When I first came to the company, you know,
Speaker 1: fifteen years ago, we were paying out maybe twenty million
Speaker 1: dollars a year. We now pay out regularly over one
Speaker 1: billion dollars a year and we pay it out very quickly.
Speaker 1: We pay every month of the money we get in
Speaker 1: the door is out within forty five days. You know,
Speaker 1: as I said, thirty six hundred services, we process thirty
Speaker 1: five billion performances a month. So it is a serious,
Speaker 1: high tech, high data operation. So if artist is getting
Speaker 1: paid by because their music is being played on Serious
Speaker 1: x M, are they only getting paid because of sound exchange?
Speaker 1: Are they also getting a check from Serious x on
Speaker 1: for the sound recording part of the business that generally
Speaker 1: comes from us, um there are other licenses in the
Speaker 1: music industry as well, so very very it's very complicated.
Speaker 1: You know, There's there's a whole another music publishing side
Speaker 1: of the business, and Serious XM has to deal with
Speaker 1: other organizations for that. But for the sound recording, the
Speaker 1: featured artists get money from us. And another interesting thing,
Speaker 1: we also send money to a fund that pays all
Speaker 1: the background vocalists and musicians as well. They get now
Speaker 1: they now get some downstream revenue and your proprietary technology
Speaker 1: to make sure that everybody who is creating content at
Speaker 1: whatever level is getting paid. But I'm thinking about conversations
Speaker 1: we have, couldn't the blockchain do this well, one day
Speaker 1: the blockchain may or may not do it. I mean,
Speaker 1: technology is not trying to replace you in your but
Speaker 1: I wonder how you think about you've got proprietary technology,
Speaker 1: how do you take it to another level that maybe
Speaker 1: even makes it purer, more direct. So I will tell
Speaker 1: you for us, all technology, all platforms, they're just tools. Right.
Speaker 1: Our job is to work on behalf of creators to
Speaker 1: make sure they get paid fairly and accurately. And if
Speaker 1: blockchain becomes the next thing, you're still going to need
Speaker 1: a place where there's authoritative data about who owns the
Speaker 1: rights and what recordings and where do they own those rights.
Speaker 1: So even if you have the blockchain and smart contracts,
Speaker 1: we would very likely still be a part of that
Speaker 1: as well. And it's something we're considering for our future.
Speaker 1: You know, where are we going to be in ten years?
Speaker 1: And the blockchain and web three is very much something
Speaker 1: we're thinking about. Do you see what is the trend
Speaker 1: when it comes to the lean back versus interactive experiences?
Speaker 1: I mean, is it? Why aren't Why isn't Spotify and
Speaker 1: Apple Music? Why aren't they part of your platform? Well,
Speaker 1: because they they do have leanbacks experience, but they also
Speaker 1: have more interactive and for that they have to go
Speaker 1: to the record labels to get to get the rights.
Speaker 1: Will they ever be be just? Will they ever be
Speaker 1: part of your platform? Well, look, we're We're happy. Would
Speaker 1: you like them to be? We're happy to work with anybody,
Speaker 1: you know, if you think about it, we are a
Speaker 1: trusted resource with as you say, state of the art,
Speaker 1: cutting edge proprietary technology and the best data music data
Speaker 1: in the industry. Um, And we would be open to
Speaker 1: working with any of these companies to help their back office,
Speaker 1: saves them money, helps us, you know, serve the industry better.
Speaker 1: So we would be very open to working with anyone
Speaker 1: who wants to make it take advantage of that. What's
Speaker 1: the impact of musicians selling their music catalogs, um, Phil Collins,
Speaker 1: Bob Dylan, Springsteen. I mean, the list just continues to grow.
Speaker 1: So what impact has that had on you guys? Um?
Speaker 1: And kind of on the growing monetization if you will,
Speaker 1: in the music industry. Well, I will say it's a
Speaker 1: fascinating development. Um. You know, looking at this as an
Speaker 1: asset class now and having these institutional investors invest in
Speaker 1: an asset class, it's great for the industry. It shows interest,
Speaker 1: it shows the future and what people expect. From our perspective,
Speaker 1: it just means, look, well we'll we'll send our compulations now,
Speaker 1: like does that help me in terms of our payments?
Speaker 1: Very much work into the valuations because we are you know,
Speaker 1: we're a large part of the revenue stream. Sound Exchange
Speaker 1: alone is ten to fift of the u US recorded
Speaker 1: music market. So when these when these artists go to
Speaker 1: sell their catalog, the investors are going to look at
Speaker 1: the history of the revenue and we are very much
Speaker 1: a part of that. And from our perspective, you know,
Speaker 1: we'll pay whoever the artist tells us to pay. If
Speaker 1: they want us to send to the studio producer, we do.
Speaker 1: If they, you know, tell us to split the money
Speaker 1: this way among their bandmates, we will. And if they say, hey,
Speaker 1: I just sold my catalog to this pe firm, then
Speaker 1: that's where the check goes. So do you know an
Speaker 1: up and coming artist before they are an up and
Speaker 1: coming artist, because you have this data, we we do
Speaker 1: have a little bit of insight into trends, maybe before
Speaker 1: they hit the mainstream. So I won't name any names.
Speaker 1: Are trying it to play favorites, But there are big
Speaker 1: artists now who we knew and we're friendly with. Who
Speaker 1: your favorite one, my favorite, my favorite artist, favorite your
Speaker 1: favorite artist, favorite artist. I would say else Costello or
Speaker 1: Billy Joel Nice. I didn't expect you to answer the question.
Speaker 1: It is not like he's going to get them a
Speaker 1: better idea all because of are you um really interesting?
Speaker 1: And I think a business that we all just take
Speaker 1: for granted in terms of how it works. So great
Speaker 1: to get some insight. Come back soon. I appreciate you
Speaker 1: having Carol always tries me to get me to sing
Speaker 1: a song on air, and then I'm like, I can't
Speaker 1: because we don't have the rights to it, So don't
Speaker 1: get me in trouble. That Sound Exchange President and CEO
Speaker 1: Michael Huppy still to come on Bloomberg Business Week. We
Speaker 1: look at a different type of content creation this time around.
Speaker 1: In the fashion world. Live streaming is really the way
Speaker 1: people shop in many parts of the world, most notably
Speaker 1: China and throughout Asia, and we're excited to launch it here.
Speaker 1: Kenda Tore, the president of The not Tory Company, on marketing, innovation,
Speaker 1: the strength of the consumer, and the cost of doing business.
Speaker 1: This is Bloomberg Broadcasting from the financial capital of the world,
Speaker 1: Bloomberg Eleve in Frio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one oh six one does San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius XM Chado one
Speaker 1: nine team and around the globe the Bloomberg Business app
Speaker 1: and Bloomberg Radio dot Com. This is Bloomberg Business Week. Well,
Speaker 1: for this last half hour, we're going to get to
Speaker 1: two firms in the retail space, one catering to women,
Speaker 1: the other all about activewear. First up, when we cut
Speaker 1: up with our next guest earlier this month, he was
Speaker 1: literally minutes away from launching the very first live stream
Speaker 1: on his fashion company's website. We're talking about Kenda Tory.
Speaker 1: He's a former Bloomberg colleague who is now president of
Speaker 1: the company created by his mom, Josie Newtry. The new
Speaker 1: Tory Company's new digital platform allows customers to engage with
Speaker 1: designers and stylists and to feel more connected to the brand.
Speaker 1: We asked Ken about his firm's for a into content creation,
Speaker 1: as well as the macro environment, with inflation and a
Speaker 1: tight labor market still posing challenges. It's been easier in
Speaker 1: the past that certainly the last couple of months have
Speaker 1: been a number of headwinds, whether that be inflation, whether
Speaker 1: that be consumer spending getting hit based on you know,
Speaker 1: the stock market being problematic, and customers frankly just having
Speaker 1: spent a lot over the past year. So you know,
Speaker 1: us as a company, considering where we were in two
Speaker 1: thousands money when the world felt like it was felling
Speaker 1: falling apart, we certainly feel fortunitate in terms of where
Speaker 1: we are, but certainly in the last couple of months
Speaker 1: has presented, you know, a good number of challenges. That's
Speaker 1: what I wanted to ask you, Ken, like, how are
Speaker 1: you like what life was like pre pandemic? And then
Speaker 1: as you said, the pandemic was just so tricky for
Speaker 1: anybody in your space. And then kind of where we
Speaker 1: are today, are you back where you were you know
Speaker 1: pre pandemic? Yes, we are, so, you know, we all
Speaker 1: we started our our direct business early, but we headed
Speaker 1: into the pandemic, you know, more than wholesale. We planned
Speaker 1: for good growth for our website every year and plan
Speaker 1: for wholesale to kind of be flat, and we felt
Speaker 1: like we were ahead of the curve then. Obviously covid
Speaker 1: Um was very problematic for our wholesale business, but it
Speaker 1: really lead to tremendous growth for for online. So all
Speaker 1: in all, considering where things were in two thousand and twenty,
Speaker 1: we do feel, you know, we feel very fortunate. But
Speaker 1: as I mentioned it, certainly there was there was such
Speaker 1: a high in two thousand twenty one that you know,
Speaker 1: companies like us, we felt like, wow, we made it.
Speaker 1: Consumers expending, everything's great. But then you know, reality has
Speaker 1: certainly started to hit a little bit. It's interesting to
Speaker 1: hear your your what you see as consumer strengths in
Speaker 1: weaknesses right now, what about when it comes to actually
Speaker 1: operating and running your business. You know, we've been very
Speaker 1: focused on you know, employee retention um. You know, even
Speaker 1: before covid and I honestly feel like, you know, our
Speaker 1: efforts there really helped us get through those very difficult years.
Speaker 1: And certainly, you know, we've been blessed. You know, we've
Speaker 1: had great employee retention even throughout the great resignation. So uh,
Speaker 1: you know, we feel very invested in our team and
Speaker 1: that has helped. But certainly, you know, we've seen which
Speaker 1: pressures go up inflation and really sort of crimp margins
Speaker 1: across the board. Hey, just trying to get inside your head.
Speaker 1: We were just talking about um our read picker who
Speaker 1: follows the Fed in the economy and can this whole
Speaker 1: is concept of labor hoarding. In other words, you'd rather
Speaker 1: a company would rather hold onto a worker because it's
Speaker 1: so it's been so hard to get workers in this
Speaker 1: tight labor market, so they would rather hold onto it
Speaker 1: a worker rather than let them go, even if maybe
Speaker 1: they're starting to see a company that is see some
Speaker 1: weakness out there. Do you buy into that? Do you
Speaker 1: do that? I do buy into that. But once again,
Speaker 1: you know, we've been blessed in terms of, you know,
Speaker 1: really having great employee retention throughout all of this. You know,
Speaker 1: to the degree we have added jobs, it has been
Speaker 1: more difficult than ever. You know, I'd say that was
Speaker 1: especially an issue kind of the first quarter of this
Speaker 1: year when hiring was just impossible. Um. You know, one
Speaker 1: benefit of the economy getting software has been it has
Speaker 1: been a little bit easier over the last couple of
Speaker 1: months as we have continued to you know, to add
Speaker 1: to the team. Um but certainly I think you know,
Speaker 1: issues in terms of employee retention. Um, and really we
Speaker 1: feel like that this environment is here to stay and
Speaker 1: that's really, you know, a big focus for us going forward.
Speaker 1: Can you give us any sort of numbers how much
Speaker 1: costing you or what percentage you've had to raise wages
Speaker 1: or just the challenges that you're seeing and how it's
Speaker 1: affected the bottom line. You know, it's hard to quantify,
Speaker 1: but you know, in terms of you know, our ability
Speaker 1: to to fill jobs before COVID compared to what it was,
Speaker 1: you know, towards the end of last year and towards
Speaker 1: the beginning of this year. I mean, we've had job
Speaker 1: searches that have lasted months and months and you know
Speaker 1: we're fortunately just about full now. But um, it's a
Speaker 1: major issue and so you know, we certainly in terms
Speaker 1: of the cost of training, costs of searches, it's something
Speaker 1: that's sort of more cognizant, um in top of mind
Speaker 1: than than it's been in the past. All right, tell
Speaker 1: us about what you guys are doing in terms of
Speaker 1: live streaming. Yeah, absolutely know, we're very excited. As I mentioned,
Speaker 1: you know, our our website you know, has been a
Speaker 1: tremendous source of strength both before COVID and certainly through
Speaker 1: it um and we're actually launching live streaming from not
Speaker 1: tory dot com. Um. Live streaming is really the way
Speaker 1: people shop in many parts of the world, most notably
Speaker 1: China and throughout Asia, and we're excited to launch it here.
Speaker 1: And I think, you know, more importantly than ever fashions
Speaker 1: about making stuff, but really customers don't just want stuff,
Speaker 1: They really want to know, like, who are the people
Speaker 1: behind this? What does this company represent? So, especially as
Speaker 1: an independent business, um as a family business, the ability
Speaker 1: for us through live streaming to really talk to our customer,
Speaker 1: for our customer to have that direct interaction and to
Speaker 1: feel that closer connection UM to you know, not just owners,
Speaker 1: but to employees as well. We think it's really going
Speaker 1: to be, you know, a big change in terms of
Speaker 1: the evolution of nottry dot com. Well, speaking of the evolution,
Speaker 1: I'm wondering how you're thinking about different ways to showcase
Speaker 1: your products, and how you're thinking about the metaverse and
Speaker 1: web three and if there's anything there for you. Yeah,
Speaker 1: you know, that has certainly been top of mind as well.
Speaker 1: You know, metaverse has been a big focus of ours
Speaker 1: and we have a partnership and maybe I'll come back
Speaker 1: next month when when we're able to announce it. Great,
Speaker 1: but let's suffice it to say, you know, you guys
Speaker 1: know if you've been great to have me on when
Speaker 1: we've had new collections, we're gonna have a new collection
Speaker 1: coming out that's going to be available and it's really
Speaker 1: gonna help sort of push us into into three point Oh.
Speaker 1: That's kinda Tory. He's the president of the family owned
Speaker 1: not Tory company. Coming up, another company in the retail space.
Speaker 1: This one focuses on what to wear when you are
Speaker 1: out and about and being active. Our conversation with your
Speaker 1: a founder and CEO Joe Kula is up next. You're
Speaker 1: listening to Bloomberg Business Week. This is Bloomberg. You're listening
Speaker 1: to Bloomberg Business Week with Carol Messer and Bloomberg Quick
Speaker 1: Takes Tim Stinovik from Bloomberg Radio. Just one year ago,
Speaker 1: the Southern California inspired active where brand Viewery got a
Speaker 1: four hundred million dollar investment from soft Bank. At the time,
Speaker 1: it brought the company's valuation up to around four billion dollars.
Speaker 1: Joe Coudla founded the company back in and he still
Speaker 1: serves as its CEO. We wanted to know how his
Speaker 1: team put that funding from soft Bank to work and
Speaker 1: where the business is today. Without question, we are dealing
Speaker 1: with complicated macro economic issues on a global scale UM,
Speaker 1: but we do feel there's a bifurcation between you know,
Speaker 1: best in class brands that are leaders in their categories,
Speaker 1: that are innovating UM and folks that are maybe called
Speaker 1: middle of the pack, more legacy mass market brands UM
Speaker 1: that are seeing you know, growth really slow as a
Speaker 1: result of this inflationary environment that we're in. You know,
Speaker 1: we feel very fortunate to be UM, you know, experiencing
Speaker 1: dynamic growth this year. I feel our our customer, our
Speaker 1: relationship with our customer has never been stronger. Work cited
Speaker 1: about Q four and holiday. When we look towards we
Speaker 1: are being optimistic, but cautiously optimistic. We are planning for
Speaker 1: another year of dynamic growth. We're going to continue to
Speaker 1: expend our fleet of retail stores, but we're not trying
Speaker 1: to swing for the fences. We want to lock in
Speaker 1: a number that we're that we're really content with, not
Speaker 1: overinvested in the business UM, and be be responsible with
Speaker 1: our growth because there are some macro factors that we're
Speaker 1: watching very closely, and UM, we just don't know how
Speaker 1: things will go. No, And you know it's interesting too.
Speaker 1: I think at the time about a year ago of
Speaker 1: that soft Bank investment, which was just about a year ago, UM,
Speaker 1: it was reported that you plan to open more than
Speaker 1: a hundred stores in the US over five years. So
Speaker 1: as you look at those macro concerns, has that number
Speaker 1: been reduced or that plan that forecast been changed? You
Speaker 1: know it hasn't. Actually, you know, the performance of our
Speaker 1: stores UM today has never been stronger. UM. We're still
Speaker 1: very bullish on our vertical retail expansion UM. You know,
Speaker 1: four wall contribution payback still best in class. And you know,
Speaker 1: we're in the unique position because you know, relative to
Speaker 1: the size of the market, theory is still very much
Speaker 1: early stage. You know, we're in our seventh year of
Speaker 1: selling in market UM, and there's a lot of opportunity
Speaker 1: to gain market share UM as we grow into the
Speaker 1: years to come. So while we might be in a
Speaker 1: more challenged macro environment, I think that will be counterbunts
Speaker 1: by the growth and taking market share from some of
Speaker 1: the other more established players. So talk to us about
Speaker 1: growth metrics where Bloomberg we're Nerdy, we level these numbers, UM,
Speaker 1: so talk to us about top and bottom line growth.
Speaker 1: Give us an idea same store sales growth. What have
Speaker 1: you guys been seeing. Yeah, I mean this year where
Speaker 1: we're seeing, you know, the business is going to grow
Speaker 1: north of between seventy and top line UM at at
Speaker 1: a pretty sizeable scale. It's a number that we're very
Speaker 1: proud of. UM. You know, our same store sales are
Speaker 1: still comping very strong over prior years, UM, demonstrating you
Speaker 1: know that. You know, it's still very much early in
Speaker 1: our awareness curve. People are experiencing the brand, We're converting
Speaker 1: them into loyalists, they're shopping with us for years to
Speaker 1: come while acquiring more new customers. So we see really
Speaker 1: great year over year growth in our existing fleet UM.
Speaker 1: And then you know, as we expand the network across
Speaker 1: the country, you know, we're leveraging e commerce data so
Speaker 1: we can be really intelligent about where we go UM,
Speaker 1: and we tend to open strong and I think that
Speaker 1: that trend is really accelerating as the brand builds more
Speaker 1: and more awareness. Joe, how are you doing with inventory
Speaker 1: right now? We saw inventory challenges of course from Nike
Speaker 1: just in the last couple of weeks. Not to mention,
Speaker 1: you know, companies that we can't necessarily compare you to
Speaker 1: like target, for example, how are you managing inventory? Yeah,
Speaker 1: a great question. You know, we have definitely seen impacts
Speaker 1: from this complicated supply chain environment um, although we are
Speaker 1: seeing it begin to normalize, especially on the logistics side
Speaker 1: of the supply chain. You know, getting your product in containers,
Speaker 1: getting it on boats, and delivering on time. That has
Speaker 1: become much more normalized. The cost of a container, you know,
Speaker 1: from Asia to the West coast of the United States.
Speaker 1: You know, pre pandemic was you know called three thousand dollars.
Speaker 1: It went up as high as eighteen thousand dollars. Now
Speaker 1: back to pre pandemic levels or materially close to pre
Speaker 1: pandemic level. So the logistics aspects of supply chain have normalized,
Speaker 1: where we're still seeing a lot of challenges in the
Speaker 1: ability to source raw materials um and get them delivered
Speaker 1: to your factory partners on time. So what happened to
Speaker 1: the larger marketplaces, you know, your spring deliveries delivered late.
Speaker 1: That created promotion as we transition from spring and summer
Speaker 1: into fall, and then you sell the same thing happened,
Speaker 1: you know, and it was it was a double whammy
Speaker 1: with the deliveries of fall being material delayed for a
Speaker 1: lot of our peers, and that's putting a lot of
Speaker 1: pressure on inventory levels. That's why a lot of folks
Speaker 1: anticipate highly promotional holiday coming up. Viewer. While we're not
Speaker 1: immune to these challenges, We've stayed very close to our
Speaker 1: supply chain. We've dealt with delays, but nothing that's been catastrophic,
Speaker 1: and we've been able to maintain our full price business,
Speaker 1: which has been a goal of ours since we launched
Speaker 1: in the spring of two thousand and fifteen. And we
Speaker 1: don't anticipate in overly promotional holiday. So you probably you
Speaker 1: probably know better than anybody else the competition that's out there,
Speaker 1: whether it's you know, those giant brands including Nike, You've
Speaker 1: got Lulu, Lemon, you've got under Armour. I mean, it's
Speaker 1: a super competitive market that could be on track for
Speaker 1: some slowing growth because you know, what we're seeing is
Speaker 1: people are going back to the office. I've stopped wearing
Speaker 1: my yoga pants during work. You know, I'm back wearing
Speaker 1: you know, what I would call grown up close was
Speaker 1: um in a big way. So tell us, you know how,
Speaker 1: what's the competitive advantage that gives you the optimism that
Speaker 1: you can continue on your growth trajectory. Yeah, I think
Speaker 1: those Yeah, it's a great point, you know, And it's
Speaker 1: it's interesting. When we launched the brand, we were facing
Speaker 1: this competition and we saw nothing but open space. And
Speaker 1: I think it's due to our product positioning, our brand positioning,
Speaker 1: the ethos of the brand, which is built to move
Speaker 1: in style for life. And it all comes down to
Speaker 1: building product that will support you in a workout, but
Speaker 1: it will transition and work across multiple aspects of your life.
Speaker 1: And so we prioritize fabrications that are have performance at
Speaker 1: their core, but they're incredibly soft. We design all of
Speaker 1: our products with a more modern athletic fit that works
Speaker 1: across multiple aspects of your life. And we design our
Speaker 1: product with an aesthetic color story um that is sophisticated
Speaker 1: that identify you as somebody going to the gym, are
Speaker 1: going to compete in a sport, but it just again
Speaker 1: works across multiple aspects of your life. That was always
Speaker 1: the premise of the brand, and we applied it first
Speaker 1: and foremost to activewear product that you would move and
Speaker 1: sweat in. But the brand has really evolved, and when
Speaker 1: you look at our assortment and where we're growing, it's
Speaker 1: evolved from core fitness into Outdoor, which is rooted in outerwear.
Speaker 1: And the fastest growing segment of our brand is travel commute,
Speaker 1: which is taking the lessons those technical fabrications and constructions
Speaker 1: that we applied to activewear and applying it to everyday
Speaker 1: sports where and that's one of the fastest growing segments
Speaker 1: of our collection. And those are the products that you're
Speaker 1: wearing to the office, you're wearing to travel, you're wearing
Speaker 1: on the golf course. And so I think our vision
Speaker 1: to build a more well rounded collection that speaks to
Speaker 1: multiple aspects of your life is really benefiting us as
Speaker 1: you see the preferences of the consumer change. And so
Speaker 1: there are a couple of different directions that it seems
Speaker 1: like the company could go at this point in terms
Speaker 1: of traject or eight. One of them is the Lulu
Speaker 1: Lemon route where you go public. Another one and forgive me,
Speaker 1: but this has happened before. I think of a company
Speaker 1: like Outdoor Voices, which you know, five years ago was
Speaker 1: the talk of the town of the town and has
Speaker 1: gone through several CEO Transitions and a New York Times
Speaker 1: profile that essentially said that it imploded after raising about
Speaker 1: fifty million dollars in funding. How do you avoid the
Speaker 1: fate of a company like Outdoor Voices. It all comes
Speaker 1: down to your people, incredible leadership, alignment of your people,
Speaker 1: but higher talent to people that are much better than yourself.
Speaker 1: That's been our ethos from day one is building an incredible,
Speaker 1: incredible team that can see around those corners, you know,
Speaker 1: and prioritizing making incredible products. You know, we are maniacal
Speaker 1: about our products, our level of service. You know, the
Speaker 1: the NPS scores in our stores are off the charts,
Speaker 1: and I think that's the most important thing. You know,
Speaker 1: it's hard comparison you look at a brand like Outdoor
Speaker 1: Voices in theory. You know, I wasn't great at raising
Speaker 1: CAPPA in the early days. Admittedly, um I didn't have
Speaker 1: a background building an apparel business, and so the little
Speaker 1: capital that I did get, I had to make it
Speaker 1: stretch a long way. And so we prioritized, you know,
Speaker 1: the basics of business, the fundamentals of you know, acquiring
Speaker 1: customers profitably from day one, and we built a business
Speaker 1: that was profitable from early stage, and we never had
Speaker 1: to sacrifice that profitability for growth over the years, and
Speaker 1: I think that's why there received, you know, one of
Speaker 1: the highest private market apparel valuations ever is because we've
Speaker 1: been able to demonstrate a commitment to growth, doing it
Speaker 1: profitably and also responsibly with our commitment to E s
Speaker 1: G and making decisions that prioritize the planet um as
Speaker 1: we're as we're building, which is an important part increasingly
Speaker 1: for consumers. We know that they look at what a
Speaker 1: company stands for their impact on the environment. Hey, Joe,
Speaker 1: just before we wrap up, So what's the endgame here?
Speaker 1: Is it ultimately to go public at some point? I
Speaker 1: think that could be a viable outcome. Right now, we're
Speaker 1: very heads down building the business. We're having a lot
Speaker 1: of fun. I'm a young man, I've got a lot
Speaker 1: of energy for the business. We've got big plans for
Speaker 1: growth both here in the in the US as well
Speaker 1: as abroad, and so today that's what we're focused on.
Speaker 1: But you know, we want to optimize the business and
Speaker 1: provide the best return for our shareholders. A public offering
Speaker 1: could be a viable option down the road. That was
Speaker 1: Joe Kudla founder and CEO of the active fashion brand Viori.
Speaker 1: And that wraps up the weekend edition of Bloomberg Business
Speaker 1: Week from Bloomberg Radio. Thank you so much for joining us.
Speaker 1: I'm Carol Masser and I'm Tim Stanibek. Be sure to
Speaker 1: tune into Bloomberg Business Week Monday through Friday. It starts
Speaker 1: at two pm Wall Street Time on Bloomberg Radio. You
Speaker 1: can also watch our daily broadcast on YouTube. Just search
Speaker 1: Bloomberg Global News and check out our Bloomberg Business Week podcast.
Speaker 1: You can find that at Bloomberg dot com, Apple, or
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Speaker 1: Have a great weekend, everyone, Stay safe. This is Bloomberg
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