WEBVTT - Potential Paramount & Warner Bros. Merger, Apple Vision Pro Production & Silicon Valley's Job Market 0:00:01.720 --> 0:00:07.000 From Mahart. We're Innovation, Money and Power Collie in Silicon Valley, NBN. 0:00:07.360 --> 0:00:11.400 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:25.160 --> 0:00:28.000 I'm Caroline Heiner bluemgg's world headquarters in New York, and 0:00:28.040 --> 0:00:29.680 I'm Ed Ludlow in San Francisco. 0:00:29.840 --> 0:00:32.000 This is Bloomberg Technology. 0:00:31.560 --> 0:00:35.320 Coming up Paramount Warner Brothers. Are they in talks for 0:00:35.360 --> 0:00:37.640 a possible merger. We're going to break down what we 0:00:37.720 --> 0:00:41.159 know on any talks between the two biggest media companies 0:00:41.159 --> 0:00:41.680 in the world. 0:00:42.560 --> 0:00:44.640 We'll get the outlook for the tech sectors. 0:00:44.680 --> 0:00:47.080 Then, as that one hundred bounces back from a sell off, 0:00:47.240 --> 0:00:49.600 the knocked it off record highs dnny Fish of Janis 0:00:49.600 --> 0:00:50.760 Henderson in the house. 0:00:51.040 --> 0:00:53.680 Plus Apple rams up production of its Vision Pro headset, 0:00:53.920 --> 0:00:56.040 so in the stage for a launch by this February. 0:00:56.360 --> 0:00:58.520 The one story that everyone's talking about. 0:00:58.880 --> 0:01:02.680 Warner Brothers, Discovery and Paramount have held talks about a merger. 0:01:03.040 --> 0:01:05.080 According to Bloomberg's sources. 0:01:05.120 --> 0:01:07.920 Who else to turn to on the details than Bloomberg's 0:01:07.959 --> 0:01:11.080 Lucas Shaw, who leads our screen time coverage of Global 0:01:11.080 --> 0:01:13.240 Hollywood And Lucas what do we know? 0:01:14.400 --> 0:01:17.720 Well, we know that that Warner Brothers Discovery CEO David 0:01:17.760 --> 0:01:21.480 Zaslav had lunch with or had a meal with Paramount 0:01:21.480 --> 0:01:24.959 Global CEO Bob Backish, and that there have been sort 0:01:25.000 --> 0:01:29.440 of informal conversations between the two companies, also involving Sherry Redstone, 0:01:29.440 --> 0:01:31.800 who sort of controls Paramount. 0:01:31.920 --> 0:01:32.959 You know, it's early. 0:01:33.800 --> 0:01:36.479 Warner Brothers Discovery can't even do a deal like this 0:01:36.560 --> 0:01:40.319 for a few months because of some complications or some 0:01:40.440 --> 0:01:43.759 tax issues related to the deal that they did. But look, 0:01:43.840 --> 0:01:46.440 we have been assuming that there would be greater consolidation 0:01:46.520 --> 0:01:48.440 in the media business over the last few months, and 0:01:48.480 --> 0:01:50.760 a deal between these two is one of many scenarios 0:01:50.800 --> 0:01:52.720 it's been proposed. I don't think this was a huge 0:01:52.760 --> 0:01:54.880 shock to anyone. I think people may be a little 0:01:54.880 --> 0:01:57.280 surprised by how quickly it came or at what point 0:01:57.320 --> 0:01:59.560 they were thinking that maybe there'd be some discussion in 0:01:59.640 --> 0:02:00.640 spring of next year. 0:02:00.840 --> 0:02:02.400 I think that's exactly it isn't it, Lucas. 0:02:02.480 --> 0:02:05.200 Everyone's been deciding how we're going to see consolidation. Everyone's 0:02:05.240 --> 0:02:08.359 been eyeing, you know, the ongoing narrative that maybe Paramount's 0:02:08.360 --> 0:02:10.280 going to be selling off some of its assets, but 0:02:10.800 --> 0:02:12.960 ultimately have we sort of open Pandora's box here. 0:02:13.000 --> 0:02:14.160 Can it be closed that. 0:02:14.160 --> 0:02:16.480 These sorts of companies actually are a going concern in 0:02:16.520 --> 0:02:18.560 their current scenario and their current forms. 0:02:19.520 --> 0:02:21.720 Well, it's a good question, and some of that is 0:02:21.760 --> 0:02:25.280 really up to Sherry Redstone, right, she has to decide 0:02:25.280 --> 0:02:27.639 what she wants to do with her family company. 0:02:28.600 --> 0:02:30.680 That can mean that she. 0:02:30.680 --> 0:02:33.640 Sells it for pieces, they have explored a sale of 0:02:33.720 --> 0:02:36.840 bet they've been approached about someone who wanted to buy showtime, 0:02:37.680 --> 0:02:39.160 or she can try to sell the whole thing, or 0:02:39.200 --> 0:02:41.320 she can try to buy something or hold on. 0:02:42.040 --> 0:02:43.360 Most people assume that things. 0:02:43.160 --> 0:02:45.239 Are going to get worse before they get better, and 0:02:45.560 --> 0:02:47.120 may never be able to get better. You know, the 0:02:47.160 --> 0:02:49.600 linear TV business is just moving in the wrong direction. 0:02:50.280 --> 0:02:52.280 But that's what happens when a family controls a company, 0:02:52.280 --> 0:02:53.120 they get to decide what. 0:02:53.080 --> 0:02:53.560 They want to do. 0:02:54.600 --> 0:02:56.680 We want to thank you, Lucas Shaw just all across 0:02:56.720 --> 0:02:59.560 this story as always and throughout what's happening in the 0:02:59.560 --> 0:03:02.519 world of Hollywood. We're now joined for some more perspective 0:03:02.560 --> 0:03:05.480 on an analyst who's kind of been calling this joining 0:03:05.520 --> 0:03:08.120 together of two of some of the biggest companies media 0:03:08.160 --> 0:03:10.920 companies in the world she's over at Needham Senior Entertainment 0:03:10.960 --> 0:03:13.639 and Internet. Aalyist is Laura Martin. You've got a hold 0:03:13.720 --> 0:03:16.480 rating on Aller Brothers Discovery shares, You've got a buy 0:03:16.560 --> 0:03:19.000 rating on Paramount and naturally. Back in November, we're thinking 0:03:19.000 --> 0:03:22.200 about how these two juggernauts could sort of perhaps be 0:03:22.240 --> 0:03:24.079 bigger than the some of their parts that they come together. 0:03:24.200 --> 0:03:25.800 Do you still stand by that? Do you think they 0:03:25.800 --> 0:03:26.680 could be better together? 0:03:27.680 --> 0:03:27.880 Yeah? 0:03:27.919 --> 0:03:30.160 I think they'd definitely be better together because both of 0:03:30.200 --> 0:03:33.840 their streaming assets at Paramount Plus and HBO Max or subscale, 0:03:33.960 --> 0:03:36.000 but you put them together, they would be bigger than 0:03:36.040 --> 0:03:39.440 Netflix or the Disney Plus bundle with Hulu, so that 0:03:39.520 --> 0:03:41.840 would make them They got way too much debt over 0:03:41.880 --> 0:03:44.640 at Paramount. When you put these companies together, especially if 0:03:44.680 --> 0:03:48.200 you issue equity to do the deal, suddenly the enterprise 0:03:48.280 --> 0:03:51.440 isn't as overlevered. And we've got a world class cost 0:03:51.480 --> 0:03:54.920 cutter at Warner Brothers Discovery, so we think they could 0:03:54.920 --> 0:03:57.200 get a billion to two billion dollars worth of cost 0:03:57.240 --> 0:04:00.240 cutting if you put these companies together, which would delver 0:04:00.320 --> 0:04:05.000 the enterprise much faster than either company can delever standalone. 0:04:05.160 --> 0:04:07.720 So we think these two companies are worth more than 0:04:07.760 --> 0:04:11.320 the some of their parts. Importantly, Amazon and Apple are 0:04:11.440 --> 0:04:14.600 DC contacts. I would not be allowed to buy Paramount 0:04:14.680 --> 0:04:16.599 or anything else really but not be allowed. 0:04:16.960 --> 0:04:20.200 And because Paramount owns CBS, which is a. 0:04:20.120 --> 0:04:24.440 Broadcaster, Disney can't buy it because they own ABC, nor 0:04:24.480 --> 0:04:27.280 can Comcast buy it because they own NBC. 0:04:27.720 --> 0:04:30.400 So limited. The number of people that are big. 0:04:30.279 --> 0:04:34.359 Enough and could buy Paramount, including the CBSS. 0:04:33.800 --> 0:04:35.320 Is sort of limited to Warner Browners. 0:04:35.320 --> 0:04:36.360 It's sort of the only bidder. 0:04:37.200 --> 0:04:41.200 So on that point of Paramount having something that Warner 0:04:41.279 --> 0:04:46.600 Brothers doesn't CBS to traditional broadcast network. In the Axios report, 0:04:46.760 --> 0:04:50.720 they made this idea that Warner Brothers executives see that 0:04:51.120 --> 0:04:53.799 as a reason that it might pass the regulatory test 0:04:54.240 --> 0:04:57.640 that they are acquiring something or would acquire something that 0:04:57.680 --> 0:04:58.440 they already have. 0:05:00.400 --> 0:05:01.120 I agree with that. 0:05:01.240 --> 0:05:05.000 And also regulators really care about the number of local 0:05:05.080 --> 0:05:09.560 voices and CBS broadcaster in the hands of Paramount, where 0:05:09.560 --> 0:05:12.960 the debt is fifteen billion and the equities ten billion, 0:05:13.279 --> 0:05:16.080 which actually has the risk of financial distress which means 0:05:16.080 --> 0:05:20.080 CBS might cease to exist, is they should, they would 0:05:20.120 --> 0:05:22.520 be happy, I think to put it with Warner Brothers Discovery, 0:05:22.520 --> 0:05:27.120 where the whole enterprise becomes less leveraged overall, which increases 0:05:27.160 --> 0:05:29.760 the chance that CBS can survive as a local voice 0:05:29.800 --> 0:05:30.600 in every market. 0:05:31.880 --> 0:05:34.039 I think back to some valley earlier in the year. 0:05:34.120 --> 0:05:38.760 The same existential question still is there. How do you 0:05:38.839 --> 0:05:43.160 make any streaming platform profitable? And in that respect, Laura, 0:05:43.200 --> 0:05:44.880 how would this deal achieve that? 0:05:46.680 --> 0:05:50.640 So everybody's raising price, right, we have streamflation, I mean streamers. 0:05:50.279 --> 0:05:51.240 Are taking inflation. 0:05:51.440 --> 0:05:54.800 Nice streamflation up thirty to fifty percent. 0:05:55.120 --> 0:05:58.000 So everybody's raising price and you must cut content costs, 0:05:58.320 --> 0:06:01.039 you must, and they are are doing that. So we're 0:06:01.040 --> 0:06:04.400 getting higher prices for consumers and lower original content. 0:06:04.520 --> 0:06:06.680 So the consumers getting squeezed in this. 0:06:07.080 --> 0:06:09.280 But Wall Street and the consumer are often at odds, 0:06:09.279 --> 0:06:11.320 and it is time to play wall Street's game because 0:06:11.480 --> 0:06:14.039 these stocks are down sixty to seventy percent because Wall 0:06:14.040 --> 0:06:17.680 Street is moving capital out unless you consolidate, which drives 0:06:17.720 --> 0:06:20.719 earnings for share growth, or unless you get profitability in 0:06:20.720 --> 0:06:21.799 your streaming assets. 0:06:22.200 --> 0:06:25.400 What other configurations do you see, Laura, if this is 0:06:25.440 --> 0:06:29.080 to you the better outcome, what are the other areas? 0:06:29.120 --> 0:06:30.760 What asset sales you anticipating? 0:06:30.800 --> 0:06:34.040 We keep on talking about it around Paramount, but sometimes 0:06:34.279 --> 0:06:37.120 market narratives get ahead of actually what would really occur. 0:06:38.480 --> 0:06:40.080 So you know, we think that. 0:06:40.080 --> 0:06:43.760 The streaming So right now consumers have five streaming platforms 0:06:43.800 --> 0:06:46.800 and the biggest frustration for consumers is it feels like 0:06:46.839 --> 0:06:49.480 no matter what they're paying for the content on something 0:06:49.520 --> 0:06:53.960 they're not paying for. Super frustrating for consumers. So you know, 0:06:54.040 --> 0:06:56.000 I think at the end of the day, there are 0:06:56.040 --> 0:07:00.640 three big streaming platforms total. Amazon Prime Onion will be 0:07:00.680 --> 0:07:03.800 one of them because Amazon the entity never needs to 0:07:03.800 --> 0:07:07.080 make money on its video service. So Amazon Prime winner. 0:07:07.480 --> 0:07:10.960 I would guess that the Disney Bundle winner, although I 0:07:11.000 --> 0:07:14.560 would like to see Apple by Disney, but can't be 0:07:14.640 --> 0:07:17.480 done so long as we have the current administration because 0:07:17.800 --> 0:07:20.480 big is bad in Washington, DC right now. So then 0:07:20.520 --> 0:07:22.640 that's the third. A lot of people will put Netflix 0:07:22.680 --> 0:07:24.920 in that camp, which means there isn't room for Peacock, 0:07:24.960 --> 0:07:26.040 which is owned by Comcast. 0:07:26.080 --> 0:07:28.160 There isn't room for Paramount Warner Brothers. 0:07:28.480 --> 0:07:31.080 But it just tells you there should be more consolidation 0:07:31.520 --> 0:07:33.440 in this group in the larger entities. 0:07:34.080 --> 0:07:37.720 Well, all you've just done is list off every subscription 0:07:37.960 --> 0:07:39.200 I have in my household. 0:07:39.680 --> 0:07:41.920 And you raise a good point that that's a lot. 0:07:42.360 --> 0:07:44.560 I mean, let's go back to the point that content 0:07:44.640 --> 0:07:47.200 is king right, and this deal we'll do Apple and 0:07:47.240 --> 0:07:52.040 Disney on another day, Paramount and HBO Max. From a 0:07:52.120 --> 0:07:54.960 content perspective, I think of The Last of Us being 0:07:55.000 --> 0:07:58.320 my favorite series of the year. Is there a content 0:07:58.400 --> 0:08:00.880 advantage to doing this, Laura, Yes. 0:08:01.200 --> 0:08:01.840 Absolutely. 0:08:01.960 --> 0:08:05.600 One of the largest film, largest and high quality film 0:08:05.640 --> 0:08:08.560 libraries sort of on planet Earth is that Warner Brothers 0:08:08.640 --> 0:08:14.600 Library CBS, which was the number one TV network okay 0:08:14.640 --> 0:08:17.679 with NBC taking like sixty years for the last fifty years, 0:08:17.800 --> 0:08:21.600 has the largest television library. So putting these two libraries together, 0:08:21.960 --> 0:08:25.600 you end up with sort of an unparalleled, enormous IP 0:08:26.000 --> 0:08:29.160 content library that you can then make sequels from or 0:08:29.240 --> 0:08:32.480 license to other people. So yes, the library would become 0:08:32.520 --> 0:08:36.319 best in class. And that then feeds your streaming app, 0:08:36.400 --> 0:08:40.600 which would be the combination of HBO plus Paramount plus, 0:08:40.880 --> 0:08:43.079 so you'd get a really big streaming app, and you 0:08:43.080 --> 0:08:47.040 would have the option to license content to other streaming 0:08:47.080 --> 0:08:49.200 apps if you wanted, like Netflix, if they wanted to 0:08:49.200 --> 0:08:52.120 pay a fortune for a couple of your mission impossible 0:08:52.160 --> 0:08:56.920 movies or er some of your great ncis some of 0:08:56.960 --> 0:08:59.079 your great CBS long running TV. 0:08:58.880 --> 0:09:01.960 Shows Needums or a Martin. 0:09:02.080 --> 0:09:06.560 You have an encyclopedic knowledge of what to watch literally 0:09:07.040 --> 0:09:08.880 as well as good insight on this deal. It's great 0:09:08.880 --> 0:09:12.640 to have you on the program again. Okay, there's just 0:09:12.720 --> 0:09:15.560 a few days of trading left. In twenty twenty three, 0:09:15.600 --> 0:09:18.360 the market winners of the year have been tech stocks, 0:09:18.360 --> 0:09:20.680 with then as that one hundred outpacing the S and 0:09:20.679 --> 0:09:23.160 P five hundred and fifty percent or more than fifty 0:09:23.200 --> 0:09:25.679 percent gain year to date. That puts it on track 0:09:25.960 --> 0:09:29.360 for its biggest annual jump going back to two thousand 0:09:29.400 --> 0:09:31.400 and nine. Joining us here in San Francisco on set 0:09:31.440 --> 0:09:35.240 Danny Fish, portfolio manager on the Global Technology in Innovation 0:09:35.320 --> 0:09:38.840 Team at Janis Henderson. If you go back two years 0:09:39.200 --> 0:09:41.280 or five years when I moved to the Bay Area, 0:09:41.440 --> 0:09:44.920 or with respect to nineteen ninety five, when you move 0:09:44.960 --> 0:09:49.480 to the Bay Area, technology comes out on top, it 0:09:49.679 --> 0:09:51.080 will it continues to come out on top? 0:09:51.120 --> 0:09:51.640 Is the question? 0:09:52.040 --> 0:09:54.280 Yeah, I mean it's it's a really good question. And 0:09:55.040 --> 0:09:57.520 I you know, given the secular trends that we have 0:09:57.640 --> 0:10:00.520 in place in the foundation that we've lead over the 0:10:00.559 --> 0:10:03.840 last twenty five years, I firmly believe that's the case. 0:10:04.320 --> 0:10:05.760 And the reality is. 0:10:05.679 --> 0:10:09.000 If you look at the tech sector in general, look 0:10:09.040 --> 0:10:12.840 at now at this point in time, by the end 0:10:12.880 --> 0:10:15.320 of twenty twenty four, if you look at the largest 0:10:15.320 --> 0:10:18.480 spenders on CAPEX globally, seven out of ten of those 0:10:18.760 --> 0:10:21.079 are going to be technology companies. If you look at 0:10:21.080 --> 0:10:23.040 companies that are spending the most on R and D 0:10:23.720 --> 0:10:27.679 across the global economy, six or seven out of the 0:10:27.720 --> 0:10:31.840 top ten globally are tech companies. The scale that's required 0:10:31.880 --> 0:10:34.640 to compete on an ongoing basis is at an immense 0:10:34.720 --> 0:10:39.400 level that continues to advantage the magnificent seven, let's call it. 0:10:39.800 --> 0:10:42.920 But then in addition, there's so much innovation that's being 0:10:42.960 --> 0:10:46.440 unleashed in areas like artificial intelligence that are taking the 0:10:46.520 --> 0:10:51.240 handoff from the generational value creation we've seen in cloud 0:10:51.280 --> 0:10:53.320 and SaaS and other areas of the economy. 0:10:53.360 --> 0:10:55.599 I mean, AI seems like the easy catalyst to point to. 0:10:55.679 --> 0:10:58.360 Th if I punch MRR into my Bloomberg terminal and 0:10:58.400 --> 0:11:01.520 just bring up the top performers on the nastat idea today, 0:11:01.600 --> 0:11:03.920 Nvidia has been the standalone top or former. 0:11:03.960 --> 0:11:04.920 I get that story. 0:11:05.120 --> 0:11:08.439 But next you have names like Meta, AMDs not far behind, 0:11:08.840 --> 0:11:12.359 but then Door Dash, Tesla, Brolcom. Is there any commonality 0:11:12.400 --> 0:11:14.960 in AI or something else. 0:11:15.520 --> 0:11:19.240 Well, there's some commonality. Most of those companies that you 0:11:19.400 --> 0:11:23.280 just mentioned in one form or another are instituting AI 0:11:23.400 --> 0:11:26.200 into their business, either to sell it directly to consumers 0:11:26.280 --> 0:11:28.160 or businesses or to enhance. 0:11:27.880 --> 0:11:29.000 Their value proposition. 0:11:29.920 --> 0:11:34.640 So I view AI as an enabling technology that companies 0:11:34.720 --> 0:11:36.880 and the long term winners are actually going to leverage 0:11:36.920 --> 0:11:40.679 in ways that create durable competitive advantage. And that's not 0:11:40.720 --> 0:11:42.880 going to change in twenty four. Now. Look, the market 0:11:42.920 --> 0:11:45.960 finally woke up to AI in twenty twenty three, and 0:11:46.000 --> 0:11:48.840 I think as we look forward, what we have to 0:11:48.840 --> 0:11:51.559 think about is now this is where the rubber starts 0:11:51.559 --> 0:11:53.720 to meet the road, and we actually have to start 0:11:53.760 --> 0:11:57.640 to see the revenues start to come through. You know, 0:11:57.760 --> 0:12:01.520 things like if we think about Microsoft, example and co pilot, 0:12:01.720 --> 0:12:04.240 you know they're a natural winner with copilot. Do we 0:12:04.280 --> 0:12:07.000 need fifteen co pilots? I don't think we do, you know, 0:12:07.080 --> 0:12:10.160 as consumers or enterprises. And so we're really going to 0:12:10.200 --> 0:12:13.280 see companies start to separate in terms of actually monetizing 0:12:13.360 --> 0:12:15.080 AI as we go forward. 0:12:15.480 --> 0:12:17.640 Denny to that end, Is it then earnings that we 0:12:17.679 --> 0:12:20.600 have to become obsessive about. Is it are the guides 0:12:20.600 --> 0:12:23.440 that throughout the year. Is it product innovation and launches? 0:12:23.480 --> 0:12:25.560 What's going to dictate when we decide which are the 0:12:25.559 --> 0:12:26.360 winners and losers? 0:12:27.320 --> 0:12:30.640 Well, I think it's all of the above, and we're 0:12:30.679 --> 0:12:33.600 in that position now where the financial performance really needs 0:12:33.600 --> 0:12:35.760 to come through for the companies that are getting an 0:12:35.840 --> 0:12:38.720 AI halo effect. But what I would also say is, 0:12:38.920 --> 0:12:40.400 you know, if we look at you know, you were 0:12:40.440 --> 0:12:43.480 just talking about Micron, there are actually parts of the 0:12:43.559 --> 0:12:48.280 technology market that have actually underperformed, but where there are 0:12:48.280 --> 0:12:51.920 really high quality businesses. And you know, memory is an 0:12:51.960 --> 0:12:54.080 area that you know, it's you know, there are three 0:12:54.120 --> 0:12:57.360 providers globally. It's been in the most significant downturn we've 0:12:57.400 --> 0:13:00.679 seen in many years because of the overbuild during COVID, 0:13:01.480 --> 0:13:04.880 But now it's slowly starting to improve. And you know 0:13:05.040 --> 0:13:07.120 the most important thing for stocks like that is when 0:13:07.160 --> 0:13:10.160 things start to improve, And that has implications across both 0:13:10.200 --> 0:13:14.720 memory providers as well as semiconductor capital equipment providers that 0:13:14.840 --> 0:13:20.320 actually provide the equipment to build new fabs to support 0:13:20.600 --> 0:13:23.880 demands in memory that are being driven by all the 0:13:23.920 --> 0:13:26.000 things that have been driven historically and now a little 0:13:26.000 --> 0:13:28.720 bit of a kicker with AI. And then another area 0:13:28.960 --> 0:13:32.480 I would point to too is analog semiconductors. They're great businesses, 0:13:32.760 --> 0:13:37.840 they're GDP dependent, they generally grow to multiple GDP, they 0:13:37.840 --> 0:13:40.960 have higher operating margins and returns than the average company 0:13:41.000 --> 0:13:42.880 in the S and P five hundred, and they grow 0:13:42.920 --> 0:13:46.160 a multiple of them, and they've really lagged. And so 0:13:46.640 --> 0:13:49.680 this can be an opportunity with rates coming down with 0:13:49.800 --> 0:13:53.240 a better global macroeconomic backdrop, that you start to see 0:13:53.240 --> 0:13:56.840 some areas that don't necessarily get an AI halo but 0:13:56.880 --> 0:13:58.960 are actually great technology businesses. 0:13:59.000 --> 0:14:02.199 I mean, isn't it wild sixty eight percent year to 0:14:02.280 --> 0:14:05.520 date increase on Micron as an underperformance, when, of course 0:14:05.520 --> 0:14:07.680 it is when you're looking to two hundred and thirty 0:14:07.679 --> 0:14:10.199 two percent increase on the year of an Invidia or 0:14:10.240 --> 0:14:11.800 a Meta that's like more than doubled. 0:14:12.280 --> 0:14:13.160 I'm interested in. 0:14:13.400 --> 0:14:17.480 Who ultimately should be being avoided, if anyone at the moment. 0:14:17.520 --> 0:14:19.240 What's interesting is I go to, like, who the worst 0:14:19.280 --> 0:14:22.400 performing companies on year to date for the NASDAQ one hundred, 0:14:22.400 --> 0:14:25.720 and it's it's PayPal. I'm interested as to whether you know, 0:14:25.760 --> 0:14:27.800 it's fintech and those sorts of names still going to 0:14:27.800 --> 0:14:28.440 be under pressure. 0:14:29.560 --> 0:14:31.960 Yeah, so it's a really good question. And you know, 0:14:32.040 --> 0:14:36.360 PayPal is unique in that it's a classic example of 0:14:36.360 --> 0:14:39.760 what I would call a value trap. At least over 0:14:39.800 --> 0:14:43.040 the last couple of years, the company was deemed a 0:14:43.080 --> 0:14:48.960 winner through COVID. But what's happened is the competitive advantage 0:14:49.000 --> 0:14:53.240 is for the company have significantly dwindled. The take rate 0:14:53.280 --> 0:14:56.680 for the company has come in, and you've seen margin 0:14:56.720 --> 0:15:00.440 pressure in the business. And generally that is is a 0:15:00.560 --> 0:15:03.760 recipe for stock underperformance because two things happen. One is 0:15:04.120 --> 0:15:07.720 the financial performance over the near term period is actually 0:15:07.840 --> 0:15:10.880 less than inspiring than what investors are looking for. And 0:15:10.920 --> 0:15:14.200 then investors start to discount the stock and the terminal 0:15:14.280 --> 0:15:17.760 value because of questions about what the stock is going 0:15:17.760 --> 0:15:20.760 to be worth over the next decade. And that's what 0:15:20.800 --> 0:15:22.760 we've seen with names like PayPal. 0:15:23.840 --> 0:15:26.360 Denny, it's always great to get your perspective on individual 0:15:26.400 --> 0:15:29.040 names on the sector as a whole. Pushing forward, Denny Fish, 0:15:29.080 --> 0:15:30.760 we look forward to seeing you in any year of 0:15:30.840 --> 0:15:34.360 Janice Henderson say, well, meanwhile, coming up, the Apple rumbling 0:15:34.440 --> 0:15:36.520 off its production of its Vision pro we're going to 0:15:36.560 --> 0:15:38.280 be breaking down everything you need to. 0:15:38.240 --> 0:15:46.760 Know next time. 0:15:46.800 --> 0:15:49.160 Now for Talking tech and first up US semi conductors, 0:15:49.200 --> 0:15:51.560 they continue to flow to Russian military. 0:15:51.240 --> 0:15:52.240 Link companies this year. 0:15:52.400 --> 0:15:55.560 That's despite an export restriction aimed at cutting them off. Now, 0:15:55.600 --> 0:15:58.200 shipments of the semiconductors actually surged in the first half 0:15:58.200 --> 0:16:01.040 of the year, many of them traveling through Kong on 0:16:01.040 --> 0:16:04.360 their way to this sanctioned country. Texas Instruments analog Devices 0:16:04.480 --> 0:16:08.000 emerged as the biggest makers of those chips. Plus, the 0:16:08.000 --> 0:16:11.520 Biden administration is weighing a tariff to increase in increasing 0:16:11.560 --> 0:16:14.000 of that tariff on Chinese electric vehicles and other goods 0:16:14.000 --> 0:16:16.320 in an effort to make US clean energy. 0:16:16.040 --> 0:16:17.200 Products more competitive. 0:16:17.480 --> 0:16:20.280 The talks are part of years long deliberations that began 0:16:20.360 --> 0:16:24.400 shortly after Biden took office. And artificial intelligence startup Anthropic 0:16:24.520 --> 0:16:26.280 It's in talks for a seven hundred and fifty million 0:16:26.320 --> 0:16:28.880 dollars in funding. That's an evaluation of as much as 0:16:28.960 --> 0:16:31.520 eighteen point four billion now. The potential deal is being 0:16:31.560 --> 0:16:34.800 there by Silicon Valley venture capital fair Menno Adventures, startup 0:16:34.840 --> 0:16:39.000 founded by open AA open AI defectors, focuses on responsible 0:16:39.120 --> 0:16:40.880 aied all right. 0:16:40.920 --> 0:16:43.360 Another top story, let's turn into Apple gearing up for 0:16:43.400 --> 0:16:46.080 its launch of the Vision Pro joining us down to 0:16:46.120 --> 0:16:47.880 break it all down is the man with the scoop 0:16:47.920 --> 0:16:49.080 blue most mark Germin. 0:16:49.720 --> 0:16:53.680 We think February for a launch. What do we know? Hi, Ed, Yeah, 0:16:53.680 --> 0:16:54.360 thanks for having me. 0:16:54.400 --> 0:16:57.520 So Apple has ramped up production overseas in China of 0:16:57.600 --> 0:16:59.640 the Vision Pro headset. This is going to be the 0:16:59.680 --> 0:17:02.840 first product category from Apple since the Apple Watch launched 0:17:02.840 --> 0:17:04.480 in the beginning of twenty fifteen. 0:17:04.880 --> 0:17:05.960 Right now, the plan. 0:17:05.840 --> 0:17:10.080 Is to get units stateside and ready to put into customers' 0:17:10.119 --> 0:17:13.240 hands by the end of January, and they're ramping up 0:17:13.760 --> 0:17:18.200 for a retail launch late January, early February time financial 0:17:18.280 --> 0:17:20.560 buy February is what we said. So this is coming 0:17:20.600 --> 0:17:23.679 sooner than I think most people had anticipated. When the 0:17:23.720 --> 0:17:26.399 Apple Watch came out, Apple said that would launch in 0:17:26.520 --> 0:17:30.639 early twenty fifteen. For Apple, early twenty fifteen was pretty 0:17:30.720 --> 0:17:32.919 much the last week of April. So this is coming 0:17:33.160 --> 0:17:34.720 quite a bit sooner than I think a lot of 0:17:34.720 --> 0:17:37.920 people expected. So we're only a couple months away from 0:17:37.920 --> 0:17:41.040 this headset. Pretty significant launch for Apple, but it's. 0:17:40.920 --> 0:17:41.720 Going to be a bit muted. 0:17:41.880 --> 0:17:43.760 I don't think they're going to hold another media event 0:17:43.880 --> 0:17:47.159 to introduce additional functionality. I think users will either have 0:17:47.200 --> 0:17:49.399 to experience that on their own through the media, but 0:17:49.440 --> 0:17:51.440 of course Apple will probably have a ton of videos 0:17:51.760 --> 0:17:54.720 online on YouTube, on its website, tons of stuff on 0:17:54.720 --> 0:17:57.040 their website to indicate all the new features coming to 0:17:57.040 --> 0:17:59.240 the headset that weren't shown back in June at the 0:17:59.280 --> 0:18:02.719 developer comp diference. They're already working on a subsequent update 0:18:02.760 --> 0:18:05.640 to the software on the headset, Vision OS two point 0:18:05.720 --> 0:18:07.840 zero that'll come out at the tail end of twenty 0:18:07.880 --> 0:18:10.160 twenty four. So this is a big priority right now 0:18:10.160 --> 0:18:10.359 for the. 0:18:10.359 --> 0:18:13.520 Company, big priority getting their staff train up to be 0:18:13.560 --> 0:18:15.720 teaching us consumers on how it really works. 0:18:15.440 --> 0:18:16.479 Mark I'm interested in. 0:18:16.760 --> 0:18:18.720 At the same time, we know that Apple's still having 0:18:18.720 --> 0:18:22.199 to deal with potentially well already taking the Apple Watches 0:18:22.200 --> 0:18:23.960 off the shelves and showing that they can't be sold 0:18:24.000 --> 0:18:25.960 during their holiday period or the back end of it. 0:18:26.320 --> 0:18:27.560 Have we got any update on that. 0:18:29.160 --> 0:18:31.639 Actually, today is when they're going to be removing the 0:18:31.680 --> 0:18:34.399 Apple Watch from its online store. That's going to happen 0:18:34.520 --> 0:18:38.160 at three pm Eastern time noon Pacific. The Apple Watch 0:18:38.200 --> 0:18:40.360 will be removed. The reason they have to do. This 0:18:40.440 --> 0:18:43.439 is because they need time to actually import those Apple watches, 0:18:43.440 --> 0:18:46.080 actually ship those Apple watches, get them into the hands 0:18:46.080 --> 0:18:48.159 of consumers. So you have that three four day window 0:18:48.359 --> 0:18:51.119 before the ban actually comes into place on the end 0:18:51.119 --> 0:18:53.400 of Christmas Day and December twenty fifth, and then those 0:18:53.400 --> 0:18:55.840 are going to be removed from sale at Apple's physical 0:18:55.840 --> 0:19:00.159 retail channels by December twenty fourth, So Christmas Eve and 0:19:00.400 --> 0:19:02.520 all indications still show that you'll be able to still 0:19:02.520 --> 0:19:04.720 get one at Best By Target, Walmart. What have you 0:19:05.040 --> 0:19:06.439 just not an official Apple stores? 0:19:06.840 --> 0:19:09.240 Mark German always on the news, We thank you so much. 0:19:09.440 --> 0:19:13.600 Warner Brothers Discovery paramount in talks, according to sources, about 0:19:13.600 --> 0:19:14.520 a possible merger. 0:19:14.840 --> 0:19:17.399 Meanwhile, let's just get some of the analysis the takes 0:19:17.400 --> 0:19:20.000 on this potential set of talks that we're hearing about. 0:19:20.240 --> 0:19:22.959 So we need an entertainment and internet analyst, Laura Martin. 0:19:23.359 --> 0:19:26.680 Let's get another take from Rich Greenfield, like sheared media 0:19:26.720 --> 0:19:29.800 and technology analysts, who will have us be wearing a 0:19:29.800 --> 0:19:31.879 bit of an asset a Warner Brothers Discovery today. 0:19:31.880 --> 0:19:33.040 Of course they made Barbie. 0:19:33.040 --> 0:19:36.359