Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller. Every business day, we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. We are sort of
Speaker 1: scrambling around here because we have the CEO of Nissan
Speaker 1: coming in and I wanted to get up in bow
Speaker 1: because that's what you do um in Japanese business. But
Speaker 1: I feel underdressed now because it's a Thursday just we're
Speaker 1: a flannel shirt. But thank you so much for joining us.
Speaker 1: Pleasure having in. Let me turn on your mic there. UM.
Speaker 1: We have so many questions and we're so uh excited
Speaker 1: that you came in. UM. Nissan is a business that's
Speaker 1: been doing really well uh lately, not only because of
Speaker 1: the popularity of the cars, um, but also because of
Speaker 1: the weakness of the yen. I wonder what you plan
Speaker 1: to do with the extra profits that you're making. It
Speaker 1: seems like you're in a great position to invest well.
Speaker 1: First of all, thank you for having me here. It's
Speaker 1: my pleasure to be in this radio. Uh. You talked
Speaker 1: about the extent where it has been benefiting financially on
Speaker 1: our our profit which is true at the short term,
Speaker 1: but we also need to be aware that our cost
Speaker 1: in terms of raw material is increasing at the level
Speaker 1: even higher than the exchange rate gains, so that is
Speaker 1: kind of making that the situation of the profitability. On
Speaker 1: top of that, we do have a good performance in
Speaker 1: our company in terms of about sales mix and how
Speaker 1: we're making that good product to the customer to give
Speaker 1: the good value to the customer. That is making up
Speaker 1: financial outlook which we announced in last month to be
Speaker 1: a little bit more positive. Beside, we're speaking with Makoto Cheeta,
Speaker 1: CEO and President of Nissan Motor Corporation. Mr. Cheetah. One
Speaker 1: of the unique things about your company, about the Nichean
Speaker 1: Motor Corporation is the relationship with Rena and the ownership
Speaker 1: cross ownership with renew Can you talk to us about
Speaker 1: the state of that today and how that may change
Speaker 1: going forward. Yeah, what we are discussing with our partners
Speaker 1: how we can make the alliance to the next stage
Speaker 1: to be more competitive and knowing that the identification is
Speaker 1: one of the next la for the automotive industry we
Speaker 1: are facing everywhere in the world and how we can
Speaker 1: maximize the asset that we built under the Alliance father
Speaker 1: to be competitive, and that is what we are in
Speaker 1: discussion with our partner every day. We have a bank
Speaker 1: of TV screens here and you can see half of
Speaker 1: them are full of President Biden right now meeting with
Speaker 1: French President Emmanuel McCrone. One of the things um that
Speaker 1: they are reportedly going to talk about is the Inflation
Speaker 1: Reduction Act, which a lot of people in Europe and
Speaker 1: I imagine um in Japan as well think unfairly benefits
Speaker 1: US carmakers. What's your take on the Inflation Reduction Act
Speaker 1: and the credits that seem um to be only for
Speaker 1: made in US, not only vehicle rolls assembled in US vehicles,
Speaker 1: but also vehicles with a certain amount of US sourced parts. Well,
Speaker 1: what I can say at this moment is that, of course,
Speaker 1: the electification in the US has become more visible done
Speaker 1: right in the two or three years ago, which is
Speaker 1: making us more future opportunity. We already have declare ourselves
Speaker 1: to be farther invest for the electification in the US
Speaker 1: at the level of the five hundred million dollar and
Speaker 1: that we are considering additional two hundred fifty million dollar
Speaker 1: in order to make identified strategy and to be accepted
Speaker 1: the customer for our value of the Nissan in the future.
Speaker 1: So this is what we're trying to do. Um I
Speaker 1: l A. Yes, it's a challenging in the short term,
Speaker 1: but there could be the opportunity in the future. How
Speaker 1: we father to press ourselves here in the United States
Speaker 1: of our presence, Mr. Treat As you probably know as
Speaker 1: you travel around America that Americans like their pickup trucks
Speaker 1: and from an electric vehicle perspective, my census, if you
Speaker 1: don't have an electric pickup truck, you don't have really
Speaker 1: a market position in the US. Talk to us about
Speaker 1: niche on and how maybe they think about that part
Speaker 1: of the market. Yeah, we're looking towards the two thousand
Speaker 1: thirty to introduce electified vehicle of twenty three models. Out
Speaker 1: of that fifteen our evs and we have a lot
Speaker 1: of plan. And then when you talk about the US,
Speaker 1: as you mentioned that the pickup is very important segment
Speaker 1: that we have to glow in the future. Yeah, we
Speaker 1: are looking at further we have a title and we
Speaker 1: have middle sized pickup as well, and we did like
Speaker 1: to have our value to be father to recognize by
Speaker 1: the customer. And when we talk about electified vehicle, we
Speaker 1: are planning a lot of things here in the US.
Speaker 1: And one of the things that I did would like
Speaker 1: to take this occasion to highlight is that we do
Speaker 1: have our new technology challenging today on the battery called
Speaker 1: a S S B ALSOLD state battery and this is
Speaker 1: to be introduced in first in Japan as a propilot
Speaker 1: plant in two twenty four. Then we were looking for
Speaker 1: this commercially and this battery specification would allow or enable
Speaker 1: more frexibility of the size of the car to be electric.
Speaker 1: So this is what we are challenging as a Nissan
Speaker 1: as we have been working for the electified vehicle or
Speaker 1: electric car. As one of the pioneer started was a
Speaker 1: Leap with a sudden ten and we do have a
Speaker 1: thirty years over experience of this battery chemistry in our company.
Speaker 1: I wonder what my favorite car clearly is Godzilla? Right.
Speaker 1: The g t r um is legendary, you know, said
Speaker 1: to be um produced by the motor. Only four people
Speaker 1: are allowed to assemble the motor in Japan. Is that true?
Speaker 1: What's the what are the plans for Godzilla can? Are
Speaker 1: you gonna make it into a hybrid? Is there is
Speaker 1: there a new electric Godzilla coming that I can talk
Speaker 1: about the future product yet, But what I can say
Speaker 1: about it is that the how Nistan father to make
Speaker 1: the eniche people's life. This is our corporate purpose and
Speaker 1: then Nissan is making fun this sports car like a
Speaker 1: GDR as you mentioned, and to down to the electric
Speaker 1: car that we have. I love the Z as well,
Speaker 1: especially in yellow. It's a great My first car as
Speaker 1: a Z nice and I do like to have a
Speaker 1: sports car to be father to deliver to the customer.
Speaker 1: And we have to think about what kind of the
Speaker 1: future power train or we have to consider for this
Speaker 1: kind of sports card as well. Mr Cheated China, talk
Speaker 1: to us about your position in China. What you think
Speaker 1: the future China is. That's certainly a big issue here
Speaker 1: in the United States. Well, China. I think it's still
Speaker 1: the big market that we are. The media or ems
Speaker 1: are experimentally doing the business case and it will continue
Speaker 1: as you see in the scale of the market. But
Speaker 1: I see the world now it's going to be more
Speaker 1: on the maybe the right way of saying English. I'm
Speaker 1: not so sure about fragmented okay especially the elxification. Each
Speaker 1: country has a different speed and customers acceptance. And what
Speaker 1: is important for us is how we can design ourselves
Speaker 1: towards to that. What is for you as what is
Speaker 1: for your what is what China? What is what Japan?
Speaker 1: And that's going to be a challenging for the next
Speaker 1: five to ten years. That's the reason why we have
Speaker 1: announced sumption to Southern thirty and we're going to do
Speaker 1: out the more detailed plan on the e respective. Mark
Speaker 1: Okayo Cheetah, a CEO and president of Nissan Motor Company,
Speaker 1: joining us live in our Bloomberg in Erector Brooker Studio.
Speaker 1: We really appreciate you taking time to speak with us
Speaker 1: and learn about what's the latest with the Nissan Motor Corporation.
Speaker 1: So I put in DAL Drones Industrials Index Space m
Speaker 1: o V for movers, and I find that costs, I
Speaker 1: mean the salesforce accounts for a hundred and twelve points
Speaker 1: of the four point decline in the Dow Jones Industrial
Speaker 1: So I need to go. It's literally been decimated. So
Speaker 1: a lot of people think decimated is reduced to one tenth,
Speaker 1: but actually it's yes, exactly, So you're using the correct Okay,
Speaker 1: Man Deep Singh senior technology annels for Bloomberg Intelligence. We
Speaker 1: got them both here in the studio on right, What
Speaker 1: how do you guys divide it? I don't rock, what
Speaker 1: do you cover that Man Deep doesn't? And vice versa?
Speaker 1: The Internet names Okay, I don't know. I just they
Speaker 1: do it all their tech. I just throw tech, hardware, software, Internet,
Speaker 1: I just throw them eat at each very different. Yes,
Speaker 1: and and that's what you'll see sales force versus All right,
Speaker 1: let's go a salesforce on that's your name. We'll assign
Speaker 1: the blame to you. What happened to them because they
Speaker 1: were just ripping it for so long? Yeah, so it's
Speaker 1: falling in the same category of you know, macro yt
Speaker 1: spending slow down. Now. I think the stock reaction would
Speaker 1: have been less worse if work they didn't announce spectacular
Speaker 1: results the day before UM. And so that's one culprit.
Speaker 1: The second is that co CEO Brett Taylor decides to
Speaker 1: leave and start you know, it's gonna most likely start
Speaker 1: a new company. I think that puts a little bit
Speaker 1: of haziness at the top. There have been a few
Speaker 1: CEOs or co CEOs that have left in the last
Speaker 1: few years. So it really people want to figure out
Speaker 1: is what's Mark Bennehoff going to do when it comes
Speaker 1: to leadership on the top. So I think both both
Speaker 1: those factors are weighing on sales force today. But in general,
Speaker 1: we've seen a lot of bad news or not good
Speaker 1: news out of these software companies over the last few days. Right,
Speaker 1: CrowdStrike was not good. I didn't think, um that we're
Speaker 1: gonna see gains in Snowflake, but it's now turned around
Speaker 1: in the market. Nonetheless, the outlook isn't great. You know,
Speaker 1: are people spending less on these services they see they
Speaker 1: are all old spending services less on some of these services.
Speaker 1: But remember one thing, it's also question of valuation and
Speaker 1: how much estimates have been reduced. So every stock is different,
Speaker 1: every company is different. In areas where they have been
Speaker 1: estimates have been cut down quite a bit, they are
Speaker 1: not responding, you know, from a stock point of view
Speaker 1: as bad. In some places where it's not been cut down,
Speaker 1: people are surprised by what happened. You know, stock reaction
Speaker 1: is bad. Crowds right is a great example. Salesforce is
Speaker 1: a great example. Over there, a man deep we have
Speaker 1: the I think just only a silicon you're only doing
Speaker 1: Silicon Valley. H Elon Musk tweeting out that he was
Speaker 1: at the Apple campus in Cupertino, California. Rewind First, he
Speaker 1: tweeted out that he was going to war with Apple. Yes,
Speaker 1: he said, you know what, they threatened to take us
Speaker 1: out of the app store. They charge us thirty it's
Speaker 1: a monopoly they're abusing, and when we choose to go
Speaker 1: to war. Then he went to the Cupertino campus and
Speaker 1: he was like, oh, we're great friends. Well, so a
Speaker 1: couple of things they're one is I don't think he
Speaker 1: realized that if they pivot to a subscription model, Apple
Speaker 1: will be taking a thirty percent cut. Remember Twitter was
Speaker 1: all advertising. With advertising, you're monetizing the time span through
Speaker 1: by showing ads. You don't have to pay Apple anything.
Speaker 1: With subscription, it's very different because if people sign up
Speaker 1: for a subscription on the phone, Apple is taking a
Speaker 1: thirty percent cut. So as he pivoted to subscriptions, I
Speaker 1: think he realized that Apple will be taking a cut,
Speaker 1: and he complained about the take rades, which Epic has
Speaker 1: done before, and a number of other companies, gaming companies
Speaker 1: that rely on a subscription model on the phone. They
Speaker 1: talk about, you know how Apple has a very high
Speaker 1: take rate and and so does Android and Google. But
Speaker 1: the advertising side was much more cleaner in terms of
Speaker 1: paying to Apple. But now he realizes, right, and he
Speaker 1: eats his chest and he talks a big game, and
Speaker 1: then somehow he ends up at Apple's headquarters and Tim
Speaker 1: Cook just quietly puts him in his place because there
Speaker 1: is no way out of it. And that's what a
Speaker 1: number of gaming companies have realized. That power off Apple's platform,
Speaker 1: that is the biggest distribution channel out there. Even if
Speaker 1: they charge the high take rades, you have no option
Speaker 1: right now but to pay for it. And you can't
Speaker 1: build your own phone or you know, launch a service
Speaker 1: outside of this is what Anora was. I was having
Speaker 1: this discussion with Anorag yesterday and I said, you know
Speaker 1: what he's gonna I thought Musk would take this to
Speaker 1: Republicans and they would raise a free speech problem and
Speaker 1: they would move some legislation through Congress. And Anorag was like, nope, no,
Speaker 1: I mean no, no, it's not that I think it's
Speaker 1: a very simple thing. If Tim Cooks tells him you
Speaker 1: want a business, turn it out, I'll help you do it.
Speaker 1: What what is the you know? I think that's a
Speaker 1: much more easier way to fix it. We'll figure it
Speaker 1: out a way. You just don't put X amount of
Speaker 1: content there, will make sure we advertise mode. And I
Speaker 1: think that's a it's a more logical and a more
Speaker 1: friendly approach to fix things. It's a more silicon value
Speaker 1: way to go. I mean they're also zen out there, um,
Speaker 1: unlike you two guys. All right, so we got on
Speaker 1: Ron and we got man deep sing uh. They cover
Speaker 1: all this tech stuff for bloombergin. Who does hardware? By
Speaker 1: the way, like if I need a hardware call, who
Speaker 1: do I go to? What is hardware? Like the computer stuff?
Speaker 1: Let me make one comment is you know the chip
Speaker 1: companies are missing so much talking about estimate cuts, software misses.
Speaker 1: Our s like slave in comparison to the misses. So
Speaker 1: that's one thing to be mindful of. When you said
Speaker 1: snowflake missed, okay, compare it to an N video or
Speaker 1: an E M D miss Alright, a lot of good
Speaker 1: tech stuff here. We can do it all day long.
Speaker 1: I don't know. I was definitely dialed in yesterday to
Speaker 1: the sand Bank Freed interview Andrew Ross Sorkin at the
Speaker 1: deal Book conference yesterday. I thought Andrew did an excellent
Speaker 1: job from a really weird topic, I guess, but I
Speaker 1: was riveted. But it's the first time I've seen Sam
Speaker 1: bankman Free speak, so you know, I'm not sure what
Speaker 1: to compare to, but it's certainly a key, key issue
Speaker 1: in this whole crypto space here. So any massa who's
Speaker 1: part of the team here, she's an investing reporter Bloomberg News,
Speaker 1: but she's part of this team here Bloomberg News that's
Speaker 1: done an extraordinary job covering all things crypto and kind
Speaker 1: of how this whole space is evolving and some of
Speaker 1: the real big stumbles were seeing out there, including ft
Speaker 1: X and any massive joins us here in our studio.
Speaker 1: Any what did you make of Sam bankman Fried's interview yesterday? Testimony?
Speaker 1: You want to say, I felt like I was just
Speaker 1: about to say testimony, But you know, his interview, Well,
Speaker 1: there was a lot of hype around this interview because
Speaker 1: he had been on the program to speak at the
Speaker 1: deal Book conference long before the blow up in f
Speaker 1: t X, so people were watching very closely and wondering
Speaker 1: if he was going to appear at all, and he did.
Speaker 1: So that was a moment when he actually appeared on
Speaker 1: the screen. As far as what he actually said in
Speaker 1: the interview, he didn't give. He answered a lot of questions,
Speaker 1: but he didn't give a lot of answers, if you
Speaker 1: know what I mean. He verry consciously, I would surmise,
Speaker 1: kept this profile of kind of looking like downcast eyes,
Speaker 1: bowing his head, saying I screwed up. I was the CEO,
Speaker 1: I'm responsible. So he said a lot of that sort
Speaker 1: of thing. He didn't give a lot of answers um
Speaker 1: and did his typical deflecting as far as what actually
Speaker 1: went down, which probably was to be expected. He clearly
Speaker 1: didn't want to incriminate himself, and Andrew really wanted to
Speaker 1: incriminate him, and he kept using the term co mingling,
Speaker 1: as if that's just a daily term we throw around.
Speaker 1: But um, I thought I came away with a pretty
Speaker 1: clear picture of if you take Sam Bankman free at
Speaker 1: his word of what happened, it seemed like Alameda, which
Speaker 1: you know, he says he was trying to distance himself
Speaker 1: from had massive margin positions all over town, and after
Speaker 1: the collapse of Terror Luna, they just shifted those margin
Speaker 1: positions onto F t X, right because they were called
Speaker 1: everywhere else and they had nowhere else to go. Um.
Speaker 1: The part that's hard to believe if that's what happened,
Speaker 1: is that he had no idea that that was happening. Yeah,
Speaker 1: I mean, I would say, you have to take everything
Speaker 1: he says. He's he's a very slippery personality, and exactly
Speaker 1: so all the disclaimers that you just mentioned, Um, he
Speaker 1: I just I think it's hard to take anything that
Speaker 1: he says at face value. Some of the things he
Speaker 1: said were demonstrably false. But to your point, he was
Speaker 1: a owner we know from the bankruptcy filings of Alameda,
Speaker 1: So to say that he didn't know what the positions were,
Speaker 1: I would treat that with a lot of skepticism. The thing, Yeah,
Speaker 1: The other thing is he lived there in the Bahamas
Speaker 1: with the the heads of Alameda. So again, like you're
Speaker 1: living in an apartment in an environment together with these people.
Speaker 1: Just to say that you had no idea seems um,
Speaker 1: seems hard to believe to me. It did seem like, um,
Speaker 1: they were living it up down there. I mean every
Speaker 1: employee who came down like got a house and a
Speaker 1: car and they were all allowed to two worth of
Speaker 1: free food. How can you two hundred door dash a
Speaker 1: day like that would be difficult even for me and
Speaker 1: I eat a lot um. So definitely there were no controls, right.
Speaker 1: But um, it seems like even now he's operating without control,
Speaker 1: why would he do this? Wouldn't his lawyers tell him
Speaker 1: not to? His parents are lawyers, right? So Andrew did
Speaker 1: ask him at one point, dear lawyers know you're doing this.
Speaker 1: What do they say? And Sam said something like they
Speaker 1: very much are not on board with me doing this.
Speaker 1: And again, who knows if that's true or false. It
Speaker 1: does seem to be a bit of an image. The
Speaker 1: lawyer in the world will be okay with even a
Speaker 1: bad lawyer, but his parents are like Stanford professor, good lawyer.
Speaker 1: It's it's hard, it's hard. It's really hard to fathom
Speaker 1: why they would why they would let him get out
Speaker 1: there on the record. Um. To your point about the
Speaker 1: freewheeling culture that they had in the Bahamas, Andrew did
Speaker 1: ask him about that, and Sam insisted again use all
Speaker 1: the grains of salt you like with us, he said,
Speaker 1: the only drug use we had was prescription drug use.
Speaker 1: I use drugs like you know, medication for focus and
Speaker 1: things like that. But but there wasn't any crazy partying.
Speaker 1: All we did was like playboard games when we partied.
Speaker 1: So that was a funny moment. And again I think
Speaker 1: you kind of have to raise an eyebrow. So you know,
Speaker 1: it's been several weeks here and we're talking billions, maybe
Speaker 1: tens of billions of dollars here, uh, and customer losses.
Speaker 1: What's the next step from a legal perspective of a
Speaker 1: police perspective. I mean, he's just sitting down there in
Speaker 1: the Bahamas. I want to know if anyone's gonna go
Speaker 1: down there and grab him right, good question. Either the
Speaker 1: d O J or Russian mafia, yeah, or an angry customer.
Speaker 1: I mean it's it's hard to know what could happen, Um.
Speaker 1: But there was an emotional moment in the interview where
Speaker 1: um Andrew read out a message that user of f
Speaker 1: t X had sent to him, basically asking like ask Sam,
Speaker 1: like where did my money go? Like? I trusted him
Speaker 1: and he betrayed my trust as he betrayed the trust
Speaker 1: of so many people. And it's a hundred percent true that.
Speaker 1: I think people who loaded money onto that platform and
Speaker 1: believed him are absolutely reeling over the scale the magnitude
Speaker 1: of the losses that they probably incurred, because it doesn't
Speaker 1: look very good um that that you'll see that very
Speaker 1: much money recovered at all in this bankruptcy. It's pretty
Speaker 1: clear where the money went, right. Alameda borrowed all the
Speaker 1: money from f t X, gave f t X worthless collateral,
Speaker 1: then lost all the money, and the collateral is now
Speaker 1: worth nothing. That's right. The problem really comes back to
Speaker 1: being able to There are a lot of problems, but
Speaker 1: one of them is that, uh, the that ability to
Speaker 1: borrow endlessly um, you know, real real dollars and like
Speaker 1: real value against um invented tokens that are just conjured
Speaker 1: out of thin air UM. And then and then the
Speaker 1: privileges that Alamide absolutely had UM that were specific to
Speaker 1: Alamade on f t X UM and and obscured to
Speaker 1: the rest of them. It's amazing that Sam Bankman freed
Speaker 1: this super genius from m I T had such um
Speaker 1: an inability to remember exact numbers, right, He's like, yeah,
Speaker 1: we had like a hundred million of margin. Maybe it
Speaker 1: was two hundred million. Your investments in Sequoia, what was
Speaker 1: like a couple hundred million? I think I can't remember.
Speaker 1: Like he didn't know even ballpark figures closest to the
Speaker 1: nearest million, right, or he didn't want to show that
Speaker 1: he knew. It's it's really hard to get him inside
Speaker 1: his head, but he does a lot of that, just
Speaker 1: pulling estimates out of the air um and it can
Speaker 1: be hard to I still don't know what the reckoning
Speaker 1: is here. I mean, I don't think it doesn't look
Speaker 1: good for I mean it doesn't look I think that
Speaker 1: one thing is like it looks horrible for US regulators
Speaker 1: to an extent that this kind of went on as
Speaker 1: long as it did so. I mean there's a lot
Speaker 1: of talk about, certainly from angry customers. There's a lot
Speaker 1: of talk like we want to see SPF and his
Speaker 1: cronies in jail. I don't know this is at the
Speaker 1: early stages. I think of a long, longer play here
Speaker 1: in any Messa and her reporting colleagues will continue to
Speaker 1: report on that. For us, we appreciate that any massa
Speaker 1: investing reporter. What I've got a Barry rid Hults. He's
Speaker 1: the founder of rid Hult's Wealth Management host of Masters
Speaker 1: in Business, Barry, we love talking to you about markets,
Speaker 1: but i'd love to just I'm not sure if you
Speaker 1: saw Sam Bankman freed yesterday, but if you did, I'd
Speaker 1: love to get your thoughts because that was certainly unique
Speaker 1: theater for those in the markets. He's a professional liar,
Speaker 1: and as a somebody who evaluates um ambiguous information constantly,
Speaker 1: I found it tremendously useful to just avoid listening to
Speaker 1: people with that sort of history. Uh. You know, this
Speaker 1: looked really negative for crypto for a while, but the
Speaker 1: parallels are burning made off. This guy is just a thief.
Speaker 1: I don't care what his model was. Once you dip
Speaker 1: into client cash, I don't care if you're borrowing it
Speaker 1: with the best of intentions, that's it. You're a felon.
Speaker 1: You go to jail. Although right now I think he
Speaker 1: would be lucky if he makes it to jail in
Speaker 1: one piece. I have to imagine there are a lot
Speaker 1: of angry people who would be very happy to spend
Speaker 1: a hundred thousand dollars making his life as miserable as
Speaker 1: he's made their life. Yeah, so you don't buy the
Speaker 1: kind of innocent. We were all down there being outru
Speaker 1: risks and spending tons of money playing board games and
Speaker 1: not paying attention to the books, when all of a
Speaker 1: sudden we realize coops or eight billion dollars in the
Speaker 1: whole rests ips. Loquatur is a phrase they teach in
Speaker 1: law school, which means the thing speaks for itself. Here
Speaker 1: is client deposits. You reached into client deposits. Sorry, you
Speaker 1: go to jail that this this is not you know,
Speaker 1: I think everybody deserves their days and talk because it
Speaker 1: seems like this is black and white. It seems like, yeah,
Speaker 1: it seems like it is black and white, and it
Speaker 1: seems like he's gonna go to jail for the rest
Speaker 1: of his life no matter what. Why Why is he
Speaker 1: talking instead of, you know, trying to put together a defense.
Speaker 1: So when people are on these self destructive spirals, and
Speaker 1: clearly he has been in one for a while, even
Speaker 1: as he has deceived many of the most sophisticated institutional
Speaker 1: investors out there, um and his parents. Apparently he's a
Speaker 1: con man. Listen, The whole thing behind Khan Man is
Speaker 1: that Khan stands for confidence. He is so self assured
Speaker 1: and so brilliant that he wins them over and they
Speaker 1: place misplace their confidence in him. And look, you know,
Speaker 1: I've been on the fiduciary side of the street for
Speaker 1: well over a decade. I've been arguing that all of
Speaker 1: Wall Street should put their client's best interests first. None
Speaker 1: of that applies here. This person allegedly reached into client
Speaker 1: accounts and took that money. I don't know how much
Speaker 1: more debate is necessary, um and again, everybody deserves their
Speaker 1: day in court. But dear lord, I don't know how
Speaker 1: else to describe that other than this isn't a business
Speaker 1: model failure, This isn't a research error. This guy is
Speaker 1: a criminal. It's I feel like we should have some
Speaker 1: kind of disclaimer just for you and me. Right, so,
Speaker 1: allegedly don't have any evidence that he's broken a lot
Speaker 1: other than the fact and billions of clients dollars have disappeared.
Speaker 1: Hold that little factory to say, I just want to
Speaker 1: keep myself out of trouble. Bear, what's the barry? What
Speaker 1: does this mean? If anything? For the cryptospace writ large
Speaker 1: so you know it in a perverse way, If this
Speaker 1: isn't a business model failure, and this turns out to
Speaker 1: be full blown theft. It's kind of like Bernie made
Speaker 1: off in hedge funds. Oh wait, this doesn't mean hedge
Speaker 1: funds are bad. It means that Jerk was a thief
Speaker 1: and one of the greatest thiefs of all time until
Speaker 1: Sam came along. Sam and Bernie will go down in
Speaker 1: history as two of the most accomplished. Um well, they
Speaker 1: both got caught. You know, here's the difference. When Ernie
Speaker 1: made Off admitted to his son's that he was stealing
Speaker 1: client money that day he was in head. That's kind
Speaker 1: of what we can I don't know. Do we not
Speaker 1: have extradition charge? I don't know. I've been asking this,
Speaker 1: but we'll figure it out, all right, Barry, thank you
Speaker 1: so much. We appreciate your comments. They're making a very
Speaker 1: clear Barry Ridholt's host of Masters in Business on Bloomberg Radio.
Speaker 1: Today is World AIDS Day, so we thought it's a
Speaker 1: good time to kind of get the latest on what's
Speaker 1: going on. I mean, the world's obviously just coming out
Speaker 1: of this pandemic and you need to kind of refocus
Speaker 1: on some of the other issues out there, and we
Speaker 1: want to do that right here. We can do with
Speaker 1: Jennifer Lotito, ce OO and president of the firm by
Speaker 1: the name of RED R. E. D. Jennifer, thanks so
Speaker 1: much for joining us here. You know, again, the world's
Speaker 1: just kind of coming out on the other side of
Speaker 1: this global pandemic um and it's probably time to refocus
Speaker 1: on some of the issues that were there before the pandemic,
Speaker 1: like AIDS. I love for you to give us kind
Speaker 1: of a summary of kind of where we are in
Speaker 1: our fight against AIDS. Yeah, thank you so much for
Speaker 1: having me. Well, you're exactly right. We need to uh
Speaker 1: you know, AIDS like COVID may not be in the
Speaker 1: headlines every day, but it needs to be. And the
Speaker 1: reason for that is because over twelve thousand people every
Speaker 1: week are dying from a treatable and preventable disease. So today,
Speaker 1: as we mark World AIDS Day, we need to think
Speaker 1: about the forty million people whose lives have been lost,
Speaker 1: but also the fact that there is treatment available, but
Speaker 1: we need to get that treatment everywhere it's needed, and
Speaker 1: that's what RED is helping to do. So what is
Speaker 1: the problem with getting people this treatment? Is it a
Speaker 1: cost issue? Yeah, you know, like so many other things,
Speaker 1: it's it's a resource issue, it's a cost you know.
Speaker 1: Thankfully we've got organizations like the Global Fund, which is
Speaker 1: who we provide funding to. They are getting treatment on
Speaker 1: the ground where it's needed the most in Sub Saharan Africa.
Speaker 1: But they need more, They need more resources. But in
Speaker 1: addition to that, they need people to care. And the
Speaker 1: way they do that is through red We work with
Speaker 1: the biggest companies in the world. We give people products
Speaker 1: to buy. When you do that, money from those companies
Speaker 1: goes to help buy those pills, that treatment and make
Speaker 1: sure that we are ending this disease for good. And
Speaker 1: they are some of the most it must be the
Speaker 1: most recognizable, uh or one of the most recognizable charities,
Speaker 1: right because you have so many products, but they're not
Speaker 1: I mean they're good products, they're not you know, just
Speaker 1: randomly picked. It looks like you do a lot of
Speaker 1: work trying to find the best things to put your
Speaker 1: name on. How do you do that, well, it's it
Speaker 1: is carefully curated. We want products and brands and leaders
Speaker 1: who believe in this fight. And so we're really excited
Speaker 1: because you know, today, being world they say we have
Speaker 1: the ability to tell people and tell the world about
Speaker 1: how they can give back during this holiday season. To
Speaker 1: your point, these are not just great, beautiful products that
Speaker 1: are well designed, they are products that are actually saving lives.
Speaker 1: So if you look at something like the temperature controlled
Speaker 1: Ember mugs, which are fantastic, a lavoid air purifier, there's
Speaker 1: a new collection from Prime mark. I mean, these are
Speaker 1: incredible products, but they are actually life saving and so
Speaker 1: you need to get to Amazon dot com, slash red
Speaker 1: and check them all out. Jennifer, can you just let
Speaker 1: us know or give us the latest on what the
Speaker 1: treatments are for AIDS? What's what is the protocol? How
Speaker 1: how you know how difficult is it is is it
Speaker 1: to treat? Or how easy is it to treat? And
Speaker 1: where are we today? Absolutely? I will, I will full disclosure.
Speaker 1: I am not a medical doctor. I am an activist
Speaker 1: at a marketer. But yeah, there is one pill a
Speaker 1: day in Sub Saharan Africa costs about twenty cents a day. Um.
Speaker 1: The interesting thing that many people may not know is
Speaker 1: that when you take that pill, now granted you need
Speaker 1: to take that pill every day, it suppresses the viral
Speaker 1: load in your system so that you are not sick,
Speaker 1: you're able to live a full and healthy life. Um.
Speaker 1: But not only that, you don't pass it on to
Speaker 1: your partner. And if your HIV positive mother or a
Speaker 1: pregnant woman, you will very high chances you will not
Speaker 1: pass it onto your unborn child. So that's really that
Speaker 1: is incredible progress, UM. But we need to make sure
Speaker 1: everybody is on that treatment. We also need to make
Speaker 1: sure everybody is getting tested. So for brands like that
Speaker 1: are out there like Roch and Mark, people are getting tested,
Speaker 1: They're getting the treatment that they need. And you know,
Speaker 1: that's the way we're going to end this disease. We
Speaker 1: know how to do it, we just need the resources
Speaker 1: to get there. And so how are you doing with
Speaker 1: UH with the marketing side of things, with the with
Speaker 1: the collection or fundraising side of things, what are your
Speaker 1: goals and where are you? Yeah? Absolutely we are. We're
Speaker 1: doing great. We would love to have more partners join
Speaker 1: us in this fight. We are very focused on talking
Speaker 1: about where the AIDS fight is right now and we
Speaker 1: are seeing it hit marginalized communities. So if you are
Speaker 1: a person of color or an l g B t
Speaker 1: Q or or young girl UH in Sub Saharan Africa especially,
Speaker 1: you are going to be more vulnerable to diseasease to
Speaker 1: the disease. So from a marketing standpoint, we want to
Speaker 1: make sure of people understand that is an injustice that
Speaker 1: we need to write and we can do that through
Speaker 1: our efforts by providing treatment and UH and prevention programs.
Speaker 1: And that's exactly what RENDS doing. We always want to
Speaker 1: do more. We want more products. We have over a
Speaker 1: hundred and thirty products, but we'd love to do more.
Speaker 1: We'd love more brands to join us. And that's exactly
Speaker 1: what we're focused on. And Jennifer, just the pandemic. It's
Speaker 1: affected everybody individually. It's affected communities, it's affected uh, you know, economies.
Speaker 1: How's it affected kind of the the fight against AIDS
Speaker 1: from your perspective, Yeah, so when you go to you
Speaker 1: know this, this shouldn't be too tough to imagine. I think,
Speaker 1: you know, I live here in New York City, when
Speaker 1: when COVID hit here, we saw the impact it had
Speaker 1: on our health system. That's the same in Sub Saharan Africa.
Speaker 1: The good news is many of the programs that had
Speaker 1: been put in place by our partners at the Global
Speaker 1: Fund were able to respond more quickly and nimbly when
Speaker 1: COVID arrived so many of the HIV programs that were
Speaker 1: in place, but but we've now lost ground and we've
Speaker 1: got to keep that prom breast going. You know, you
Speaker 1: can just imagine if you're somebody who's on HIV treatment,
Speaker 1: you need to go into the clinic, you need to
Speaker 1: get your pills. If you're worried about getting COVID, you
Speaker 1: may not do that. We saw the impact on healthcare workers.
Speaker 1: That's no different there. These are all part of this
Speaker 1: health system that we need to make sure we're strengthening
Speaker 1: because there will be another pandemic. We need to be
Speaker 1: prepared for it. All right, good stuff, Jennifer Latito, thank
Speaker 1: you so much for joining us. Jennifer's the CEO and
Speaker 1: president of Red Spelled r e D. Just getting the
Speaker 1: latest on AIDS. It is World Age Day, so getting
Speaker 1: a little kind of an update. They're still still a
Speaker 1: grave issue out there in the global community. But the
Speaker 1: good news is obviously after years and years and decades
Speaker 1: of scientific study, there are very effective treatments out there,
Speaker 1: and that's the good news. So the folks are read
Speaker 1: continuing to do the good work in raising awareness, raising
Speaker 1: funding for the issue. Go by their stuff go by
Speaker 1: their stuff. Let's get right to our next guest, Charles
Speaker 1: Meyer Sees the CEO of equine Equinox is a NASTAC
Speaker 1: traded stock. E q i X is a symbol to
Speaker 1: put into your Bloomberg professional terminals. It's a really real
Speaker 1: estate investment trust. Those guys throw off lots of cash,
Speaker 1: lots of dividends. This company, though, does it with like
Speaker 1: data centers, so it's got a real tech spin to it. Charles,
Speaker 1: thanks so much for joining us here in studio. Talk
Speaker 1: to us about Equinox. What's talk? Just give us a
Speaker 1: thirty seconds on what your company does, what where, where
Speaker 1: your focuses and kind of what are the opportunities for
Speaker 1: you guys going forward. Sure, thanks for having me. Yuh So,
Speaker 1: Equinics is the really the largest provider data centers around
Speaker 1: the world. We operate two data centers seventy one markets
Speaker 1: twenty nine countries around the world. And you know, the
Speaker 1: genesis story of the company and the name even Equinox is,
Speaker 1: you know, is Equitable Internet Exchange. That's sort of where
Speaker 1: the name is derived from. And uh, you know, we've
Speaker 1: built the set of data centers that really provide interconnection
Speaker 1: between the major players in the digital ecosystem and that's
Speaker 1: really are our sort of special role in the in
Speaker 1: the data center space. So we've seen, um, just in
Speaker 1: the last few days a number of reports that some
Speaker 1: big tech companies, including data centers, are seeing less demand.
Speaker 1: Is that what you're seeing as well? We're not. We're
Speaker 1: seeing a strong demand signal from the market right now.
Speaker 1: I think that um, you know, we uh, we we're
Speaker 1: seeing customers very committed to digital transformation as a means
Speaker 1: of driving competitive advantage and in fact, in a in
Speaker 1: a in an environment where there's a lot of belt tightening,
Speaker 1: I think doing you know, doing more with less, so
Speaker 1: to speak. Um, I think digital transformation is a major
Speaker 1: element of that. And they're using cloud and other things
Speaker 1: to think differently about I T and and we play
Speaker 1: an important role and then helping them think through that.
Speaker 1: So we're seeing a very strong demand right now. Sept
Speaker 1: under dollar stock price. You gotta split this thing. What's
Speaker 1: what's your thing? I'm an old stock analyst. How do
Speaker 1: you think about that? We just we don't have a
Speaker 1: lot of retail uh you know, demanded um is the reality,
Speaker 1: and so uh you know, it hasn't been something area
Speaker 1: focus for US, something we've we've occasionally looked at and
Speaker 1: probably will you know, continue to do so, but it
Speaker 1: hasn't been a strong, strong reason just because we don't
Speaker 1: have a lot of retail demand. How global are you
Speaker 1: and and what's the breakdown look like regionally? Extremely global.
Speaker 1: We operate in seventy one markets in twenty nine countries
Speaker 1: around the world. We're more than fifty outside the US. UM.
Speaker 1: So yeah, you know, it's interesting because we've been running
Speaker 1: into a pretty stiff currency headwind in that regard for
Speaker 1: a while. UM. I think we may see that warm
Speaker 1: turn as we see interest rates peak. But it's um,
Speaker 1: we're very, very global business for sure. I think. I
Speaker 1: know I've always said when I come back in the
Speaker 1: next life, I want to come back as a real
Speaker 1: m and a banker. You guys are very active, you
Speaker 1: guys being the industry, you're very active. Here, talk just
Speaker 1: about kind of the next five years, how much of
Speaker 1: your growth is kind of organic and maybe what that
Speaker 1: organic growth rate might look like versus what you might
Speaker 1: get on the equator. Yeah, I mean, we're we're running
Speaker 1: you know, we're about a seven point to five billion
Speaker 1: dollar company. That's what our guide for this year implies
Speaker 1: UM and growing at you know, ten to eleven percent,
Speaker 1: so still a pretty nice growth rate on a pretty
Speaker 1: large installed base UM and so our organic owth is
Speaker 1: very strong. That's our top priority in terms of our
Speaker 1: allocation of capital. But I will say, and as you noted,
Speaker 1: we've been extremely successful in M and A and UH.
Speaker 1: We continue to believe that extending the geographic reach of
Speaker 1: the footprint as a priority, and and we'll look to
Speaker 1: M and A as a as a tool in that toolbox.
Speaker 1: Will be very disciplined in that, as we always are,
Speaker 1: but I expect that we're gonna use some of our
Speaker 1: balance sheet firepower in that regard. I mean, and you know,
Speaker 1: previous months you must have in years you must have
Speaker 1: had a ton of competition there. But I wonder as
Speaker 1: rates go up, if you have a strong balance sheet
Speaker 1: and cash to spend, you must be finding yourselves as
Speaker 1: some of the only bidder. Sometimes well you know, it's
Speaker 1: still I will say, there's the demand for these assets
Speaker 1: still is vigorous with the private players. Private equity players
Speaker 1: are very active in the space. But I do think
Speaker 1: that you know, times like this, the challenging macro is
Speaker 1: when I think market leaders often have a chance to
Speaker 1: extend their lead, and so I think we're gonna position
Speaker 1: ourselves to do that again. We'll we'll be disciplined, but
Speaker 1: I believe will be have that opportunity. What's your company?
Speaker 1: You know, I'm just looking here, and when we have
Speaker 1: CEOs come in here, oftentimes we asked them kind of
Speaker 1: how did the pandemic impact your company? You've got close
Speaker 1: to twelve thousand employees, uh, your companies based in Silicon Valley.
Speaker 1: How's the pandemic change your business from your company our
Speaker 1: own operations. Yeah, that's a lot of employees too, it is,
Speaker 1: but a huge chunk of those our frontline employees. And
Speaker 1: so they were in the data center still, you know,
Speaker 1: and so we still have an element of our business
Speaker 1: where and to their credit, I think they did an
Speaker 1: extraordinary job of rising to the occasion, navigating a lot
Speaker 1: of difficulties in terms of being there with all the
Speaker 1: you know, all the processes and protections that come with
Speaker 1: throughing that in the in the form of the pandemic
Speaker 1: and dealing with customers through that. Um. But then you know,
Speaker 1: our other a lot of other elements of our staff. UM,
Speaker 1: we did go you know, virtual Um, but you know
Speaker 1: it was funny because we're a huge partner to provider
Speaker 1: to people like Zoom. In fact, as Zoom scaled their infrastructure,
Speaker 1: you know, Eric you wanted Zoom said, hey, couldn't have
Speaker 1: done it without Equinix, And we were very appreciative of
Speaker 1: them as a customer. And but you know, we we
Speaker 1: were very successful in that. I will tell you that
Speaker 1: I'm pushing for us to get back to a you know,
Speaker 1: a hybrid model that because I believe in the power
Speaker 1: of human connection and and the importance of that and innovation,
Speaker 1: and so you know, we, like many others, I think,
Speaker 1: will will end up in a in a hybrid state.
Speaker 1: But in terms of your employees right now, you hiring
Speaker 1: rather than layoffs. We are for sure, Um we are,
Speaker 1: you know in in here I qualified that a little
Speaker 1: bit in saying that, Um, you know we're We're not.
Speaker 1: We're also, like others, being very prudent in a in
Speaker 1: an environment that has some challenging macro factors. And so
Speaker 1: I think G and A, for example, we're gonna really
Speaker 1: try to be very flat and find automation and process
Speaker 1: efficiencies to drive improvements and and keep our head count
Speaker 1: as flat as possible there. But given the demand signal
Speaker 1: we're seeing, we're hiring on our go to market side
Speaker 1: and salespeople, quota bearing headcount, etcetera. And um, you know,
Speaker 1: and and also since our platform is expanding, that means
Speaker 1: new people on the ground, technicians in the data centers, etcetera.
Speaker 1: And so those are areas that were how are they?
Speaker 1: How are those technicians? You know? That's really uh, it's uh,
Speaker 1: it's harder than uh than we'd like. Sometimes I'll tell
Speaker 1: you that it's well, you're not the only ones, right,
Speaker 1: I mean, that's a story for those who are hiring
Speaker 1: right now. It's hard to find the qualified people, that's right.
Speaker 1: That's right, And I think they are. You know, it
Speaker 1: really depends on the job category. I just think, you know,
Speaker 1: I know, you're we're seeing some of these tech laughs
Speaker 1: and these kind of things, but I think they are
Speaker 1: oftentimes not in those high demand roles, right. They're not
Speaker 1: software engineers, they're not technicians, they're not and those continue
Speaker 1: to be very competitive. So going forward here, I mean,
Speaker 1: is there any diversification you need? Are you focusing on
Speaker 1: kind of the core data centers, which seems to be
Speaker 1: an inherently strong growth story. Yeah, I think we're in
Speaker 1: a very great spot. I don't think we need diversification
Speaker 1: to really new areas. But I will say, you know,
Speaker 1: we've we've made a big investment what we call our
Speaker 1: digital services business, which is what people are really looking
Speaker 1: for with you know, the value proposition we deliver global reach.
Speaker 1: We talked about that access to these digital ecosystems we
Speaker 1: cultivate and curate ecosystems inside of our facilities for people
Speaker 1: to interconnect to clouds and networks and as a service
Speaker 1: providers and all these They really get that um, this
Speaker 1: interconnection platform that we have and a track record of
Speaker 1: service excellence. But what we are finding is that people
Speaker 1: want to consume that value proposition in different ways. They
Speaker 1: want it more as a service, more on demand, more
Speaker 1: software enabled, and so you know, I think our diverse
Speaker 1: fasification is coming in evolving our our value proposition in
Speaker 1: those ways. So are you competing then with a WS
Speaker 1: and Microsoft Not really. It's I would say that you know,
Speaker 1: as you look at mostly if you go to any
Speaker 1: large enterprise CEO or even CEOs of service providers who
Speaker 1: are saying, how are we building our infrastructure hybrid and
Speaker 1: multi cloud is really the architectural choice. They absolutely are.
Speaker 1: In fact, are those are your biggest customers. Amazon Web
Speaker 1: Services and Goo. The hyper scalers are significant customers of
Speaker 1: ours because they actually use our infrastructure oftentimes to place
Speaker 1: network nodes. They're on ramps to their clouds, often live
Speaker 1: in our facilities. We have about shared and then we
Speaker 1: have a sort of JV business where we build large
Speaker 1: scale data centers for them. We do that through a
Speaker 1: JV that we have with UH with the Sovereign wealthone
Speaker 1: to Singapore g I c um and UH guy yeah
Speaker 1: and so uh and so that's so they are big customers,
Speaker 1: but most customers are ending up or they're saying, look,
Speaker 1: I'm gonna I may put the even the super majority
Speaker 1: of my workloads in the public cloud over time. But
Speaker 1: there's a variety of things that they need, and they
Speaker 1: want private infrastructure that's proximate to the cloud, and they
Speaker 1: want it geographically distributed. And so that's where we really
Speaker 1: come in as being able to you know, support them
Speaker 1: as they move to hybrid and multi cloud and security.
Speaker 1: Just give us kind of how you've used security of
Speaker 1: data in the cloud. More and more is going into
Speaker 1: the cloud, I know that's a concern for people. It is,
Speaker 1: but I think that, you know, I think the techno
Speaker 1: anology is out there to make that, you know, to
Speaker 1: address those challenges. We're going to increasingly zero trust environment. Um.
Speaker 1: I think, um, you know, companies are using it right. Things.
Speaker 1: We have a lot of customers that are delivering security
Speaker 1: applications and services as part of the ecosystem that lives
Speaker 1: inside platform equinics and so and making those kind of
Speaker 1: things available and allowing them to integrate with cloud services.
Speaker 1: That's a key part of our value problem. All right, Charles,
Speaker 1: thank you so much for joining us. Really appreciate it.
Speaker 1: Fascinating stuff. Charles Myers, uh, CEO of Equinox. That's asta
Speaker 1: trade of stock. E q i X is a the
Speaker 1: ticker to put into your Bloomberg terminal, a reap, but
Speaker 1: really focusing on the text based the cloud business, and
Speaker 1: we know that is a big business. The stock has
Speaker 1: ripped up also the last couple of months. Right, it's
Speaker 1: five hundred uh in the middle of October and now
Speaker 1: you're back up at over seven. Really strong earnings, I think,
Speaker 1: strong demand profile and you know, good execution. I think
Speaker 1: you know that people are are reading into that in
Speaker 1: terms of what the what the future right look look
Speaker 1: all right, cho It's great stuff. We appreciate it. Thanks
Speaker 1: for listening to the Bloomberg Markets podcast. You can subscribe
Speaker 1: and listen to interviews of Apple Podcasts or whatever podcast
Speaker 1: platform you prefer. I'm Matt Miller. I'm on Twitter at
Speaker 1: Matt Miller three. On Fall Sweeney, I'm on Twitter at
Speaker 1: pt Sweeney Before the podcast. You can always catch us
Speaker 1: worldwide at Bloomberg Radio