WEBVTT - GE Splitting Into Three Units, Ending Conglomerate for Good 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.680 plus technology, politics, economics, all purnising the power of Business 0:00:13.680 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.040 --> 0:00:23.239 Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.440 --> 0:00:25.200 You can also listen to our radio show at two 0:00:25.200 --> 0:00:27.880 pm Eastern Time on Bloomberg Radio, or watch us on 0:00:27.920 --> 0:00:32.720 YouTube search Bloomberg, Clovel News so Bloomberg. Sarah McBride writing 0:00:32.760 --> 0:00:35.199 today that early last year, at the outset of the 0:00:35.240 --> 0:00:38.600 coronavirus pandemic, there was a small genetics startup. Call company 0:00:38.880 --> 0:00:41.880 was called Color Genomics. It's set up a COVID nineteen 0:00:41.920 --> 0:00:44.640 testing lab. It was the company's really first step towards 0:00:44.680 --> 0:00:47.199 what we've become a full transformation of its business. Well 0:00:47.240 --> 0:00:51.199 today the company continuing that transformation. It's now known as Color. 0:00:51.560 --> 0:00:54.279 It completed another round of funding today that gives it 0:00:54.800 --> 0:00:58.320 a four point six billion dollar valuation triple Katie. What 0:00:58.400 --> 0:01:00.640 it was just like a love and months ago. So 0:01:00.680 --> 0:01:03.000 that's been quite a bump up. Let's get more. Let's 0:01:03.000 --> 0:01:05.520 bring in our guests. Utman Laura Key. He's co founder 0:01:05.560 --> 0:01:07.280 and CEO of color Ink, and he joins us on 0:01:07.319 --> 0:01:09.679 the phone in San Francisco. I'm nice to have you 0:01:09.680 --> 0:01:12.679 here with Katie and myself. How are you good? Thanks 0:01:12.680 --> 0:01:14.479 for having me. Well, tell us a little bit about 0:01:14.600 --> 0:01:17.120 what you guys are doing right now and how it 0:01:17.160 --> 0:01:19.360 fits into what's going on more broadly, of course when 0:01:19.400 --> 0:01:21.960 it comes to COVID, Sure, maybe I can give you 0:01:21.959 --> 0:01:25.039 a little bit of context about colors. So fundamentally, what 0:01:25.080 --> 0:01:28.040 we do is we make public health happen where public 0:01:28.080 --> 0:01:30.520 life also happens. And what I mean by that is that, 0:01:30.959 --> 0:01:34.480 for example, today we're running about seven thousand sites across 0:01:34.480 --> 0:01:39.480 the country between testing and vaccination sites UM, where we 0:01:39.560 --> 0:01:43.479 deliver essential services in context where that are like directly 0:01:43.480 --> 0:01:47.240 connected to where people's lives actually happen. So for example, 0:01:47.280 --> 0:01:52.960 thousands of schools, workplaces, um, churches, other community centers. And 0:01:53.000 --> 0:01:55.560 what we found is that when you take essential health 0:01:55.600 --> 0:02:00.400 services directly into people's community and so that they're immediately 0:02:00.400 --> 0:02:03.720 accessible in the context of where their lives actually happened. 0:02:03.800 --> 0:02:07.040 You're able to make these basic services dramatically more accessible 0:02:07.040 --> 0:02:09.200 than if people have to jump through hoops in order 0:02:09.280 --> 0:02:12.280 to to to access to access them like they normally do. 0:02:12.360 --> 0:02:14.480 And you know thet what we think of a standard 0:02:14.520 --> 0:02:18.160 healthcare And let's talk about your latest financing round, a 0:02:18.200 --> 0:02:21.000 hundred million dollars Series E that has your valuation of 0:02:21.080 --> 0:02:24.240 four point six billion dollars. What do you plan to 0:02:24.240 --> 0:02:29.359 do with that money? YEA. So, our our overall approach 0:02:29.480 --> 0:02:32.200 on this is that we believe that UM, in part 0:02:32.400 --> 0:02:35.639 through the pandemic or due to the effects of the pandemic, 0:02:36.120 --> 0:02:39.760 we have been decidedly forced i thing, to really change 0:02:39.800 --> 0:02:44.160 gears and how we deliver basic care UM. And we 0:02:44.320 --> 0:02:48.360 view this as kind of this pretty durable transformation in 0:02:48.440 --> 0:02:51.560 that expectation and how basic health care will work. And 0:02:51.600 --> 0:02:54.440 so our our goal and our plan for the over 0:02:54.480 --> 0:02:59.920 the next years is to keep building services in these 0:03:00.040 --> 0:03:03.200 kind of access points that are uh immediately part of 0:03:03.480 --> 0:03:05.240 the community. So I'll give you a few examples, if 0:03:05.280 --> 0:03:09.000 that's helpful. So, for example, we work with UM large 0:03:09.080 --> 0:03:14.280 employer basis so essential care essential workers, whether they're UM 0:03:14.400 --> 0:03:17.120 farm workers or tech workers and so on, and one 0:03:17.160 --> 0:03:19.440 of the biggest things that's happened over the pandemic in 0:03:19.440 --> 0:03:22.320 addition obviously to dealing with the effects of the COVID pandemic, 0:03:22.639 --> 0:03:25.040 has been that people have been falling behind on their 0:03:25.200 --> 0:03:30.240 basic preventative care, so literally your annual checkups, basic medications 0:03:30.240 --> 0:03:32.040 and so on. UM. So we've been asked by a 0:03:32.080 --> 0:03:35.440 number of our partners started developing solutions that are similar 0:03:35.480 --> 0:03:38.920 to our approach to managing COVID testing and vaccinations, but 0:03:39.000 --> 0:03:42.680 to make basic care accessible to these road distributed workforces 0:03:42.680 --> 0:03:45.440 and going from like farm workers all the way to 0:03:45.920 --> 0:03:48.720 white collar workers. UM. That's one example, but there are 0:03:48.760 --> 0:03:51.240 many other examples in other contexts. For example, if you 0:03:51.320 --> 0:03:55.880 look at schools again being a UM one of the 0:03:55.960 --> 0:03:59.120 places where a very big part of our society lives 0:03:59.160 --> 0:04:01.760 as in like all this all the school children, UM, 0:04:01.960 --> 0:04:05.360 and thinking of the school systems as themselves being a 0:04:05.360 --> 0:04:08.680 place where you can deliver basic health care services such 0:04:08.720 --> 0:04:11.400 as vaccines and so right now we started working with 0:04:11.480 --> 0:04:15.440 initially with testing, but we're rolling out vaccinations within schools, 0:04:15.720 --> 0:04:18.039 initially for COVID, but then broadening that to other types 0:04:18.080 --> 0:04:20.560 of organizations. Well, that's what I'm interesting. Will you stay 0:04:20.600 --> 0:04:22.840 kind of the immunization route. Is that enough of a 0:04:23.080 --> 0:04:26.040 sustainable business long term or do you then build out 0:04:26.400 --> 0:04:28.800 the types of services that you might provide, almost like 0:04:28.839 --> 0:04:32.440 bringing urgent care, whether it's to rural communities or to 0:04:32.600 --> 0:04:36.560 churches or to workplaces. And so we've do this suff 0:04:36.600 --> 0:04:40.920 something that UM will likely end up applying to abroad 0:04:41.760 --> 0:04:45.040 surface area of how we think of healthcare. Like I'll 0:04:45.040 --> 0:04:47.240 give you another example that we're working right now in 0:04:47.320 --> 0:04:50.880 public health, which is around managing HIV and other sexually 0:04:50.880 --> 0:04:54.880 transmitted diseases. Similar to challenges that we're faced with COVID, 0:04:55.480 --> 0:04:58.760 there is the challenge of immediacy and access UM and 0:04:59.279 --> 0:05:03.280 using that same model, for example, for creating fully integrated 0:05:03.920 --> 0:05:09.479 HIV management programs within communities UM that go from initial 0:05:09.520 --> 0:05:14.039 screening to counseling all the way to medications and management 0:05:14.600 --> 0:05:17.720 for people but in a context that is much more 0:05:17.760 --> 0:05:20.680 part of their lives as opposed to requiring them to 0:05:21.360 --> 0:05:25.640 go out of their lives to seek basic care UM. 0:05:25.720 --> 0:05:28.520 And so this overall approach we viewed as applying to 0:05:29.279 --> 0:05:33.560 infectual diseases, to metabolic and other kind of UM CHRONICCT 0:05:33.600 --> 0:05:36.240 disease management that you know, whether it's psych cholesterol and 0:05:36.279 --> 0:05:39.240 so on. Women's health is another very large area. I 0:05:39.279 --> 0:05:43.160 think when we step back ten years from now, I think, well, 0:05:43.160 --> 0:05:45.080 we're likely to to look back and it'll feel very 0:05:45.160 --> 0:05:49.200 much how our lives have shifted with e commerce and retail, 0:05:49.560 --> 0:05:51.520 where initially it felt like, you know, only a few 0:05:51.560 --> 0:05:55.640 things would be interesting to buy online, but it turns 0:05:55.640 --> 0:05:59.120 out over time that convenience and immediacy is one of 0:05:59.120 --> 0:06:02.120 the biggest features and drivers of people being able to 0:06:02.160 --> 0:06:04.120 access any form of service. And I think healthcare is 0:06:04.120 --> 0:06:06.000 going to be no difference. No, I think you're you're 0:06:06.120 --> 0:06:09.080 totally onto something. Um one quick question, just got about 0:06:09.080 --> 0:06:11.240 twenty five seconds left here. Can you find the labor 0:06:11.320 --> 0:06:13.000 force that you need to be able to continue to 0:06:13.040 --> 0:06:16.599 build out as you hope just quickly? I believe. So. 0:06:16.680 --> 0:06:18.240 I think what happens here is that there's much more 0:06:18.320 --> 0:06:21.440 leverage on technology, especially through I think public health has 0:06:21.480 --> 0:06:24.559 been incredibly innovative through through this phase. So we're seeing 0:06:25.000 --> 0:06:27.599 all of our partners in big departments of public health 0:06:27.640 --> 0:06:30.760 like California, Masters and so on, I think themselves also 0:06:30.800 --> 0:06:32.880 being very innovative and how they think about this. So 0:06:32.880 --> 0:06:34.680 I think it actually going to create a lot more 0:06:34.760 --> 0:06:37.120 leverage on the on the labor force. We're gonna leave 0:06:37.120 --> 0:06:38.800 it there. Hey, um, hopefully you'll come back and give 0:06:38.839 --> 0:06:41.480 us updates as you continue into the new year, uh 0:06:41.480 --> 0:06:43.920 and rolling out what you're doing in terms of services 0:06:44.200 --> 0:06:47.080 up in Laraki. He is chief executive officer, co founder 0:06:47.279 --> 0:06:50.880 of Color Incorporated. Joining us on the phone in San Francisco. 0:06:50.920 --> 0:06:54.279 You listen to Bloomberg Business Week. This is Bloomberg Business 0:06:54.320 --> 0:06:58.080 Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic 0:06:58.440 --> 0:07:01.400 from Bloomberg Radio. So we've been hinting at it a 0:07:01.520 --> 0:07:04.120 change in leadership at the Fed. How likely is it? 0:07:04.560 --> 0:07:07.360 As news of Fed Governor Lal Branard being interviewed by 0:07:07.360 --> 0:07:10.360 President Binden, a Bloomberg scoop, by the way, interviewed last 0:07:10.360 --> 0:07:12.440 week for the top spot at the US Central Bank, 0:07:12.840 --> 0:07:15.080 leaked out. We've seen it playing out in the financial 0:07:15.120 --> 0:07:17.560 markets today. So let's get to it. Joining us with 0:07:17.600 --> 0:07:20.560 a look at it is Peggy Collins, Bloomberg News Washington 0:07:20.560 --> 0:07:23.520 Bureau chief, a friend of our show, a favorite person 0:07:23.600 --> 0:07:25.640 to talk with. She is in her Bloomberg not anyone 0:07:25.680 --> 0:07:28.200 studio in the nation's cappele. Peggy is so good to 0:07:28.200 --> 0:07:32.360 have you here with Katie and myself. So, first of all, congratulations, 0:07:32.440 --> 0:07:36.320 great Bloomberg scoop by the Washington team. What do we 0:07:36.440 --> 0:07:41.840 know about the President sitting down with Leo Branard? Yes, Carol, 0:07:41.880 --> 0:07:44.160 and great to be with you and Katie today. As 0:07:44.160 --> 0:07:46.320 you said, we had a great scoop out by my 0:07:46.360 --> 0:07:51.000 colleagues Craig Tourist, Jennifer Jacobs and Slamson. Basically what it 0:07:51.040 --> 0:07:53.480 could what it tells us is that the White House 0:07:53.520 --> 0:07:58.400 has interviewed up Brainerd for the chair spots. So people 0:07:58.880 --> 0:08:03.920 were know know that Brainard was in consideration for for 0:08:04.000 --> 0:08:06.400 one of the open seats at the FED um. But 0:08:06.520 --> 0:08:08.440 what we didn't know was that when she was at 0:08:08.480 --> 0:08:11.400 the White House last week that the interview was specifically 0:08:11.440 --> 0:08:13.920 for the FED chair slot as opposed to one of 0:08:13.960 --> 0:08:16.600 the other open seats. She has been talked about as 0:08:16.640 --> 0:08:20.000 a top contender for the vice chair of Supervision slot, 0:08:20.360 --> 0:08:24.840 which Randall Quarrels was in until October and just yesterday 0:08:24.880 --> 0:08:27.040 said he was going to be exiting the FED at 0:08:27.080 --> 0:08:29.360 the end of the year. And that vice chair slot 0:08:29.400 --> 0:08:33.240 of Supervision is really the FEDS top regulator of Wall Street. 0:08:33.480 --> 0:08:36.440 So Brainard is still considered in the running potentially for 0:08:36.480 --> 0:08:39.120 one of those open seats, and particularly that one as well. 0:08:39.160 --> 0:08:42.080 But it's clear that she now she and Powell are 0:08:42.160 --> 0:08:45.440 the two top contenders for the FED chair slot, and 0:08:45.480 --> 0:08:48.400 powell seat is open in February of this year for 0:08:48.640 --> 0:08:51.480 that and so, Peggy, something I've been thinking about is 0:08:51.480 --> 0:08:54.480 the saying that, you know, a wartime president always gets 0:08:54.480 --> 0:08:57.400 re elected, and if we look at the US economy, 0:08:57.440 --> 0:08:59.080 there's a light at the end of the tunnel, but 0:08:59.160 --> 0:09:03.439 obviously still in a pretty tense place. So I mean, 0:09:03.440 --> 0:09:07.160 one are the odds that pal actually gets replaced at 0:09:07.200 --> 0:09:10.520 this juncture with the FED, you know, starting to actually 0:09:10.600 --> 0:09:14.840 taper and enter this really interesting period of normalization. Well, 0:09:14.840 --> 0:09:17.200 it's great question, Katie. I do think, you know, the 0:09:17.240 --> 0:09:21.920 pandemic economy is something that really is in Powell's pro 0:09:22.040 --> 0:09:24.520 column in the sense that a lot of people credit 0:09:24.600 --> 0:09:28.920 him for having handled the crisis, particularly in March and April, 0:09:29.760 --> 0:09:31.839 when the FED really stepped in not only on a 0:09:32.400 --> 0:09:35.240 US level but a global level to try to inject 0:09:35.320 --> 0:09:38.320 tons of support into the economy and markets and for 0:09:38.480 --> 0:09:41.840 businesses kind of opening up the floodgates to make sure 0:09:41.880 --> 0:09:43.760 that interest rates were as low as they could go 0:09:44.120 --> 0:09:47.240 and that business has had access to funding. So there's that, 0:09:47.360 --> 0:09:49.600 But I also do think the markets, um, you know, 0:09:49.720 --> 0:09:52.840 no brainerd well as as well. She's on been on 0:09:52.880 --> 0:09:56.880 the FED board since um she's certainly seen as one 0:09:56.920 --> 0:10:00.760 of the most accomplished people like in the business she's 0:10:00.760 --> 0:10:03.720 worked at Treasury. She definitely has been like a key 0:10:03.880 --> 0:10:08.239 architect alongside her FED colleagues of the feds new framework 0:10:08.320 --> 0:10:11.840 that they created in August, which really put more of 0:10:11.880 --> 0:10:15.680 the focus on full employment being broad and inclusive, which 0:10:15.760 --> 0:10:18.880 is very much so in line with the Biden administration's goals. 0:10:19.280 --> 0:10:22.080 So I think, you know, I think there's certainly an argument, 0:10:22.080 --> 0:10:25.120 and I think markets and economists up until now had 0:10:25.200 --> 0:10:28.599 really waited their expectations in the column of Powell. But 0:10:28.640 --> 0:10:31.440 the longer that this has gone on, the more question 0:10:31.480 --> 0:10:34.640 marks have arisen in terms of whether the Biden administration 0:10:34.760 --> 0:10:36.920 would take this moment to shake things up. All right, 0:10:36.960 --> 0:10:39.600 but well, the Fed's not supposed to be political. We 0:10:39.640 --> 0:10:43.320 know that politics will be at play. Um lyle Brennard 0:10:43.559 --> 0:10:45.679 is what the only Democrats serving on the FED board, 0:10:45.720 --> 0:10:48.440 I mean, how might politics play in her favor or 0:10:48.440 --> 0:10:50.959 against her? And just got about thirty seconds pack. I 0:10:51.000 --> 0:10:52.960 think it's a question market, did you say, Carol, The 0:10:53.000 --> 0:10:55.839 tradition in the past, up until the Trump administration had 0:10:55.880 --> 0:10:59.160 been to keep with the FED chair of the incoming president. 0:10:59.280 --> 0:11:02.040 So that will be something that the Biden administration has 0:11:02.080 --> 0:11:04.680 to pest it away in terms of independence of the 0:11:04.720 --> 0:11:07.600 FED and politics and how that may be seen in 0:11:07.760 --> 0:11:10.839 light of past tradition. Alright, TikTok. We'll have to wait 0:11:10.840 --> 0:11:13.360 and see what happens. And there are a lot of 0:11:13.400 --> 0:11:16.520 FED positions. We have a lot of FED officials leaving 0:11:16.600 --> 0:11:18.959 and I know or are up for you know, is 0:11:19.000 --> 0:11:21.640 it Clarata, Rich Clarata Right, his term as governor expires 0:11:21.640 --> 0:11:23.360 at the end of January. There's a lot of potential 0:11:23.400 --> 0:11:27.360 movements for open spots of accounted correctly, and you think 0:11:27.360 --> 0:11:30.320 about what that impact those changes could mean in terms 0:11:30.320 --> 0:11:33.360 of FED policy longer term. Um, Peggy Collins, she's our 0:11:33.360 --> 0:11:35.680 Washington burea chief of Bloomberg News, joining us from our 0:11:35.720 --> 0:11:40.040 not anyone studio in the nation's capital. You're listening to 0:11:40.120 --> 0:11:44.079 Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes 0:11:44.160 --> 0:11:48.440 Tim Stinovic on Bloomberg Radio. Well, first came this estimate 0:11:48.600 --> 0:11:52.320 then z prices, then I buying, and then of course 0:11:52.360 --> 0:11:54.520 there was the damage in the fallout. So tracking it all, 0:11:54.559 --> 0:11:57.400 we're talking about the story that is Zillo. That stock, 0:11:57.480 --> 0:11:59.880 by the way, it is down about sixty seven percent 0:12:00.040 --> 0:12:02.760 from its February sixteenth high this year, so tracking it 0:12:02.800 --> 0:12:06.000 all is Bloomberg News real estate reporter Patrick Clark reports 0:12:06.000 --> 0:12:08.880 on Zillow's trajectory that changes for the upcoming issue of 0:12:08.880 --> 0:12:11.079 Bloomberg business Week, which is due out later this week 0:12:11.360 --> 0:12:13.520 online at Bloomberg dot com, on business Week dot com, 0:12:13.640 --> 0:12:15.960 and on the Bloomberg pat joining us on the phone 0:12:15.960 --> 0:12:19.240 in New York City. This is just an amazing story. 0:12:19.240 --> 0:12:21.160 And I think back when it was I believe a 0:12:21.280 --> 0:12:24.120 cover story Business Week magazine just a few years ago 0:12:24.160 --> 0:12:28.920 about Zillo wanting to flip your house. Um what ultimately 0:12:28.960 --> 0:12:36.360 went wrong? They did it poorly? Well said, it's you're 0:12:36.400 --> 0:12:39.440 exactly right. We did a long Business Week story on Zillo, 0:12:39.559 --> 0:12:44.440 which is, uh, you know, best known for one publishing 0:12:44.559 --> 0:12:47.280 homeless ins what you can then go in Browns and 0:12:47.400 --> 0:12:50.640 too publishing what they called estimates, which is, you know, 0:12:50.679 --> 0:12:53.160 an attempt to approximate the value of just about every 0:12:53.160 --> 0:12:54.760 home or I don't know, I think it's more than 0:12:54.760 --> 0:13:00.000 a hundred million homes in America for first sport. Basically, Uh, 0:13:00.240 --> 0:13:02.440 at some point, I guess in two thousand eighteen, they 0:13:02.480 --> 0:13:05.520 decided to take all the people and technology that they 0:13:05.640 --> 0:13:08.360 used for those first two things and apply them to 0:13:08.520 --> 0:13:12.040 flipping houses, which is a you know, I would say, 0:13:12.040 --> 0:13:15.880 a notoriously sort of risky business. It's it's it's it's 0:13:15.920 --> 0:13:19.080 not the first time that a company or you know, 0:13:19.160 --> 0:13:22.760 offen an individual has gotten the business of buying and 0:13:22.800 --> 0:13:25.880 selling and had home prices move on them in the 0:13:26.000 --> 0:13:29.520 interim period and gotten burned. And so about you write 0:13:29.520 --> 0:13:34.320 that this is a five hundred sixty million dollar cautionary tail. 0:13:34.520 --> 0:13:37.959 I'm curious what are the takeaways that Zillo is going 0:13:38.000 --> 0:13:40.240 to take from this. I mean, obviously they've paused the 0:13:40.280 --> 0:13:44.679 home flipping experiment. Do you expect this to bleed into 0:13:44.800 --> 0:13:48.680 some of the other ways that they operate. I think 0:13:48.679 --> 0:13:52.000 that their old business should be fine. Um, people are 0:13:52.040 --> 0:13:55.880 still going to go to Zillow's websites and apps and 0:13:55.920 --> 0:13:57.600 look at houses, and that's still going to be a 0:13:57.640 --> 0:14:00.079 great place for a real estate agent to getting on 0:14:00.160 --> 0:14:03.920 a you know, house centers. Basically, Uh, they shouldn't have 0:14:03.960 --> 0:14:07.040 trouble making money that way. The question is, you know, 0:14:07.360 --> 0:14:09.920 number one, how are they going to sail the sort 0:14:09.920 --> 0:14:14.240 of pull in their strategic purpose that that ending this 0:14:14.679 --> 0:14:18.439 Dellow Offers program creates? And then too, you know, I 0:14:18.440 --> 0:14:21.920 mean I think there is a big push not just Dillow. 0:14:21.920 --> 0:14:24.080 It wasn't just Billow doing this. There there are other 0:14:24.120 --> 0:14:26.960 companies in the same I buying sort of tech power 0:14:27.080 --> 0:14:29.160 flipping business as they are. And then there are other 0:14:29.200 --> 0:14:32.000 companies that are are buying off different pieces of the 0:14:32.000 --> 0:14:36.400 housing transaction. Uh it seems fairly likely to me that 0:14:36.520 --> 0:14:38.880 some of them will succeed in some form, and we won't, 0:14:39.040 --> 0:14:41.720 you know, we're not tied to this sort of hundred 0:14:41.760 --> 0:14:45.200 year old method of buying or selling house. So not 0:14:45.280 --> 0:14:47.160 only did Zilo you know, sort of plush some money 0:14:47.160 --> 0:14:49.680 down the drain, but they also they also wasted time 0:14:49.720 --> 0:14:52.320 that they could have been using to, you know, figure 0:14:52.360 --> 0:14:54.840 out what the big opportunity is. Well, and I feel 0:14:54.840 --> 0:14:56.920 like until Weber come on in of course the editor 0:14:57.000 --> 0:15:00.200 Bloomberg Business Week, I felt like, algorithms, can't we trust them? 0:15:00.200 --> 0:15:03.880 Like don't they know? All right? Yeah? Totally? Um, And 0:15:03.960 --> 0:15:06.560 now that that was sort of I think, Um, you 0:15:06.600 --> 0:15:10.280 know what what sort of inticated Pat wanting? I wanted 0:15:10.480 --> 0:15:12.640 Pat to write this story for the for the magazine 0:15:12.680 --> 0:15:15.360 was like, look, as a society, like we've come to 0:15:15.680 --> 0:15:18.440 put a lot of faith in algorithms and entire business 0:15:18.440 --> 0:15:20.560 models will rest on it. And in this case, the 0:15:20.720 --> 0:15:23.680 sort of the future of Zillo is sort of intrinsically 0:15:23.760 --> 0:15:27.720 tied to this al go. And Pat, you know, just curious, like, 0:15:27.760 --> 0:15:31.400 what do we know changed? Did they? Did they juice it? 0:15:31.440 --> 0:15:33.840 Did they did they try and get more than than 0:15:34.320 --> 0:15:38.160 might have they might have wanted? In hindsight, my best 0:15:38.240 --> 0:15:42.880 understanding is, uh, this was more human failure that a 0:15:43.480 --> 0:15:47.560 technology failure. I mean they you know, on the individual um, 0:15:47.600 --> 0:15:51.200 on the level of an individual home. Uh, it's you know, 0:15:51.280 --> 0:15:54.240 it's a computer program telling Zello, here's how much we 0:15:54.320 --> 0:15:57.880 think it's worth. But number one, when they first started 0:15:57.880 --> 0:16:01.240 doing this, they had human eyeballs every offer and multiple 0:16:01.320 --> 0:16:04.200 touch points where a person was saying that this makes sense. 0:16:04.280 --> 0:16:06.400 And and you know, as they did it more, they 0:16:06.440 --> 0:16:09.000 got more confident in their ability to get pricing right. 0:16:09.400 --> 0:16:13.520 And uh so that's that's number one. Um, if they 0:16:13.560 --> 0:16:17.960 sort of took away all of the the human touch ones. 0:16:18.000 --> 0:16:20.960 But the other thing is they were sort of flagging 0:16:21.000 --> 0:16:24.280 their competition. And you know, there there's open door technologies, 0:16:24.320 --> 0:16:26.880 which is the biggest of these eye buyers were playing 0:16:26.920 --> 0:16:29.640 way more homes and billows or very ambitious plans to 0:16:29.680 --> 0:16:35.280 catch up. And uh, you know, they they was very 0:16:35.360 --> 0:16:38.280 clear to them that if they made more aggressive offers, 0:16:38.320 --> 0:16:41.120 they would be able to buy more homes. And and 0:16:41.120 --> 0:16:42.920 and they believed they had to buy an awful lot 0:16:42.960 --> 0:16:45.360 of homes, you know, in order to make the business work, 0:16:46.000 --> 0:16:49.200 and and and so they basically just started feeding, uh, 0:16:49.240 --> 0:16:50.880 you know, to the best of my knowledge, started just 0:16:50.960 --> 0:16:57.640 feeding the algorithms more aggressive assumptions of home price appreciation. 0:16:58.160 --> 0:17:01.000 You know, so if if, if instance, like they had 0:17:01.040 --> 0:17:03.280 been assuming that home prices were going to grow twelve 0:17:03.360 --> 0:17:05.560 per said year over yere, you know what they said, Well, 0:17:05.600 --> 0:17:09.360 let's let's let's see what happens to pcent. I'm sure 0:17:09.440 --> 0:17:11.840 enough they bought a lot of homes. Um, you know, 0:17:12.160 --> 0:17:16.480 the home prices appreciation. It's home prices are still growing, 0:17:16.560 --> 0:17:21.520 but at a slightly slower pace than they were earlier 0:17:21.560 --> 0:17:23.760 in the year. And what those executives have said is 0:17:24.240 --> 0:17:27.360 the the sort of slow down was outside the sort 0:17:27.400 --> 0:17:30.600 of range of outcomes they thought more likely. But you 0:17:30.600 --> 0:17:32.760 know that's why when people when they got into this business, 0:17:32.800 --> 0:17:35.359 people say said, well, you're exposing yourself to a lot 0:17:35.400 --> 0:17:37.760 of market risks. So you've got a lot of houses 0:17:37.760 --> 0:17:41.160 that are suddenly on the market, um that that Zelo 0:17:41.200 --> 0:17:44.280 would bought. Do we have any since yet? Who's gonna 0:17:44.280 --> 0:17:48.720 buy these? Um? Yeah, we'll see. I mean they've they've 0:17:48.840 --> 0:17:53.359 sent you know, information on you know, something like seven 0:17:53.359 --> 0:17:57.800 thousand homes the large single family landlords um. And that 0:17:58.080 --> 0:18:00.080 I mean so much money that has gone in to 0:18:00.160 --> 0:18:04.399 this from an institutional standpoint, right there's been an enormous 0:18:04.440 --> 0:18:08.440 amount of money that's come into that business. Um during 0:18:08.440 --> 0:18:12.200 the pandemic in particular, very appealing way to invest behind 0:18:12.280 --> 0:18:15.800 like millennial household formation, you know, migration to the south 0:18:15.880 --> 0:18:19.119 and southwest, and also just like you gotta put you know, 0:18:19.119 --> 0:18:20.920 if you're if you're a pensive, but you gotta put 0:18:20.920 --> 0:18:24.440 your money somewhere and rental houses. Uh is a hot 0:18:24.480 --> 0:18:28.480 idea right now. I think that you know, there's so 0:18:28.600 --> 0:18:32.520 much demand and if it's not clear yet, you know, 0:18:32.600 --> 0:18:35.399 the agree to which Zilo wants to transact you know 0:18:35.440 --> 0:18:38.359 at a at a bulk scale. But you know, people 0:18:38.400 --> 0:18:41.720 have been telling me that if if you could buy um, 0:18:41.800 --> 0:18:43.679 if you could buy two thousand homes, and you know, 0:18:43.880 --> 0:18:46.240 the snap of the fingers, and it's not a snap 0:18:46.280 --> 0:18:48.040 of the fingers, right if there's a lot of due 0:18:48.040 --> 0:18:50.679 diligence in time, but you would you might not have 0:18:50.720 --> 0:18:53.040 to pay, you might not get a discount. Right, There's 0:18:53.119 --> 0:18:55.560 like a there's a premium you get for being able 0:18:55.600 --> 0:18:58.119 to deliver bulk to an investor. Right now you a 0:18:58.160 --> 0:19:00.719 little be able to tap into that. Well, it's an 0:19:00.760 --> 0:19:03.720 interesting story. Uh. The CEO is still in place, the 0:19:03.720 --> 0:19:06.640 co founder still in place. Uh, and you get into 0:19:06.680 --> 0:19:09.720 why because he certainly owns a certain type of stock 0:19:09.760 --> 0:19:11.840 that enables him to still be there. But it's a 0:19:11.880 --> 0:19:14.480 great uh right through of what's been going on at 0:19:14.560 --> 0:19:16.880 Zillo and how it got there. Um, thank you so much, 0:19:16.920 --> 0:19:20.200 really appreciated. Bloomberg News real estate reporter Pat Clark, along 0:19:20.240 --> 0:19:24.800 with Bloomberg Business Editor Jill Webber. This is Bloomberg Business 0:19:24.920 --> 0:19:28.680 Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic 0:19:29.160 --> 0:19:32.520 on Bloomberg Radio three. Maybe better than one, at least 0:19:32.560 --> 0:19:35.359 that's how General Electric investors seem to be voting today 0:19:35.400 --> 0:19:37.919 by bidding up shares of GE as the couple announces 0:19:38.280 --> 0:19:41.399 it will split into three units, ending a remarkable and 0:19:41.400 --> 0:19:44.639 long run as an industrial behemoth that was revered a 0:19:44.720 --> 0:19:47.280 market and economic bell weather, once the world's most valuable 0:19:47.320 --> 0:19:50.840 company until it wasn't well. David Weston caught up with 0:19:51.040 --> 0:19:54.240 the current GE CEO, Larry Colp, earlier on Bloomberg TV, 0:19:54.359 --> 0:19:59.560 talking about the breakup. These businesses will be more focused, 0:20:00.000 --> 0:20:03.320 will be a higher, greater level of accountability. We should 0:20:03.320 --> 0:20:07.080 have sharper capital allocation, more strategic flexibility, and frankly, I 0:20:07.080 --> 0:20:08.560 think it's gonna be good for the team as well. 0:20:08.600 --> 0:20:12.720 I think we'll end up with investor bases focused on 0:20:12.760 --> 0:20:15.439 these pure plays, investors that are probably under invested in 0:20:15.520 --> 0:20:18.439 GE today. You put all that together, it's clear this 0:20:18.520 --> 0:20:22.720 is the best path for us to unlock and create value. 0:20:23.240 --> 0:20:26.080 G e CEO Larry Colp speaking to Bloomberg's David Weston 0:20:26.160 --> 0:20:29.000 earlier about that stunning breakup of G. Let's get more 0:20:29.040 --> 0:20:31.560 on the slaying of the gebs that Jack Welch built. 0:20:31.760 --> 0:20:35.240 Brooks Sutherland Bloomberg Opinion, Deals and Industrials columnists in our 0:20:35.280 --> 0:20:38.760 Interactive Broker studio here in New York City. It is stunning. 0:20:39.160 --> 0:20:41.560 Like when you saw the news, you have followed this company, 0:20:41.560 --> 0:20:44.720 you follow the industrial sector, but you've all this company 0:20:44.720 --> 0:20:47.480 for a long time. Were you just kind of speechless? 0:20:48.400 --> 0:20:50.800 Or I always thought that this was the way that 0:20:50.880 --> 0:20:53.040 the saga was going to end. But I do have 0:20:53.080 --> 0:20:55.960 to say, I don't think anybody saw it coming this week, 0:20:56.200 --> 0:20:59.320 UM this year even in so I think in that 0:20:59.359 --> 0:21:01.720 way it shocking, but I think that this is sort 0:21:01.760 --> 0:21:04.280 of the way that g E had to go. It 0:21:04.359 --> 0:21:07.360 had to adapt to the modern times, and it's um 0:21:07.560 --> 0:21:10.639 combination of businesses has never really made a lot of sense, 0:21:10.680 --> 0:21:14.119 but particularly in recent years, just with UM, you know, 0:21:14.200 --> 0:21:16.720 all of the breakups that we've seen across the industrial sector, 0:21:16.760 --> 0:21:19.480 I think that the logic tying these businesses together had 0:21:19.520 --> 0:21:21.840 had really been tested. And then, of course, just with 0:21:21.880 --> 0:21:24.520