WEBVTT - Disney Shareholder Meeting, Tesla Deliveries Miss 0:00:02.920 --> 0:00:07.280 Bloomberg Audio Studios, Podcasts, radio News. 0:00:10.600 --> 0:00:14.400 This is Bloomberg Intelligence with Alex Steina and Paul'sweenye. 0:00:14.520 --> 0:00:17.720 The real app performance has been in US corporate high yield. 0:00:17.880 --> 0:00:19.040 Are the companies lean enough? 0:00:19.040 --> 0:00:20.280 Have they trimmed all the fats? 0:00:20.320 --> 0:00:23.880 The semiconductor business is a really cyclical business. 0:00:23.600 --> 0:00:27.200 Breaking market headlines and corporate news from across the globe. 0:00:27.240 --> 0:00:29.880 Do investors like the M and A that we've seen? 0:00:30.080 --> 0:00:33.159 These are two big time blue chip companies. 0:00:33.320 --> 0:00:36.920 The window between the peak and cut changing super fast. 0:00:37.080 --> 0:00:41.680 Bloomberg Intelligence with Alex Steinall and Paul's Wheenie on Bloomberg Radio. 0:00:42.960 --> 0:00:45.159 On Today's Bloomberg Intelligence Show, we dig inside the big 0:00:45.159 --> 0:00:47.440 business stories impacting Wall Street and the global markets. 0:00:47.479 --> 0:00:49.440 Each and every week we provide in depth research and 0:00:49.520 --> 0:00:51.320 data on some of the two thousand companies and one 0:00:51.360 --> 0:00:53.880 hundred and thirty industries our analysts cover worldwide. 0:00:53.920 --> 0:00:56.400 Today, we'll look at why Tesla's first quarter deliveries missed 0:00:56.440 --> 0:00:57.480 Wall Street expectations. 0:00:57.560 --> 0:00:59.240 Let's we'll look at why things are looking up for 0:00:59.280 --> 0:01:00.640 the shipping company ups. 0:01:00.840 --> 0:01:02.800 But first we begin with the Walt Disney Company. This 0:01:02.840 --> 0:01:05.520 week's shareholders handed CEO Bob Biger, a big vote of 0:01:05.560 --> 0:01:07.199 confidence at the company's annual meeting. 0:01:07.360 --> 0:01:10.760 The shareholders rejected activist investor Nelson Peltz's bid for a 0:01:10.760 --> 0:01:13.360 board seat and elected all of Disney's choices for the board. 0:01:13.600 --> 0:01:16.280 Peltz's Tree On Fund Management holds a Disney stake both 0:01:16.319 --> 0:01:18.160 more than three and a half billion dollars and has 0:01:18.200 --> 0:01:21.320 been pushing for seats to address lagging shareholder returns. 0:01:21.600 --> 0:01:24.280 Also, when the news, Paramount Global, the parent of CBS 0:01:24.280 --> 0:01:26.760 and MTV, is getting closer to a deal to merge 0:01:26.760 --> 0:01:30.040 with independent producer David Ellison's Skydance Media. For more and 0:01:30.120 --> 0:01:31.600 all of this, we were joined by Githa Rong and 0:01:31.640 --> 0:01:35.280 Nathan Bloomberg, intelligence analyst on media. We first asked Githa 0:01:35.400 --> 0:01:37.040 for her take on this week's news. 0:01:37.280 --> 0:01:41.200 Definitely a huge sigh of relief for both Bob Biger 0:01:41.200 --> 0:01:43.080 and the management team. I mean, it would have been, 0:01:43.160 --> 0:01:46.120 I think a very very publicly embarrassing thing for him 0:01:46.160 --> 0:01:49.680 if Pelts had had won. So this is definitely I 0:01:49.680 --> 0:01:53.520 think gives them some something to cheer about, at least 0:01:53.520 --> 0:01:55.400 in the near term. So I think it's really business 0:01:55.400 --> 0:01:57.600 as usual, right. They had their work cut out for them. 0:01:57.960 --> 0:02:00.000 They know exactly what they need to do, whether it's 0:02:00.040 --> 0:02:03.840 it's finding a proper good ESPN digital strategy, whether it's 0:02:03.840 --> 0:02:06.880 getting the streaming business to profits, and more importantly for 0:02:06.920 --> 0:02:10.200 the board, whether it's chalking out a really bullet proof 0:02:10.320 --> 0:02:11.960 succession plan this time around. 0:02:12.720 --> 0:02:16.480 And on that succession plan, is the expectation getha that 0:02:17.080 --> 0:02:20.359 they will hire from within or will they try to 0:02:20.400 --> 0:02:22.639 make a big splash by hiring an outsider. 0:02:22.720 --> 0:02:24.280 How do you think Disney would like to proceed? 0:02:24.600 --> 0:02:27.520 Disney has always kind of looked within, Paul, and you 0:02:27.560 --> 0:02:29.280 know this well. I mean the last time that they 0:02:29.320 --> 0:02:33.040 went external was back in nineteen eighty four. That's when 0:02:33.080 --> 0:02:36.960 they hired you know, Michael Eisner, right, the Barry Diller protege. 0:02:37.200 --> 0:02:39.799 But after that, it's always been internal, right, whether it's 0:02:40.280 --> 0:02:42.440 Bob Bieger, I mean it was Barb Biger after that 0:02:42.520 --> 0:02:44.919 for almost fifteen years, and then of course you had 0:02:45.040 --> 0:02:47.440 Bob Japek for a couple of years, and then you know, 0:02:47.480 --> 0:02:50.920 we have Bob Bieger two point zero back again. So 0:02:51.040 --> 0:02:53.760 they've always kind of had, you know more, they've always 0:02:53.800 --> 0:02:57.520 looked internal, and they do have four solid candidates, so 0:02:57.600 --> 0:03:04.240 all the division chiefs kind of emerge as potential successor candidates. 0:03:03.840 --> 0:03:07.440 It's just going to be up to how they groomed them. 0:03:07.960 --> 0:03:09.760 Is Barbiger going to do something very similar to what 0:03:09.760 --> 0:03:11.560 he did with you know, Tom's tags and Jay Rizzulo 0:03:11.919 --> 0:03:15.560 kind of have that coo position for somebody whom he's 0:03:15.880 --> 0:03:17.280 kind of looking to to elevate. 0:03:17.400 --> 0:03:20.120 What's the time frame here, KEITHA for this, it. 0:03:20.080 --> 0:03:24.520 Has to happen pretty quickly, Alex. I mean barb Biger's term, 0:03:24.800 --> 0:03:26.960 which was initially when he came back in November twenty 0:03:27.040 --> 0:03:29.240 twenty two, was supposed to be two years. They extended 0:03:29.280 --> 0:03:31.480 that out to four years, so we have until the 0:03:31.560 --> 0:03:32.680 end of twenty twenty six. 0:03:33.040 --> 0:03:36.560 Yeah, and he's been known to extend extend extent. I mean, 0:03:36.640 --> 0:03:38.320 he could do that because most shareholders are like Bob 0:03:38.320 --> 0:03:40.400 Biger's better than anybody else out there, will stick with that. 0:03:40.400 --> 0:03:42.360 All right, So things seem to be settling down a 0:03:42.400 --> 0:03:45.120 little bit of stability. Returning to Mickey Mouse, how about 0:03:45.320 --> 0:03:46.240 a Paramount Global? 0:03:46.240 --> 0:03:48.440 It's almost the opposite. Are they going to sell the. 0:03:48.480 --> 0:03:51.440 Entire company parts of the company super voting stock? 0:03:51.920 --> 0:03:52.880 What's going on there? 0:03:53.120 --> 0:03:55.840 Yeah, So it looks like now they have or they've 0:03:55.960 --> 0:03:59.600 entered this period of exclusive talks with Skydance Media, and 0:03:59.600 --> 0:04:02.839 Skydance Media has kind of been this on again, off 0:04:02.880 --> 0:04:06.480 again interested party in the Paramount company, but of course 0:04:06.480 --> 0:04:08.240 they didn't want to come out with a bid for 0:04:08.280 --> 0:04:10.000 the entire company at least up until this point. They 0:04:10.040 --> 0:04:12.120 always kind of wanted to do it in a slightly 0:04:12.160 --> 0:04:14.880 different way by kind of taking control of the voting 0:04:14.920 --> 0:04:18.680 stock with through National Amusements and the red Stone family. 0:04:19.240 --> 0:04:21.960 Now it looks like they're kind of going to engineer 0:04:22.160 --> 0:04:24.240 like a two step process where they first take control 0:04:24.279 --> 0:04:26.960 of National Amusements and then go about and merge sky 0:04:27.080 --> 0:04:30.800 Dance with the entire company with Paramount. So still, I mean, 0:04:30.839 --> 0:04:34.320 there's just more unknowns than knowns at this point. There 0:04:34.360 --> 0:04:36.920 seems to be some report out there suggesting that they 0:04:36.960 --> 0:04:38.839 would need to do an equity deal raise of at 0:04:38.960 --> 0:04:41.360 least three billion dollars. That's going to be really dilutive 0:04:41.520 --> 0:04:44.760 for the current shareholders. Again, we don't know exactly how 0:04:44.839 --> 0:04:48.200 much Sherry Redstone is demanding for her voting stock. There 0:04:48.240 --> 0:04:50.800 are rumors out there suggesting it's upwards of about two 0:04:50.880 --> 0:04:53.119 to two and a half billion dollars. She also owns 0:04:53.160 --> 0:04:56.360 about close to almost a billion dollars in economic stake 0:04:56.360 --> 0:04:59.120 in Paramount. So again, too many unknowns right now, Paul, 0:04:59.600 --> 0:05:02.479 But you know, we do definitely have concrete talks. That 0:05:02.560 --> 0:05:03.280 much is for sure. 0:05:03.640 --> 0:05:06.560 So is the Apollo thing like off the table, right, 0:05:06.640 --> 0:05:10.280 because that would be more of a piecemeal approach to Paramount, right, 0:05:10.320 --> 0:05:12.159 even though the cash deal was better. 0:05:12.720 --> 0:05:15.960 So the Apollo thing was actually initially it was it 0:05:16.000 --> 0:05:18.080 was piecemeals. So, but they only was really interested in 0:05:18.120 --> 0:05:21.480 the film studio. They did not want the TV networks, 0:05:21.520 --> 0:05:23.599 They did not want the streaming asset. But it looks 0:05:23.640 --> 0:05:26.600 like when reports emerge about the Skydance deal, they said 0:05:26.600 --> 0:05:30.320 that Apollo actually had made a twenty six billion offer, 0:05:30.360 --> 0:05:33.880 an all cash deal for the entire company, which Sherry 0:05:33.920 --> 0:05:36.279 Redstone for some reason basically said note. 0:05:36.160 --> 0:05:38.520 To So, what's the future. I mean, this is the 0:05:38.560 --> 0:05:41.359 Paramount studio, geeth that this is one of the prize 0:05:41.480 --> 0:05:44.880 jewels in Hollywood. I mean, what happens to this company? 0:05:44.920 --> 0:05:47.640 I mean, is it can remain a publicly traded company? 0:05:47.800 --> 0:05:48.880 Is it going to be taken private? 0:05:49.080 --> 0:05:50.880 I think the most likely out come at this point, Paul, 0:05:50.920 --> 0:05:53.039 is that it still very much remains a public company. 0:05:53.640 --> 0:05:56.080 You know, we know that David Ellison is really only 0:05:56.160 --> 0:05:58.320 interested in the studio portion of the business, and you're 0:05:58.320 --> 0:06:01.680 absolutely right. It's an iconic studio, there's no doubt about it. 0:06:01.680 --> 0:06:05.240 They have a very, very valuable studio lot right in 0:06:05.240 --> 0:06:07.840 the heart of la that's worth maybe upwards of one 0:06:07.880 --> 0:06:10.480 point five two billion dollars. So obviously there's a lot 0:06:10.480 --> 0:06:12.960 of assets that he likes, but only with the studio business. 0:06:13.000 --> 0:06:15.599 So again the question is, yes, he can keep it 0:06:15.600 --> 0:06:17.680 a public company, but he might really kind of trim 0:06:17.720 --> 0:06:20.919 it down, try and find some buyers for the TV network, 0:06:20.920 --> 0:06:24.080 for probably the streaming platform, and just make this like 0:06:24.120 --> 0:06:28.080 a pure play kind of a film studio with production 0:06:28.160 --> 0:06:31.520 and licensing operations, very similar to what lions Gate is doing. 0:06:31.800 --> 0:06:34.719 Our thanks to Githa Ranganath and Bloomberg Intelligence senior annals 0:06:34.760 --> 0:06:35.599 covering media. 0:06:35.640 --> 0:06:38.200 Back in January, Bloomberg Intelligence came up with a list 0:06:38.240 --> 0:06:40.560 of fifty companies to watch in twenty twenty four, and 0:06:40.600 --> 0:06:43.400 now they're back with a list of ten companies specifically 0:06:43.440 --> 0:06:44.279 for the second quarter. 0:06:44.680 --> 0:06:47.320 This is based on scenarios from our bi analysts who 0:06:47.320 --> 0:06:49.479 sort of threw the barrel to find the good apples 0:06:49.520 --> 0:06:51.160 across sectors and regions. 0:06:51.520 --> 0:06:51.840 For more. 0:06:51.839 --> 0:06:54.520 We were join by Tim craigkh Heat, Bloomberg Intelligence Research 0:06:54.560 --> 0:06:57.159 Director for Content. We first asked him to talk about 0:06:57.160 --> 0:06:58.600 the companies on this list. 0:06:58.720 --> 0:07:00.200 A couple of things to keep in mind. We are 0:07:00.320 --> 0:07:04.240 top ten or two Q. These are part of a 0:07:04.279 --> 0:07:07.360 broader set of focus ideas that we've got. There's roughly 0:07:07.360 --> 0:07:09.720 seventy five to eighty of them right now, across sectors, 0:07:09.760 --> 0:07:15.000 across regions. These specifically have important catalysts coming up into 0:07:15.160 --> 0:07:18.120 Q that we think can bring the market around to 0:07:18.280 --> 0:07:21.360 our perspective. All of these focus ideas have really strong, 0:07:21.760 --> 0:07:25.400 high conviction fundamental views that we think are different from 0:07:25.440 --> 0:07:29.000 the market, and these catalysts should bring that awareness around. 0:07:29.480 --> 0:07:33.200 It's a group of US companies. There's four of them, 0:07:33.480 --> 0:07:36.920 there's three in Europe, three in Asia, and they span 0:07:37.280 --> 0:07:44.080 the gamut from healthcare, medtech products to big financials to tires. 0:07:44.480 --> 0:07:46.040 So interesting group. 0:07:45.960 --> 0:07:48.400 And Tim, one of the ones that you know, I've 0:07:48.400 --> 0:07:50.520 been kind of thinking about. I just think these Olympics 0:07:50.560 --> 0:07:52.840 in Parish are going to be just huge, and I'm 0:07:52.840 --> 0:07:55.160 thinking that ways to play it. You guys have one 0:07:55.200 --> 0:07:57.280 of them in the lodging space. Talk to us about 0:07:57.320 --> 0:07:58.080 that opportunity. 0:07:58.320 --> 0:08:02.679 Yeah, we do at Core. It's a big French hotel company. 0:08:02.720 --> 0:08:06.400 You might not know Akor, but you probably know some 0:08:06.480 --> 0:08:10.880 of their underlying brands. And you know, anybody who's made 0:08:10.920 --> 0:08:14.600 a hotel booking as of late knows that the prices 0:08:14.640 --> 0:08:20.760 seem to be really high. Surprisingly, so that's feeding Akor's 0:08:21.360 --> 0:08:25.400 rev par they're pricing, which is playing through into profit margins. 0:08:25.760 --> 0:08:30.000 And the catalyst for these guys is, in fact, Paris Olympics. 0:08:30.040 --> 0:08:33.120 We should start to see early booking data over the 0:08:33.160 --> 0:08:35.800 course of two Q heading into Summer Olympics. No, Paris 0:08:35.960 --> 0:08:38.560 is only one part of their portfolio. They're across Europe 0:08:38.600 --> 0:08:41.960 and Asia, and we're seeing a strong sustained travel recovery 0:08:42.120 --> 0:08:44.480 story that we think is better than consensus expects. 0:08:44.720 --> 0:08:46.440 But apparently they have to like clean out the send. 0:08:46.440 --> 0:08:48.360 Did you read that that there's so much to you, 0:08:49.440 --> 0:08:51.640 Like can you imagine being Olympic swimmer and like those 0:08:51.679 --> 0:08:53.200 garbage hitting you in the end. I mean they're working 0:08:53.200 --> 0:08:53.360 on it. 0:08:53.400 --> 0:08:54.319 They're definitely working on it. 0:08:54.920 --> 0:08:57.520 Okay, you your second one is in retail chow Tai fuk. 0:08:58.000 --> 0:08:59.920 No one's going to know this company here in the US, 0:09:00.000 --> 0:09:02.080 So tell us about it and why this makes the outlook. 0:09:02.440 --> 0:09:04.560 That and the next one on the list from an 0:09:04.559 --> 0:09:09.120 alphabetical perspective are both sort of interesting twists on the 0:09:09.160 --> 0:09:12.400 same underlying theme, and that's China. We all know that 0:09:12.440 --> 0:09:15.720 there's problems in China from the standpoint of the property market, 0:09:15.720 --> 0:09:19.080 and now that's playing through in terms of sentiment, the 0:09:19.160 --> 0:09:23.400 wealth effect on spending plans, et cetera. Chautai Fuk is 0:09:23.880 --> 0:09:28.040 arguably the best known Chinese retailer when it comes to jewelry, 0:09:28.320 --> 0:09:32.400 and it's a big market historically for tourists and travelers 0:09:32.440 --> 0:09:36.040 coming into Hong Kong and to make those purchases. In fact, 0:09:36.080 --> 0:09:39.280 what we're seeing right now is Hong kongers are going 0:09:39.520 --> 0:09:42.120 out of Hong Kong across the border in the mainland 0:09:42.200 --> 0:09:45.800 China to shop for pretty much everything because it's cheaper. 0:09:46.040 --> 0:09:49.120 So you combine that with negative sentiment, we think Hong 0:09:49.200 --> 0:09:51.720 Kong retail sales are going to disappoint and Chautai Fuk 0:09:52.000 --> 0:09:56.640 is a poster child. The other one, CSC Financial is 0:09:57.080 --> 0:10:00.559 one of the largest Chinese brokerages you know good old fashion, 0:10:01.080 --> 0:10:05.280 you know wealth management, and they are the investment banking business. 0:10:05.280 --> 0:10:08.240 We think is set for disappointment because IPOs and other 0:10:08.360 --> 0:10:12.920 new stock listings are way underwater. You know, we think 0:10:13.400 --> 0:10:16.240 you're going to see investment banking revenue disappoint You. 0:10:16.160 --> 0:10:17.560 Know, I was looking through the list here, Tim, and 0:10:17.800 --> 0:10:20.480 I was looking for a name from Michael Dean and 0:10:20.520 --> 0:10:22.880 the European Autos team, and I think I found one 0:10:22.920 --> 0:10:24.320 in Perelli Tires. 0:10:24.880 --> 0:10:27.640 Yes, indeed, I started to say, if you're an F 0:10:27.720 --> 0:10:30.560 one fan, but that's more from a European perspective than 0:10:30.640 --> 0:10:34.800 NASCAR in the US. But Perelli is a well known 0:10:34.840 --> 0:10:38.880 tire maker and what they're doing is twofold number one 0:10:39.520 --> 0:10:40.520 upgrading their mix. 0:10:40.600 --> 0:10:41.360 They're getting rid. 0:10:41.240 --> 0:10:44.120 Of some of their lower end products. And number two, 0:10:44.320 --> 0:10:47.559 they've taken on a pretty big initiative to shift production 0:10:48.200 --> 0:10:51.679 from core Europe to places like Romania over here in 0:10:51.679 --> 0:10:56.200 Mexico over there, all of which is driving better margins. 0:10:56.360 --> 0:10:58.760 And we think that this is going to continue more 0:10:58.800 --> 0:11:00.560 than what consensus currently he bakes in. 0:11:00.880 --> 0:11:03.160 Plus, it's from one of my favorite analysts over in 0:11:03.160 --> 0:11:06.240 our London office, Gillian Davis, doing some good work there, 0:11:06.280 --> 0:11:06.960 so good stuff. 0:11:07.280 --> 0:11:09.800 Home building Taylor Morrison made the list. 0:11:09.840 --> 0:11:11.520 That's not normally the company you think of when you 0:11:11.559 --> 0:11:14.480 think of like a homebuilder, right you're thinking lenar KB homes, 0:11:14.480 --> 0:11:16.320 et cetera. How does one make a list. 0:11:16.520 --> 0:11:20.880 They're continuing to expand, specifically in some larger developments in 0:11:20.920 --> 0:11:24.680 Florida and Texas, and it just seems to be a 0:11:24.800 --> 0:11:29.000 case of good old fashioned running the numbers with those 0:11:29.240 --> 0:11:34.280 expansion plans feeding through and their order book coming through 0:11:34.360 --> 0:11:37.440 better than anticipated, where we think their positive surprises ad 0:11:37.920 --> 0:11:40.880 but it is a classic story from the standpoint of 0:11:41.400 --> 0:11:43.840 expanding order books, expanding volumes. 0:11:44.040 --> 0:11:46.560 You know one name that's on here that surprising, but 0:11:46.640 --> 0:11:50.640 I think it's a potential rule opportunity is Tencent talks 0:11:50.640 --> 0:11:52.720 about that big Chinese e commerce because for a lot 0:11:52.760 --> 0:11:54.920 of people, Tim as you well know, China's kind of 0:11:54.920 --> 0:11:55.600 taboot right now. 0:11:55.640 --> 0:11:57.200 From an investment perspective. 0:11:56.960 --> 0:11:59.880 It is, especially when it comes to technology and regulat 0:12:00.040 --> 0:12:03.800 where he concerns and you know, Beijing focusing in on 0:12:04.120 --> 0:12:06.800 you know what the big tech companies are doing. You know, 0:12:07.080 --> 0:12:12.520 historically these have ten cents driven by online gaming and 0:12:13.480 --> 0:12:18.079 that growth rate is still somewhat muted, but there's more 0:12:18.200 --> 0:12:23.000 video that's coming through. There's AI assisted advertising that is growing. 0:12:23.080 --> 0:12:26.400 Both of those are drivers of their income statement that 0:12:26.480 --> 0:12:30.280 we think are underappreciated. We think it's mid team's growth 0:12:30.320 --> 0:12:32.800 going forward, but if you do the math, the market 0:12:32.800 --> 0:12:37.520 seems to be discounting basically static to maybe low single 0:12:37.520 --> 0:12:40.360 digit growth rates. And so there it's just a it's 0:12:40.440 --> 0:12:43.880 just a case where we think the market doesn't realize 0:12:43.880 --> 0:12:47.080 that they're back to having good, solid forward growth. 0:12:47.240 --> 0:12:49.600 Our thanks to Tim Craik, he had Bloomberg Intelligence Research 0:12:49.640 --> 0:12:50.560 director for content. 0:12:50.640 --> 0:12:52.480 All right, coming up, we're going to discuss with Tesla's 0:12:52.480 --> 0:12:55.319 first quarter delivery mis means for the EV space. 0:12:55.679 --> 0:12:58.720 Listening to Bloomberg Intelligence on Bloomberg Radio, providing end up 0:12:58.760 --> 0:13:00.880 research and data on two thousand and companies and one. 0:13:00.840 --> 0:13:01.880 Hundred and thirty industries. 0:13:02.120 --> 0:13:05.080 You can access Bloomberg Intelligence via big on the terminal. 0:13:05.200 --> 0:13:07.079 I'm Paul Sweeney and I'm Alex Steele, and. 0:13:07.080 --> 0:13:08.079 This is Bloomberg. 0:13:13.000 --> 0:13:16.880 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:13:16.960 --> 0:13:19.679 weekdays at ten am Eastern on Apple car Playing and 0:13:19.800 --> 0:13:22.680 Broud Auto with the Bloomberg Business App. Listen on demand 0:13:22.720 --> 0:13:27.040 wherever you get your podcasts, or watch us live on YouTube. 0:13:28.120 --> 0:13:30.000 We look next at the EVS space. 0:13:30.080 --> 0:13:32.760 So this week Tesla reported first quarter vehicle deliveries it 0:13:32.800 --> 0:13:35.920 felt fourteen percent short of analyst expectations, and this also 0:13:36.240 --> 0:13:39.240 represented Tesla's first year over year decline and delivery since 0:13:39.280 --> 0:13:40.000 twenty twenty. 0:13:40.240 --> 0:13:41.600 This comes to us to EV maker. 0:13:41.679 --> 0:13:44.560 Rivian reported that it delivered more EV's last quarter than 0:13:44.600 --> 0:13:46.880 Wall Street expected. For more on all of this, we 0:13:46.880 --> 0:13:50.400 were joined by Steve Man, Global Autos and Industrials Research analysts. 0:13:50.520 --> 0:13:53.280 We first asked Steve what Tesla's miss means for the 0:13:53.280 --> 0:13:54.240 company going forward. 0:13:54.600 --> 0:13:56.200 I mean, it's a bad time. You know, they just 0:13:56.240 --> 0:13:59.560 actually raise prices on their cars, puts in the question 0:13:59.679 --> 0:14:03.000 about that strategy. There's a lot of questions out there, 0:14:03.040 --> 0:14:05.880 you know, with you know, the end market, the consumer 0:14:06.440 --> 0:14:10.040 hesitating a bit on buying evs. So what's going to 0:14:10.120 --> 0:14:13.439 be for Tesla going forward? Definitely their one point million 0:14:14.080 --> 0:14:18.199 target sales target for the year is definitely at risk. 0:14:18.559 --> 0:14:19.480 Do we know why? 0:14:19.720 --> 0:14:21.640 Like, what's the why behind it? They're going to talk 0:14:21.640 --> 0:14:25.120 about production misses in terms of supply chain issues, et cetera. 0:14:25.600 --> 0:14:28.760 But then Ruvian kind of crushed it, So so what's 0:14:28.800 --> 0:14:29.840 the real reason here? 0:14:30.280 --> 0:14:34.720 Yeah, they actually you know, TESTA attributed to the RESC hostilities, 0:14:35.280 --> 0:14:37.240 and you know that's that's partly right, because a lot 0:14:37.280 --> 0:14:40.160 of their Model three and Model why they're most the 0:14:40.200 --> 0:14:43.520 best selling vehicles actually come from China. And you know, 0:14:43.880 --> 0:14:45.840 you know, you would assume a lot of these vehicles 0:14:45.840 --> 0:14:48.920 are shipped through the Pacific Ocean, avoiding the Red Sea. 0:14:49.360 --> 0:14:51.520 But we'll give them benefit of the doubt that it 0:14:51.680 --> 0:14:57.640 had some impact. Maybe it's not necessarily the shipment of vehicles. 0:14:57.640 --> 0:15:00.440 Maybe the shipment of parts right through the Red Sea 0:15:00.480 --> 0:15:04.200 that's impacted the production in China. And remember they actually 0:15:04.280 --> 0:15:07.920 cut some of the some production in China recently as well, 0:15:08.360 --> 0:15:11.640 so you know that could be the reason. But like 0:15:11.680 --> 0:15:14.000 you said, Rivian sales have gone up. You know, is 0:15:14.040 --> 0:15:18.080 there anything specific to Tesla? I don't. I don't really 0:15:18.080 --> 0:15:18.480 think so. 0:15:18.680 --> 0:15:18.880 One. 0:15:19.040 --> 0:15:21.320 You know, one quarter is not gonna tell us the 0:15:21.760 --> 0:15:24.720 trend for the long term. I think Tesla vehicles are 0:15:24.760 --> 0:15:27.880 still you know, liked by a lot of consumer. We 0:15:27.960 --> 0:15:31.960 just did a survey actually recently, a buying intention survey. 0:15:32.360 --> 0:15:35.800 You know, Tesla has the greatest rand loyalty still amongst 0:15:35.840 --> 0:15:38.360 all brands in the in the auto industry. 0:15:38.720 --> 0:15:42.080 Yes, the big question on investors' minds is what is 0:15:42.480 --> 0:15:45.800 the real demand for evs in general? 0:15:45.800 --> 0:15:46.760 And Tesla in particular. 0:15:47.160 --> 0:15:49.440 Look in I guess the near and intermediate term. 0:15:49.480 --> 0:15:50.280 Do you have a view on that. 0:15:51.000 --> 0:15:54.160 Yeah, I mean I've always thought that not only Tesla, 0:15:54.320 --> 0:15:56.760 but the entire eating market is going through a rough 0:15:56.760 --> 0:16:00.160 patch this year and likely into the next year. My 0:16:00.200 --> 0:16:04.080 long term view is still optimistic about EV's. I think 0:16:04.200 --> 0:16:09.720 there's enough policies out there to push greener vehicles, more 0:16:09.760 --> 0:16:13.640 greener vehicles on the road. I think the issue today 0:16:13.760 --> 0:16:19.000 is aboutffordability. There's actually not enough affordable EV's out there 0:16:19.480 --> 0:16:23.400 for the masses currently. A lot of vehicles are expensive. 0:16:23.840 --> 0:16:26.920 They're over fifty thousand dollars. A lot of people can 0:16:26.920 --> 0:16:31.160 buy them, especially during high interest rate environments. 0:16:31.480 --> 0:16:34.400 That has been the rhetoric really for a bit, and 0:16:34.480 --> 0:16:36.360 Elon Musk seems to say, Okay, we're going to do 0:16:36.400 --> 0:16:38.040 the lower cost, but give us a second. 0:16:38.120 --> 0:16:38.240 Right. 0:16:38.280 --> 0:16:41.400 We had this wave of Model Y, Model three, et cetera, 0:16:41.520 --> 0:16:43.600 and now we're going to have another wave of. 0:16:43.560 --> 0:16:46.120 More affordable EV's. Well, when does that wave happen. 0:16:46.560 --> 0:16:48.360 A lot of it actually comes online at the end 0:16:48.400 --> 0:16:50.880 of twenty twenty five. Starts coming online at at the 0:16:50.960 --> 0:16:53.760 end of twenty twenty five. That's when you have a 0:16:53.800 --> 0:16:58.880 Model two. GM is also relaunching the more affordable Bolt. 0:16:59.400 --> 0:17:02.840 All of them are you know, thirty thousand or less. 0:17:03.720 --> 0:17:06.080 And then you have you know, GM will continue to 0:17:06.119 --> 0:17:10.240 roll out cheaper vehicles, and you have Rivian also launching 0:17:10.280 --> 0:17:13.200 the R two and R three, you know, in twenty 0:17:13.240 --> 0:17:14.720 twenty six and twenty twenty seven. 0:17:14.880 --> 0:17:16.760 So it doesn't want a car Nambar two by the way, 0:17:17.320 --> 0:17:20.160 total side note, I mean everyone, but go ahead. 0:17:20.680 --> 0:17:22.359 Yeah, but you know, a lot a lot of more 0:17:22.400 --> 0:17:25.040 affordable EV's coming in and the hope is that, you know, 0:17:25.160 --> 0:17:28.800 the addressable market for the EV, market for the EV 0:17:28.960 --> 0:17:32.640 industry expands as the cheaper cars come on the road 0:17:32.680 --> 0:17:34.399 and are available to consumers. 0:17:34.600 --> 0:17:37.040 If I were an investor in this company, I'd be saying, Okay, 0:17:37.160 --> 0:17:39.840 you need to bring in a cheaper priced car for 0:17:39.880 --> 0:17:43.439 the mash market, but I'm not sure you can convince 0:17:43.480 --> 0:17:45.360 me that you could do it at a profit. 0:17:45.560 --> 0:17:46.800 What's the expectation of. 0:17:46.760 --> 0:17:49.840 Their ability to turn out lower price models on a 0:17:49.880 --> 0:17:51.800 per unit profitable basis. 0:17:51.640 --> 0:17:55.240 That That's a very good question. I think scale is 0:17:55.280 --> 0:17:57.560 the most important thing. I mean, this is a scale 0:17:57.720 --> 0:18:00.520 volume game in the auto industry has has been like 0:18:00.560 --> 0:18:04.480 that for one hundred years. So the question is are 0:18:04.520 --> 0:18:07.680 the cheaper vehicles going to resonate as you push more 0:18:07.760 --> 0:18:11.119 production through an assembly plant. In the auto industry, the 0:18:11.200 --> 0:18:16.960 unicost does fall significantly in a logarithmic kind of trend, 0:18:17.080 --> 0:18:21.520 so we're hoping that it will cut. But specifically to Tesla, 0:18:21.760 --> 0:18:24.600 I would have also mention that they've done a really 0:18:24.600 --> 0:18:29.520 good job in vertically integrating their processes throughout the whole 0:18:29.600 --> 0:18:34.160 value chain, right, and that actually does cut costs, especially 0:18:34.359 --> 0:18:38.080 in newer tech like this. You know, if I look 0:18:38.119 --> 0:18:41.639 at over one hundred years ago, Henry Ford basically did 0:18:41.680 --> 0:18:45.679 the same thing. You know, switching everybody from horse carriages 0:18:46.080 --> 0:18:50.720 to automobiles actually required vertical required Ford to be to 0:18:50.800 --> 0:18:55.400 vertically integrate and able to manage costs and manage design 0:18:55.960 --> 0:18:59.880 and be nimble and flexible to react to consumers. 0:19:00.640 --> 0:19:03.680 Our thanks to Steve Man Global Autos and Industrial Research Jonalysts. 0:19:03.880 --> 0:19:06.200 Earlier in the week, we were joined by Matt Winkler, 0:19:06.320 --> 0:19:09.159 Editor in chief Emeritus at Bloomberg News. He's also been 0:19:09.160 --> 0:19:12.280 writing a series of opinion pieces on key swing states 0:19:12.320 --> 0:19:13.280 in the US. 0:19:13.280 --> 0:19:16.240 And that's latest piece. His research focused on Georgia. His 0:19:16.359 --> 0:19:19.040 economy has been booming over the last few decades. We 0:19:19.080 --> 0:19:21.840 began our conversation with Matt by asking him to discuss 0:19:21.840 --> 0:19:23.359 his findings in Georgia. 0:19:23.480 --> 0:19:26.600 Georgia population of more than eleven million makes it the 0:19:26.600 --> 0:19:29.800 eighth largest state, and it's booming right now like it 0:19:29.880 --> 0:19:33.280 never did before Joe Biden became the forty sixth president. 0:19:33.440 --> 0:19:37.880 And we know this because not since data was initially 0:19:37.920 --> 0:19:40.480 collected in nineteen ninety has there been a three year 0:19:40.560 --> 0:19:45.080 period when growth in the Peach States manufacturing payrolls came 0:19:45.160 --> 0:19:49.439 close to matching the eleven point nine percent increase in 0:19:49.560 --> 0:19:53.080 jobs since twenty twenty one, or its rate of employment 0:19:53.080 --> 0:19:56.800 gains compared with the US overall. And that's according to 0:19:56.880 --> 0:19:59.879 data compiled by Bloomberg. So we are seeing a man 0:20:00.000 --> 0:20:04.000