WEBVTT - Tesla Drops and SBF Pleads Not Guilty 0:00:13.119 --> 0:00:16.120 I'm Caroline Hyde at Bloomberg's world headquarters in New York 0:00:16.239 --> 0:00:19.120 and then made Lovelow in San Francisco. This is Bloomberg 0:00:19.200 --> 0:00:21.520 Technology and it was a tough first day of trading 0:00:21.560 --> 0:00:24.799 for the year, especially for Tesla shareholders to stop falling 0:00:24.800 --> 0:00:29.720 by the most after deliveries they miss and Sam bankman 0:00:29.800 --> 0:00:33.040 Fried pleads not guilty as the ft X founder faces 0:00:33.120 --> 0:00:36.240 trial in October. The same day, the top US banking 0:00:36.240 --> 0:00:40.480 watchdogs send a warning about crypto activity and the slowdown 0:00:40.479 --> 0:00:43.320 in ad spending will continue to shake up Silicon Valley 0:00:43.360 --> 0:00:46.400 giants like Google and Meta. That's as Netflix and TikTok 0:00:46.600 --> 0:00:50.519 come into play. We bring you expert analysis. But first 0:00:50.880 --> 0:00:54.560 on this first day of three trading, editor is good 0:00:54.600 --> 0:00:55.920 to be back with you, and we talked about it 0:00:55.960 --> 0:00:57.920 all with Dana Hall, where Piece of Station joins us 0:00:57.920 --> 0:00:59.880 to kick off this new year's show. These new glasses 0:00:59.880 --> 0:01:02.160 as well, whether we love them, but down people don't 0:01:02.240 --> 0:01:04.080 love the numbers that came out of Tesla. What is 0:01:04.080 --> 0:01:06.560 it four hundred, five thousand, two hundred seventy eight vehicles 0:01:06.800 --> 0:01:09.000 in the last three months. Why was that such a 0:01:09.040 --> 0:01:12.080 shock to the four hund and twenty that they promised, Well, 0:01:12.080 --> 0:01:14.520 you know, it's always about expectations. A beat is a beat, 0:01:14.560 --> 0:01:16.039 and a miss and a miss is a miss, and 0:01:16.040 --> 0:01:18.400 this is a clear miss. I mean Elon Musk spent 0:01:18.480 --> 0:01:21.120 the last earnings call talking about Tesla is going to 0:01:21.160 --> 0:01:23.679 have this epic year end, and we saw on social 0:01:23.680 --> 0:01:27.040 media that Franz, the chief designer, was at the delivery 0:01:27.040 --> 0:01:29.080 center helping to hand over the car. So everyone was 0:01:29.120 --> 0:01:31.080 kind of expecting that the numbers would be pretty close 0:01:31.120 --> 0:01:34.360 to consensus, but they missed consensus by a mile, even 0:01:34.360 --> 0:01:37.440 the company's own the consensus. And you can't, you know, 0:01:37.520 --> 0:01:39.360 you just can't be that way when you're this kind 0:01:39.360 --> 0:01:41.800 of a company. In the SNP five, I mean, people 0:01:41.800 --> 0:01:44.319 are expecting things to be better. The other thing is 0:01:44.360 --> 0:01:47.000 that over thirty or four thousand cars were quote unquote 0:01:47.000 --> 0:01:50.000 in transit, and so it's like Tesla is this big 0:01:50.000 --> 0:01:52.760 company now, and yet they still have this logistical problem 0:01:52.760 --> 0:01:55.200 in terms of getting cars into the hands of customers 0:01:55.240 --> 0:01:58.920 at the end of every quarter, third consecutive quarter of 0:01:59.000 --> 0:02:01.520 missing delivery estimate this thing I'm right and saying. And 0:02:01.560 --> 0:02:03.280 then the other kind of thing that jumped out with 0:02:03.320 --> 0:02:05.480 me your story is that they didn't quite make that 0:02:05.560 --> 0:02:09.480 fifty percent average annual growth rate. A lot a lot 0:02:09.480 --> 0:02:11.400 of analysts of cut price tuggets. I mean, what is 0:02:11.760 --> 0:02:15.639 the picture now for Tesla going forward? In well, they 0:02:15.639 --> 0:02:18.079 report earnings later this month, and the big question is 0:02:18.120 --> 0:02:20.960 the hit too margins? So you know, they cut all 0:02:20.960 --> 0:02:23.240 these prices to try to make to try to make 0:02:23.360 --> 0:02:25.799 the delivery target. That didn't work, So now there's gonna 0:02:25.840 --> 0:02:27.520 be a great hit to gross margins. And I think 0:02:27.520 --> 0:02:30.440 the big thing too is guidance, Like why didn't Tesla 0:02:30.520 --> 0:02:33.280 lower their guidance? You have Elon Musk selling shares of 0:02:33.360 --> 0:02:35.560 his stock in the company mid December when he clearly 0:02:35.600 --> 0:02:37.799 had a clear look at what demand was like for 0:02:37.880 --> 0:02:41.040 the quarter. So he unloads his stock. Everyone else is 0:02:41.040 --> 0:02:44.160 holding the bag. And then they missed by several units. 0:02:44.280 --> 0:02:47.160 And so going into earnings, everyone's cutting their targets and 0:02:47.160 --> 0:02:50.760 everyone wants more conservative guidance for the going You're going forward, 0:02:50.800 --> 0:02:53.000 all right, Bloomberg's Dona Hole, Thank you very much. Want 0:02:53.040 --> 0:02:56.760 to continue the conversation is stick with Tesla with all convests. 0:02:57.160 --> 0:03:01.440 Chief futurist Brett Winton. Brett, we'll get into two arcs 0:03:01.639 --> 0:03:06.320 long term call around Tesla shortly, but just first your 0:03:06.360 --> 0:03:08.880 reaction to the fourth quarter of deliveries miss and as 0:03:08.880 --> 0:03:11.679 we were discussing with Dane of the third consecutive miss 0:03:11.680 --> 0:03:15.200 for deliveries for Tesla, I think it's ironic that you 0:03:15.400 --> 0:03:19.160 qualified as a miss when a company delivers year in 0:03:19.240 --> 0:03:23.360 your growth against an auto market that's declining. Eight. I 0:03:23.400 --> 0:03:26.680 think it's very clear from our perspective that electric vehicles 0:03:26.680 --> 0:03:29.840 are going to become the dominant drive trains um for 0:03:30.160 --> 0:03:33.760 um for automotive over the next five years. And we 0:03:33.800 --> 0:03:38.200 think there'll be sixty million evs sold in and Tesla 0:03:38.240 --> 0:03:41.200 will take a plurality of that. Uh, and so they 0:03:41.200 --> 0:03:43.360 have a huge tail wind behind them. Uh. You know, 0:03:43.400 --> 0:03:46.440 equities are priced on the basis of future expectations of 0:03:46.520 --> 0:03:51.280 cash flow, not the quarterly delivery results. And so I 0:03:51.360 --> 0:03:54.520 expected over the you know, long term, this will resolve 0:03:54.560 --> 0:03:56.720 and will be seen as just a blip in the 0:03:56.800 --> 0:04:00.080 company's trajectory. Right, you called it ironic. What I'm saying 0:04:00.160 --> 0:04:02.320 is that, you know, we need a yard stick, a 0:04:02.400 --> 0:04:05.760 benchmark by on which to go by. Right, it's three 0:04:06.080 --> 0:04:10.240 consecutive quarters of miss against consensus. But you also mentioned 0:04:10.240 --> 0:04:13.680 that and your growth Tesla set out once again in 0:04:13.720 --> 0:04:18.680 two hopes of reaching a fift annual average growth target. 0:04:18.720 --> 0:04:21.320 They didn't hit that either. Do you expect them to 0:04:21.400 --> 0:04:25.320 hit it going forward? Yeah, Then whether or not they 0:04:25.400 --> 0:04:28.320 hit their growth target is a function of production, not demand. 0:04:28.360 --> 0:04:30.880 And so right now the market is talking a lot 0:04:30.880 --> 0:04:35.520 about demand. I think it's probably um true that consumers 0:04:35.520 --> 0:04:39.560 are confused by the u S regulation and which evs 0:04:39.560 --> 0:04:42.159 will qualify and what mix and models will and so 0:04:42.520 --> 0:04:45.760 there is probably a demand kind of hiccup as people 0:04:45.800 --> 0:04:49.240 tried to assess and wait out kind of tax guidance 0:04:49.440 --> 0:04:52.200 for for getting money off the vehicle starting in the 0:04:52.240 --> 0:04:55.040 new year. But ultimately it's a question of whether or 0:04:55.080 --> 0:04:58.279 not Tesla can scale production, and they've demonstrated over time 0:04:58.320 --> 0:05:01.480 that they can, and and I think that's the you know, 0:05:01.760 --> 0:05:04.960 we're making a huge transition from one drive train to another. 0:05:05.080 --> 0:05:07.920 Tesla is is at least three or four years ahead 0:05:07.960 --> 0:05:10.520 of the industry and driving that transition. And we believe 0:05:10.520 --> 0:05:13.640 they're going to continue to scale drive down costs of manufacture. 0:05:13.960 --> 0:05:16.000 And and that's not a scenario where you end up 0:05:16.040 --> 0:05:20.960 with a problem on on even margins as as as 0:05:21.040 --> 0:05:23.440 Dana mentioned, who knows what the margins will look like 0:05:23.480 --> 0:05:25.839 this quarter. I think over time, the company has delivered 0:05:25.839 --> 0:05:30.600 an ability to expand gross margins and and operating margins 0:05:31.040 --> 0:05:35.080 as they have this incredible tailwind of demand for electric vehicles, 0:05:35.080 --> 0:05:36.960 which is the way in which we're going to ride 0:05:36.960 --> 0:05:40.400 around to us. Though about the competition, of course, you 0:05:40.480 --> 0:05:42.560 say that what ahead of it? But competition is coming, 0:05:42.560 --> 0:05:46.719 and it's coming firstly bred sure. So Tesla released the 0:05:46.800 --> 0:05:50.039 Model three in sen and it basically took the industry 0:05:50.120 --> 0:05:54.000 four years before there was a range and cost competitive 0:05:54.600 --> 0:05:58.120 vehicle with the Model three. With that Model three, and 0:05:58.320 --> 0:06:00.920 their cars haven't stayed the same. In March, we think 0:06:00.920 --> 0:06:04.080 that Tesla's gonna announce a new vehicle platform and that 0:06:04.240 --> 0:06:06.800 the cost of manufacturer for that vehicle platform will be 0:06:06.880 --> 0:06:09.599 roughly half the cost of the Model three. If you 0:06:09.640 --> 0:06:11.640 look at what happened when they released the Model three, 0:06:11.680 --> 0:06:15.320 they had a massive gross margin expansion and massive unit 0:06:15.400 --> 0:06:18.320 volume expansion over multiple years. I think the same thing 0:06:18.400 --> 0:06:21.159 is going to happen with the new vehicle platform they 0:06:21.200 --> 0:06:23.920 announced in March, and so they're gonna set the standard 0:06:23.960 --> 0:06:26.240 for the industry again. The industry will again be four 0:06:26.320 --> 0:06:29.480 or five years behind UH and for shareholder it's it's 0:06:29.480 --> 0:06:32.880 a great outcome. Uh. You you end up with a 0:06:33.040 --> 0:06:37.560 company establishing a strategic footprint in in a massive, literally 0:06:38.080 --> 0:06:42.560 trillion dollar plus market UH and UH and and likely 0:06:42.600 --> 0:06:45.320 to dominate and soak up all of the profits out 0:06:45.320 --> 0:06:49.200 of that industry, as as the rest of the competitors 0:06:49.200 --> 0:06:53.040 struggle to catch up. Well, I mean, China's a slightly 0:06:53.080 --> 0:06:56.880 different UH market than than the US and Western markets. 0:06:56.920 --> 0:06:59.840 I think that Tesla will remain at the higher end 0:07:00.040 --> 0:07:03.280 the Chinese market and UM and clearly they have a 0:07:04.160 --> 0:07:08.039 beneficial and synergistic relationship with the government in China, and 0:07:08.080 --> 0:07:13.520 that they're providing demand for the Chinese battery ecosystem and 0:07:13.520 --> 0:07:16.280 and releasing a product into the market that the Chinese 0:07:16.280 --> 0:07:19.480 domestics really enjoy and love. UH and that market is 0:07:19.520 --> 0:07:23.320 likely to be more competitive just because costom manufacturers so 0:07:23.400 --> 0:07:26.560 much lower. There right, brett Arc has a sort of 0:07:26.640 --> 0:07:30.720 long term call on the stock hundred dollars per share, 0:07:30.760 --> 0:07:37.120 which you expect to materialize in six I asked Twitter 0:07:37.240 --> 0:07:39.400 users and our followers, our audience on the show kind 0:07:39.400 --> 0:07:41.280 of what they wanted to ask you. Many wanted to 0:07:41.320 --> 0:07:44.200 ask about that call if it's still is intact. But 0:07:44.240 --> 0:07:46.560 they also wanted to ask how much of it is 0:07:46.600 --> 0:07:50.160 reflective of the promise of full self driving away from 0:07:50.200 --> 0:07:55.360 just the simple business of selling vehicles. Sure, so, just 0:07:55.360 --> 0:07:57.920 just a note that forty dollars to show that was 0:07:58.000 --> 0:07:59.760 pre stock split, so you have to make in a 0:08:00.080 --> 0:08:02.760 split for the stock split, for the for the for 0:08:02.840 --> 0:08:06.440 the UH. You know, current adjusted UH share price expectation, 0:08:06.600 --> 0:08:10.640 though our expectation hasn't um changed UH and in fact, 0:08:10.720 --> 0:08:15.440 we're going through the process of of updating our numbers 0:08:15.880 --> 0:08:17.960 right now, so keep an eye out for that as 0:08:17.960 --> 0:08:20.960 well as our overall EV forecast and and in our 0:08:21.000 --> 0:08:24.160 Big Ideas report that will release later this month. UM 0:08:24.440 --> 0:08:28.560 the roughly a third of the value of the business 0:08:28.720 --> 0:08:31.200 is the EV manufacturing the business in our view, and 0:08:31.280 --> 0:08:34.120 two thirds of the value of the business is expectations 0:08:34.120 --> 0:08:38.440 for GROBOTAXI. And that's a really important consideration here. People 0:08:38.480 --> 0:08:44.400 act like, oh, this unit number in matters tremendously in 0:08:44.400 --> 0:08:48.280 in the the scheme and scope of of the business model. 0:08:48.480 --> 0:08:51.360 If they can deliver full self driving, that will transform 0:08:51.440 --> 0:08:54.480 the company. You go from getting one time profitability from 0:08:54.480 --> 0:08:59.240 each asset sold to ongoing cash flow generation from every 0:08:59.360 --> 0:09:03.520 asset in field per annum. On a go forward basis, 0:09:03.600 --> 0:09:07.240 as these um individually owned vehicles that are used you know, 0:09:07.360 --> 0:09:10.480 five percent of the time and spend their time part 0:09:10.840 --> 0:09:14.360 turn into robotaxis that can take you know, five or 0:09:14.400 --> 0:09:17.160 ten people around in a day uh and and deliver 0:09:17.400 --> 0:09:21.400 ongoing returns to shareholders. So it will be a business 0:09:21.480 --> 0:09:24.360 value transformation if and as they deliver it, and the 0:09:24.440 --> 0:09:26.959 evidence on the ground is they'll be able to. I mean, 0:09:27.040 --> 0:09:30.800 I use it every day. It makes driving safer less stressful. 0:09:31.080 --> 0:09:33.920 Uh and and I'm less tired after driving. It's a 0:09:33.960 --> 0:09:37.280 great product. And by the way, it improved yesterday while 0:09:37.280 --> 0:09:39.440 it was sitting in my driveway. The car I owned 0:09:39.440 --> 0:09:42.120 today is better than the car I owned yesterday. There's 0:09:42.120 --> 0:09:44.960 almost no other vehicle in the world you can say 0:09:44.960 --> 0:09:48.520 that about. And so I think that the promise of 0:09:48.559 --> 0:09:52.480 that transformation to the business models is really extreme and 0:09:52.640 --> 0:09:54.840 you don't need to assume it's going to happen in 0:09:54.920 --> 0:10:00.160 order to underwrite a really material return for the company. Right. Well, 0:10:00.280 --> 0:10:02.520 certainly the bill case, we thanks for you for having 0:10:02.800 --> 0:10:05.600 new on and do come back with the updated numbers. 0:10:06.320 --> 0:10:09.560 It's the pragmatic case. I mean, like, let's be honest, 0:10:09.640 --> 0:10:13.960 this is a world class um product that people love 0:10:14.240 --> 0:10:17.280 and that makes them safer and gets them to and 0:10:17.400 --> 0:10:20.920 from places faster and easier. Uh, and I don't expect 0:10:21.000 --> 0:10:24.200 it that that hasn't changed, and so we expected to 0:10:24.200 --> 0:10:27.880 continue of arc. We thank you, hands up, have a 0:10:27.920 --> 0:10:30.480 great start to twenty three. Thanks for coming on. All 0:10:30.559 --> 0:10:33.559 things tess are all things pragmatic, or some would say, 0:10:33.559 --> 0:10:35.839 in all case, what to expect from tech stocks? Of course, 0:10:35.880 --> 0:10:38.360 more broadly, next to you bull more generally, we're gonna 0:10:38.400 --> 0:10:40.480 be asking, ever core I s I Senior Imagine Director 0:10:40.480 --> 0:10:44.040 and head of Internet Research, Mark Mahaney, that's next is 0:10:44.080 --> 0:10:56.040 a bloomberg. These take investors really haven't had to focus 0:10:56.040 --> 0:10:59.000 on business fundamentals for a long period of time. They've 0:10:59.040 --> 0:11:02.200 been writing this lower inflation rate cycle and riding the 0:11:02.320 --> 0:11:05.080 right you know, the rising in stock prices that come 0:11:05.120 --> 0:11:07.280 as a result of that. So tech investors are now 0:11:07.320 --> 0:11:10.160 actually having to do the work that we have been doing, 0:11:10.360 --> 0:11:13.000 you know, as active stock pickers our entire career. So 0:11:13.240 --> 0:11:15.840 that's why we think there's a lot of opportunity there, 0:11:15.880 --> 0:11:20.600 But you really need to be stockpickers. Franklin Mutual Advisors 0:11:20.640 --> 0:11:25.079 portfolio manager Katrina Dudley. There was some tough love tech investors. 0:11:25.080 --> 0:11:27.600 As we entered this new year, let's continue the conversation 0:11:27.640 --> 0:11:30.080 with a man who does a lot of fundamental analysis, 0:11:30.240 --> 0:11:32.920 Mark Mahaney of ever Core. And it's great to start 0:11:33.000 --> 0:11:35.160 the year with you, Mark and talk to us about 0:11:35.200 --> 0:11:38.800 what was cautious and muted two now turns to constructive 0:11:38.840 --> 0:11:42.360 after a brutal last year. Mark, some of your best 0:11:42.400 --> 0:11:44.880 ideas and one of them is Uber. It's interesting we 0:11:44.920 --> 0:11:48.160 just finished a conversation had on the heels of Tessa robotaxis. 0:11:48.200 --> 0:11:53.840 What fundamentally looks nice to you with Uber? Mark? Well, Caroline, 0:11:53.880 --> 0:11:56.079 thanks and happy new year to you. It's nice to 0:11:56.080 --> 0:11:58.920 see you again. The this last year wasn't terrible year. 0:11:59.400 --> 0:12:02.440 There was the worst performing year for stocks, especially for 0:12:02.480 --> 0:12:06.120 growth equities since two thousand and eight. So yeah, that 0:12:06.200 --> 0:12:09.040 was that was very challenging. I'm going into this year 0:12:09.080 --> 0:12:11.880 we try to be tactically constructive, which means we're looking 0:12:11.920 --> 0:12:15.200 for companies that are somewhat recession resistant and I don't 0:12:15.200 --> 0:12:18.560 cover a defensive space, so somewhat recession resistant, maybe have 0:12:18.600 --> 0:12:21.559 new revenue streams and then have taken cost actions because 0:12:21.600 --> 0:12:23.199 you need to do that at demand is going to 0:12:23.280 --> 0:12:26.440 soften and that leads us to like to two stocks 0:12:26.440 --> 0:12:28.960 in particular. You mentioned one Uber, the others Netflix Uber. 0:12:29.240 --> 0:12:30.760 I just think that the ride sharing part of the 0:12:30.840 --> 0:12:34.320 business is more for utility than a discretionary spend environment. 0:12:34.360 --> 0:12:37.640 We still need to commute, We still have our weekend outings, 0:12:38.000 --> 0:12:40.559 and we still have some airport trips, and leisure demand 0:12:40.559 --> 0:12:42.880 trends seem to be holding up very well. So I 0:12:42.960 --> 0:12:45.080 just think that that part of the business holds up well. 0:12:45.320 --> 0:12:47.320 Company has taken a lot of costs out it was 0:12:47.440 --> 0:12:50.600 forced to, and it was probably to its own benefit. UH. 0:12:50.600 --> 0:12:52.440 And they've now turned a corner on free cash flow, 0:12:52.440 --> 0:12:54.040 and I think they'll be able to continue to grow 0:12:54.160 --> 0:12:56.199 free cash flow. So I think it's that as the 0:12:56.240 --> 0:12:58.800 story changes from a growth at all cost company to 0:12:58.920 --> 0:13:01.559 a im positive free cash flow company. I just think 0:13:01.559 --> 0:13:02.800 that you know, you're going to find a lot of 0:13:02.880 --> 0:13:05.920 valuation support for the name UH and that's why I 0:13:05.920 --> 0:13:09.079 think the stock and outperformed this year. It's interesting just 0:13:09.240 --> 0:13:11.600 there already you're getting to the nuts and the bolts 0:13:11.600 --> 0:13:14.360 of fundamentals and decisions while you're picking certain companies to 0:13:14.480 --> 0:13:17.160 perform over and above others. Do you think it's true 0:13:17.240 --> 0:13:19.720 that a lot of technology investors out there haven't done 0:13:19.760 --> 0:13:22.800 the fundamental analysis or indeed aren't able and set up 0:13:22.840 --> 0:13:25.280 for an environment that is completely out odds with what 0:13:25.320 --> 0:13:27.360 they've been used to, which is basically lower rates for 0:13:27.400 --> 0:13:32.800 longer there's no question and easy money time, you know, 0:13:32.880 --> 0:13:38.240 with with practically zero interest rates allowed multiples for one 0:13:38.559 --> 0:13:43.480 to get in times very aggressive, and it kind of 0:13:43.520 --> 0:13:46.720 there was a fools follow fools, and I was certainly 0:13:46.720 --> 0:13:49.280 one of those fools. From time to time on certain stocks. 0:13:49.320 --> 0:13:51.120 We all make mistakes. I've made fit more than my 0:13:51.200 --> 0:13:54.280 share of them. But in terms of the fundamentals, you know, 0:13:54.320 --> 0:13:55.840 I still stick with those, and I think a lot 0:13:55.920 --> 0:13:59.280 of tech investors do. I don't think. I don't think 0:13:59.320 --> 0:14:02.840 that's hot rising interest rates. So this caused names like 0:14:02.960 --> 0:14:07.640 Amazon or Google or Meta to underperforming stocks. I think 0:14:07.679 --> 0:14:11.000 there are other issues, including now increasingly cyclical risk. In 0:14:11.200 --> 0:14:13.480 case of Meta, there are these Apple privacy changes. In 0:14:13.480 --> 0:14:16.400 the case of Amazon, there's also some MISSE execution on 0:14:16.440 --> 0:14:19.880 the airport, and then also just full exposure to inflationary concerns. 0:14:19.880 --> 0:14:22.280 So there really were a lot of issues besides just 0:14:22.480 --> 0:14:26.440 rising rates. Rising rates really affected those long term profitable, 0:14:26.480 --> 0:14:29.720 near term profit less companies, and that would be more 0:14:29.960 --> 0:14:32.720 names like a Shopify for example, and that's why you 0:14:32.760 --> 0:14:35.720 saw names like that with the highest multiples correct the 0:14:35.800 --> 0:14:39.480 most last year, Mark, Caroline and I spent a lot 0:14:39.520 --> 0:14:41.600 of the last few weeks of the year talking about 0:14:41.680 --> 0:14:45.400 layoffs or hiring freezes, cost cutting. I'm trying to summarize 0:14:45.400 --> 0:14:47.280 all of your your points that you seem to be 0:14:47.360 --> 0:14:51.080 suggesting that all the pain is gone, like it's been done. 0:14:51.120 --> 0:14:53.640 We we we we We've gone through it, We've d risk. 0:14:53.840 --> 0:14:57.800 Is that your conclusion going into this year? No, I 0:14:57.800 --> 0:15:00.360 I wouldn't go that far, wouldn't be that bold. US 0:15:00.520 --> 0:15:03.520 multiples have been de risked. Could multiple still fall, of 0:15:03.520 --> 0:15:06.440 course they could, but they have fallen pretty dramatically. And 0:15:06.480 --> 0:15:08.600 you've got a good number of these large cap internet 0:15:08.680 --> 0:15:10.360 names that I look at that are trading at five 0:15:10.440 --> 0:15:13.080 year trop multiples. Doesn't mean they can't go down further, 0:15:13.320 --> 0:15:15.440 but a lot of the risk has been taken out. 0:15:16.200 --> 0:15:17.880 The same thing with estimates, and one of the things 0:15:17.920 --> 0:15:20.320 that it's caused estimates to come down are these companies 0:15:20.400 --> 0:15:24.600 taking costs out of their business. The six percent riff 0:15:24.640 --> 0:15:29.800 reduction enforce at door Dash, the riff production enforce at 0:15:30.040 --> 0:15:33.040 Meta these companies and Amazon did this to There are 0:15:33.040 --> 0:15:35.440 companies that have yet to do this, though Google is 0:15:35.480 --> 0:15:37.880 one where I just think they had five quarters in 0:15:37.920 --> 0:15:41.360 a row of accelerating in record high employee ads up 0:15:41.400 --> 0:15:44.080 through the September quarter of last year. It's really kind 0:15:44.080 --> 0:15:47.320 of a little bit shocking in hindsight. I'm surprised that 0:15:47.360 --> 0:15:50.720 the company didn't start tempering down it's number of new employees. 0:15:51.000 --> 0:15:53.400 I think they're gonna have to start, you know, reducing 0:15:53.480 --> 0:15:56.360 that employee footprint or else margin is gonna be under 0:15:56.400 --> 0:15:59.040 a lot of pressure. Mark we took to twin at 0:15:59.040 --> 0:16:02.320 to Oscar already it's how they see three. We asked 0:16:02.600 --> 0:16:05.040 are you bullish on tech or you barish on tech? Vs? 0:16:05.040 --> 0:16:09.040 Are the results will bring them up for you mostly 0:16:09.240 --> 0:16:13.480 bullish respondents bullish? What would it take to make you 0:16:13.640 --> 0:16:18.200 bullish on technology broadly going into the rest of the year. Well, 0:16:18.400 --> 0:16:23.000 I'm actually surprised that the survey was that bullish. Frankly, 0:16:23.000 --> 0:16:27.280 I'm I'm surprised by that. So, uh, you know, I 0:16:27.320 --> 0:16:29.080 want to be tactically constructive, and I tell you one 0:16:29.120 --> 0:16:30.760 thing I still want to get across the point here. 0:16:30.880 --> 0:16:33.200 I think demand trends are going to continue to soften 0:16:33.240 --> 0:16:34.840 they did in Q three. I think when the Q 0:16:35.040 --> 0:16:37.400 four results come out over the next month, we're going 0:16:37.440 --> 0:16:40.920 to see the revenue trendsfer online retail, online advertising, cloud 0:16:40.960 --> 0:16:44.160 computing companies. Those are all continued to soften, and I 0:16:44.200 --> 0:16:46.840 think they will continue to in the middle through the 0:16:46.840 --> 0:16:50.000 middle of twenty three. Then I hope and the market hopes, 0:16:50.240 --> 0:16:53.600 that fundamental trends stabilized, revenue growth starts to re accelerate. 0:16:53.800 --> 0:16:56.960 If that happens, you'll start seeing multiples go up. And 0:16:57.080 --> 0:17:00.240 especially with cost taking out, you have revenue growth reacceleration 0:17:00.280 --> 0:17:03.640 on a lower cost base, you get this EPs slingshot opportunity. 0:17:04.040 --> 0:17:06.200 That's what's going to cause these stocks to work well. 0:17:06.480 --> 0:17:08.600 So the market is sort of hoping thinking that that 0:17:08.640 --> 0:17:10.720 will happen in the back cap of twenty three. And 0:17:10.760 --> 0:17:13.000 the question we all need to ask ourselves is is 0:17:13.040 --> 0:17:15.000 the market going to be too early or too late 0:17:15.040 --> 0:17:17.800 on that call? All right? Mark mehadia ever call a 0:17:17.920 --> 0:17:29.439 day one three in the bag, Thank you. It was 0:17:29.640 --> 0:17:32.639 Sam bang Winfried's day in court. The ft X founder 0:17:32.720 --> 0:17:36.000 appeared before a federal judge in Manhattan and pleaded not 0:17:36.119 --> 0:17:38.639 guilty to criminal charges he's now set to face a 0:17:38.720 --> 0:17:41.840 trial in October. Stood outside, this is the one the 0:17:41.880 --> 0:17:45.480 only Asian hallibus joining us from the courthouse, and we'll 0:17:45.520 --> 0:17:51.000 where next Shannani. What a day it's been, Caroline, Because 0:17:51.040 --> 0:17:53.760 in addition to him playing not guilty as we had 0:17:53.760 --> 0:17:57.640 expected to eight criminal counts here, there's a lot else 0:17:57.680 --> 0:18:01.600 that happened. A trial date has been set for October. Second, now, 0:18:01.640 --> 0:18:04.159 if everything goes correctly, and that does indeed happen on 0:18:04.200 --> 0:18:07.600 October seven A second, Sorry, this is expected here to 0:18:07.680 --> 0:18:10.040 take a number of weeks to play out in terms 0:18:10.080 --> 0:18:11.920 of the trial that we made too later this year. 0:18:12.200 --> 0:18:14.800 In the coming weeks, we expect the US to start 0:18:14.840 --> 0:18:18.159 presenting their evidence, to present evidence at greater scale on 0:18:18.359 --> 0:18:21.000 the charges that they have made. And remember, then there 0:18:21.040 --> 0:18:23.639 is a process by which Sam Bangmun freed and his 0:18:23.800 --> 0:18:27.040 lawyers set forward their motions. So there is a process here, 0:18:27.080 --> 0:18:31.159 and again things could change before October, certainly, but we 0:18:31.200 --> 0:18:33.760 did get a lot of information today about the nature 0:18:33.760 --> 0:18:36.240 of what we'll play out ahead and the timelines in 0:18:36.280 --> 0:18:39.359 which we are preliminarily operating on. Now. I will also 0:18:39.440 --> 0:18:42.560 say there was contention in the court. Sam Bangmun freed 0:18:42.640 --> 0:18:46.119 came in wearing a suit north face backpack that was 0:18:46.160 --> 0:18:50.960 his arms crossed as the prosecutors asked to amend the 0:18:51.160 --> 0:18:54.439 terms of his bail package. Now this is very interesting 0:18:54.440 --> 0:18:57.840 because Bloomberg is separately reported Aba Beny Morrison for US 0:18:57.840 --> 0:19:02.199 has broken that US prosecutors are separately investigating this idea 0:19:02.280 --> 0:19:06.480 here of money being transferred out of FT and Alameda wallets. Remember, 0:19:06.600 --> 0:19:09.040 the part of a THEIL amendment now is for them 0:19:09.080 --> 0:19:12.679 to seek the spf SA. Magma Freed himself cannot be 0:19:12.840 --> 0:19:16.399 taking money. It cannot be taking any cryptocurrency assets or 0:19:16.400 --> 0:19:20.280 any other assets from Alameda and f TS wallets. Now 0:19:20.320 --> 0:19:23.160 he himself has tweeted as we know that he has 0:19:23.200 --> 0:19:26.520 not done so, but the prosecutor had said the assistant 0:19:26.560 --> 0:19:29.560 attorney has said that this is something that they've seen 0:19:29.640 --> 0:19:33.399 him lie about before in general, and so again a 0:19:33.480 --> 0:19:36.359 point of contention here. But we will see this play 0:19:36.400 --> 0:19:40.520 out in real time, all right, thanks to bloombergs Snali Bassett. 0:19:40.600 --> 0:19:43.000 October seems a long way away, given that that story 0:19:43.080 --> 0:19:54.360 is dominated headlines for the last two months. Welcome back 0:19:54.400 --> 0:19:57.000 to Bloeveog Technology of Caroline Hide in New York alongside 0:19:57.000 --> 0:20:00.440 at Ludlow in San Francisco and big text we out 0:20:00.440 --> 0:20:02.800 of the world of hedge funds in fact today, Yeah, 0:20:02.840 --> 0:20:04.840 it was really interesting because throughout the day this was 0:20:04.880 --> 0:20:07.080 one of the most read stories on the Bloomberg terminal 0:20:07.160 --> 0:20:11.320 and online. It's about Serga cap okay debut Tuesday. It's 0:20:11.359 --> 0:20:14.600 the first or biggest launched by a woman led hedge 0:20:14.600 --> 0:20:17.640 fund one point eight billion dollars in assets under management. 0:20:17.640 --> 0:20:19.960 And I found this so fascinating because we've been writing 0:20:19.960 --> 0:20:22.920 a lot of Bloomberg about how hedge funds suffered in 0:20:23.000 --> 0:20:27.000 two Those that kind of looks more to private markets 0:20:27.040 --> 0:20:29.200 fed a little bit better. But this is really interesting 0:20:29.240 --> 0:20:31.880 based on what Serga Cap is going to be focused on. 0:20:32.080 --> 0:20:35.159 Malagan caused the founder. She's kind of this alumni of 0:20:35.480 --> 0:20:39.720 Lone Pine Capital and according to sources, this is interesting Caroline. 0:20:39.920 --> 0:20:43.639 She's going to be using data science to invest in 0:20:43.840 --> 0:20:47.640 themes that look at how technology can improve pretty bog 0:20:47.680 --> 0:20:52.119 standard areas. So how technology enhances financials, industrials, healthcare is 0:20:52.320 --> 0:20:55.439 enterprise data. But really the why we care here is 0:20:55.480 --> 0:20:58.200 that this is the largest debut of a woman led 0:20:58.240 --> 0:21:00.720 hedge fund in the industries here streak given all of 0:21:00.760 --> 0:21:04.520 the volatility literally around this industry and the under performance 0:21:04.560 --> 0:21:06.920 of two. It was a headline that caught my eye, 0:21:06.920 --> 0:21:08.399 and certainly this is a name that we want to 0:21:08.440 --> 0:21:11.640 keep an eye on going forward. Historic day, it would 0:21:11.640 --> 0:21:13.919 seem there's some history being made in politics as well. 0:21:13.920 --> 0:21:16.200 If I briefly want to bring you the headline after 0:21:16.240 --> 0:21:18.960 Macarthury suffered a historic rebar remember and a pretty drawn 0:21:18.960 --> 0:21:21.440 out speaker vote, they are going to be a journeying 0:21:21.560 --> 0:21:26.240 now until tomorrow Wednesday noon, after failing to elect a 0:21:26.359 --> 0:21:28.720 Speaker of the House. Of course, that's in the United 0:21:28.760 --> 0:21:32.720 States politics. So for now we see an adjournment after 0:21:32.880 --> 0:21:35.440 three rounds of votes to elect a Speaker of the House. 0:21:35.760 --> 0:21:37.760 But let's get back to our bread and butter. Let's 0:21:37.760 --> 0:21:40.240