WEBVTT - Tesla Beats Expectations and Netflix Shares Rally 0:00:02.200 --> 0:00:05.520 From the heart of where innovation, money and power COLLI 0:00:06.360 --> 0:00:10.840 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.920 --> 0:00:26.680 Emily Jay I'm Emily check in San Francisco and this 0:00:26.720 --> 0:00:29.240 is Bloomberg Technology coming up in the next hour. Tesla 0:00:29.280 --> 0:00:32.840 shares jump after better than expected results showing the car 0:00:32.960 --> 0:00:37.280 maker is getting production back on track. Tesla making more 0:00:37.320 --> 0:00:40.160 evis in June than any other month in the company's history. 0:00:40.920 --> 0:00:44.480 Dig into the numbers. Plus Netflix shares rally big time 0:00:44.520 --> 0:00:47.680 after the streaming giant lost only one million instead of 0:00:47.680 --> 0:00:51.919 two million subscribers. Could this big shift in investor sentiment 0:00:52.000 --> 0:00:55.120 booing markets as earnings roll out over the next few weeks. 0:00:55.720 --> 0:00:58.640 We will dig in and it is game on for 0:00:58.760 --> 0:01:02.440 Phase Clan, the influencer marketing house that counts snoops up 0:01:02.640 --> 0:01:05.760 as a board member. Just what public vias back? Why now? 0:01:06.319 --> 0:01:08.920 Who has to see you taking with tests? I want 0:01:08.920 --> 0:01:11.360 to bring in Steve Wesley West, Sleep Group founder and 0:01:11.560 --> 0:01:16.880 managing partner, also former longtime member of Tesla's board. Steve, 0:01:16.959 --> 0:01:19.720 I know you're liking what you see here. Investors seem 0:01:19.840 --> 0:01:23.160 a little look warm. What are you thinking? Well, look, 0:01:23.200 --> 0:01:25.880 it's great news for Tesla and Tesla investors. Everybody thought 0:01:25.920 --> 0:01:27.400 it's going to be a soft quarter. We knew there 0:01:27.400 --> 0:01:30.759 were supply chain issues combined with COVID closing the China 0:01:30.800 --> 0:01:34.240 facility for twenty two days, and we saw two U 0:01:34.360 --> 0:01:38.039 and fifty four thousand units delivered. Fifty increase year over year. 0:01:38.120 --> 0:01:42.840 That's growth. The big surprise was revenue and profitability. They 0:01:42.920 --> 0:01:45.840 hit sixteen point nine three billion, that's forty year over 0:01:45.959 --> 0:01:51.200 year growth. The biggest news is largest cars deliveries in history. 0:01:51.240 --> 0:01:53.400 In June says they're really ramping up to the back 0:01:53.520 --> 0:01:55.520 end of the year. I think they're on track to 0:01:55.520 --> 0:01:58.520 deliver three thousand units a Q three. I think they're 0:01:58.520 --> 0:02:01.480 gonna hit five thousand and before. If they do that, 0:02:01.520 --> 0:02:04.560 it'll be closer to fifty six growth. Keep in mind, 0:02:04.560 --> 0:02:07.960 analysts for predicting profitability of about a dollar eighty one, 0:02:08.080 --> 0:02:13.799 they hit to seven, so they're on track for record deliveries, 0:02:14.280 --> 0:02:19.640 record profits. Simply put, Tesla's got manufacturing capability in supply 0:02:19.720 --> 0:02:23.000 chain relationships no one else has. Someday they may not 0:02:23.120 --> 0:02:24.520 be king of the hill, but for the next year 0:02:24.560 --> 0:02:27.480 or two, they're looking awful strong. Now they didn't change 0:02:27.520 --> 0:02:31.880 their production forecast. They've made five sixty four thousand vehicles 0:02:32.320 --> 0:02:35.000 so far this year. They say they'll make a million 0:02:35.040 --> 0:02:37.880 and a half. Can they really make twice as many 0:02:37.960 --> 0:02:39.519 vehicles as they made in the first half of the 0:02:39.560 --> 0:02:42.560 year in the second half of the year without a doubt? 0:02:42.600 --> 0:02:45.560 And here's why. Mostly the their car companies General motors 0:02:45.639 --> 0:02:48.919 for it. They have one electric plant that's going online, 0:02:49.360 --> 0:02:51.919 maybe another one or two or three years. Tesla now 0:02:51.960 --> 0:02:59.080 has four plants up and running in California, Austin, uh Shanghai, 0:02:59.120 --> 0:03:02.720 and Berlin, and all four are running. Austin and Berlin 0:03:02.760 --> 0:03:04.800 are going to be pumping into big numbers by the 0:03:04.800 --> 0:03:06.800 tail end of the year. But that's only part of 0:03:06.840 --> 0:03:09.679 the story. The other key part that investors should understand 0:03:09.880 --> 0:03:12.639 is the biggest component in electric cars is the battery. 0:03:12.919 --> 0:03:15.560 Teslaw is the first to bring battery production in house. 0:03:15.880 --> 0:03:20.000 With their new technology, they appear to be the technology leader. 0:03:20.000 --> 0:03:23.600 They're taking the cost curve batteries down fast than anybody else. 0:03:23.880 --> 0:03:25.959 And on top of that, the leaders are providing what's 0:03:26.000 --> 0:03:29.120 called O t A or over the air software services 0:03:29.360 --> 0:03:32.280 that are dropping bigger profits to the bottom line. And again, 0:03:32.639 --> 0:03:36.119 the big story is profitability was way beyond when analysts 0:03:36.120 --> 0:03:38.560 saw and I know a lot of people say this 0:03:38.840 --> 0:03:42.200 test Less stock price is crazy, this is an anomaly 0:03:42.240 --> 0:03:45.560 at how capital markets work. But the fact is, if 0:03:45.600 --> 0:03:48.120 you're going in fifty a year from these big numbers 0:03:48.120 --> 0:03:49.960 fifty three point six billion to what I think is 0:03:49.960 --> 0:03:52.680 going to be eighty six billion, and you're more profitable 0:03:52.720 --> 0:03:55.360 than any other competitor in the market, you're gonna have 0:03:55.880 --> 0:03:59.040 a share price that's the envy of the industry. Big 0:03:59.080 --> 0:04:03.040 story just crossed for Mark Bloomergatto's team, including our own Ludlow, 0:04:03.120 --> 0:04:06.960 that Ford is planning to cut eight thousand jobs out 0:04:07.000 --> 0:04:10.160 of the you know, gas powered side of the business 0:04:10.160 --> 0:04:13.600 in part to fund the e V side of the business. 0:04:13.600 --> 0:04:16.919 And look, Jim Farley has been very serious about taking 0:04:17.000 --> 0:04:20.680 on Tesla and also his admiration for Tesla. How well 0:04:20.720 --> 0:04:26.960 positioned is Tesla compared to Ford, compared to Rivan and Lucid. Look, 0:04:27.279 --> 0:04:32.240 Americans want to know how well GM and Ford and 0:04:32.360 --> 0:04:35.200 Lucid and Riva are doing. But to be honest, there 0:04:35.240 --> 0:04:41.760 behind they came late to the game. Um, they should 0:04:41.760 --> 0:04:44.720 have started years ago. Keep in mind, General Motors has 0:04:44.760 --> 0:04:47.720 been making electric cars for eleven years now and they 0:04:47.720 --> 0:04:50.800 were only able to make twenty five thousand last year 0:04:50.839 --> 0:04:54.039 compared to Tesla's nine d and twenty five thousand, So 0:04:54.080 --> 0:04:56.080 they've got a long way to go. They need to 0:04:56.120 --> 0:04:59.240 kick it into higher gear. That having been said, Ribban 0:04:59.320 --> 0:05:02.760 makes a great ruck, but they too were laying people off. 0:05:02.800 --> 0:05:06.279 They've taken their production numbers down to twenty five thousand. Well, 0:05:06.279 --> 0:05:09.240 Tesla's ramping their predictions up to one point five million. 0:05:09.760 --> 0:05:13.440 The real people look at Volagon, they saw the writing 0:05:13.440 --> 0:05:15.599 on the wall. Herbert Dese has been a leader in 0:05:15.640 --> 0:05:18.560 the sector. He took battery production in house early with 0:05:18.640 --> 0:05:22.880 north Pole. They've got deep pockets factories on multiple continents. 0:05:23.120 --> 0:05:26.880 And then there's the Chinese. Most Americans have never heard 0:05:26.880 --> 0:05:30.120 of a Chinese auto company, but no, this b y 0:05:30.200 --> 0:05:33.920 D lead Pang, x Pang and others are gonna Lee 0:05:33.920 --> 0:05:36.880 Auto and x Panging are going to be coming to market. Four. 0:05:37.200 --> 0:05:40.400 Here's why they're tough. One, they're moving faster than vers 0:05:40.480 --> 0:05:43.560 than any other auto company except Tesla. To the Chinese 0:05:43.640 --> 0:05:47.480 are really subsidizing battery and auto costs. Three they make 0:05:47.520 --> 0:05:50.720 pretty darn good cars, so I expect the global competition. 0:05:50.800 --> 0:05:53.400 It's good for the consumer, but there's gonna be a 0:05:53.400 --> 0:05:56.160 shakeout here. Thirty new electric vehicle companies are coming to 0:05:56.240 --> 0:05:58.440 the market the last twenty four months. We may be 0:05:58.520 --> 0:06:02.360 heading into a recession. More cars, fewer buyers will see 0:06:02.400 --> 0:06:04.839 who winds up on top. To keep an eye on Tesla, 0:06:05.080 --> 0:06:08.320 Folkswagen and the Chinese. But is the China problem going 0:06:08.360 --> 0:06:10.960 to go away? I mean, you still got this twenty 0:06:10.960 --> 0:06:14.920 one day lockdown quarantine excuse me in Shanghai, and you 0:06:15.040 --> 0:06:18.520 just got the unpredictability of an ongoing pandemic where the 0:06:18.600 --> 0:06:21.719 Chinese government could once again crack down and make production 0:06:22.240 --> 0:06:25.599 They're difficult. Well, look, there are two big sign issues 0:06:25.600 --> 0:06:27.800 out there. One is the COVID one with the Chinese 0:06:27.880 --> 0:06:30.120 dude that others just can't for labor. A lot of 0:06:30.160 --> 0:06:34.480 reasons is the Chinese bring the entire workforce eight thousand 0:06:34.560 --> 0:06:37.320 people in the house and they will sequester them for 0:06:37.360 --> 0:06:39.840 weeks at a time so they don't get exposed. So 0:06:40.000 --> 0:06:42.960 I think the COVID issue gets solved. The bigger issue, 0:06:42.960 --> 0:06:46.440 it's the long term geopolitical issue. Is Hi Jinping, who 0:06:46.520 --> 0:06:50.400 is just reconfirmed as the new chairman of China, has 0:06:50.440 --> 0:06:55.880 said he intends to reunify or invade Taiwan at some 0:06:55.920 --> 0:06:58.479 point if you ever see something like that happened. China 0:06:58.480 --> 0:07:02.239 has a huge part of its action capacity, uh Tesla 0:07:02.279 --> 0:07:04.919 has in China. So there's a lot of issues to 0:07:04.960 --> 0:07:08.000 solve for. But right now, what investors need to look 0:07:08.040 --> 0:07:10.520 at who's selling the most and who's going the fast. 0:07:10.600 --> 0:07:13.440 The answer to that question is Tesla. Who's getting the 0:07:13.480 --> 0:07:17.800 smartest and bringing battery costs down and doing more selling 0:07:17.840 --> 0:07:21.240 more over the year software services. The answer to that's Tesla. 0:07:21.520 --> 0:07:25.200 But these aren't big secrets. Volkswagen, Chinese, others will catch up. 0:07:25.440 --> 0:07:27.880 It's going to be a question of who's fleet is 0:07:28.000 --> 0:07:30.680 to foot time to buckle up. How big a problem 0:07:30.720 --> 0:07:33.920 is the Twitter saga? Doesn't seem like Twitter is gonna 0:07:34.000 --> 0:07:36.800 let this go away. And obviously Tesla investors haven't been 0:07:36.960 --> 0:07:40.400 necessarily pleased about the commitments Elon Musk made. Now he's 0:07:40.440 --> 0:07:43.560 trying to pull out of them. What do you think 0:07:44.560 --> 0:07:47.840 Testa and Tesla and Elon or a master making great cars. 0:07:47.920 --> 0:07:49.960 I hope they stay focused on that. I think Twitter 0:07:50.000 --> 0:07:52.120 has been a diversion. I think the more they can 0:07:52.160 --> 0:07:55.880 stay focused on executing, whoever wins the electric car race 0:07:56.280 --> 0:07:58.840 is going to own a fifty year franchise, So you're 0:07:58.880 --> 0:08:01.040 gonna need to keep your eye on the ball. Tesla 0:08:01.120 --> 0:08:03.840 sitting pretty now, but a lot of serious people are 0:08:03.880 --> 0:08:07.040 coming after you, so we'll have to be on our 0:08:07.160 --> 0:08:09.480 toes and I hope Tesla's up to the task. I 0:08:09.520 --> 0:08:12.760 want to see an company win, all right, Wesley Who 0:08:12.800 --> 0:08:16.520 Founder and managing partner, Steve Wesley, thank you as always 0:08:16.560 --> 0:08:20.760 for your insights. Coming up? After Twitter rins round one 0:08:21.040 --> 0:08:23.560 fast tracking and suit against Elon Musk, what's coming in 0:08:23.680 --> 0:08:27.080 round two? Ali Rogani, Why Combinator Managing partner and the 0:08:27.160 --> 0:08:31.200 former CFO and CEOO of Twitter, will share his view 0:08:31.400 --> 0:08:35.760 of the saga and the recent market meltdown. Next, Mrs Bloomberg, 0:08:45.080 --> 0:08:47.760 fast forward to October. That's when Twitter and Neon Musk 0:08:47.800 --> 0:08:51.320 will officially face off in Delaware court. Will Twitter succeed 0:08:51.320 --> 0:08:53.000 in forcing Musk to do the deal, and if so, 0:08:53.520 --> 0:08:56.280 is that actually good for Twitter? For more insight into 0:08:56.320 --> 0:08:58.080 all of this, I want to bring in Ali Rogani, 0:08:58.120 --> 0:09:04.480 Why Combinator Managing partner and former Twitter CFO and c OH. So, Ali, 0:09:04.760 --> 0:09:08.439 what's your take Twitter one round one? That means they've 0:09:08.480 --> 0:09:11.960 potentially got the upper hand in round two? Is that good? 0:09:12.000 --> 0:09:17.120 For the company. Well, I think it's good for Twitter shareholders, um, 0:09:17.160 --> 0:09:21.480 you know, especially seeing the sell off and technology stocks 0:09:21.840 --> 0:09:24.640 over the past couple of months. I think the deal 0:09:24.720 --> 0:09:27.960 is very richly valued in today's terms. And you know, 0:09:28.080 --> 0:09:32.400 I actually expect Twitter to prevail in court. I think that, uh, 0:09:32.520 --> 0:09:35.280 the agreement as pretty ironclad as I read it. Uh, 0:09:35.280 --> 0:09:39.040 and Twitter's lawsuit is very clear. I think, um, you know, 0:09:39.080 --> 0:09:41.160 if you read it, you feel pretty I think find 0:09:41.160 --> 0:09:45.079 it pretty compelling that Musk had agreed to buy the company, 0:09:45.160 --> 0:09:49.800 even in the case of my market downturn. So I don't, um, 0:09:49.840 --> 0:09:51.560 I think this is going to go on Twitter's direction, 0:09:51.600 --> 0:09:55.040 which I think is good for Twitter shareholders. UM. But 0:09:55.800 --> 0:09:57.839 you know, my own personal view, as I said last 0:09:57.880 --> 0:10:00.320 time I was on your program, is an not sure 0:10:00.320 --> 0:10:03.360 it's good for Twitter the service because I don't think 0:10:03.440 --> 0:10:07.559 that um, you know, Twitter being owned by a single person, um, 0:10:07.600 --> 0:10:10.840 particularly one whose public statements have kind of indicated a 0:10:10.920 --> 0:10:13.480 lack of a deep understanding of the way the platform works, 0:10:13.480 --> 0:10:16.600 particularly in areas of trust and abuse, I'm not sure 0:10:16.640 --> 0:10:21.040 that's good for Twitter the service. So that's my personal view. UM. 0:10:21.160 --> 0:10:24.480 And and it's been pretty consistent over time, so let's 0:10:24.520 --> 0:10:26.880 game this out and talk a little bit more about why. 0:10:27.080 --> 0:10:29.800 Let's say Mosque is forced to do the deal. He 0:10:29.880 --> 0:10:33.520 owns Twitter, he could turn right around and sell it. 0:10:33.720 --> 0:10:37.240 You know, that is also a possibility. If he is 0:10:37.280 --> 0:10:40.360 forced to do this deal, then what do you think? 0:10:40.360 --> 0:10:43.720 How it's very awkward to force someone to buy something 0:10:43.760 --> 0:10:46.280 that they are saying they don't want. Um. And I 0:10:46.320 --> 0:10:48.040 don't know how he reacts. I mean, I think one 0:10:48.040 --> 0:10:51.120 thing that Elon has proven is that he's quite unpredictable 0:10:51.640 --> 0:10:58.120 um and quite um you know, uh, extremes sometimes and 0:10:58.240 --> 0:11:01.000 what he wants to do. So your guess is as 0:11:01.000 --> 0:11:04.280 good as mine. You know, if he's forced to buy Twitter, um, 0:11:04.320 --> 0:11:07.320 you know, probably what happens, if I were to just speculate, 0:11:07.559 --> 0:11:09.880 is that it will lead to some kind of renegotiation 0:11:09.960 --> 0:11:12.200 where he has some kind of face saving outcome where 0:11:12.240 --> 0:11:14.600 he can claim he was happy and he becomes a 0:11:14.600 --> 0:11:17.199 happy buyer again. Because I don't think he's going to 0:11:17.280 --> 0:11:19.080 be able to get out of this. Um. I'm not 0:11:19.120 --> 0:11:23.160 a lawyer, but my read of the documents, um, uh, 0:11:23.200 --> 0:11:24.760 that's what I believe. I don't think he's going to 0:11:24.840 --> 0:11:26.880 get out of this. Maybe there's a compromise where he 0:11:26.880 --> 0:11:28.520 pays a little bit less for it, or the terms 0:11:28.520 --> 0:11:30.719 are altered in somewhere or another where he ends up 0:11:30.720 --> 0:11:33.400 magically being a happy buyer again. And we'll see what 0:11:33.440 --> 0:11:36.280 he does. Um. I would be surprised, and I think 0:11:36.280 --> 0:11:38.840 it would be terrible, how come for probably everyone involved 0:11:39.160 --> 0:11:41.199 if he buys it then turns around and looks for 0:11:41.200 --> 0:11:44.560 for a new buyer. UM. I think probably he would 0:11:44.559 --> 0:11:47.440 take a bath on a transaction like that. UM. But 0:11:47.559 --> 0:11:49.720 in any case, Look, I don't My view of Twitter 0:11:49.840 --> 0:11:52.600 is it's too important a company to be a like 0:11:52.640 --> 0:11:55.400 a little hot potato that's jumping from you know, one 0:11:55.400 --> 0:11:58.160 person's hands to another, going private and going public, etcetera. 0:11:58.280 --> 0:11:59.760 You know, if he buys it, I hope he has 0:12:00.080 --> 0:12:03.240 you know, serious enough about really making the platform better 0:12:03.559 --> 0:12:07.040 and helping it to reach its true true potential. UM. 0:12:07.080 --> 0:12:10.600 I think that's everyone's hope. UM. And I still, you know, 0:12:10.679 --> 0:12:13.679 I have my fingers crossed that that somehow happens. So 0:12:13.840 --> 0:12:15.520 part of the reason this is a you know, quote 0:12:15.559 --> 0:12:18.920 unquote good deal for Twitter shareholders is because the market 0:12:18.960 --> 0:12:23.680 has plummeted. Obviously putting on your y combinator hat and 0:12:23.760 --> 0:12:26.200 you know, obviously you know, you've you've been the CFO 0:12:26.320 --> 0:12:30.079 of of of big public companies. You know, how bad 0:12:30.160 --> 0:12:32.960 is this is this for Silicon Valley? How lasting is 0:12:33.000 --> 0:12:35.480 this downturn? And what does it look like as an 0:12:35.480 --> 0:12:39.440 inflection point when we look back a decade from now. Yeah, 0:12:39.520 --> 0:12:41.480 great question. I think it's important to put it into 0:12:41.480 --> 0:12:43.760 the right historical context. I mean, we went through a 0:12:43.800 --> 0:12:50.079 really remarkable period, uh in one in terms of technology stocks, 0:12:50.240 --> 0:12:54.240 where the covid um sort of changes in the COVID 0:12:54.280 --> 0:12:56.960 economy really benefited a lot of tech stocks, and there 0:12:57.000 --> 0:12:58.920 was a feeling that like everything was moving into the 0:12:58.960 --> 0:13:02.920 internet immediately um. And we saw a really historic run 0:13:03.000 --> 0:13:07.840 up on technology stocks, with stocks trading at multiples that 0:13:07.880 --> 0:13:10.439 had kind of never been seen before. And so everyone 0:13:10.720 --> 0:13:13.720 was expecting a correction. Um. Perhaps not one that was 0:13:13.880 --> 0:13:17.080 as rapid and severe as what we've seen, but everyone 0:13:17.160 --> 0:13:20.120 was expecting a correction, and that's what we've seen. So, 0:13:20.280 --> 0:13:22.400 you know, I think there are a number of companies, 0:13:22.559 --> 0:13:25.360 great technology companies, recent I p o s like door 0:13:25.440 --> 0:13:28.280 Dash or Data Dog. They're just wonderful companies, and I 0:13:28.280 --> 0:13:31.560 think they've been oversold. That's my personal view. But I 0:13:31.559 --> 0:13:36.000 think if you zoom out. My expectation is that um, 0:13:36.040 --> 0:13:39.200 this will be like other things, um, you know, like 0:13:39.280 --> 0:13:43.120 other recessions and talent times of market. You know, turbulence 0:13:43.679 --> 0:13:46.560 will be seen as just another one, perhaps one would 0:13:46.559 --> 0:13:49.000 a slope downward as a little sharper, but nothing that 0:13:49.080 --> 0:13:53.160 fundamentally alters the view that technology is changing our society, 0:13:53.520 --> 0:13:56.240 and that technology companies that are driving that change will 0:13:56.280 --> 0:13:59.120 be valuable, and that there are many of more of 0:13:59.160 --> 0:14:02.280 them to come in our portfolio. Companies like Stripe and 0:14:02.320 --> 0:14:06.160 brex uh and uh, those are some of the public 0:14:06.160 --> 0:14:08.960 stocks that are ye combinator companies. But um, you know, 0:14:09.160 --> 0:14:12.040 the Stripes, the Brexast, the Fairs, Gusto, it's that are 0:14:12.040 --> 0:14:16.440 there are a lot more amazing companies that have great businesses, uh, 0:14:16.520 --> 0:14:18.679 that you know will continue to be disruptive and will 0:14:18.679 --> 0:14:21.960 continue to be really amazing assets for investors to own. Well, 0:14:22.000 --> 0:14:24.320 it's interesting you mentioned Stripe because obviously they've been in 0:14:24.360 --> 0:14:28.800 the news for sort of an internal revaluation. Paul Graham, 0:14:28.920 --> 0:14:31.520 the co founder of hy Combinator, has this essay called 0:14:31.520 --> 0:14:35.160 Default Dead, Default Alive. Who do you think survives? Who 0:14:35.160 --> 0:14:38.000 do you think dies in this downturn? And how is 0:14:38.040 --> 0:14:43.040 that informing your investment decisions. Now. So this may surprise you, 0:14:43.120 --> 0:14:46.960 but almost every company private company that you know, has 0:14:47.000 --> 0:14:49.920 a reputation you know that people on your program will 0:14:49.960 --> 0:14:53.320 have probably heard of. I think they all survive. Uh. 0:14:53.400 --> 0:14:56.000 And the reason is the markets have been so frothy 0:14:56.080 --> 0:14:59.800 over the past few years that almost every promising technology 0:14:59.840 --> 0:15:03.080 come in the mid to late stages is extremely well capitalized. 0:15:03.160 --> 0:15:05.280 I mean, these are companies that have raised hundreds of 0:15:05.280 --> 0:15:08.280 millions of dollars. And yeah, there have been some downsizing 0:15:08.360 --> 0:15:11.280 and some adjustments, um, but in most cases those were 0:15:11.320 --> 0:15:14.560 done not because the companies were under dress, but because 0:15:14.640 --> 0:15:16.600 they said, hey, this is an opportunity for us to 0:15:16.680 --> 0:15:19.200 right size the business a little bit. Given the economic climate, 0:15:19.240 --> 0:15:23.040 everyone will understand and lengthen our runway. So I don't 0:15:23.080 --> 0:15:27.600 expect for you know, mid to late stage private companies, 0:15:27.640 --> 0:15:29.640 for there to be a blood bath at all. I 0:15:29.640 --> 0:15:33.360 expect modest belt tightening, but almost all these companies are 0:15:33.360 --> 0:15:37.200 going to just continue to invest in growth. Interesting that's 0:15:37.200 --> 0:15:40.880 a more optimistic view than we've heard. Um Ali Roghani, 0:15:41.040 --> 0:15:44.040 managing partner at y Combinator, also the former CFO and 0:15:44.080 --> 0:15:47.240 CEO of Twitter. Great to have your thoughts. Here on 0:15:47.240 --> 0:15:49.120 the show thank You, Thank You, Great to be with you. 0:15:58.280 --> 0:16:02.200 Apple is arguing that is now a major force in healthcare. 0:16:02.280 --> 0:16:05.240 The iPhone maker is published and almost sixty page report 0:16:05.560 --> 0:16:08.560 outlining all of its health features and partnerships with various 0:16:08.600 --> 0:16:12.760 medical institutions. Though the Apple Watch dominates the market, the 0:16:12.800 --> 0:16:16.000 device hasn't always gotten new health features as quickly as 0:16:16.040 --> 0:16:18.800 its competitors. Bloom, we're smart, German here to tell us, 0:16:18.800 --> 0:16:21.040 spart Mark tell us. But what is in this report? 0:16:22.200 --> 0:16:24.640 So this is a nearly sixty page report, and I 0:16:24.720 --> 0:16:27.280 rarely see Apple do things like this. Typically, when they 0:16:27.280 --> 0:16:29.760 want to tout their initiatives, they make a new website 0:16:29.760 --> 0:16:32.600 for it, they put out a an event or a 0:16:32.680 --> 0:16:34.600 video of some sort. But this is more of an 0:16:34.640 --> 0:16:38.680 academically focused report. It's not for consumers. That really showcases 0:16:39.040 --> 0:16:42.320 all the health and fitness and workout related features you know, 0:16:42.400 --> 0:16:44.600 as we all know and use across the iPhone, of 0:16:44.640 --> 0:16:47.240 the Apple Watch and the rest of its ecosystem. It 0:16:47.320 --> 0:16:49.560 dives deep into how all the features work. They talk 0:16:49.600 --> 0:16:52.720 about some of the research studies. They have sleep studies, 0:16:52.760 --> 0:16:55.360 they have walking studies, they have heart studies, and how 0:16:55.440 --> 0:16:59.240 all of that works. Together complete in concert with different 0:16:59.240 --> 0:17:02.080 medical institute sans and medical partners they have, you know, 0:17:02.120 --> 0:17:06.199 globally to produce new features for their products. That's what 0:17:06.240 --> 0:17:08.399 I thought. I don't I can't remember a time that 0:17:08.440 --> 0:17:11.159 Apple has done this previously. You know, what does they 0:17:11.200 --> 0:17:13.000 say about their plans for the future. I mean, that's 0:17:13.000 --> 0:17:15.520 what we want to know is how will you know 0:17:15.640 --> 0:17:20.880 health tech increasingly be integrated into all of my Apple devices? Yeah, 0:17:20.880 --> 0:17:24.080 it's fascinating. I think that health functionality will really spread 0:17:24.119 --> 0:17:26.960 to all of Apple's future products. I mean, don't forget 0:17:27.040 --> 0:17:31.840 the air pods, upcoming virtual reality headset, future augmented reality glasses. 0:17:32.200 --> 0:17:34.800 You're gonna see some health integration probably in all of 0:17:34.800 --> 0:17:37.560 those products at some point. Maybe one day your air 0:17:37.600 --> 0:17:40.239 pods to be able to tell you your your heart rate, right, 0:17:40.320 --> 0:17:43.080 or your body temperature. Maybe you'll have some health workout 0:17:43.080 --> 0:17:46.520 functionality related to Apple's headset, just like Meta has with 0:17:46.600 --> 0:17:50.840 its oculus move feature on its VR in a R headsets. Right. 0:17:50.920 --> 0:17:55.000 So the Apple future of health is very strong. This year, 0:17:55.040 --> 0:17:57.080 they're going to add a body temperature sensor to the 0:17:57.080 --> 0:17:59.679 Apple Watch, to new Apple Watch models with that feature 0:17:59.720 --> 0:18:02.040 until if you have a fever or other things going on. 0:18:02.119 --> 0:18:04.640 There'll be new women's health features tied to the new 0:18:04.680 --> 0:18:10.040 hardward this fall. Specifically, Apple wants to release a blood 0:18:10.040 --> 0:18:13.199 pressure feature for the Apple Walk, something that Samsung and 0:18:13.240 --> 0:18:15.600 others have had, but of course Apple needs to get 0:18:15.600 --> 0:18:18.560 in that space two and they're also very invested in 0:18:18.600 --> 0:18:21.560 an R and D project to bring blood sugar monitoring 0:18:21.600 --> 0:18:25.399 to the watch eventually as well. Buying Peloton or has 0:18:25.440 --> 0:18:30.080 Apple purposely let that ship sail? I think the ship 0:18:30.160 --> 0:18:33.320 is sailed for sure on Apple buying Peloton, unless it 0:18:33.359 --> 0:18:36.479 gets to an absurdly low price and Apple finds a 0:18:36.480 --> 0:18:38.879 way to really integrate it. I don't think Peloton is 0:18:38.960 --> 0:18:42.880 necessary to Apple. If Apple wanted, it can start producing 0:18:42.920 --> 0:18:45.240 bikes and treadmills at a far cheaper cost than what 0:18:45.280 --> 0:18:47.719 it would take to buy Peloton, unless there is a 0:18:47.760 --> 0:18:50.560 fire sale at some point. I also think they'd rather 0:18:50.720 --> 0:18:54.280 integrate their features into their existing ecosystem rather than add 0:18:54.359 --> 0:18:59.520 that really expensive business that fitness hardware would be all right, 0:18:59.720 --> 0:19:03.000 Mark German as always covers Apple and Peloton for us. 0:19:03.040 --> 0:19:12.840 Thanks Mark, But there was a single thing that might 0:19:12.880 --> 0:19:16.600 say stranger things. But again we're talking about, you know, 0:19:16.760 --> 0:19:20.119 losing one million instead of losing two millions. So you 0:19:20.600 --> 0:19:23.080 tough in in some ways losing a million and calling 0:19:23.119 --> 0:19:26.360 at success, but you know, really we're set up very 0:19:26.400 --> 0:19:31.680 well for the next year. Well come back to Bloomber Technology. 0:19:31.800 --> 0:19:35.960 That was Netflix co CEO Read Hastings on the Ernies call, 0:19:36.000 --> 0:19:39.040 I'm want to get to the Netflix relief rally after 0:19:39.080 --> 0:19:42.680 it over promised on subscriber losses for the second quarter. 0:19:42.920 --> 0:19:46.200 James CHOCKMK, partner at Clockwise Capital, joins us now to discuss. James, 0:19:46.240 --> 0:19:48.520 good to have you back here on the show. So 0:19:48.760 --> 0:19:53.000 turns out over promising in this case was a good thing. 0:19:53.320 --> 0:19:58.639 But how good a thing? How confident are you that 0:19:58.800 --> 0:20:03.240 Netflix can continue it cut its losses. I think it's 0:20:03.240 --> 0:20:06.080 gonna be difficult. Um, you know, they have a lot 0:20:06.119 --> 0:20:08.399 of battles to contend with. But I think when you 0:20:08.440 --> 0:20:11.240 look at the stock and the reaction, you know what 0:20:11.359 --> 0:20:13.440 a difference, you know, a quarter or two makes, you 0:20:13.480 --> 0:20:15.960 know that we're seeing a big shift in the tone 0:20:15.960 --> 0:20:18.720 of the market. I mean this Netflix was a company 0:20:18.760 --> 0:20:21.760 that only treated on subscriber growth. What's the sub number? 0:20:21.800 --> 0:20:24.200 What's the sub number? You know that that's pretty much 0:20:24.280 --> 0:20:28.000 was the singular metric that people looked at now you 0:20:28.160 --> 0:20:33.159 had a decline in subs and a downward guidance to 0:20:33.240 --> 0:20:36.280 the third quarter subs and that the third quarter downward 0:20:36.280 --> 0:20:40.960 outlook uh so in the stock. So there's clearly a 0:20:41.000 --> 0:20:45.120 shifting sentiment and a reprioritization of what the metrics relevant 0:20:45.160 --> 0:20:47.800 metrics are and it's increasingly looking like it's going to 0:20:47.880 --> 0:20:51.920 be monetization over the absolute number of subs. So here's 0:20:51.960 --> 0:20:55.080 the question. The markets took a turn in part because 0:20:55.080 --> 0:20:59.000 of Netflix big loss in subscribers three months ago, which 0:20:59.119 --> 0:21:05.120 was totally unprecedented. Do you think that this shifting sentiment 0:21:05.280 --> 0:21:09.040 will buoy markets through earnings over the next six weeks 0:21:10.520 --> 0:21:13.680 near term? Yeah, absolutely, I think I think that the 0:21:13.960 --> 0:21:16.320 sentiment has become so bad and the bar is so 0:21:16.440 --> 0:21:20.560 low that you aren't going to see, um, some some 0:21:20.720 --> 0:21:22.960 level of relief. Obviously we're not out of the woods 0:21:23.000 --> 0:21:25.520 as it relates inflation what the FED is going to do. 0:21:25.680 --> 0:21:28.240 But I do think that these companies have have come 0:21:28.280 --> 0:21:29.960 down way too much, and I think that what you're 0:21:30.119 --> 0:21:34.320 going to be seeing is an increasing appreciation for mean 0:21:34.359 --> 0:21:36.520 reversion in the growth rates. And what I mean by 0:21:36.560 --> 0:21:39.880 that is that you know, these companies pulled that companies 0:21:39.880 --> 0:21:42.920 pulled forward so much demand during COVID and then you 0:21:43.040 --> 0:21:45.800 had this growth drop off the last couple of quarters 0:21:46.480 --> 0:21:48.480 where it looks like, is this a structural change in 0:21:48.520 --> 0:21:52.439 the growth rates where demand is actually slowing, or is 0:21:52.480 --> 0:21:54.800 this a mean reversion where we're just going to revert 0:21:54.880 --> 0:21:57.159 back to the original growth curve. And I think what 0:21:57.320 --> 0:22:00.720 people are investors are starting to increasingly areciate is that 0:22:00.840 --> 0:22:02.960 we're just coming back to the original growth group and 0:22:03.040 --> 0:22:07.480 that these companies can and will grow um the way 0:22:07.520 --> 0:22:11.640 that we thought before COVID, and in some cases like Amazon, 0:22:11.800 --> 0:22:15.800 like Microsoft, um like Apple, potentially even better uh than 0:22:15.840 --> 0:22:19.440 they were before COVID. And as far as Netflix is concerned, 0:22:19.480 --> 0:22:22.359 you know, this is still a company. You know, the 0:22:22.400 --> 0:22:27.920 advertising is not easy, and you're contending with juggernauts like Amazon, 0:22:28.040 --> 0:22:31.080 like Facebook, like Google. And when you think about the 0:22:31.160 --> 0:22:34.520 level of differentiation you have as a service versus them 0:22:34.640 --> 0:22:37.960 um in in order to targeting capabilities and whatnot, it's 0:22:37.960 --> 0:22:41.200