1 00:00:02,240 --> 00:00:05,600 Speaker 1: From the heart of where innovation, money and power collive 2 00:00:06,360 --> 00:00:10,879 Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with 3 00:00:10,960 --> 00:00:26,960 Speaker 1: Emily Jay I'm Taylor Rigs in New York and Family Chain. 4 00:00:27,080 --> 00:00:29,880 Speaker 1: This is Bloomberg Technology coming up in the next hour. 5 00:00:29,960 --> 00:00:32,800 Speaker 1: It is a choppy day of trading, full of ups 6 00:00:32,840 --> 00:00:35,160 Speaker 1: and downs. Yes, and p FID now having the worst 7 00:00:35,200 --> 00:00:39,680 Speaker 1: two days since June. Plus of course the deal is 8 00:00:39,760 --> 00:00:42,400 Speaker 1: on well, at least according to Twitter. We'll get the 9 00:00:42,479 --> 00:00:45,720 Speaker 1: latest inside from inside Twitter, as the company says it 10 00:00:45,880 --> 00:00:48,440 Speaker 1: is not backing down from that forty four billion dollar 11 00:00:48,520 --> 00:00:53,480 Speaker 1: takeover from Elon Musk and its retail stocks slide over 12 00:00:53,560 --> 00:00:56,440 Speaker 1: ongoing inflation fears. What does that mean for the second 13 00:00:56,440 --> 00:00:59,160 Speaker 1: hand market. I'll be speaking about that with thread Up 14 00:00:59,240 --> 00:01:03,320 Speaker 1: CEO g Speinehart, including why he expects the secondhand market 15 00:01:03,440 --> 00:01:06,240 Speaker 1: to double in the coming years. We'll get to all 16 00:01:06,280 --> 00:01:07,920 Speaker 1: of that in a moment, but first let's get a 17 00:01:07,959 --> 00:01:10,640 Speaker 1: look at the markets with our very own lead Ludlow. 18 00:01:11,240 --> 00:01:13,959 Speaker 1: In this place, I missed most. I left my heart 19 00:01:14,040 --> 00:01:17,600 Speaker 1: in San Francisco. Wad I mean it's sunny, calm here 20 00:01:17,640 --> 00:01:20,960 Speaker 1: in San Francisco. The market for some time during Thursday 21 00:01:21,040 --> 00:01:23,440 Speaker 1: session looks sunny and calm as well. We call it 22 00:01:23,440 --> 00:01:26,119 Speaker 1: a choppy day right of trading, or a see saw day, 23 00:01:26,360 --> 00:01:29,680 Speaker 1: ultimately with down six tents of percent on the SMP 24 00:01:30,760 --> 00:01:32,840 Speaker 1: half a percentage point four tents of percent on the 25 00:01:32,920 --> 00:01:36,039 Speaker 1: Nasdaq one. But you contrast that with the declines we 26 00:01:36,080 --> 00:01:39,640 Speaker 1: saw on Wednesday. Perhaps the market more sanguine but struggling 27 00:01:39,640 --> 00:01:42,640 Speaker 1: for direction, and ultimately in the last hour or so 28 00:01:42,760 --> 00:01:45,440 Speaker 1: of the session we fell away into negative territory. Also 29 00:01:45,480 --> 00:01:47,960 Speaker 1: interesting to see yield softerter You see the US tenure 30 00:01:48,000 --> 00:01:51,680 Speaker 1: at two point eight three percent, Bitcoin holding around thirty 31 00:01:51,680 --> 00:01:54,520 Speaker 1: thousand dollars for token it had fallen, of course, in 32 00:01:54,520 --> 00:01:56,760 Speaker 1: the set off we saw on Wednesday. This general risk 33 00:01:56,800 --> 00:01:59,480 Speaker 1: off sentiment staying in place is that the FED is 34 00:01:59,520 --> 00:02:02,240 Speaker 1: that inflation, Asian concerns will We also look at Cisco, 35 00:02:02,320 --> 00:02:06,800 Speaker 1: because corporate earning season continue Cisco pretty steadily holding it 36 00:02:06,960 --> 00:02:10,600 Speaker 1: declines of thirteen fourteen percent all throughout the session on Thursday, 37 00:02:11,400 --> 00:02:15,560 Speaker 1: cutting its annual sales forecast, supply chain problems, impact from China, 38 00:02:15,639 --> 00:02:18,720 Speaker 1: And we're so focused on Cisco because it's really a 39 00:02:18,760 --> 00:02:22,440 Speaker 1: proxy or a barometer for corporate spending. When corporate America 40 00:02:22,520 --> 00:02:25,400 Speaker 1: wants to invest in itself. Cisco tends to do well, 41 00:02:25,520 --> 00:02:28,800 Speaker 1: so cutting its sales forecast. It's an interesting forward looking 42 00:02:28,840 --> 00:02:31,480 Speaker 1: one after ours. We're also looking to apply materials Key 43 00:02:31,560 --> 00:02:34,800 Speaker 1: chip maker of course lower a little lower, actually by 44 00:02:34,840 --> 00:02:36,720 Speaker 1: around two and a half percent. It have been down 45 00:02:36,800 --> 00:02:38,520 Speaker 1: as much as five and a half percent. A very 46 00:02:38,520 --> 00:02:41,440 Speaker 1: similar story. It gave a tepid forecast for the current 47 00:02:41,560 --> 00:02:44,880 Speaker 1: quarter and says the supply chain issues around semi conductors 48 00:02:44,919 --> 00:02:48,080 Speaker 1: are still there. In some cases suppliers are running at 49 00:02:48,080 --> 00:02:50,720 Speaker 1: fifty percent of capacity. Those are not the things we 50 00:02:50,760 --> 00:02:52,839 Speaker 1: want to be hearing when we were also worrying about 51 00:02:52,880 --> 00:02:55,880 Speaker 1: global growth and a recession. Very quickly tailored two big 52 00:02:55,880 --> 00:02:58,040 Speaker 1: Bloomberg scoops on Thursday that I want to talk about 53 00:02:58,040 --> 00:02:59,880 Speaker 1: and we will talk about later in the show for 54 00:03:00,040 --> 00:03:02,519 Speaker 1: us of all Twitter higher you mentioned it. According to 55 00:03:02,639 --> 00:03:05,959 Speaker 1: sources inside a meeting and all hands on Thursday, Twitter 56 00:03:06,000 --> 00:03:08,720 Speaker 1: executives said he the deal with Elon Musque is not 57 00:03:08,840 --> 00:03:11,880 Speaker 1: on hold. Be there's no such thing as a deal 58 00:03:11,919 --> 00:03:14,280 Speaker 1: being on hold. Another big scoop, Apple actually one of 59 00:03:14,280 --> 00:03:16,679 Speaker 1: the big laggards during Thursday session, down two and a 60 00:03:16,720 --> 00:03:19,840 Speaker 1: half percent, but according to sources at a recent board meeting, 61 00:03:20,080 --> 00:03:23,720 Speaker 1: Apple presented its latest virtual reality headset. You know what 62 00:03:23,760 --> 00:03:25,560 Speaker 1: they look like, you know what I'm holding up, and 63 00:03:25,600 --> 00:03:27,519 Speaker 1: that's a sign that it might be a new products 64 00:03:27,560 --> 00:03:29,920 Speaker 1: on the horizon. We need more of those hand gestures 65 00:03:29,960 --> 00:03:32,760 Speaker 1: from you add way to make it interactive. Really appreciate 66 00:03:32,800 --> 00:03:35,640 Speaker 1: it very own at Lulow when is say, of course, 67 00:03:35,640 --> 00:03:39,000 Speaker 1: on these volatile markets, and welcome in Jason Telber, portfolio 68 00:03:39,040 --> 00:03:42,120 Speaker 1: manager for New Burger Berman and of course the disruptors 69 00:03:42,200 --> 00:03:45,320 Speaker 1: E T F. Jason, what do you make quickly just 70 00:03:45,560 --> 00:03:48,640 Speaker 1: sort of these volatile markets, particularly within your world of 71 00:03:48,680 --> 00:03:53,040 Speaker 1: technology as well. Well. You know, it's interesting if if 72 00:03:53,040 --> 00:03:56,640 Speaker 1: you look at tech overall, it's actually outperformed on a 73 00:03:56,680 --> 00:03:58,800 Speaker 1: one year basis. We have to remember that tech was 74 00:03:58,920 --> 00:04:02,400 Speaker 1: really really strong and back half last year, and particularly 75 00:04:02,800 --> 00:04:05,720 Speaker 1: you know, Microsoft and Apple, which make up a large 76 00:04:05,760 --> 00:04:09,200 Speaker 1: percentage of the Tech index. The first half of the 77 00:04:09,280 --> 00:04:12,480 Speaker 1: year has been tougher. There's been some high profile disappointments, 78 00:04:12,520 --> 00:04:17,800 Speaker 1: you know, Facebook, Meta, Amazon, Netflix, um. But I do 79 00:04:17,960 --> 00:04:22,080 Speaker 1: think within our universe, within our universe of disruptive companies. 80 00:04:22,400 --> 00:04:24,919 Speaker 1: It's been interesting because in the last two days of 81 00:04:25,000 --> 00:04:28,880 Speaker 1: pretty significant down drafts in the market, we've seen significant 82 00:04:28,920 --> 00:04:33,440 Speaker 1: outperformance UM, and we have to remember that smid cap 83 00:04:33,480 --> 00:04:36,800 Speaker 1: Tech and smith Cap Growth specifically has been under a 84 00:04:36,800 --> 00:04:39,960 Speaker 1: tremendous amount of pressure for the last twelve months, and 85 00:04:40,000 --> 00:04:42,560 Speaker 1: we may be close to finding a bottom at least 86 00:04:42,560 --> 00:04:45,240 Speaker 1: on a relative basis. Interesting, So when you talk about 87 00:04:45,240 --> 00:04:47,640 Speaker 1: some of the smidcap technology companies, I think of a 88 00:04:47,640 --> 00:04:50,279 Speaker 1: few headwinds. Rising rates, of course, sort of the classic 89 00:04:50,320 --> 00:04:53,160 Speaker 1: headwind that we know with some of these long duration assets, 90 00:04:53,560 --> 00:04:56,040 Speaker 1: and then smaller down the scale, maybe the less healthy 91 00:04:56,080 --> 00:04:58,440 Speaker 1: the balance sheet. When you're thinking about the fundamentals and 92 00:04:58,720 --> 00:05:01,840 Speaker 1: growth at any cost does didn't work anymore? How does 93 00:05:01,920 --> 00:05:05,400 Speaker 1: that sort of impact the way you're looking at these companies. Absolutely, 94 00:05:05,440 --> 00:05:08,440 Speaker 1: it's a great question, Taylor. You know, we've always been very, 95 00:05:08,560 --> 00:05:11,440 Speaker 1: very focused on free cash flow. So even though we're 96 00:05:11,480 --> 00:05:15,080 Speaker 1: interested in innovative, disruptive companies and you know a lot 97 00:05:15,120 --> 00:05:17,120 Speaker 1: of their earnings could be out in the future, we 98 00:05:17,160 --> 00:05:19,560 Speaker 1: also want to see free cash flow as soon as possible, 99 00:05:19,600 --> 00:05:21,799 Speaker 1: and we want to own businesses there are in really 100 00:05:21,920 --> 00:05:25,159 Speaker 1: strong strategic positions. So this isn't a fear of missing 101 00:05:25,160 --> 00:05:29,120 Speaker 1: out portfolio UM. Within smitcap Growth, there's actually a lot 102 00:05:29,200 --> 00:05:32,560 Speaker 1: of interesting names that have free cash flow support, So 103 00:05:32,800 --> 00:05:35,479 Speaker 1: we're talking about two to four percent free cash flow 104 00:05:35,560 --> 00:05:41,280 Speaker 1: yields companies like zoom Info and Zendesk. Within medical technologies, 105 00:05:41,279 --> 00:05:45,800 Speaker 1: companies like dex Com, uh Intuitive Surgical, and I think 106 00:05:45,880 --> 00:05:49,279 Speaker 1: that investors are starting to realize, hey, I've been paying 107 00:05:49,680 --> 00:05:52,760 Speaker 1: you know, higher and higher multiples for consumer staples companies 108 00:05:52,760 --> 00:05:55,599 Speaker 1: for safety, They're only really giving me a four percent 109 00:05:55,640 --> 00:05:59,479 Speaker 1: free cash flow yield. And the reality is these costs 110 00:05:59,520 --> 00:06:03,320 Speaker 1: are going to hit them disproportionately. So I think that's 111 00:06:03,320 --> 00:06:05,599 Speaker 1: what we've been seeing the last two days, is that 112 00:06:06,040 --> 00:06:09,080 Speaker 1: the real economy stocks are really going to be hurt 113 00:06:09,160 --> 00:06:12,920 Speaker 1: by inflation. So there's too many investors hiding out there, 114 00:06:13,000 --> 00:06:15,280 Speaker 1: and we may start to see a rotation to some 115 00:06:15,360 --> 00:06:19,400 Speaker 1: of these you know, skinny balance sheets, high pricing power, 116 00:06:19,760 --> 00:06:24,280 Speaker 1: high intellectual property businesses that exist in them in our 117 00:06:24,279 --> 00:06:29,240 Speaker 1: disruptor's portfolio. Within that portfolio, how sort of defensive do 118 00:06:29,279 --> 00:06:31,880 Speaker 1: you feel like you need to be and making sure 119 00:06:31,920 --> 00:06:34,720 Speaker 1: that you're also cash on the sidelines for better opportunities. 120 00:06:34,720 --> 00:06:38,080 Speaker 1: But cash, of course, after inflation, is a money loser. 121 00:06:39,279 --> 00:06:43,920 Speaker 1: Yeah that, I mean, great question. I wouldn't say that. Um, 122 00:06:43,960 --> 00:06:45,400 Speaker 1: you know, I don't want to make a call on 123 00:06:45,440 --> 00:06:50,000 Speaker 1: the market. Do have concerns of how is this inflation 124 00:06:50,040 --> 00:06:52,800 Speaker 1: going to kind of filter through our economy and particularly 125 00:06:52,880 --> 00:06:56,080 Speaker 1: hit consumer spending over time. We're obviously already beginning to 126 00:06:56,120 --> 00:06:59,240 Speaker 1: see that um show up pretty brightly in in you know, 127 00:06:59,360 --> 00:07:03,919 Speaker 1: raw Store, some Walmart and Target, etcetera. UM So, I 128 00:07:03,960 --> 00:07:07,400 Speaker 1: would say our portfolio is definitely tilted in the in 129 00:07:07,839 --> 00:07:10,400 Speaker 1: the in the health care sector, so we do want 130 00:07:10,400 --> 00:07:13,320 Speaker 1: to be a little defensive from that standpoint. But even 131 00:07:13,400 --> 00:07:16,680 Speaker 1: those names, if they're high growth, they are down a 132 00:07:16,760 --> 00:07:20,160 Speaker 1: lot from where they were, you know, nine twelve months ago, 133 00:07:20,680 --> 00:07:23,280 Speaker 1: And as I was saying earlier, they're starting to kind 134 00:07:23,280 --> 00:07:26,920 Speaker 1: of bump up against pretty interesting valuations where you can 135 00:07:26,920 --> 00:07:30,520 Speaker 1: get you know, to three percent free cashual yields for 136 00:07:30,560 --> 00:07:34,640 Speaker 1: a company that's growing the top line A And if, 137 00:07:34,680 --> 00:07:38,239 Speaker 1: if you know, we enter into a kind of stagflationary 138 00:07:38,360 --> 00:07:41,840 Speaker 1: environment and and real growth becomes elusive, I do think 139 00:07:41,840 --> 00:07:44,360 Speaker 1: investors are going to come back to companies like this. 140 00:07:45,640 --> 00:07:49,120 Speaker 1: Interesting though, I was speaking with Annestesia amorros So earlier 141 00:07:49,160 --> 00:07:53,640 Speaker 1: by Capital and she said, maybe not always looking at 142 00:07:53,720 --> 00:07:57,600 Speaker 1: valuations is the best way when you're thinking about investing. 143 00:07:58,680 --> 00:08:02,040 Speaker 1: How much. Are you really keen valuations versus then just 144 00:08:02,120 --> 00:08:04,200 Speaker 1: some of the other big technicals and just sort of 145 00:08:04,240 --> 00:08:08,960 Speaker 1: the mass selloffs and indiscriminate selling where valuations look good 146 00:08:08,960 --> 00:08:13,280 Speaker 1: but the market frankly doesn't seem to care. Yeah. I 147 00:08:13,320 --> 00:08:17,000 Speaker 1: think ultimately, you know, as they say that, you know, 148 00:08:17,040 --> 00:08:21,119 Speaker 1: the short term markets canting machine machine, long term waing machine, 149 00:08:21,400 --> 00:08:24,560 Speaker 1: and ultimately valuation is going to matter. You know, one 150 00:08:24,600 --> 00:08:28,000 Speaker 1: of our companies in the portfolio that I mentioned, zendesk Um, 151 00:08:28,040 --> 00:08:30,720 Speaker 1: you know, has private equity interests that's been kind of 152 00:08:30,720 --> 00:08:34,280 Speaker 1: broadly reported. I think you could start to see start 153 00:08:34,360 --> 00:08:36,280 Speaker 1: start to see more of that in the kind of 154 00:08:36,320 --> 00:08:41,360 Speaker 1: disrupted in innovation uh space. So I think we have 155 00:08:41,520 --> 00:08:46,400 Speaker 1: to stay focused on valuation and owning good businesses that 156 00:08:46,440 --> 00:08:49,800 Speaker 1: are disruptive. Sounding like a good see a fach hardholder 157 00:08:49,960 --> 00:08:53,520 Speaker 1: that he is focused on those valuations. I remember as well, 158 00:08:53,559 --> 00:08:57,520 Speaker 1: and I'm understanding of course what that means. I think 159 00:08:57,520 --> 00:09:00,720 Speaker 1: when we talk about the bubbles and some of the 160 00:09:00,800 --> 00:09:03,920 Speaker 1: hysteria in this market, it really was SPACs as well. 161 00:09:03,960 --> 00:09:06,520 Speaker 1: You know, we understand the disclosures. When you think about 162 00:09:06,520 --> 00:09:09,040 Speaker 1: an I p O wanting to raise capital, was the 163 00:09:09,120 --> 00:09:12,400 Speaker 1: snack spack market. One of the first indications of a 164 00:09:12,480 --> 00:09:14,880 Speaker 1: little frothy, a little bit over our skis here when 165 00:09:14,920 --> 00:09:18,080 Speaker 1: we were taking a look at that peak market bubbles. Oh, 166 00:09:18,160 --> 00:09:21,360 Speaker 1: I mean, I mean, if we look back on this, 167 00:09:22,280 --> 00:09:25,959 Speaker 1: I think that what happened is during the pandemic UM, 168 00:09:26,000 --> 00:09:29,560 Speaker 1: it was really these innovative growth companies that had massive 169 00:09:30,240 --> 00:09:33,000 Speaker 1: estimate revisions because they were kind of leading us through 170 00:09:33,080 --> 00:09:38,600 Speaker 1: the pandemic. You know, think companies like Zoom, Moderna, bioin Tech, etcetera. 171 00:09:38,720 --> 00:09:42,880 Speaker 1: And this just generated a halo on all things innovative 172 00:09:43,040 --> 00:09:46,080 Speaker 1: and growth. And there's going to be a massive acceleration 173 00:09:46,200 --> 00:09:50,240 Speaker 1: even once the pandemic is over. UM and and and 174 00:09:50,280 --> 00:09:53,000 Speaker 1: I think that there there's a lot of herds you know, 175 00:09:53,080 --> 00:09:56,000 Speaker 1: heard following that goes on in the market. And I 176 00:09:56,040 --> 00:10:00,679 Speaker 1: think the equity markets are friendly investment banks UH responded 177 00:10:00,760 --> 00:10:05,920 Speaker 1: by by taking anything public UM that was remotely innovative. 178 00:10:06,040 --> 00:10:08,280 Speaker 1: A lot of these companies went public way too early. 179 00:10:08,840 --> 00:10:11,559 Speaker 1: UM And Frankly, when we look at the fact that 180 00:10:11,720 --> 00:10:14,760 Speaker 1: you know, small cap growth underperformed large cap growth by 181 00:10:14,800 --> 00:10:18,760 Speaker 1: twenty five percentage points last year the most. And I 182 00:10:18,800 --> 00:10:21,200 Speaker 1: think a big part of that is just all the 183 00:10:21,280 --> 00:10:26,239 Speaker 1: supply that was pushed into the market. Um and and interestingly, 184 00:10:26,280 --> 00:10:29,679 Speaker 1: if we look at where investors, so households have been 185 00:10:29,679 --> 00:10:33,280 Speaker 1: putting money, they've generally been putting it into large cap funds. Right, 186 00:10:33,280 --> 00:10:36,520 Speaker 1: So you had this mismatch of supply and demand, and 187 00:10:36,559 --> 00:10:39,000 Speaker 1: that's one of the reasons why I think, you know, 188 00:10:39,160 --> 00:10:42,640 Speaker 1: kind of the megacps kind of lead in the back 189 00:10:42,679 --> 00:10:46,000 Speaker 1: half of one while some of these you know, this 190 00:10:46,160 --> 00:10:50,520 Speaker 1: MidCap space was being decimated quickly. Yeah, no, quickly here, 191 00:10:50,559 --> 00:10:52,760 Speaker 1: we only have about a minute left, Chase and Curs 192 00:10:52,800 --> 00:10:55,600 Speaker 1: gets your thoughts on if this is a U S story. 193 00:10:55,679 --> 00:10:59,079 Speaker 1: We've heard a lot of calls that China tech, for example, uninvestable. 194 00:10:59,559 --> 00:11:02,680 Speaker 1: Are you us only focus here within these volatile markets, 195 00:11:03,559 --> 00:11:07,199 Speaker 1: within the our Disruptors E t F, we only focus 196 00:11:07,360 --> 00:11:10,280 Speaker 1: or we only owned US listed companies we own like 197 00:11:10,440 --> 00:11:14,080 Speaker 1: one A d R. I think we own no Chinese stocks. 198 00:11:14,800 --> 00:11:18,079 Speaker 1: Really appreciate it, Jason Topper Newberger Berman Disruptors E t 199 00:11:18,240 --> 00:11:21,480 Speaker 1: F portfolio manager, really keeping us up to date on 200 00:11:21,520 --> 00:11:32,760 Speaker 1: all things big tech and these volatile markets. Investors are 201 00:11:32,880 --> 00:11:35,559 Speaker 1: finding shelter from the deepending bear market sell off in 202 00:11:35,559 --> 00:11:37,720 Speaker 1: the cheapest corners of the U S tech sector and 203 00:11:37,800 --> 00:11:41,640 Speaker 1: really pulling back significantly significantly from some of the software 204 00:11:41,679 --> 00:11:45,160 Speaker 1: stocks joining us now Rishie Jewelry f software analysts at 205 00:11:45,280 --> 00:11:49,400 Speaker 1: RBC Capital Markets. And it's another sort of big day 206 00:11:49,400 --> 00:11:52,800 Speaker 1: when we think about valuations and re rating of some 207 00:11:52,920 --> 00:11:54,679 Speaker 1: of the big high flyers, a lot of the high 208 00:11:54,720 --> 00:11:57,559 Speaker 1: flyers during the pandemic as well. To kick us off 209 00:11:57,559 --> 00:12:02,480 Speaker 1: broadly speaking, how are you looking at valuations at this moment? Yeah, 210 00:12:02,520 --> 00:12:04,079 Speaker 1: and thank you so much for having me. Look, I 211 00:12:04,360 --> 00:12:07,080 Speaker 1: think we increasingly have to you know, get away from 212 00:12:07,120 --> 00:12:10,160 Speaker 1: the fraud that we were experienced, uh experiencing for the 213 00:12:10,160 --> 00:12:13,320 Speaker 1: past two years during the pandemic and and drill more 214 00:12:13,440 --> 00:12:17,240 Speaker 1: on on free cash flow and profitability and to that extent, 215 00:12:17,280 --> 00:12:20,079 Speaker 1: I mean, we're seeing some really attractive opportunities out there. 216 00:12:20,120 --> 00:12:22,840 Speaker 1: You know, we see some really high quality companies like 217 00:12:22,960 --> 00:12:25,840 Speaker 1: Zoom infol trading at thirty times cash flow, and and 218 00:12:25,880 --> 00:12:28,000 Speaker 1: even some of the pandemic darlings that you know, they're 219 00:12:28,000 --> 00:12:30,520 Speaker 1: going through some struggles, but we see you know, Zoom 220 00:12:30,520 --> 00:12:33,280 Speaker 1: trading at fifteen times free cash flow. Uh. You know, 221 00:12:33,320 --> 00:12:35,600 Speaker 1: we see Viva, very high quality company trading at twenty 222 00:12:35,679 --> 00:12:38,200 Speaker 1: five times free cash flow. Um. We really like these 223 00:12:38,240 --> 00:12:40,160 Speaker 1: sort of names and and and think the fact that 224 00:12:40,200 --> 00:12:43,920 Speaker 1: there's actual valuation support on a profitability basis, uh and 225 00:12:43,920 --> 00:12:45,440 Speaker 1: and these are names that we think can can do 226 00:12:45,520 --> 00:12:48,120 Speaker 1: well in any sort of environment and still have a 227 00:12:48,120 --> 00:12:50,959 Speaker 1: long run way of growth. Um. We are increasingly, though, 228 00:12:51,000 --> 00:12:53,120 Speaker 1: looking at profitability way more than we used to do 229 00:12:53,200 --> 00:12:56,000 Speaker 1: a year ago. And you're spot on. And I'm chuckling 230 00:12:56,040 --> 00:12:57,920 Speaker 1: a little bit because the previous guests and you are 231 00:12:57,960 --> 00:13:00,760 Speaker 1: mentioning on a instead of forward pe we're looking at 232 00:13:01,280 --> 00:13:03,679 Speaker 1: multiples that include cash flow. And I'm wondering because when 233 00:13:03,679 --> 00:13:06,000 Speaker 1: the E is negative, the math doesn't really work. Is 234 00:13:06,040 --> 00:13:08,800 Speaker 1: you need a positive number in the denominator? How much 235 00:13:08,800 --> 00:13:11,560 Speaker 1: of a focus is that e positive earnings instead of 236 00:13:11,559 --> 00:13:15,360 Speaker 1: negative earnings? Yeah. Look with with SaaS companies, I think 237 00:13:15,400 --> 00:13:17,400 Speaker 1: free cash flow matters a lot because it's just the 238 00:13:17,480 --> 00:13:21,560 Speaker 1: dynamics of how revenue recognition works. Right, there's subscription businesses, 239 00:13:21,840 --> 00:13:24,000 Speaker 1: and so you have to look at free cash flow 240 00:13:24,400 --> 00:13:26,960 Speaker 1: rather than earnings. I mean you obviously still have you know, 241 00:13:27,120 --> 00:13:30,320 Speaker 1: high quality businesses that you can value on earnings. Microsoft, 242 00:13:30,320 --> 00:13:33,840 Speaker 1: for example, trading at twenty times forward earnings and that's 243 00:13:33,880 --> 00:13:36,440 Speaker 1: gap earnings at that um. You know, so so you 244 00:13:36,440 --> 00:13:38,680 Speaker 1: you would definitely have businesses where you can look at earnings. 245 00:13:38,679 --> 00:13:41,079 Speaker 1: But the reason we always look at cash flow is 246 00:13:41,160 --> 00:13:43,080 Speaker 1: number one, it's a it's a metric that is really 247 00:13:43,080 --> 00:13:46,280 Speaker 1: hard to manipulate like earnings. And number two because of 248 00:13:46,320 --> 00:13:49,120 Speaker 1: that whole subscription dynamic I just mentioned. What do you 249 00:13:49,160 --> 00:13:51,120 Speaker 1: make of the big sell off looking at your coverage 250 00:13:51,160 --> 00:13:55,800 Speaker 1: list Salesforce Microsoft? You know you think Microsoft massive, strong 251 00:13:55,880 --> 00:13:59,120 Speaker 1: balance sheet, huge free cash flow, as you mentioned, strong 252 00:13:59,240 --> 00:14:03,520 Speaker 1: debt rating. The indiscriminate selling that's been going on in 253 00:14:03,520 --> 00:14:05,680 Speaker 1: the market, what is that telling you about the future 254 00:14:05,679 --> 00:14:10,360 Speaker 1: path forward for even these super strong, healthy companies. Yeah, 255 00:14:10,400 --> 00:14:11,800 Speaker 1: I look at I think you hit it on the head. 256 00:14:11,800 --> 00:14:14,600 Speaker 1: It'sn't It is indiscriminated selling. And I think what is 257 00:14:14,640 --> 00:14:17,800 Speaker 1: happening is investors are just fearful, right and and and 258 00:14:17,800 --> 00:14:20,920 Speaker 1: and it's more the uncertainty that's killing everything. Um. You know, 259 00:14:20,960 --> 00:14:24,080 Speaker 1: if we were actually in a recession right now, I 260 00:14:24,080 --> 00:14:26,720 Speaker 1: think there's been a lot lesson certainty, But it's the unknown, 261 00:14:26,760 --> 00:14:28,800 Speaker 1: as you know, are are we heading into recession? Are 262 00:14:28,800 --> 00:14:30,840 Speaker 1: we not? Is it going to be like oh eight? Um? 263 00:14:30,920 --> 00:14:33,080 Speaker 1: And I think that's what's making investors just sell off 264 00:14:33,120 --> 00:14:35,240 Speaker 1: everything software, along with the fact that you know, all 265 00:14:35,280 --> 00:14:37,840 Speaker 1: these stocks benefited during the pandemic um and I think 266 00:14:37,880 --> 00:14:40,480 Speaker 1: it's time for investors to take a look and say, look, 267 00:14:40,560 --> 00:14:43,680 Speaker 1: let's separate. You know, really, what are quality businesses from 268 00:14:43,720 --> 00:14:46,200 Speaker 1: those that that aren't. And you know, where have investors 269 00:14:46,240 --> 00:14:49,360 Speaker 1: been throwing out the baby with the bathwater? Um? So 270 00:14:49,400 --> 00:14:51,040 Speaker 1: that's what I really think is happening here. But I 271 00:14:51,080 --> 00:14:54,560 Speaker 1: think it is creating some opportunity. What are those opportunities then? 272 00:14:54,640 --> 00:14:56,800 Speaker 1: For you? Within your coverage list? How are you thinking 273 00:14:56,840 --> 00:15:01,120 Speaker 1: about the strong companies going forward? Uh? Yeah, Look, we're 274 00:15:01,160 --> 00:15:04,080 Speaker 1: we're we're bullish on you know Microsoft, right for example, 275 00:15:04,080 --> 00:15:06,640 Speaker 1: you know, it's pulled back off the highs and trades 276 00:15:06,680 --> 00:15:09,240 Speaker 1: of a very reasonable valuation. Uh and and it's one 277 00:15:09,240 --> 00:15:11,840 Speaker 1: of those names that should do well in a even 278 00:15:11,840 --> 00:15:14,480 Speaker 1: in a downturn. Right. Viva is another name we like, 279 00:15:14,640 --> 00:15:16,720 Speaker 1: you know, and in fact, they sell to healthcare, which 280 00:15:16,760 --> 00:15:20,200 Speaker 1: is itself a very defensive sector. Um HubSpot is another 281 00:15:20,280 --> 00:15:22,800 Speaker 1: name that we're taking advantage of on the pullback. Right. 282 00:15:22,840 --> 00:15:25,640 Speaker 1: These are all companies that that have profitability that you 283 00:15:25,640 --> 00:15:28,960 Speaker 1: can value on cash flow, have multiple growth drivers to 284 00:15:29,040 --> 00:15:31,600 Speaker 1: to to continue growing, and and you know names again, 285 00:15:31,720 --> 00:15:34,920 Speaker 1: especially Microsoft and Viva should hold up really well even 286 00:15:34,920 --> 00:15:37,040 Speaker 1: in the event of a recession. What about some of 287 00:15:37,040 --> 00:15:40,840 Speaker 1: the big pandemic winners that you mentioned, Palanteer, Zoom, the 288 00:15:41,160 --> 00:15:43,920 Speaker 1: video conference company that we know, docu Side, we no 289 00:15:44,000 --> 00:15:47,040 Speaker 1: longer were able to sign in persons were doing docu sign. 290 00:15:47,720 --> 00:15:50,400 Speaker 1: Was that just a pull forward revenue that we saw. 291 00:15:50,920 --> 00:15:54,320 Speaker 1: How consistent do you see that revenue and of course 292 00:15:54,360 --> 00:15:58,480 Speaker 1: cash flow going forward? Yeah? Absolutely, And and you know, 293 00:15:58,640 --> 00:16:01,440 Speaker 1: i'll put Palanteer side because we're actually a negative on 294 00:16:01,520 --> 00:16:04,440 Speaker 1: that name. But but on on Zoom and docu Sign, 295 00:16:04,680 --> 00:16:07,240 Speaker 1: I think you're you're absol right. They did pull forward 296 00:16:07,240 --> 00:16:09,720 Speaker 1: a lot of business and and they're both very focused 297 00:16:09,760 --> 00:16:12,200 Speaker 1: on their second act. Right. For for Zoom it's Zoom 298 00:16:12,240 --> 00:16:15,240 Speaker 1: Phone and some of the other adjacencies like rooms and 299 00:16:15,480 --> 00:16:19,680 Speaker 1: events UM. For for docu sign, it's it's CLM, Contract 300 00:16:19,680 --> 00:16:22,440 Speaker 1: Lifecycle Management UM. Their focused on their second act. And 301 00:16:22,480 --> 00:16:24,920 Speaker 1: I think the again, the uncertainty is what's holding these 302 00:16:25,000 --> 00:16:27,120 Speaker 1: names back, right, It's why Zoom trades at fifteen times 303 00:16:27,160 --> 00:16:30,080 Speaker 1: cash flow for what I think is a very quality 304 00:16:30,160 --> 00:16:33,240 Speaker 1: business that that has you know, good unit economics and 305 00:16:33,240 --> 00:16:35,840 Speaker 1: and really great technology. I think it's the best video 306 00:16:35,840 --> 00:16:38,960 Speaker 1: conferencing technology that exists out there, but all the uncertainty 307 00:16:39,040 --> 00:16:40,840 Speaker 1: is okay, well, how many other people are left in 308 00:16:40,880 --> 00:16:44,200 Speaker 1: the world to do video conferencing Once you displace WebEx Uh, 309 00:16:44,280 --> 00:16:46,360 Speaker 1: then where is there to go? And so as as 310 00:16:46,360 --> 00:16:49,160 Speaker 1: they can prove that these second and third acts of 311 00:16:49,200 --> 00:16:51,920 Speaker 1: their business are are for real, uh, then I think 312 00:16:51,960 --> 00:16:54,080 Speaker 1: we can start to see a rerating on those docks. 313 00:16:54,120 --> 00:16:57,359 Speaker 1: The argument has always been companies, even in a recession, 314 00:16:57,480 --> 00:17:01,360 Speaker 1: even in a pullback, will continue to invest in technology. 315 00:17:01,640 --> 00:17:03,520 Speaker 1: You've mentioned some of the companies that you really see 316 00:17:03,520 --> 00:17:08,480 Speaker 1: as a recession proof effectively what companies don't do well 317 00:17:08,520 --> 00:17:12,520 Speaker 1: in some of those slow down environments. Yeah. Look, I 318 00:17:12,520 --> 00:17:14,639 Speaker 1: think there's a couple of categories. Number one is going 319 00:17:14,680 --> 00:17:17,399 Speaker 1: to be any piece of software that is a a 320 00:17:17,600 --> 00:17:20,000 Speaker 1: nice to have, not a need to have, right. Um 321 00:17:20,040 --> 00:17:22,159 Speaker 1: you know, look, I think you can find plenty of 322 00:17:22,200 --> 00:17:25,080 Speaker 1: categories of software that there's are more discretionary nature that 323 00:17:25,400 --> 00:17:27,280 Speaker 1: if you know, push comes to shove and you have 324 00:17:27,320 --> 00:17:30,200 Speaker 1: to unplug them. Um, it's okay, but you can't unplug 325 00:17:30,240 --> 00:17:32,800 Speaker 1: your e RP, you cannot unplug your CRM, you can't 326 00:17:32,840 --> 00:17:35,879 Speaker 1: move your workloads off as youre um so so you know, 327 00:17:35,920 --> 00:17:39,080 Speaker 1: it's the discretionary items that we think are gonna do poorly. 328 00:17:39,359 --> 00:17:42,000 Speaker 1: And then it's it's companies that are really levered to 329 00:17:42,400 --> 00:17:44,880 Speaker 1: you know, the VC back businesses, right. I mean, it's 330 00:17:44,920 --> 00:17:47,320 Speaker 1: no secret out there. We're seeing a lot of VC 331 00:17:47,520 --> 00:17:49,480 Speaker 1: you know, funding dry up. We're seeing you know, those 332 00:17:49,480 --> 00:17:52,919 Speaker 1: companies have to focus on profitability or even seeing layoffs right. 333 00:17:52,960 --> 00:17:56,200 Speaker 1: And in consumer tech and even some VC backed enterprise 334 00:17:56,680 --> 00:17:59,720 Speaker 1: software companies uh and and and any software company that 335 00:17:59,800 --> 00:18:02,679 Speaker 1: is is proportionately exposed to the low end of the 336 00:18:02,760 --> 00:18:05,520 Speaker 1: market um and to this kind of froth the VC 337 00:18:06,280 --> 00:18:08,920 Speaker 1: back businesses, we think those ones are definitely at risk 338 00:18:08,960 --> 00:18:12,480 Speaker 1: in the downturn. Really appreciate it so smart for cash flow, 339 00:18:12,520 --> 00:18:17,640 Speaker 1: That's my takeaway. Bristi Gelirias, software analyst at OURBC Capital Markets, 340 00:18:17,640 --> 00:18:21,200 Speaker 1: coming up, Twitter executives toning down some of the tweets 341 00:18:21,200 --> 00:18:24,080 Speaker 1: and reassuring employees that the deal with Musk is on 342 00:18:24,720 --> 00:18:27,879 Speaker 1: and not on hold. We're going to discuss the latest 343 00:18:27,880 --> 00:18:43,879 Speaker 1: this Bloomberg time now for a Bloomberg scoop. The Twitter 344 00:18:43,960 --> 00:18:47,440 Speaker 1: takeover drama continues as executives telling employees that the deal 345 00:18:47,480 --> 00:18:50,080 Speaker 1: with Elon Musk it is not on hold, and it 346 00:18:50,280 --> 00:18:53,280 Speaker 1: is moving forward as planned with the agreed upon price. 347 00:18:53,600 --> 00:18:56,320 Speaker 1: Joining us once again is a very own Bloomberg's at 348 00:18:56,400 --> 00:18:58,560 Speaker 1: Ludlow ned I wanted to say her just discuss our 349 00:18:59,480 --> 00:19:02,439 Speaker 1: twins is wedding planning, and the producer said, no, we 350 00:19:02,480 --> 00:19:04,520 Speaker 1: have to do Twitter. We have to do the story 351 00:19:04,560 --> 00:19:06,919 Speaker 1: of the day. Right. Well, there's a lot to talk about. 352 00:19:07,000 --> 00:19:09,479 Speaker 1: So we're hearing from sources that are in this big meeting, 353 00:19:09,560 --> 00:19:13,720 Speaker 1: this big old hands that Vigor Gadda, who's the head lawyer, 354 00:19:13,800 --> 00:19:16,359 Speaker 1: head of policy at Twitter, basically stood up and said, 355 00:19:16,760 --> 00:19:19,840 Speaker 1: you know, not only is the deal with Elon Musk 356 00:19:20,040 --> 00:19:23,080 Speaker 1: not on hold, but there's no such thing as a 357 00:19:23,160 --> 00:19:26,720 Speaker 1: deal being put on hold, literally a quote from within 358 00:19:26,800 --> 00:19:29,359 Speaker 1: that meeting. And you know this has been an area 359 00:19:29,359 --> 00:19:31,960 Speaker 1: of intent interests not just for investors or US in 360 00:19:32,000 --> 00:19:35,480 Speaker 1: the media, but Twitter users, fans of Elon Musk. And 361 00:19:35,560 --> 00:19:37,560 Speaker 1: you know this was a move by company executive to 362 00:19:37,640 --> 00:19:40,720 Speaker 1: reassure Twitter employees that you know, this is going to 363 00:19:40,800 --> 00:19:43,680 Speaker 1: go ahead and this is what they're working toward. Why 364 00:19:43,800 --> 00:19:47,800 Speaker 1: they need to even address this, right, Let's go back 365 00:19:47,800 --> 00:19:50,680 Speaker 1: to basics. Great question. You'll remember that Elon Musk tweeted 366 00:19:51,040 --> 00:19:55,199 Speaker 1: several days ago that the deal was quote temporarily on 367 00:19:55,280 --> 00:19:59,080 Speaker 1: hold because he felt that data Twitter had provided in 368 00:19:59,080 --> 00:20:02,560 Speaker 1: a regulatory fire ng saying less than five percent of 369 00:20:02,640 --> 00:20:05,439 Speaker 1: users on the platform were bots was not accurate. He 370 00:20:05,560 --> 00:20:08,320 Speaker 1: felt that he didn't believe the data and evidence that 371 00:20:08,320 --> 00:20:10,760 Speaker 1: Twitter had provided, and he wanted to know more, and 372 00:20:10,840 --> 00:20:14,040 Speaker 1: he stated on Twitter, in classic Elon Musk fashion, that 373 00:20:14,160 --> 00:20:18,160 Speaker 1: until he had more evidence, the deal was temporarily on hold. Quote. 374 00:20:18,200 --> 00:20:21,800 Speaker 1: But remember Bloomberg reporting as well that according to sources 375 00:20:22,359 --> 00:20:25,800 Speaker 1: in the background, whatever Elon Musk is saying, his advisers, 376 00:20:25,880 --> 00:20:28,760 Speaker 1: his bankers were getting on with it, you know, working 377 00:20:28,800 --> 00:20:31,400 Speaker 1: with the other side, working with Twitter to get this 378 00:20:31,440 --> 00:20:33,639 Speaker 1: deal to happen at the original price, which will remind 379 00:20:33,640 --> 00:20:37,920 Speaker 1: our audience twenty cents per share to take Twitter private 380 00:20:37,920 --> 00:20:41,600 Speaker 1: and evaluation forty four billion dollars. A lot of drama 381 00:20:41,800 --> 00:20:44,320 Speaker 1: continuing to play out, and know that you continue to 382 00:20:44,400 --> 00:20:46,480 Speaker 1: keep us up to date here on Twitter. I want 383 00:20:46,480 --> 00:20:48,520 Speaker 1: to go to potentially a little bit more of a 384 00:20:48,600 --> 00:20:51,639 Speaker 1: stable growth company here, and that's Apple. We had a great, 385 00:20:51,760 --> 00:20:54,120 Speaker 1: of course story out here from our very and Mark 386 00:20:54,240 --> 00:20:56,600 Speaker 1: Roman talking about the headset. I know that you love 387 00:20:56,640 --> 00:20:59,800 Speaker 1: to do that hand motion and really described that headset 388 00:20:59,800 --> 00:21:02,639 Speaker 1: for as visually here, but showing it to the board 389 00:21:02,920 --> 00:21:06,840 Speaker 1: a significant sign of progress. Right, we're talking about a 390 00:21:06,960 --> 00:21:10,440 Speaker 1: virtual augmented reality headset. You know, I don't have a prop, 391 00:21:10,480 --> 00:21:13,720 Speaker 1: but basically sources saying that the latest version of this 392 00:21:13,960 --> 00:21:16,520 Speaker 1: device was presented to the board recently. The board meets 393 00:21:16,520 --> 00:21:18,680 Speaker 1: four times a year, but that's a pretty good sign 394 00:21:18,760 --> 00:21:21,840 Speaker 1: that it's at a stage where it could be real. 395 00:21:21,920 --> 00:21:23,560 Speaker 1: It could be the next big thing. You look there 396 00:21:23,560 --> 00:21:27,439 Speaker 1: at that pie chart. Hardware so important for Apple revenue, 397 00:21:27,440 --> 00:21:30,639 Speaker 1: but the iPhone dominates. What's the next generation of products? 398 00:21:30,680 --> 00:21:34,439 Speaker 1: How can they boost services revenue? Were augmented virtual reality 399 00:21:34,720 --> 00:21:36,800 Speaker 1: is one way of doing that. And so you know, 400 00:21:36,840 --> 00:21:40,280 Speaker 1: we're hearing that this headset has amazing processing power, the 401 00:21:40,320 --> 00:21:43,879 Speaker 1: same kind of chip power semiconductor power that it's latest 402 00:21:43,920 --> 00:21:46,720 Speaker 1: generation of Max has and in previous years they've tested 403 00:21:46,760 --> 00:21:51,000 Speaker 1: their software on competitor headsets. This is a market dominated 404 00:21:51,000 --> 00:21:54,119 Speaker 1: by Meta, right, the Facebook parent and it's quest two device. 405 00:21:54,240 --> 00:21:56,919 Speaker 1: So can Apple catch up? It's very exciting how to 406 00:21:56,960 --> 00:22:00,280 Speaker 1: get your hands on the chips first, very appreciate, did 407 00:22:00,840 --> 00:22:12,200 Speaker 1: very own Bloomberg's at ludlow. It is the single most 408 00:22:12,200 --> 00:22:15,879 Speaker 1: efficient competitive market in the world. Hands down, we should 409 00:22:15,880 --> 00:22:18,560 Speaker 1: think about how do we have far more companies be 410 00:22:18,800 --> 00:22:24,119 Speaker 1: public companies where their success is enjoyed by American investors 411 00:22:24,240 --> 00:22:27,639 Speaker 1: saving for the retirement or otherwise. And everything that we 412 00:22:27,800 --> 00:22:32,240 Speaker 1: keep piling onto the list of obligations and responsibilities for 413 00:22:32,320 --> 00:22:37,119 Speaker 1: public company discourages that from happy. We've seen thousands of 414 00:22:37,200 --> 00:22:40,360 Speaker 1: fewer companies in our public markets today than twenty five 415 00:22:40,440 --> 00:22:43,480 Speaker 1: years ago. And that's really I I hate to say it, 416 00:22:43,520 --> 00:22:47,199 Speaker 1: but but shame on Washington for for really forcing so 417 00:22:47,320 --> 00:22:51,480 Speaker 1: many investment opportunities outside of the line of sight of 418 00:22:51,520 --> 00:22:56,000 Speaker 1: the American investment public. Welcome back to Bloomberg Technology. I'm 419 00:22:56,000 --> 00:22:58,119 Speaker 1: Taylor Riggs. That was, of course that l CEO Ken 420 00:22:58,200 --> 00:23:02,240 Speaker 1: Griffin speaking earlier at the bloom Intelligence Market Structure Conference, 421 00:23:02,560 --> 00:23:05,040 Speaker 1: talking really here about the dearth of deals that he's 422 00:23:05,040 --> 00:23:07,840 Speaker 1: seen in the US right now. He also warned how 423 00:23:07,840 --> 00:23:10,280 Speaker 1: the chaotic markets are also making it harder to look 424 00:23:10,320 --> 00:23:13,520 Speaker 1: at new deal, new deals and ideas. For more on 425 00:23:13,560 --> 00:23:16,879 Speaker 1: how this is affecting startups, especially as they try to fundraise. 426 00:23:17,119 --> 00:23:19,560 Speaker 1: I'm joined by Lisa Blow She is of course founding 427 00:23:19,640 --> 00:23:23,800 Speaker 1: partner at Able. Great to have you here talk to 428 00:23:23,840 --> 00:23:25,919 Speaker 1: us about sort of the volatility that we're seeing in 429 00:23:25,960 --> 00:23:27,960 Speaker 1: the in the markets and sort of the impact that 430 00:23:28,000 --> 00:23:30,520 Speaker 1: you're seeing, if at all, on some of the fundraising 431 00:23:30,560 --> 00:23:34,359 Speaker 1: as well. Absolutely thanks for having me, Taylor. You know, 432 00:23:34,560 --> 00:23:37,240 Speaker 1: we're really seeing that some of the later stage v 433 00:23:37,560 --> 00:23:41,359 Speaker 1: C market, you know, shift, some of that turbulence is 434 00:23:41,440 --> 00:23:46,760 Speaker 1: really um shifting down a bit um many investors, especially 435 00:23:46,840 --> 00:23:51,120 Speaker 1: the crossover funds with public and private exposure, they pulled 436 00:23:51,119 --> 00:23:54,480 Speaker 1: back or they've simply gone pencils down, and we're hearing 437 00:23:54,520 --> 00:23:58,359 Speaker 1: about flat or down rounds as multiple start to normalize. 438 00:23:58,680 --> 00:24:03,600 Speaker 1: We're also seeing significant interest in selling secondary shares in 439 00:24:03,880 --> 00:24:07,720 Speaker 1: unicorns and a fair number of extension or bridge rounds. 440 00:24:08,359 --> 00:24:11,240 Speaker 1: You know, right now the very early stage, the precede 441 00:24:11,600 --> 00:24:15,600 Speaker 1: two seeds still remains somewhat insulated, but it's really just 442 00:24:15,640 --> 00:24:18,600 Speaker 1: a matter of time before we see that instability seem 443 00:24:18,680 --> 00:24:21,879 Speaker 1: into the super early stage, and many of those precede 444 00:24:22,000 --> 00:24:25,960 Speaker 1: and seed rounds they're upsizing the size of their current reads, 445 00:24:26,240 --> 00:24:28,520 Speaker 1: you know, for a little more cushion so that they 446 00:24:28,600 --> 00:24:31,920 Speaker 1: have runway given you know, the macro and certainty that 447 00:24:32,000 --> 00:24:33,920 Speaker 1: we're seeing in the later stage market, and are you 448 00:24:34,000 --> 00:24:36,359 Speaker 1: telling your companies to prepare for a little bit of 449 00:24:36,440 --> 00:24:39,240 Speaker 1: a slow down, to think about conserving cash, just tightening 450 00:24:39,359 --> 00:24:41,840 Speaker 1: up your belt and being able to And I was 451 00:24:41,920 --> 00:24:44,199 Speaker 1: in Boston, I believe it was two days ago when 452 00:24:44,240 --> 00:24:46,080 Speaker 1: I think one of the vcs that I was speaking 453 00:24:46,080 --> 00:24:49,040 Speaker 1: to told his companies be prepared to not be able 454 00:24:49,080 --> 00:24:53,280 Speaker 1: to fundraise for eight teen months. Yeah. Absolutely, I think 455 00:24:53,359 --> 00:24:56,399 Speaker 1: that's good advice. It's certainly a good um framework in 456 00:24:56,480 --> 00:24:59,080 Speaker 1: a way of thinking. You know, our best advice to 457 00:24:59,200 --> 00:25:02,639 Speaker 1: any founder at as time is to remain incredibly disciplined 458 00:25:02,800 --> 00:25:06,000 Speaker 1: on your cash furn and to utilize, you know, an 459 00:25:06,240 --> 00:25:11,159 Speaker 1: R o I driven decision making framework to prioritize and 460 00:25:11,400 --> 00:25:14,920 Speaker 1: and really, irrespective of the macro environment, we enable have 461 00:25:15,080 --> 00:25:19,040 Speaker 1: always set you know, the best companies with outstanding metrics, 462 00:25:19,320 --> 00:25:23,639 Speaker 1: fundamentals and a unique competitive advantage will continue to get funded. 463 00:25:24,000 --> 00:25:26,840 Speaker 1: There's still venture funding out there with dollars that will 464 00:25:26,920 --> 00:25:29,560 Speaker 1: have to be deployed, and they'll go, you know, out 465 00:25:29,640 --> 00:25:32,040 Speaker 1: to the best the best founders and the best businesses. 466 00:25:32,680 --> 00:25:35,359 Speaker 1: You know, and we've also said to our founders, you know, 467 00:25:35,520 --> 00:25:38,639 Speaker 1: many of them try to optimize for lower dilution and 468 00:25:38,760 --> 00:25:42,720 Speaker 1: higher valuation, but there may be advantages now to remaining 469 00:25:42,800 --> 00:25:46,720 Speaker 1: disciplined on valuation to avoid being in a situation where 470 00:25:47,080 --> 00:25:49,880 Speaker 1: it's hard to clear that valuation at the next round, 471 00:25:50,320 --> 00:25:53,480 Speaker 1: you know, giving given the continued challenges in the macro environment. 472 00:25:53,600 --> 00:25:56,720 Speaker 1: So the shift is no longer a unicorn at any cost. Right. 473 00:25:56,840 --> 00:25:59,720 Speaker 1: Has it been a focus on looking at more or 474 00:26:00,080 --> 00:26:05,400 Speaker 1: sooner profitability? Absolutely? Um, you know, I think it's it's 475 00:26:05,440 --> 00:26:07,800 Speaker 1: no longer. The message is no longer you know, grows 476 00:26:07,840 --> 00:26:11,440 Speaker 1: at any cost. It is really trying to UM to 477 00:26:11,600 --> 00:26:14,920 Speaker 1: focus on the fundamentals and to build you know, a 478 00:26:15,000 --> 00:26:19,520 Speaker 1: strategically competitive business. UM. That's still sort of grounded in 479 00:26:19,880 --> 00:26:22,159 Speaker 1: in good economics. You know, you talked about it in 480 00:26:22,200 --> 00:26:24,920 Speaker 1: the slowdown. You'll still get funding for the companies with 481 00:26:25,080 --> 00:26:29,040 Speaker 1: really strong ideas. Where do you what sectors? Where are 482 00:26:29,119 --> 00:26:33,159 Speaker 1: those good ideas? You know? And able we're focused on 483 00:26:33,680 --> 00:26:36,399 Speaker 1: what we call kind of narrowing the wellness gap, right, 484 00:26:36,520 --> 00:26:40,040 Speaker 1: that's the delta that's grown over the past two decades 485 00:26:40,280 --> 00:26:44,440 Speaker 1: as economic indicators such as GDP per capita you know, 486 00:26:44,560 --> 00:26:47,480 Speaker 1: have gone up into the right UM, while our measures 487 00:26:47,560 --> 00:26:50,960 Speaker 1: of overall well being, including physical and mental health, have 488 00:26:51,119 --> 00:26:55,800 Speaker 1: stagnated or decreased. So we're most focused on overlooked or 489 00:26:56,080 --> 00:27:00,440 Speaker 1: underserved demographics where there has been historical sigma stigma. So 490 00:27:00,800 --> 00:27:03,480 Speaker 1: one area that's been very active for US is mental health. 491 00:27:03,960 --> 00:27:06,520 Speaker 1: You know, we've been invested in spring Health and Alma 492 00:27:06,600 --> 00:27:10,280 Speaker 1: and Little Otter. One in five US adults and kids 493 00:27:10,720 --> 00:27:13,879 Speaker 1: suffer from a mental health or substance abuse issue in 494 00:27:14,000 --> 00:27:18,680 Speaker 1: any given year, but over half have never received treatment. Um, 495 00:27:19,080 --> 00:27:21,479 Speaker 1: the stats really speak for themselves. But it's also an 496 00:27:21,480 --> 00:27:26,960 Speaker 1: opportunity that's right for technological innovation given the significant supply 497 00:27:27,040 --> 00:27:30,640 Speaker 1: and demand and balance that we see in this sector specifically. 498 00:27:31,200 --> 00:27:34,240 Speaker 1: So I think it's six counties in the US, including 499 00:27:35,640 --> 00:27:39,280 Speaker 1: of rural counties, don't have a single psychiatrist, and the 500 00:27:39,359 --> 00:27:43,440 Speaker 1: number of psychiatrists interesting entering the profession has been trending down, 501 00:27:43,720 --> 00:27:46,000 Speaker 1: you know. So our thesis is that technology can really 502 00:27:46,800 --> 00:27:49,240 Speaker 1: help unlock a lot of value and opportunity there. And 503 00:27:49,400 --> 00:27:52,400 Speaker 1: I hear you, but also coming out of the pandemic, 504 00:27:52,520 --> 00:27:55,280 Speaker 1: this also felt like, says a competitive space. I mean, 505 00:27:56,160 --> 00:27:59,119 Speaker 1: you get up advertisements all the time of all of 506 00:27:59,200 --> 00:28:02,200 Speaker 1: these different mental health apps here on your phone, so 507 00:28:02,880 --> 00:28:06,160 Speaker 1: how do you also then differentiate if there is the need. 508 00:28:06,320 --> 00:28:10,480 Speaker 1: But it also kind of feels competitive as well, yeah, absolutely. 509 00:28:10,600 --> 00:28:12,520 Speaker 1: You know, I think kind of going back, as I said, 510 00:28:12,600 --> 00:28:16,040 Speaker 1: we've really focused where we think technology UM can make 511 00:28:16,080 --> 00:28:18,639 Speaker 1: a big difference, particularly in the mental health sector. So 512 00:28:18,760 --> 00:28:21,919 Speaker 1: we've looked at tools that make the mental health providers 513 00:28:22,080 --> 00:28:24,920 Speaker 1: more efficient in managing their care. You know, we've looked 514 00:28:24,960 --> 00:28:30,439 Speaker 1: at services and technology that allows personalization for an employee 515 00:28:30,560 --> 00:28:34,200 Speaker 1: to determine, you know, exactly what care, what mental health 516 00:28:34,280 --> 00:28:38,040 Speaker 1: modality is most effective for their needs. We've also looked 517 00:28:38,080 --> 00:28:41,800 Speaker 1: at a digital services that allow those in world geographies, 518 00:28:41,800 --> 00:28:45,600 Speaker 1: as I mentioned before, you know, to access quality care virtually. 519 00:28:46,480 --> 00:28:49,520 Speaker 1: And now that's right, Yeah, no, wonderful. And I think 520 00:28:49,520 --> 00:28:51,200 Speaker 1: another great thing here I'm ringing in your notes is 521 00:28:51,280 --> 00:28:54,200 Speaker 1: course backing female entrepreneurs, and they're sort of a big 522 00:28:54,320 --> 00:28:58,280 Speaker 1: takeaway from the pandemic. It all forced us to stop, 523 00:28:58,320 --> 00:29:00,840 Speaker 1: slow down and look around at a quality around us. 524 00:29:00,960 --> 00:29:03,320 Speaker 1: And certainly in your world you're doing that as well. 525 00:29:03,520 --> 00:29:09,560 Speaker 1: How are you looking at investing and supporting female entrepreneurs. Absolutely, 526 00:29:09,640 --> 00:29:12,000 Speaker 1: that's been central to our thesis and our work since 527 00:29:12,000 --> 00:29:15,880 Speaker 1: Stables inception UM. You know, we have about seventy companies 528 00:29:15,920 --> 00:29:18,720 Speaker 1: and our current portfolio and six have a female on 529 00:29:18,800 --> 00:29:21,760 Speaker 1: the founding team. But we've always said that that we 530 00:29:21,880 --> 00:29:24,160 Speaker 1: really invest in the most talented founders and they just 531 00:29:24,240 --> 00:29:26,680 Speaker 1: happened to be women. Right, are our sectors that we 532 00:29:26,800 --> 00:29:30,760 Speaker 1: focus on, our consumer, their health, their care. Women make 533 00:29:30,920 --> 00:29:34,719 Speaker 1: the vast majority of purchase decisions, and we as investors, 534 00:29:34,840 --> 00:29:36,920 Speaker 1: you know, we're really looking and talking a lot about 535 00:29:37,080 --> 00:29:40,680 Speaker 1: founder product that and we're looking for entrepreneurs that have 536 00:29:40,920 --> 00:29:45,360 Speaker 1: lived experiences that uniquely qualify them to solve the problem. So, 537 00:29:45,720 --> 00:29:48,560 Speaker 1: you know, from our perspective, understanding the female point of 538 00:29:48,640 --> 00:29:52,440 Speaker 1: view is really critical to success and to scale. And 539 00:29:52,640 --> 00:29:56,600 Speaker 1: and there has been progress last year, and women raised 540 00:29:56,640 --> 00:30:01,360 Speaker 1: more venture dollars and executed more exits, greater evaluations than 541 00:30:01,400 --> 00:30:04,160 Speaker 1: at any point in the past decade, but the percentage 542 00:30:04,200 --> 00:30:07,400 Speaker 1: share of funding to all female founding teams declined for 543 00:30:07,480 --> 00:30:09,520 Speaker 1: the second year in the row. So you know, the 544 00:30:09,600 --> 00:30:13,320 Speaker 1: reality is we need more diverse perspectives, more women in 545 00:30:13,400 --> 00:30:17,520 Speaker 1: decision making roles at investment firms, because you know, it's 546 00:30:17,560 --> 00:30:21,320 Speaker 1: not just it's not just good work, good business. Women 547 00:30:21,560 --> 00:30:25,400 Speaker 1: on founding teams. You know, those teams perform sixty three 548 00:30:25,520 --> 00:30:29,080 Speaker 1: percent better than all male founding teams, and women lead 549 00:30:29,120 --> 00:30:32,080 Speaker 1: teams generate you know, like thirty five percent higher return 550 00:30:32,240 --> 00:30:35,320 Speaker 1: on investment than all male teams. So this is you know, 551 00:30:35,440 --> 00:30:38,280 Speaker 1: this is not charity, this is good investment work. Really 552 00:30:38,320 --> 00:30:41,800 Speaker 1: appreciate it. Good investment work is from Lisa Blow, founding 553 00:30:41,880 --> 00:30:45,920 Speaker 1: partner over an Able Ventures. Really appreciative coming up closing 554 00:30:46,080 --> 00:30:48,480 Speaker 1: the gender gap, something that we were just discussing and 555 00:30:48,560 --> 00:30:51,160 Speaker 1: now doing that in the digital art world by conversation 556 00:30:51,280 --> 00:30:53,600 Speaker 1: with well one of the biggest artists in that space. 557 00:30:53,760 --> 00:31:13,640 Speaker 1: That's next. This is Bloomberg time now for our Crypto Report. 558 00:31:13,760 --> 00:31:16,000 Speaker 1: I'm so pleased to welcome in while our of course 559 00:31:16,040 --> 00:31:20,840 Speaker 1: crypto contributor Snali bask along with Nadia to Lakonikova. She 560 00:31:21,000 --> 00:31:22,560 Speaker 1: is of course one of the co founders of the 561 00:31:22,600 --> 00:31:27,560 Speaker 1: feminist protest art collective Pussy Right and an outspoken social activists. 562 00:31:27,840 --> 00:31:30,600 Speaker 1: Nadia is so great to um have you here with 563 00:31:30,760 --> 00:31:33,160 Speaker 1: us today. First talk about sort of this new initiative 564 00:31:33,240 --> 00:31:36,040 Speaker 1: that you have underway and and sort of the more 565 00:31:36,160 --> 00:31:39,040 Speaker 1: equalizing within the l g B t Q community that 566 00:31:39,160 --> 00:31:43,640 Speaker 1: that you're looking for within the crypto world. UM, it's 567 00:31:43,680 --> 00:31:47,720 Speaker 1: called again Learned Out and they bring together one of 568 00:31:47,760 --> 00:31:53,040 Speaker 1: the biggest minds and flancers, artists, collectors in the digital 569 00:31:53,520 --> 00:31:58,920 Speaker 1: arts space to close the gender gap. Artists thinking is 570 00:31:59,240 --> 00:32:04,920 Speaker 1: that UM crypto digital space promised to build a new world, 571 00:32:05,080 --> 00:32:07,280 Speaker 1: and a lot of people in this space belief that 572 00:32:07,960 --> 00:32:11,840 Speaker 1: UM the world has to be more UM open, excessive, 573 00:32:12,000 --> 00:32:16,440 Speaker 1: accessible for everyone, UM equitable and UM. We believe that 574 00:32:16,640 --> 00:32:19,040 Speaker 1: if we bring together in the room one of the 575 00:32:19,120 --> 00:32:23,800 Speaker 1: most inefntional people in space, people like people see a 576 00:32:24,160 --> 00:32:28,200 Speaker 1: borde yacht club, grinds, UM, pussy right, a lot of 577 00:32:28,320 --> 00:32:31,800 Speaker 1: other prominent artists in space UM, than we are going 578 00:32:31,840 --> 00:32:34,640 Speaker 1: to be able to establish NUMER them and everyone else 579 00:32:34,680 --> 00:32:37,160 Speaker 1: who's going to come to webs three later going to 580 00:32:37,280 --> 00:32:40,320 Speaker 1: be following this model of the world that they're going 581 00:32:40,360 --> 00:32:42,959 Speaker 1: to be able to build where women are equal men. 582 00:32:44,280 --> 00:32:47,479 Speaker 1: I'm really curious about diving into that a little more. 583 00:32:47,560 --> 00:32:50,520 Speaker 1: Your website also for Unicorn, Dow points out some of 584 00:32:50,600 --> 00:32:53,040 Speaker 1: the issue here and idea that there is not a 585 00:32:53,120 --> 00:32:55,280 Speaker 1: lot of diversity in the space yet. So when you're 586 00:32:55,320 --> 00:32:57,960 Speaker 1: getting together with all the members of this taw, how 587 00:32:58,160 --> 00:33:01,840 Speaker 1: do you defeat this problem and are there challenges to 588 00:33:01,960 --> 00:33:07,760 Speaker 1: doing so? M We get together on weekly calls, sometimes 589 00:33:07,840 --> 00:33:12,560 Speaker 1: we do parties UM. When it comes to UM membership, 590 00:33:12,840 --> 00:33:16,160 Speaker 1: we try to make sure that we have UM and 591 00:33:16,280 --> 00:33:19,760 Speaker 1: this equal amount of members, and we have systems in 592 00:33:19,840 --> 00:33:22,880 Speaker 1: place that help to maintain that, like, for example, we 593 00:33:22,960 --> 00:33:27,640 Speaker 1: have sponsorship program UM that is sponsored by movie a UM, 594 00:33:27,960 --> 00:33:30,880 Speaker 1: so there are a number of female artists who are 595 00:33:30,960 --> 00:33:34,920 Speaker 1: not able to contribute to fifty ease for a seat, 596 00:33:35,040 --> 00:33:38,520 Speaker 1: so instead movie based for them. When it comes to 597 00:33:38,840 --> 00:33:41,480 Speaker 1: in real life mons, UM you know obviously prefer to 598 00:33:41,960 --> 00:33:45,360 Speaker 1: party with UM girls and all people people, so we 599 00:33:45,520 --> 00:33:50,120 Speaker 1: also as always maintain UM people who we've watched, people 600 00:33:50,160 --> 00:33:52,640 Speaker 1: who we invite, so it's like it's never a cryptive 601 00:33:52,680 --> 00:33:55,400 Speaker 1: broad party UM. I think this is one of the 602 00:33:55,440 --> 00:33:58,880 Speaker 1: biggest problems in web scree in crypto that they are 603 00:33:59,640 --> 00:34:02,840 Speaker 1: called SURE that is created by crypto bros, which is 604 00:34:03,040 --> 00:34:06,880 Speaker 1: so repulsive for a lot of people from the outside, 605 00:34:06,960 --> 00:34:10,880 Speaker 1: and then it doesn't allow UM an if season really 606 00:34:11,000 --> 00:34:14,440 Speaker 1: skill and reach massive option. And what a story. I 607 00:34:14,480 --> 00:34:18,960 Speaker 1: mean this was launched in the tenure anniversary. Since you're 608 00:34:19,120 --> 00:34:22,960 Speaker 1: arrest in Moscow for an anti Putin protest and I'm 609 00:34:23,000 --> 00:34:24,959 Speaker 1: wondering if you'll talk a little more about the power 610 00:34:25,040 --> 00:34:28,040 Speaker 1: you found in crypto to bring people together, especially because 611 00:34:28,080 --> 00:34:30,879 Speaker 1: you were such a big part of what had raised 612 00:34:30,920 --> 00:34:37,720 Speaker 1: money for Ukraine through the Tao world. UM. I'm always 613 00:34:37,840 --> 00:34:41,320 Speaker 1: been connected with the world of technology. Creci believes that 614 00:34:41,760 --> 00:34:44,560 Speaker 1: not just to be a good effective activists have to 615 00:34:44,680 --> 00:34:48,320 Speaker 1: be also smart abode what's going on in the tech world. 616 00:34:48,960 --> 00:34:53,640 Speaker 1: UM so I mm hmm, I'll love to I love 617 00:34:53,719 --> 00:34:57,600 Speaker 1: to use whatever this world gives us in order to 618 00:34:57,719 --> 00:35:00,840 Speaker 1: which you've better results. Is an actness. So with the 619 00:35:01,000 --> 00:35:05,400 Speaker 1: same mindset I came into crypto UM. I started to 620 00:35:05,440 --> 00:35:08,680 Speaker 1: actually work in the game of last year UM. And 621 00:35:08,960 --> 00:35:13,439 Speaker 1: but you know, my core UM ethos didn't change really 622 00:35:13,920 --> 00:35:16,800 Speaker 1: over the last fifteen years. It started to be feminist 623 00:35:16,920 --> 00:35:20,799 Speaker 1: and interpreting in the interstature. And actually fifteen years ago 624 00:35:21,280 --> 00:35:23,640 Speaker 1: so UM doing the same thing, tried to cheat the 625 00:35:23,680 --> 00:35:27,680 Speaker 1: same goals, but with new tools and UM for example, 626 00:35:28,239 --> 00:35:32,200 Speaker 1: when they were grain started in the end of February, 627 00:35:32,680 --> 00:35:35,960 Speaker 1: were put together ukrained out and I'm one of the 628 00:35:36,120 --> 00:35:39,600 Speaker 1: co founders of the brained out and we were able 629 00:35:39,640 --> 00:35:42,239 Speaker 1: to raise seven million dollars just a few days and 630 00:35:42,320 --> 00:35:45,040 Speaker 1: dispersed those wine in the next twenty four hours and 631 00:35:45,200 --> 00:35:51,839 Speaker 1: creat allows for UM transparency, speed, UH and efficiency that's 632 00:35:51,880 --> 00:35:56,000 Speaker 1: not really seen before. The sort of argument against that though, 633 00:35:56,120 --> 00:35:58,080 Speaker 1: it's been sort of the high flying n f t 634 00:35:58,320 --> 00:36:02,040 Speaker 1: S high flying crypto. Oh, it's come down a lot 635 00:36:02,120 --> 00:36:05,640 Speaker 1: in terms of price. Are you worried about entering and 636 00:36:05,880 --> 00:36:08,759 Speaker 1: continuing in this market when prices weren't what they were 637 00:36:08,800 --> 00:36:13,879 Speaker 1: a few months ago. I'm not worried because I'm here 638 00:36:13,960 --> 00:36:17,560 Speaker 1: for different reasons. I'm looking at scripture as as a 639 00:36:17,640 --> 00:36:21,719 Speaker 1: tool for activism, and uh, nothing really changed, and that Simpsons. 640 00:36:22,239 --> 00:36:24,359 Speaker 1: I also, I also think that there are a lot 641 00:36:24,440 --> 00:36:29,440 Speaker 1: of UM use cases of Considium applications UM for building 642 00:36:29,480 --> 00:36:34,000 Speaker 1: better governance models, and the founder of Isyrianthetic Garnity, talks 643 00:36:34,000 --> 00:36:37,560 Speaker 1: a lot about that. So I'm usually looking forward for deco, 644 00:36:37,719 --> 00:36:41,880 Speaker 1: playing UM lust for money and crypto and looking at 645 00:36:41,920 --> 00:36:45,400 Speaker 1: scripted and I think this, this current market allows us 646 00:36:45,440 --> 00:36:47,440 Speaker 1: to actually take a look at crypt and try to 647 00:36:47,480 --> 00:36:52,080 Speaker 1: find something better and more interesting, deeper than just UM 648 00:36:52,440 --> 00:36:55,560 Speaker 1: you know, means to get rich. You know, speaking of 649 00:36:56,400 --> 00:36:59,759 Speaker 1: deeper reasons for cryptocurrency, one of the things that you're 650 00:37:00,120 --> 00:37:04,200 Speaker 1: Dallas talked about is reproductive rights and what you've called 651 00:37:04,239 --> 00:37:06,719 Speaker 1: the summer rage and in the release out here, so 652 00:37:06,920 --> 00:37:08,880 Speaker 1: how do you see that playing out for members of 653 00:37:08,920 --> 00:37:11,640 Speaker 1: the community to really talk about reproductive rights in the 654 00:37:11,719 --> 00:37:16,960 Speaker 1: United States. We're working currently on the auctions is UM 655 00:37:17,560 --> 00:37:21,560 Speaker 1: Christie's and the auction is going to be revolving around 656 00:37:21,600 --> 00:37:25,719 Speaker 1: the topic of reproductive justice UM and big proportion of 657 00:37:25,840 --> 00:37:27,839 Speaker 1: what we're going to be able to raise what we're 658 00:37:27,880 --> 00:37:31,360 Speaker 1: going to be donating to various reproductive justice organizations in 659 00:37:31,440 --> 00:37:34,800 Speaker 1: the US UM and also we are in conversations with 660 00:37:34,960 --> 00:37:40,440 Speaker 1: various UM and so various recoundations like Blind Friendhood and 661 00:37:40,560 --> 00:37:43,839 Speaker 1: When's March to see how we can actually help them 662 00:37:43,880 --> 00:37:48,200 Speaker 1: to onboard their members two bops three to hopefully provide 663 00:37:48,239 --> 00:37:51,480 Speaker 1: them better governance tools and also found aging tools for 664 00:37:51,760 --> 00:37:56,719 Speaker 1: their goals. Really appreciate it, Nadia to look Nikova of course, 665 00:37:56,800 --> 00:38:00,399 Speaker 1: and our very own Bloomberg generally Bostic. Really appreciate both 666 00:38:00,480 --> 00:38:12,279 Speaker 1: of you joining this program. Retail Stock's got a big 667 00:38:12,400 --> 00:38:15,239 Speaker 1: hit this week as investors worry about consumers paying higher 668 00:38:15,320 --> 00:38:18,440 Speaker 1: prices in the wake of higher inflation. Join is now 669 00:38:18,560 --> 00:38:21,480 Speaker 1: is James Riinhardt's CEO of thread Up, the world's largest 670 00:38:21,520 --> 00:38:24,640 Speaker 1: online market place for secondhand clothing. And before we get 671 00:38:24,680 --> 00:38:28,200 Speaker 1: to the inflation conversations, I think the bigger issue underway 672 00:38:28,400 --> 00:38:30,719 Speaker 1: is well the lack of supply chain issues that at 673 00:38:30,800 --> 00:38:33,880 Speaker 1: least maybe you're starting to see. Is that one area 674 00:38:34,040 --> 00:38:38,719 Speaker 1: of at least reprieve for you Yeah, definitely. And we 675 00:38:38,760 --> 00:38:40,800 Speaker 1: don't have exposure to China, so we don't have to 676 00:38:40,880 --> 00:38:43,719 Speaker 1: put you to international production. Um. You know, of course 677 00:38:43,760 --> 00:38:46,040 Speaker 1: we still are dealing with freight and labor costs here 678 00:38:46,080 --> 00:38:48,120 Speaker 1: in the US. But certainly it's nice to be in 679 00:38:48,160 --> 00:38:50,640 Speaker 1: a market where, you know, everything that we're selling back 680 00:38:50,680 --> 00:38:54,600 Speaker 1: to the American consumer is being sourced domestically from from 681 00:38:54,640 --> 00:38:56,960 Speaker 1: the American consumer. So that does give us some insulation. 682 00:38:57,000 --> 00:39:00,800 Speaker 1: Tower talk to us then about inflation, huge concern and 683 00:39:01,239 --> 00:39:04,120 Speaker 1: you know one of my bigger concerns is if Walmart 684 00:39:04,200 --> 00:39:07,440 Speaker 1: and Target aren't figuring out how to manage it, how 685 00:39:07,520 --> 00:39:10,960 Speaker 1: does everyone else do it? How are you doing it? Yeah? 686 00:39:10,960 --> 00:39:12,840 Speaker 1: I mean I don't think the targeting Walmart and it 687 00:39:12,960 --> 00:39:16,239 Speaker 1: told sort of different stories about about the results. I think, Um, 688 00:39:16,440 --> 00:39:18,759 Speaker 1: you know, for us, ultimately, what we see is a 689 00:39:18,840 --> 00:39:22,680 Speaker 1: consumer that seems like they're getting a little pinched right 690 00:39:22,719 --> 00:39:26,560 Speaker 1: and pinched at the palm, pinched on groceries. Um. You know, 691 00:39:26,880 --> 00:39:29,760 Speaker 1: you can see this across sort of consumer discretionary spend 692 00:39:29,800 --> 00:39:31,680 Speaker 1: and so you know, I think what we're seeing is 693 00:39:31,760 --> 00:39:35,239 Speaker 1: that this is now a time where discount apparel, you know, 694 00:39:35,320 --> 00:39:38,080 Speaker 1: secondhand apparel can really shine, and so I think, you know, 695 00:39:38,200 --> 00:39:40,239 Speaker 1: our job is to make sure consumers are aware of 696 00:39:40,440 --> 00:39:42,080 Speaker 1: the great value that you can get in second hand 697 00:39:42,680 --> 00:39:46,160 Speaker 1: and you're really seeing that. I'm looking at your two 698 00:39:46,239 --> 00:39:49,960 Speaker 1: resell report talking about how the market is expected to 699 00:39:50,040 --> 00:39:54,200 Speaker 1: grow by a hundred and twenty seven by six How 700 00:39:54,280 --> 00:39:57,280 Speaker 1: do you sort of make sure that you're meeting your audience, 701 00:39:57,360 --> 00:40:00,239 Speaker 1: that you have the right inventory that consumers are looking 702 00:40:00,320 --> 00:40:03,640 Speaker 1: for at the moment. Yeah, that's the tricky part, right 703 00:40:03,719 --> 00:40:06,200 Speaker 1: is it is that it requires some investment right now 704 00:40:06,280 --> 00:40:09,200 Speaker 1: to make sure that we have the products that consumers 705 00:40:09,280 --> 00:40:11,520 Speaker 1: want to buy and that we're really investing for the 706 00:40:12,120 --> 00:40:14,560 Speaker 1: consumer of the future, you know, which is young people. 707 00:40:14,920 --> 00:40:17,920 Speaker 1: Where you're really seeing the growth in Gen Z millennial 708 00:40:18,680 --> 00:40:21,719 Speaker 1: shoppers is their pursuit of second hand. And I think 709 00:40:21,760 --> 00:40:25,319 Speaker 1: second hand is now moved from hey, I'm gonna occasionally 710 00:40:25,360 --> 00:40:27,759 Speaker 1: think about shopping second hand to really being one of 711 00:40:27,800 --> 00:40:30,400 Speaker 1: the first places the young people are going. And I 712 00:40:30,480 --> 00:40:34,240 Speaker 1: think that's a really exciting change for the resale industry. 713 00:40:34,320 --> 00:40:37,520 Speaker 1: And so we're trying to make sure that that we're there. Uh, 714 00:40:37,800 --> 00:40:39,640 Speaker 1: you know, as consumers are looking to you know, go 715 00:40:39,760 --> 00:40:41,560 Speaker 1: back out in the world and return to work. And 716 00:40:41,719 --> 00:40:44,080 Speaker 1: that's where second and can shine. We were showing a 717 00:40:44,239 --> 00:40:47,400 Speaker 1: chart here about how the consumers are really looking at 718 00:40:47,520 --> 00:40:51,440 Speaker 1: North America. That area is leading the growth, but how 719 00:40:51,520 --> 00:40:55,839 Speaker 1: much of this is also a global story for future opportunity, Yeah, 720 00:40:55,880 --> 00:40:58,719 Speaker 1: the global resail industry. This is the first time that 721 00:40:58,800 --> 00:41:00,520 Speaker 1: we've ever done that as far as are you know, 722 00:41:00,600 --> 00:41:02,800 Speaker 1: in our resale report was a look at the global trends, 723 00:41:02,840 --> 00:41:05,200 Speaker 1: and you know, the global trends are really positive. Whether 724 00:41:05,280 --> 00:41:08,160 Speaker 1: it's whether it's in South America or it's in Europe 725 00:41:08,280 --> 00:41:11,800 Speaker 1: or or Australia. Right across the globe, resale is growing 726 00:41:12,239 --> 00:41:14,440 Speaker 1: and so, you know, I think it suggests that this 727 00:41:14,680 --> 00:41:17,800 Speaker 1: movement to shop more sustainably is not a US phenomenon. 728 00:41:18,040 --> 00:41:20,239 Speaker 1: I've said for a long time that the problem we're 729 00:41:20,239 --> 00:41:23,320 Speaker 1: solving for consumers is a global one, and so I 730 00:41:23,360 --> 00:41:26,080 Speaker 1: think it's exciting, uh, you know, for us to see 731 00:41:26,160 --> 00:41:28,200 Speaker 1: that type of global growth. I think the global markets 732 00:41:28,200 --> 00:41:30,960 Speaker 1: supposed to triple over the next five years, and and 733 00:41:31,040 --> 00:41:34,760 Speaker 1: obviously that's waited more towards North America the near term. Finally, 734 00:41:34,840 --> 00:41:38,800 Speaker 1: here you mentioned sustainability. I'm curious during times when the 735 00:41:38,920 --> 00:41:42,160 Speaker 1: economics pull back a little bit and consumers are feeling pinched, 736 00:41:42,360 --> 00:41:44,840 Speaker 1: is it a necessity or is it a desire to 737 00:41:45,000 --> 00:41:48,640 Speaker 1: actually be sustainable. Yeah, I think what we've been trying 738 00:41:48,719 --> 00:41:51,120 Speaker 1: to keep top of mind for consumers is that the 739 00:41:51,160 --> 00:41:54,600 Speaker 1: threat of value proposition is always great brands at great prices. 740 00:41:54,920 --> 00:41:57,160 Speaker 1: You know, we certainly believe price and value is the 741 00:41:57,280 --> 00:42:00,560 Speaker 1: number one consideration at a time like this, but we 742 00:42:00,640 --> 00:42:02,840 Speaker 1: always add the caveat of like its great brands of 743 00:42:02,880 --> 00:42:05,719 Speaker 1: great prices in a sustainable way. And I think young 744 00:42:05,840 --> 00:42:09,080 Speaker 1: people increasingly are saying, hey, I want to change the 745 00:42:09,120 --> 00:42:11,360 Speaker 1: way on shopping and I do want to be more sustainable, 746 00:42:11,640 --> 00:42:13,239 Speaker 1: and so I think, you know, now is our time 747 00:42:13,320 --> 00:42:16,200 Speaker 1: to improve that we can deliver value in a sustainable 748 00:42:16,239 --> 00:42:19,600 Speaker 1: way to our consumer. Really appreciate it. Thanks for spending 749 00:42:19,640 --> 00:42:22,880 Speaker 1: some time with us through it up, CEO James Reinhardt. 750 00:42:23,440 --> 00:42:25,440 Speaker 1: And of course that does it for this edition of 751 00:42:25,480 --> 00:42:28,880 Speaker 1: Bloomberg Technology. We're going to be right back here tomorrow. 752 00:42:29,160 --> 00:42:33,000 Speaker 1: I hear Emily Chang may grace the building and return. 753 00:42:33,200 --> 00:42:36,120 Speaker 1: We'll have to see if that indeed doesn't work out. Also, though, 754 00:42:36,200 --> 00:42:38,279 Speaker 1: don't make sure to check out our new podcast. You 755 00:42:38,360 --> 00:42:40,360 Speaker 1: can find it on the terminal. You can find it 756 00:42:40,440 --> 00:42:44,560 Speaker 1: online on Apple, Spotify, and I Heart This is Bloomberg. 757 00:43:00,239 --> 00:43:04,560 Speaker 1: Sat Lady