1 00:00:02,960 --> 00:00:10,720 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Business. 2 00:00:10,760 --> 00:00:13,960 Speaker 1: Wait inside from the reporters and editors who bring you 3 00:00:14,040 --> 00:00:18,360 Speaker 1: America's most trusted business magazine, plus global business, finance and 4 00:00:18,440 --> 00:00:22,880 Speaker 1: tech news. The Bloomberg Business Week podcast with Carol Messer 5 00:00:23,040 --> 00:00:26,160 Speaker 1: and Tim Stenebeck from Bloomberg Radio. 6 00:00:26,960 --> 00:00:29,319 Speaker 2: We've got to check out the worst performer in the 7 00:00:29,640 --> 00:00:31,400 Speaker 2: S and P five hundred, and that would be super 8 00:00:31,520 --> 00:00:35,280 Speaker 2: Micro Computer shares absolutely cratering after Ernst and Young resigned 9 00:00:35,280 --> 00:00:39,080 Speaker 2: as the auditor ceting concerns about the company's governance and transparency. 10 00:00:39,120 --> 00:00:41,000 Speaker 2: We got with us Caroline Hye. She's co host of 11 00:00:41,159 --> 00:00:45,279 Speaker 2: Bloomberg Technology on Bloomberg TV eleven Wall Street Time each day. 12 00:00:45,320 --> 00:00:47,520 Speaker 2: She joins us here in the Bloomberg BusinessWeek studio. Bailey 13 00:00:47,560 --> 00:00:50,479 Speaker 2: Lipschultz also with us. He's Bloomberg News equities reporter. He 14 00:00:50,560 --> 00:00:53,280 Speaker 2: joins us from our Chicago bureau. Caroline, I want to 15 00:00:53,280 --> 00:00:56,240 Speaker 2: start with you because I want to remind everyone, or 16 00:00:56,240 --> 00:00:58,520 Speaker 2: I want you to remind everyone how we got here 17 00:00:58,680 --> 00:01:01,080 Speaker 2: today with super Micro, because it's not the first time 18 00:01:01,160 --> 00:01:04,360 Speaker 2: that smci's accounting practices have been under scrutiny. 19 00:01:04,520 --> 00:01:06,960 Speaker 3: No, that was in twenty twenty. In fact, if you 20 00:01:07,000 --> 00:01:09,679 Speaker 3: look back as to when the last time the shares 21 00:01:09,720 --> 00:01:12,200 Speaker 3: fell as much as they have today, well that was 22 00:01:12,200 --> 00:01:14,440 Speaker 3: back in twenty eighteen, when a Business Week report was 23 00:01:14,480 --> 00:01:16,920 Speaker 3: out that they'd been had seen their motherboards and their 24 00:01:16,959 --> 00:01:20,920 Speaker 3: servers hacked by the Chinese. They're not unaccustomed to controversy, 25 00:01:20,959 --> 00:01:23,760 Speaker 3: shall we say. But twenty twenty was when they actually 26 00:01:23,800 --> 00:01:27,600 Speaker 3: paid a fine seventeen million dollar penalty to end the 27 00:01:27,640 --> 00:01:31,000 Speaker 3: investigation of the SEC into concerns about accounting. At that point, 28 00:01:31,120 --> 00:01:34,240 Speaker 3: it was alleged that they'd been basically seeing their revenue 29 00:01:34,280 --> 00:01:36,920 Speaker 3: come in faster than naturally it had been. Now we 30 00:01:37,040 --> 00:01:39,880 Speaker 3: fast forward, and now it seems to be that we 31 00:01:39,920 --> 00:01:42,560 Speaker 3: go back two months in August, we get the Hindenburg 32 00:01:42,640 --> 00:01:45,679 Speaker 3: report that is citing in particular an ex employee who 33 00:01:45,720 --> 00:01:49,360 Speaker 3: worries about accounting. Again, Hindenburg puts out a short report 34 00:01:49,560 --> 00:01:52,160 Speaker 3: saying that we're worried about the accounting red flags. They 35 00:01:52,200 --> 00:01:55,600 Speaker 3: call it the stock tumbles. Then we get a DOJ 36 00:01:55,800 --> 00:01:58,960 Speaker 3: reports of a DOJ investigation into all of this. And 37 00:01:59,000 --> 00:02:02,920 Speaker 3: now finally Ey not wanting their name to be associated 38 00:02:02,960 --> 00:02:05,120 Speaker 3: with these financial reports. I mean, that is the last 39 00:02:05,120 --> 00:02:07,680 Speaker 3: thing you ever want to hear about an accounting firm 40 00:02:07,920 --> 00:02:09,560 Speaker 3: involved in a company that you have, Chaz and. 41 00:02:09,840 --> 00:02:13,280 Speaker 4: Yeah, pretty us stunning culmination of that timeline here. Shares 42 00:02:13,280 --> 00:02:16,160 Speaker 4: currently down about thirty two percent right now. 43 00:02:16,240 --> 00:02:18,680 Speaker 5: And Billy Lipschel's cone in on the. 44 00:02:18,600 --> 00:02:22,320 Speaker 4: Fact that Nate Anderson, of course of Hindenburn Research, he 45 00:02:22,400 --> 00:02:23,919 Speaker 4: must be having a pretty good day today. 46 00:02:24,639 --> 00:02:25,960 Speaker 2: He must be having a good day, Kitty. 47 00:02:25,960 --> 00:02:29,320 Speaker 6: He's having really a good few years, depending what timeframe 48 00:02:29,360 --> 00:02:30,840 Speaker 6: you want to use, whether you go back to the 49 00:02:30,919 --> 00:02:33,960 Speaker 6: Nicola fraud that he called out or a number of 50 00:02:33,960 --> 00:02:36,480 Speaker 6: his other big time hits. When you look at the 51 00:02:36,560 --> 00:02:39,560 Speaker 6: report from Hindenburg really kind of laying out those red 52 00:02:39,560 --> 00:02:42,160 Speaker 6: flags to Caro's point, But the big thing is that 53 00:02:42,200 --> 00:02:45,160 Speaker 6: was the day before they delayed their ten K filing, 54 00:02:45,240 --> 00:02:48,359 Speaker 6: So it has been a flurry of issues for the company. 55 00:02:48,480 --> 00:02:50,560 Speaker 6: And I know this is a name that Hindenburger in 56 00:02:50,600 --> 00:02:53,480 Speaker 6: a number of other investors both on the long end 57 00:02:53,480 --> 00:02:55,639 Speaker 6: short side, have been keeping a close eye on. Again, 58 00:02:55,760 --> 00:02:58,880 Speaker 6: just given the ascent, the rapid ascent that we saw 59 00:02:59,040 --> 00:03:01,360 Speaker 6: over the last few years and what we've seen really 60 00:03:01,360 --> 00:03:03,240 Speaker 6: play out even back since March when it hit its 61 00:03:03,240 --> 00:03:04,919 Speaker 6: all time high, baily. 62 00:03:04,639 --> 00:03:07,919 Speaker 2: Hard to answer counterfactule here, But you know, Katie and 63 00:03:07,919 --> 00:03:10,120 Speaker 2: I were kind of talking about this ahead of the 64 00:03:10,240 --> 00:03:12,240 Speaker 2: interview when we were preparing for this, in the idea 65 00:03:12,240 --> 00:03:14,840 Speaker 2: that shorts certainly play an important role here, even though 66 00:03:14,840 --> 00:03:17,680 Speaker 2: they're heavily criticized. Do you think we'd be talking about 67 00:03:17,720 --> 00:03:20,440 Speaker 2: this or do you think Ey would have resigned today 68 00:03:20,480 --> 00:03:22,760 Speaker 2: had that Hindenberg report not come out? 69 00:03:23,760 --> 00:03:25,640 Speaker 6: I think it's impossible to note tim But when you 70 00:03:25,680 --> 00:03:29,120 Speaker 6: look at it just chronologically, Hindenberger report comes out, the 71 00:03:29,280 --> 00:03:31,400 Speaker 6: next day, they come back and say, all right, we're 72 00:03:31,440 --> 00:03:33,480 Speaker 6: going to delay our filings because we need a little 73 00:03:33,480 --> 00:03:34,840 Speaker 6: bit more time to go through them. 74 00:03:35,040 --> 00:03:36,680 Speaker 2: Fast forward a month to Caro's point. 75 00:03:36,800 --> 00:03:40,080 Speaker 6: Then you have the reports of the DOJ in query 76 00:03:40,080 --> 00:03:43,880 Speaker 6: and investigation, and now ultimately Ey resigning, and you look 77 00:03:43,920 --> 00:03:46,880 Speaker 6: at the letter that Ey wrote. Whether or not Hindenburg 78 00:03:46,960 --> 00:03:49,360 Speaker 6: kick started this, I think can be debated, But if 79 00:03:49,400 --> 00:03:51,200 Speaker 6: you look at the kind of outlay and how those 80 00:03:51,240 --> 00:03:53,960 Speaker 6: events have played out, whether it was a short report 81 00:03:54,000 --> 00:03:56,200 Speaker 6: or whether this would have eventually gotten out, it does 82 00:03:56,240 --> 00:03:59,440 Speaker 6: seem at least on the margin to point towards Nate 83 00:03:59,480 --> 00:04:02,720 Speaker 6: Anderson's we're actually kickstarting what we've seen play out. 84 00:04:02,960 --> 00:04:06,839 Speaker 2: Carolyn, remind us where SMCI is in the chip ecosystem here, 85 00:04:06,960 --> 00:04:09,520 Speaker 2: because I mean, whenever talk about these companies, I feel 86 00:04:09,520 --> 00:04:12,560 Speaker 2: like I need some sort of like whiteboard that where 87 00:04:12,560 --> 00:04:16,120 Speaker 2: they play me both is TSMC. 88 00:04:16,680 --> 00:04:20,640 Speaker 3: Well, just think of them as encapsulating in video. They 89 00:04:20,760 --> 00:04:24,560 Speaker 3: basically take the Invidia chips, they circulate them in metal, 90 00:04:24,640 --> 00:04:27,760 Speaker 3: and they help install your server into your data center. 91 00:04:27,839 --> 00:04:30,159 Speaker 3: So ultimately a lot of companies and clients go to 92 00:04:30,839 --> 00:04:33,640 Speaker 3: a super Micro rather than directly to an Nvidia to 93 00:04:33,680 --> 00:04:35,840 Speaker 3: get all of their computes sorted out. They're in the 94 00:04:35,880 --> 00:04:37,800 Speaker 3: same lane as Dell. And that is why we're seeing 95 00:04:37,839 --> 00:04:40,719 Speaker 3: Dell shoot higher today because analysts saying that this is 96 00:04:40,720 --> 00:04:43,159 Speaker 3: their moment to take market share from the likes of 97 00:04:43,160 --> 00:04:45,880 Speaker 3: super Micro. And to Bailey's point, this is why it 98 00:04:46,000 --> 00:04:47,880 Speaker 3: hit an all time high earlier this year. This is 99 00:04:47,880 --> 00:04:50,000 Speaker 3: why we saw the shares at one point up fourfold 100 00:04:50,160 --> 00:04:53,120 Speaker 3: because they were integral to this whole AI Darling, Searge 101 00:04:53,160 --> 00:04:56,440 Speaker 3: and now well we're only up about what's I think, 102 00:04:56,480 --> 00:04:59,040 Speaker 3: sixteen percent year to date if you're looking at it, 103 00:04:59,080 --> 00:05:02,120 Speaker 3: and ultimately, with to see them trying to fight against 104 00:05:02,120 --> 00:05:04,719 Speaker 3: this narrative, we've got to go and make clear that 105 00:05:04,720 --> 00:05:07,640 Speaker 3: the company is saying it doesn't expect the issues will 106 00:05:07,720 --> 00:05:10,520 Speaker 3: lead to a revision and previously issued financials, and they 107 00:05:10,560 --> 00:05:13,000 Speaker 3: have begun to look for another auditor. But the share 108 00:05:13,040 --> 00:05:15,120 Speaker 3: price tells at all. And if you're looking at certain things, 109 00:05:15,120 --> 00:05:17,240 Speaker 3: we're down thirty two percent, with the lowest since January 110 00:05:17,279 --> 00:05:19,839 Speaker 3: the eighteenth of twenty twenty fourth who basically erased all 111 00:05:19,880 --> 00:05:20,680 Speaker 3: of this ye's games. 112 00:05:20,760 --> 00:05:22,840 Speaker 4: Yeah, big time and great point on Dell. You take 113 00:05:22,880 --> 00:05:24,880 Speaker 4: a look at shares right now, up about seven point 114 00:05:25,360 --> 00:05:28,800 Speaker 4: seven percent, and Bailly, you think about, of course, this 115 00:05:29,320 --> 00:05:31,320 Speaker 4: enormous I'm not gonna call it a bubble, but all 116 00:05:31,360 --> 00:05:35,400 Speaker 4: of this enthusiasm around some of these AI names, obviously 117 00:05:35,440 --> 00:05:37,640 Speaker 4: that's CATENIV for some of these short sellers. I want 118 00:05:37,680 --> 00:05:40,440 Speaker 4: to talk a little bit about Luhman because we're talking 119 00:05:40,440 --> 00:05:43,400 Speaker 4: about this great year that Nate Anderson is having over 120 00:05:43,440 --> 00:05:44,640 Speaker 4: at Hindenburg Research. 121 00:05:44,680 --> 00:05:46,120 Speaker 5: Then you think about Luhman. 122 00:05:46,240 --> 00:05:49,200 Speaker 4: Of course you had who was It was Caersdale who 123 00:05:49,240 --> 00:05:51,640 Speaker 4: took a short position in Luhmen a couple months ago. 124 00:05:52,160 --> 00:05:56,000 Speaker 4: And Luhman has really defied that. They just signed another 125 00:05:56,080 --> 00:06:00,280 Speaker 4: partnership today with AWS. The shares have done incredible over 126 00:06:00,320 --> 00:06:04,800 Speaker 4: the past couple months. So even if you have some 127 00:06:04,880 --> 00:06:06,680 Speaker 4: of these big run ups, I guess it just speaks 128 00:06:06,720 --> 00:06:09,600 Speaker 4: to how difficult a business short selling is. 129 00:06:10,560 --> 00:06:11,279 Speaker 2: Exactly, Katie. 130 00:06:11,279 --> 00:06:12,839 Speaker 6: But the one thing to keep in mind, and this 131 00:06:13,000 --> 00:06:16,560 Speaker 6: is kind of the hot debate around short sellers, is 132 00:06:16,560 --> 00:06:19,120 Speaker 6: we don't know when these active as short sellers actually 133 00:06:19,120 --> 00:06:21,800 Speaker 6: cover their positions, and we don't know whether they're taking 134 00:06:21,839 --> 00:06:24,359 Speaker 6: out and betting against the company via put options and 135 00:06:24,400 --> 00:06:26,479 Speaker 6: set about right shorting the stocks. 136 00:06:26,520 --> 00:06:27,760 Speaker 2: So it's hard to be. 137 00:06:27,760 --> 00:06:30,240 Speaker 6: Able to say whether or not, even with a super 138 00:06:30,240 --> 00:06:34,440 Speaker 6: micrown mind, Handenberg actually maximized their potential return because for 139 00:06:34,480 --> 00:06:37,440 Speaker 6: all intentsive purposes, they could have covered immediately after and 140 00:06:37,480 --> 00:06:40,200 Speaker 6: that would not be disclosed. But to your point with Luman, 141 00:06:40,320 --> 00:06:42,920 Speaker 6: with a company like Symbotic, with all of these other 142 00:06:43,000 --> 00:06:46,320 Speaker 6: AI flavors, if you will, that have drawn the ire 143 00:06:46,400 --> 00:06:50,960 Speaker 6: of short sellers, whether they're quiet investors betting against a company, 144 00:06:51,040 --> 00:06:53,760 Speaker 6: or activists who come out with these lengthy reports with 145 00:06:53,839 --> 00:06:56,640 Speaker 6: a number of allegations, it does speak back to to 146 00:06:56,680 --> 00:06:59,960 Speaker 6: your point, the difficulty for the long term short seller 147 00:07:00,240 --> 00:07:03,040 Speaker 6: to be successful, because if you go back just a 148 00:07:03,080 --> 00:07:05,360 Speaker 6: little while ago, you look at a company like Herbal Life, 149 00:07:05,360 --> 00:07:08,160 Speaker 6: that actman versus Icon narrative and how that played out, 150 00:07:08,200 --> 00:07:10,200 Speaker 6: and you kind of can ascribe that, at least at 151 00:07:10,280 --> 00:07:13,040 Speaker 6: some level to a number of these other companies that 152 00:07:13,160 --> 00:07:15,320 Speaker 6: have drawn scrutiny of those activists. 153 00:07:15,440 --> 00:07:19,080 Speaker 3: Someone's shorlting this stock, though it's twenty percent of the 154 00:07:19,320 --> 00:07:22,560 Speaker 3: outside float, is currently shulted. Someone out there is still 155 00:07:22,560 --> 00:07:23,720 Speaker 3: wedding against it head. 156 00:07:23,560 --> 00:07:26,080 Speaker 4: And they're probably feeling pretty good today. It is a 157 00:07:26,080 --> 00:07:29,240 Speaker 4: good reminder though that who knows, of course, is Hindenberg. 158 00:07:28,920 --> 00:07:30,760 Speaker 5: Is still in this stock. 159 00:07:30,880 --> 00:07:33,880 Speaker 4: But Carolin, when it comes to super Micro, you know, 160 00:07:34,200 --> 00:07:37,480 Speaker 4: as you mentioned, this timeline of these sort of accounting 161 00:07:37,560 --> 00:07:40,120 Speaker 4: questions goes back to at least twenty twenty. 162 00:07:40,680 --> 00:07:42,760 Speaker 5: What is next for this story? What should we keep 163 00:07:42,760 --> 00:07:44,040 Speaker 5: an eye on from here? 164 00:07:44,120 --> 00:07:47,440 Speaker 4: Because I don't know, you think about the reputational damage 165 00:07:47,800 --> 00:07:49,560 Speaker 4: that this company is going. 166 00:07:49,280 --> 00:07:51,600 Speaker 5: Through right now, it seems like a rocky road ahead. 167 00:07:51,720 --> 00:07:57,000 Speaker 3: November fifth, same day as then, is when they're coming 168 00:07:57,040 --> 00:08:01,440 Speaker 3: out with an updated business report. So ultimately it can't 169 00:08:01,480 --> 00:08:03,760 Speaker 3: be their financials because they're delaying their financials, but they 170 00:08:03,800 --> 00:08:05,440 Speaker 3: are going to come to the market to their investors 171 00:08:05,480 --> 00:08:07,400 Speaker 3: and give an update on November the fifth, So all 172 00:08:07,480 --> 00:08:09,800 Speaker 3: eyes on that, all eyes on whether they get another accountant. 173 00:08:09,840 --> 00:08:12,280 Speaker 5: They're trying to bury that news with the election. 174 00:08:13,800 --> 00:08:15,920 Speaker 3: Would you dare say such thing, Katie? 175 00:08:16,360 --> 00:08:18,960 Speaker 2: I know, let's not forget that this company was added 176 00:08:18,960 --> 00:08:21,040 Speaker 2: to the S and P five hundred this year, so 177 00:08:21,200 --> 00:08:23,000 Speaker 2: you know, which is a very prestigious thing, and you know, 178 00:08:23,000 --> 00:08:24,280 Speaker 2: it gets into it. 179 00:08:24,200 --> 00:08:28,080 Speaker 3: Was delisted previously, so that on its old accounting issues. 180 00:08:28,200 --> 00:08:30,160 Speaker 3: And actually that is something that's being brought up again 181 00:08:30,200 --> 00:08:33,240 Speaker 3: by analysts. I think Wujinhome over Bloomberg Intelligence is saying, look, 182 00:08:33,400 --> 00:08:35,800 Speaker 3: they need to focus on great corporate governance. We may 183 00:08:36,000 --> 00:08:38,160 Speaker 3: require a leadership change. And they're also saying, look, maybe 184 00:08:38,200 --> 00:08:41,160 Speaker 3: we will start to see an issue of delisting once again. 185 00:08:41,280 --> 00:08:42,959 Speaker 2: That's what I'm wondering if those folks over at S 186 00:08:43,000 --> 00:08:45,440 Speaker 2: and P are having like second guesses about adding it 187 00:08:45,440 --> 00:08:45,839 Speaker 2: to the S. 188 00:08:45,800 --> 00:08:48,040 Speaker 5: And P three nineteen billion dollar valuation. 189 00:08:47,840 --> 00:08:50,559 Speaker 2: Still even after today. Yeah, all right, a big thank 190 00:08:50,559 --> 00:08:52,480 Speaker 2: you to Caroline Hydeen Bailey Lipsheltz. 191 00:08:53,320 --> 00:08:56,960 Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and 192 00:08:57,080 --> 00:09:00,000 Speaker 1: Tim Steneveek on Bloomberg Radio and tele. 193 00:09:01,040 --> 00:09:04,040 Speaker 2: It is Bloomberg Business Week. That's Katie greifeld in for 194 00:09:04,360 --> 00:09:07,400 Speaker 2: Carol Nasser this afternoon. As we mentioned earlier, as slew 195 00:09:07,480 --> 00:09:10,520 Speaker 2: of economic data today showed that the economy expanded at 196 00:09:10,520 --> 00:09:13,400 Speaker 2: a robust pace in the third quarter. Inflation adjusted GDP 197 00:09:13,880 --> 00:09:17,040 Speaker 2: increased at a two point eight percent annualized rate. A 198 00:09:17,080 --> 00:09:19,440 Speaker 2: big part of that has to do with small business. 199 00:09:19,440 --> 00:09:22,520 Speaker 2: The US Chamber of Commerce reminding us that small businesses 200 00:09:22,559 --> 00:09:24,840 Speaker 2: are responsible for employing close to half of the workers 201 00:09:24,840 --> 00:09:27,400 Speaker 2: in the US and they represent more than forty percent 202 00:09:27,920 --> 00:09:32,360 Speaker 2: of GDP. Needless to say, super important to our economy. 203 00:09:32,600 --> 00:09:35,080 Speaker 2: For a temperature check of small business, we welcome back 204 00:09:35,120 --> 00:09:37,240 Speaker 2: Sharon Miller. She's president and co head of Business Banking 205 00:09:37,280 --> 00:09:40,160 Speaker 2: at Bank of America. She joins us from San Antonio. 206 00:09:40,480 --> 00:09:42,600 Speaker 2: Always good to check in with you, Sharon. You guys 207 00:09:42,600 --> 00:09:46,440 Speaker 2: do this report over at Bank of America about small business. 208 00:09:46,679 --> 00:09:50,080 Speaker 2: You get into the demographic details of how small business 209 00:09:50,120 --> 00:09:52,800 Speaker 2: owners are feeling, how they're doing, what they see coming 210 00:09:52,880 --> 00:09:56,600 Speaker 2: up ahead. Looking through the data, seems to me people 211 00:09:56,600 --> 00:09:58,080 Speaker 2: are pretty optimistic right now. 212 00:09:59,080 --> 00:10:02,679 Speaker 7: They are mean, they did maintain a very positive outlook. 213 00:10:02,720 --> 00:10:06,199 Speaker 7: I mean, as we surveyed the clients, seventy eight percent 214 00:10:06,360 --> 00:10:09,040 Speaker 7: told us that they expect their revenue to increase over 215 00:10:09,040 --> 00:10:11,720 Speaker 7: the next twelve months. So to me, that is a 216 00:10:11,760 --> 00:10:15,400 Speaker 7: good sign and there is a positive sentiment out there. 217 00:10:16,240 --> 00:10:18,679 Speaker 4: And Sharon I also thought it was interesting that, you know, 218 00:10:18,720 --> 00:10:21,480 Speaker 4: within this positive sentiment you think about what is still 219 00:10:21,840 --> 00:10:25,559 Speaker 4: an issue, and topics such as inflation, such as supply 220 00:10:25,720 --> 00:10:29,839 Speaker 4: chain issues come up, and especially with supply chain chains. 221 00:10:29,880 --> 00:10:32,040 Speaker 4: We still talk about inflation all the time, but supply 222 00:10:32,120 --> 00:10:34,600 Speaker 4: chain issues. It's a good reminder that a lot of 223 00:10:34,600 --> 00:10:36,520 Speaker 4: small business owners are still struggling with that. 224 00:10:37,640 --> 00:10:41,240 Speaker 7: They are I mean, inflation does remain the number one 225 00:10:41,360 --> 00:10:44,440 Speaker 7: concern in our survey of small business owners at baut 226 00:10:44,559 --> 00:10:48,480 Speaker 7: nine and ten told us that they saw inflation as 227 00:10:48,720 --> 00:10:51,640 Speaker 7: an issue for their business. Your right, supply chain does 228 00:10:51,960 --> 00:10:54,240 Speaker 7: pop up there, although it has gone down in the 229 00:10:54,280 --> 00:10:57,840 Speaker 7: list of concerns, but there are still concerns around supply chain. 230 00:10:58,120 --> 00:11:00,960 Speaker 7: And I'd also say to the political environment that came 231 00:11:01,000 --> 00:11:03,440 Speaker 7: in number two, which makes sense. We're in the middle 232 00:11:03,480 --> 00:11:06,440 Speaker 7: of an election year, and in fact, next week, you know, 233 00:11:06,480 --> 00:11:09,200 Speaker 7: we will know the election results and so from there 234 00:11:09,480 --> 00:11:11,760 Speaker 7: we normally see this. I mean, we've been doing this 235 00:11:11,920 --> 00:11:16,240 Speaker 7: survey over ten years and every election cycle there seems 236 00:11:16,240 --> 00:11:19,480 Speaker 7: to be you know, concern and then post that regardless 237 00:11:19,480 --> 00:11:23,040 Speaker 7: of who wins, there's certainty and people seem to move 238 00:11:23,080 --> 00:11:24,080 Speaker 7: on with their business. 239 00:11:24,720 --> 00:11:29,200 Speaker 2: So I mentioned that there's really interesting demographic information in 240 00:11:29,240 --> 00:11:32,920 Speaker 2: the survey. You guys break it down. You look at 241 00:11:33,040 --> 00:11:36,360 Speaker 2: Black and Latino business owners, you look at women business owners. 242 00:11:36,880 --> 00:11:40,160 Speaker 2: How do business owners vary based on their demographic data. 243 00:11:41,360 --> 00:11:43,960 Speaker 7: Well, I mean when we talk about women business owners, 244 00:11:43,960 --> 00:11:47,800 Speaker 7: for example, I mean they are implementing expansion strategies at 245 00:11:47,800 --> 00:11:51,080 Speaker 7: a high rate, with sixty five percent focusing on growing 246 00:11:51,120 --> 00:11:55,640 Speaker 7: their customer base. When you talk about Hispanic Latino business owners, 247 00:11:55,679 --> 00:12:00,640 Speaker 7: their confidence in the economy despite labor shortages, encourage to 248 00:12:00,760 --> 00:12:05,040 Speaker 7: obtain funding. In fact, ninety four percent of Hispanic Latinos 249 00:12:05,120 --> 00:12:09,040 Speaker 7: survey respondents told us that they expect to obtain funding 250 00:12:09,040 --> 00:12:11,320 Speaker 7: for their business to grow. And so, you know, there 251 00:12:11,320 --> 00:12:15,440 Speaker 7: are some differences, but certainly there's definitely some optimism out there, 252 00:12:15,720 --> 00:12:21,240 Speaker 7: especially in Hispanic Latino communities and also Black African American communities. 253 00:12:21,120 --> 00:12:24,400 Speaker 4: And there's also optimism in local economies. One of the 254 00:12:24,400 --> 00:12:27,680 Speaker 4: takeaways that I found interesting was that sixty six percent 255 00:12:27,720 --> 00:12:31,200 Speaker 4: that their local economy will improve, compared to sixty percent 256 00:12:31,240 --> 00:12:34,679 Speaker 4: believing that the national economy will improve. Those numbers are 257 00:12:34,679 --> 00:12:38,000 Speaker 4: fairly close sixty six to sixty percent, but still an 258 00:12:38,040 --> 00:12:40,600 Speaker 4: interesting difference there it is. 259 00:12:40,640 --> 00:12:43,319 Speaker 7: And I think, you know, as you think about smaller businesses, 260 00:12:43,360 --> 00:12:46,120 Speaker 7: and I heard as we let into this segment, just 261 00:12:46,160 --> 00:12:50,040 Speaker 7: thinking about how important small business is to the US economy. 262 00:12:50,080 --> 00:12:52,840 Speaker 7: But generally speaking, I mean, small businesses are in our 263 00:12:52,960 --> 00:12:55,840 Speaker 7: local communities and so you know, they're very close to 264 00:12:55,880 --> 00:12:58,760 Speaker 7: their local communities. I think it's important that we support 265 00:12:58,880 --> 00:13:02,360 Speaker 7: small businesses. And when you think about, you know, what 266 00:13:02,480 --> 00:13:05,360 Speaker 7: they have more control over. I do think that we 267 00:13:05,480 --> 00:13:09,840 Speaker 7: tend to see more optimism in local economies and in 268 00:13:09,880 --> 00:13:12,640 Speaker 7: their own ability to grow their business than maybe that 269 00:13:12,679 --> 00:13:15,360 Speaker 7: they think about the national or the worldwide landscape. 270 00:13:15,920 --> 00:13:19,600 Speaker 4: And Sharon put some of these numbers into historical context 271 00:13:19,600 --> 00:13:21,160 Speaker 4: for us, like you said, you know, you've been doing 272 00:13:21,160 --> 00:13:24,439 Speaker 4: the survey for about ten years. Now, how do the 273 00:13:24,520 --> 00:13:26,880 Speaker 4: numbers this year compared to the past several years. 274 00:13:27,920 --> 00:13:31,280 Speaker 7: Well, we've seen, you know, I think that the revenue expectations, 275 00:13:31,320 --> 00:13:35,000 Speaker 7: I mean, business owners in general are more optimistic, and 276 00:13:35,880 --> 00:13:38,560 Speaker 7: this year we did find a slight uptick as you 277 00:13:38,600 --> 00:13:43,040 Speaker 7: think about their plans for hiring. In fact, over half 278 00:13:43,280 --> 00:13:45,720 Speaker 7: plan to hire over the next twelve months, which is 279 00:13:45,760 --> 00:13:51,000 Speaker 7: an increase. Despite labor shortages, despite finding the right skilled labor, 280 00:13:51,400 --> 00:13:54,200 Speaker 7: people are still hiring for their business. They are expanding 281 00:13:54,240 --> 00:13:57,040 Speaker 7: and those numbers have increased, and so you know, we 282 00:13:57,200 --> 00:14:00,880 Speaker 7: have seen an uptick in the optimism of business owners 283 00:14:01,240 --> 00:14:04,920 Speaker 7: and I do think that this year's report is really 284 00:14:04,960 --> 00:14:07,480 Speaker 7: a good sign for the next twelve months to come. 285 00:14:08,280 --> 00:14:11,400 Speaker 2: Sharon Miller, President, co head of Business Banking at Bank 286 00:14:11,440 --> 00:14:14,600 Speaker 2: of America, joining us from San Antonio. A lot of 287 00:14:14,640 --> 00:14:16,320 Speaker 2: optimism coming out of that survey. 288 00:14:16,400 --> 00:14:19,040 Speaker 4: A lot of optimism. Yeah, definitely interesting to hear about 289 00:14:19,080 --> 00:14:21,120 Speaker 4: some of the nitty gritty, especially I really love the 290 00:14:21,200 --> 00:14:24,320 Speaker 4: point on the local economy versus the national economy. 291 00:14:25,520 --> 00:14:29,000 Speaker 1: You're listening to the Bloomberg Business Week podcast. Can't Us 292 00:14:29,080 --> 00:14:32,360 Speaker 1: Live weekday afternoons from two to five pm Eastern Listen 293 00:14:32,360 --> 00:14:34,560 Speaker 1: on Apple car Play and and brout Auto with a 294 00:14:34,560 --> 00:14:38,680 Speaker 1: Bloomberg Business app or want us Live on YouTube? 295 00:14:39,080 --> 00:14:41,960 Speaker 2: Well, full disclosure. People who know me, you know I 296 00:14:42,040 --> 00:14:42,760 Speaker 2: ride bikes a lot. 297 00:14:42,920 --> 00:14:43,680 Speaker 5: You certainly do. 298 00:14:44,560 --> 00:14:47,560 Speaker 2: I'm a big swift too. Zwift is well known among 299 00:14:47,640 --> 00:14:49,480 Speaker 2: cyclists as a way to train or compete when it's 300 00:14:49,520 --> 00:14:51,840 Speaker 2: too cold or rainy to go on your bike outside, 301 00:14:52,120 --> 00:14:53,800 Speaker 2: or if you want to get a quick workout. In 302 00:14:54,200 --> 00:14:56,960 Speaker 2: the Appcnnect, cyclists riding their bikes inside to real time 303 00:14:57,080 --> 00:14:59,880 Speaker 2: races and virtual worlds through a mobile device, a computer 304 00:15:00,160 --> 00:15:02,320 Speaker 2: or an Apple TV. Think about it like kind of 305 00:15:02,360 --> 00:15:06,000 Speaker 2: like gaming with your bike. The company is raised six 306 00:15:06,080 --> 00:15:10,400 Speaker 2: hundred and twenty million dollars from backers including KKR, Premiere Holdings, 307 00:15:10,400 --> 00:15:13,720 Speaker 2: Amazon's Alexa Fund, and more, giving it a market value 308 00:15:13,720 --> 00:15:15,760 Speaker 2: of more than a billion dollars. We've got with us 309 00:15:15,840 --> 00:15:17,760 Speaker 2: Eric min the co founder and CEO of Swift. He 310 00:15:17,800 --> 00:15:21,280 Speaker 2: joins us here in the Bloomberg Interactive Broker's studio. Welcome, 311 00:15:21,280 --> 00:15:21,720 Speaker 2: How are you? 312 00:15:21,840 --> 00:15:22,080 Speaker 8: Yeah? 313 00:15:22,120 --> 00:15:24,160 Speaker 2: Good, thank you for having me. Good to have you back. 314 00:15:24,200 --> 00:15:26,960 Speaker 2: A lot has happened since you last joined us on Bloomberg, Katie. 315 00:15:27,000 --> 00:15:28,080 Speaker 2: I don't know if you saw this, we got to 316 00:15:28,080 --> 00:15:29,480 Speaker 2: do this virtual ride together. 317 00:15:29,640 --> 00:15:31,960 Speaker 5: No, I remember it well. It was pretty cool. Yeah, 318 00:15:31,960 --> 00:15:33,320 Speaker 5: I thought you were going to wear the outfit. 319 00:15:33,400 --> 00:15:34,120 Speaker 2: I'm not wearing. 320 00:15:35,800 --> 00:15:36,880 Speaker 5: You got your helmet over there. 321 00:15:36,920 --> 00:15:39,520 Speaker 2: I got to helmet here. Don't need that for Swift. 322 00:15:40,520 --> 00:15:42,280 Speaker 2: But there's a lot has happened. There was a there 323 00:15:42,280 --> 00:15:44,840 Speaker 2: was a round of layoffs earlier this year a big 324 00:15:44,880 --> 00:15:48,360 Speaker 2: hardware pivot, but I think you being back as sole 325 00:15:48,480 --> 00:15:51,720 Speaker 2: CEO of the company is sort of among the biggest news. 326 00:15:52,360 --> 00:15:53,840 Speaker 2: Give us an update. How's the business going. 327 00:15:54,800 --> 00:15:57,640 Speaker 8: The business is doing really well. I mean it's it's 328 00:15:58,320 --> 00:16:01,320 Speaker 8: it's doing better than we expected. We've had some change 329 00:16:01,360 --> 00:16:05,160 Speaker 8: earlier this year and we've pivoted, and really the focus 330 00:16:05,160 --> 00:16:07,120 Speaker 8: for the business has been really around like what can 331 00:16:07,160 --> 00:16:10,320 Speaker 8: we do to supercharge our community, I think, which is 332 00:16:10,360 --> 00:16:13,800 Speaker 8: the most valuable asset that we have. So we are 333 00:16:13,840 --> 00:16:17,160 Speaker 8: a leaner team and we're finding that we're moving faster. 334 00:16:17,320 --> 00:16:21,120 Speaker 8: Of course we're doing less, but we're you know, we 335 00:16:21,240 --> 00:16:23,640 Speaker 8: get to focus on the things that I think we'll 336 00:16:23,960 --> 00:16:26,240 Speaker 8: really move the needle for us. So the business is 337 00:16:26,280 --> 00:16:29,840 Speaker 8: doing great, and you know, we launched new hardware this 338 00:16:29,920 --> 00:16:36,680 Speaker 8: year and it's it's surprisingly doing very very well, and 339 00:16:36,760 --> 00:16:39,600 Speaker 8: you know, over the next few months is really the 340 00:16:39,640 --> 00:16:40,640 Speaker 8: height of our season. 341 00:16:40,760 --> 00:16:42,200 Speaker 2: I do want to explain to people who might not 342 00:16:42,440 --> 00:16:45,280 Speaker 2: know what Swift is. When Eric says new hardware, we're 343 00:16:45,280 --> 00:16:49,760 Speaker 2: talking about an actual like bike that Zwift has released. 344 00:16:49,800 --> 00:16:52,720 Speaker 2: It's called the Swift Ride smart bike, and typically the 345 00:16:52,720 --> 00:16:55,480 Speaker 2: way that people use Swift as they hook up their 346 00:16:55,840 --> 00:16:59,000 Speaker 2: own bike to what's called a virtual or what's called 347 00:16:59,080 --> 00:17:02,120 Speaker 2: a trainer, and one that can be hooked up to 348 00:17:02,200 --> 00:17:05,800 Speaker 2: a virtual world using Bluetooth or another type of connection. 349 00:17:06,000 --> 00:17:09,560 Speaker 2: So instead of using or you're using a you're still 350 00:17:09,640 --> 00:17:12,480 Speaker 2: using a trainer with the smart bike. But what's the 351 00:17:12,520 --> 00:17:14,600 Speaker 2: idea behind a thirteen hundred dollars bike? 352 00:17:15,000 --> 00:17:18,040 Speaker 8: Yeah, I mean the price point is an important one. 353 00:17:18,240 --> 00:17:21,760 Speaker 8: It's probably less than half or third of what you 354 00:17:21,800 --> 00:17:24,119 Speaker 8: would typically pay for a smart bike, So we've i 355 00:17:24,160 --> 00:17:28,919 Speaker 8: think innovated on price. We've also developed and designed it 356 00:17:28,960 --> 00:17:31,119 Speaker 8: in a way that you can leverage existing hardwad that 357 00:17:31,160 --> 00:17:34,880 Speaker 8: you've already invested in. So what you have is essentially 358 00:17:34,880 --> 00:17:38,199 Speaker 8: a bike frame that slides onto a trainer that you 359 00:17:38,240 --> 00:17:41,159 Speaker 8: probably already purchased. The other piece of innovation that we 360 00:17:42,480 --> 00:17:45,840 Speaker 8: pushed about a year ago is what we call the ziftcog. 361 00:17:46,480 --> 00:17:50,240 Speaker 8: And you know, for non cyclis, it's very complicated to understand, 362 00:17:50,240 --> 00:17:53,199 Speaker 8: like what kind of gears you need to put on 363 00:17:53,240 --> 00:17:53,840 Speaker 8: these trainers. 364 00:17:54,200 --> 00:17:55,400 Speaker 2: We got rid of all that. 365 00:17:55,440 --> 00:17:58,439 Speaker 8: With a single cog, and then what we layered on 366 00:17:58,480 --> 00:18:02,560 Speaker 8: top of that is a a little device that can 367 00:18:02,600 --> 00:18:07,480 Speaker 8: control and create the gears virtually. And you know, Our 368 00:18:07,520 --> 00:18:10,880 Speaker 8: goal is to of course bring down the cost of 369 00:18:10,920 --> 00:18:13,199 Speaker 8: the hardware to get onto is with, but also just 370 00:18:13,240 --> 00:18:16,680 Speaker 8: to simplify the onborne experience, and that is how we 371 00:18:16,720 --> 00:18:20,160 Speaker 8: open up the market. All our studies have suggested that 372 00:18:20,480 --> 00:18:23,600 Speaker 8: those are the two drivers for holding us back from 373 00:18:23,600 --> 00:18:24,760 Speaker 8: growing even more. 374 00:18:25,000 --> 00:18:27,000 Speaker 4: Well, let's talk a little bit more about your business. 375 00:18:27,080 --> 00:18:30,119 Speaker 4: I assume you make money off of a subscription based 376 00:18:30,760 --> 00:18:33,760 Speaker 4: sort of membership. There Where are you when it comes 377 00:18:33,760 --> 00:18:35,879 Speaker 4: to membership. I think the last time you guys spoke, 378 00:18:35,920 --> 00:18:39,040 Speaker 4: you said around a million members. How has that number changed? 379 00:18:39,359 --> 00:18:43,160 Speaker 8: We're over a million. I think the pandemic that wonders 380 00:18:43,160 --> 00:18:45,400 Speaker 8: for us. It also had it was a double edged 381 00:18:45,400 --> 00:18:48,240 Speaker 8: sword because you know, of course, like many companies, we 382 00:18:48,240 --> 00:18:52,360 Speaker 8: thought the growth would continue forever. But what we're finding 383 00:18:52,400 --> 00:18:56,160 Speaker 8: today is that it's these these are we're growing. We're 384 00:18:56,200 --> 00:18:59,720 Speaker 8: certainly growing on a number of different levels, both revenue 385 00:18:59,760 --> 00:19:03,679 Speaker 8: and and subscribers. But I think, you know, to double 386 00:19:03,720 --> 00:19:05,680 Speaker 8: your business like we did during the pandemic is just 387 00:19:05,760 --> 00:19:10,160 Speaker 8: an unrealistic expectation. So we've adjusted our business to that. 388 00:19:10,760 --> 00:19:12,800 Speaker 2: One thing that you've also done within the last year 389 00:19:12,880 --> 00:19:15,520 Speaker 2: is actually increased prices. I believe since the first time 390 00:19:15,600 --> 00:19:18,560 Speaker 2: since twenty seventeen, So for years it costs about fifteen 391 00:19:18,560 --> 00:19:21,080 Speaker 2: bucks a month. Now it's twenty dollars per month. If 392 00:19:21,520 --> 00:19:27,120 Speaker 2: not an annual membership, that's a monthly membership. How did 393 00:19:27,119 --> 00:19:28,960 Speaker 2: members respond? What has churn been like? 394 00:19:29,200 --> 00:19:32,160 Speaker 8: Well, you know, I don't think anyone likes price increases, 395 00:19:32,359 --> 00:19:35,639 Speaker 8: let's be honest, right, But I think I certainly we 396 00:19:35,680 --> 00:19:38,280 Speaker 8: feel very good about it. The value that we offer 397 00:19:38,800 --> 00:19:42,720 Speaker 8: to our community at twenty dollars a month and two 398 00:19:42,840 --> 00:19:46,399 Speaker 8: hundred for the year, is is really good value given 399 00:19:46,640 --> 00:19:48,199 Speaker 8: you know, all the other products that are out there 400 00:19:48,200 --> 00:19:53,040 Speaker 8: and the experiences that we offer. But you know, look, 401 00:19:53,720 --> 00:19:56,960 Speaker 8: things have gotten more expensive since since twenty seventeen. We've 402 00:19:57,000 --> 00:20:00,680 Speaker 8: not raised the prices, and I remember reading from community 403 00:20:00,680 --> 00:20:04,200 Speaker 8: members saying, hey, you should have just increased prices incrementally. Well, 404 00:20:04,240 --> 00:20:06,800 Speaker 8: we would have actually collected more revenues had you done that. 405 00:20:07,720 --> 00:20:10,639 Speaker 8: But we felt that the timing was right for us 406 00:20:10,680 --> 00:20:15,119 Speaker 8: to increase the price. And I think the customers have 407 00:20:15,240 --> 00:20:16,760 Speaker 8: largely voted with their wallets. 408 00:20:17,200 --> 00:20:18,720 Speaker 2: Any more price shikes on the horizon. 409 00:20:19,880 --> 00:20:23,520 Speaker 8: Look, you know, things, I would never say that there 410 00:20:23,520 --> 00:20:27,639 Speaker 8: will never be future price hikes, you know, I think 411 00:20:27,760 --> 00:20:30,680 Speaker 8: the five dollars move on a relative basis is big. 412 00:20:31,480 --> 00:20:33,399 Speaker 8: If we do have future price PRIs I think we 413 00:20:33,400 --> 00:20:36,240 Speaker 8: should do it more incrementally, like I see from Netflix 414 00:20:36,320 --> 00:20:37,200 Speaker 8: almost every year. 415 00:20:37,760 --> 00:20:40,160 Speaker 4: Well, i'd love to talk about, you know what went 416 00:20:40,680 --> 00:20:44,200 Speaker 4: into that, Like Tim mentioned first price sikes since twenty seventeen, 417 00:20:44,560 --> 00:20:46,440 Speaker 4: what did that decision. 418 00:20:46,000 --> 00:20:46,679 Speaker 5: Try look like? 419 00:20:46,760 --> 00:20:50,040 Speaker 4: Because you think about everything that's happened since twenty seventeen, 420 00:20:50,520 --> 00:20:54,240 Speaker 4: it's exhausting and it's been a really strange economic moment. 421 00:20:55,440 --> 00:20:59,639 Speaker 8: Well, we delayed and delayed our price increase, and I 422 00:21:00,160 --> 00:21:02,479 Speaker 8: we've done this twice before. Every time we've done a 423 00:21:02,480 --> 00:21:05,840 Speaker 8: price increase. The you know how we feel about it 424 00:21:05,880 --> 00:21:09,640 Speaker 8: is we should have done it much earlier. And you know, look, 425 00:21:09,680 --> 00:21:13,320 Speaker 8: things do get more expensive. Our costs have gone up, 426 00:21:13,359 --> 00:21:15,480 Speaker 8: and we haven't passed that on to our customers. The 427 00:21:15,520 --> 00:21:19,240 Speaker 8: product is vastly improved since twenty seventeen, So we feel 428 00:21:19,280 --> 00:21:21,320 Speaker 8: really good about it and we stand behind it when 429 00:21:21,359 --> 00:21:23,760 Speaker 8: we you know, we were committed to making that change. 430 00:21:24,040 --> 00:21:25,680 Speaker 2: Yeah, that's actually one thing that I that I haven't 431 00:21:25,720 --> 00:21:28,960 Speaker 2: talked about the heads of display the world. There's been 432 00:21:29,040 --> 00:21:32,240 Speaker 2: a lot of changes to the gaming environment since I 433 00:21:32,320 --> 00:21:35,320 Speaker 2: started swifting, which was during the pandemic. Personally, I don't 434 00:21:35,359 --> 00:21:37,800 Speaker 2: see myself. That's the main way I actually ride and 435 00:21:37,840 --> 00:21:40,520 Speaker 2: get exercised because I have two little kids and going 436 00:21:40,560 --> 00:21:42,159 Speaker 2: on a five hour bike ride on a Saturday like 437 00:21:42,200 --> 00:21:42,720 Speaker 2: I used to do. 438 00:21:42,760 --> 00:21:43,840 Speaker 5: Your wife isn't into that. 439 00:21:44,080 --> 00:21:47,040 Speaker 2: She's just not feasible right now. So swift is where 440 00:21:47,040 --> 00:21:49,680 Speaker 2: I do it. You run a lot here I do. 441 00:21:50,040 --> 00:21:54,000 Speaker 2: Are you a Strava person? No, okay, that's interesting, she's 442 00:21:54,040 --> 00:21:54,919 Speaker 2: a garment person. 443 00:21:55,080 --> 00:21:57,320 Speaker 5: I feel like I killed a line of questioning. You 444 00:21:57,320 --> 00:21:57,800 Speaker 5: were about to go. 445 00:21:58,000 --> 00:21:59,880 Speaker 2: That's fine, I'm going to turn this way. I'll talk 446 00:22:00,320 --> 00:22:03,119 Speaker 2: about it. You did. One thing I noticed recently with 447 00:22:03,160 --> 00:22:07,800 Speaker 2: Strava is that an AI sort of integration that they're 448 00:22:07,920 --> 00:22:12,280 Speaker 2: experimenting with. How are you using AI? You recently launched 449 00:22:12,440 --> 00:22:15,600 Speaker 2: for me recently virtual Ride Partners, which I find a 450 00:22:15,640 --> 00:22:17,840 Speaker 2: really helpful thing for me. So this is like a 451 00:22:17,880 --> 00:22:22,280 Speaker 2: pacer that will kind of go at a specific speed 452 00:22:23,160 --> 00:22:24,879 Speaker 2: that you can keep up with, and it's really helpful 453 00:22:24,920 --> 00:22:28,879 Speaker 2: for training and for riding. How are you thinking about AI? 454 00:22:29,359 --> 00:22:34,719 Speaker 8: So we already use AI in our engineering development, so 455 00:22:35,320 --> 00:22:37,760 Speaker 8: that's already been happening. I think in terms of how 456 00:22:38,840 --> 00:22:43,720 Speaker 8: we can expose these types of technology for consumer related features. 457 00:22:44,920 --> 00:22:48,600 Speaker 8: We're absolutely thinking about that, and the two obvious places 458 00:22:48,720 --> 00:22:52,840 Speaker 8: will be the conversational you know AI experience that you know, 459 00:22:52,840 --> 00:22:54,919 Speaker 8: for example, Strava is doing, and I think that's going 460 00:22:55,000 --> 00:22:58,480 Speaker 8: to be table stakes for many many products. You know, 461 00:22:58,560 --> 00:23:01,640 Speaker 8: it's not going to be something you know, so innovative, 462 00:23:02,960 --> 00:23:05,320 Speaker 8: we have to offer it. And I think the other 463 00:23:05,480 --> 00:23:09,159 Speaker 8: opportunity for us and others is just using machine learning 464 00:23:09,200 --> 00:23:12,800 Speaker 8: to to figure out exactly what to offer in terms 465 00:23:12,800 --> 00:23:16,640 Speaker 8: of content and when and with whom. That I think 466 00:23:16,760 --> 00:23:18,080 Speaker 8: is the next innovation. 467 00:23:18,160 --> 00:23:21,000 Speaker 2: That's more like an Instagram timeline approach, where it like 468 00:23:21,040 --> 00:23:23,159 Speaker 2: serves you what you think you are yes. 469 00:23:22,960 --> 00:23:25,720 Speaker 8: Yes, yes, And I think you know it can factor 470 00:23:25,800 --> 00:23:29,400 Speaker 8: into you know, your usage behavior, who your friends are, 471 00:23:30,119 --> 00:23:32,679 Speaker 8: when you know, what kind of events you like, what 472 00:23:32,800 --> 00:23:35,440 Speaker 8: kind of fitness you have today, and we can serve 473 00:23:35,560 --> 00:23:37,480 Speaker 8: up the right content at the right time. I think 474 00:23:37,480 --> 00:23:42,320 Speaker 8: that that is innovation that no one has really you know, 475 00:23:43,040 --> 00:23:46,000 Speaker 8: produced yet, but that's an exciting opportunity for us. 476 00:23:46,080 --> 00:23:49,800 Speaker 4: What about AI and coaching, I asked, because I think 477 00:23:49,800 --> 00:23:54,040 Speaker 4: about myself, you know, my world revolves around me, and 478 00:23:54,080 --> 00:23:56,439 Speaker 4: the thing that I miss about college is having a 479 00:23:56,480 --> 00:23:58,119 Speaker 4: coach and I was part of a running club, but 480 00:23:58,560 --> 00:24:01,520 Speaker 4: it was just too much, so I sort of like 481 00:24:01,600 --> 00:24:03,520 Speaker 4: making up my own training plans. I could see a 482 00:24:03,560 --> 00:24:06,520 Speaker 4: lot of value in having an AI coach be able 483 00:24:06,520 --> 00:24:09,480 Speaker 4: to see your stats, see what you're doing, and suggest workouts. 484 00:24:09,640 --> 00:24:11,560 Speaker 8: Let's face it, if you can afford it, you'd rather 485 00:24:11,680 --> 00:24:14,520 Speaker 8: have a human coach right right, because they will motivate 486 00:24:14,520 --> 00:24:16,960 Speaker 8: you more than any any tool that you have in 487 00:24:17,000 --> 00:24:18,800 Speaker 8: front of you. But I think the two pieces that 488 00:24:18,840 --> 00:24:21,679 Speaker 8: I just mentioned to you, which is like a conversation 489 00:24:21,760 --> 00:24:25,040 Speaker 8: about how you did with your workout, and then the 490 00:24:25,320 --> 00:24:28,600 Speaker 8: AI to tell you exactly what you should recommend next, 491 00:24:28,800 --> 00:24:32,840 Speaker 8: those two pieces should in theory represent you know, a 492 00:24:32,920 --> 00:24:36,320 Speaker 8: replacement for an expensive coach, and that I think is 493 00:24:36,320 --> 00:24:40,439 Speaker 8: a solution for you know, the ninety five percent of 494 00:24:40,480 --> 00:24:44,400 Speaker 8: the customer base. Yeah, the five percent should and will 495 00:24:44,440 --> 00:24:47,320 Speaker 8: continue to invest in, you know, human coaches. 496 00:24:47,480 --> 00:24:49,720 Speaker 2: Two hundred to two hundred and fifty dollars three hundred 497 00:24:49,720 --> 00:24:52,680 Speaker 2: dollars a month more by the way, for a coach, 498 00:24:53,240 --> 00:24:55,359 Speaker 2: a coach that you've never met. And just like puts, 499 00:24:55,480 --> 00:24:56,520 Speaker 2: you know thatts in. 500 00:24:56,520 --> 00:24:59,000 Speaker 4: Swift and so I mean I just I you know, 501 00:24:59,040 --> 00:25:00,840 Speaker 4: I'm not like I'm not going to the Olympics. 502 00:25:01,119 --> 00:25:02,480 Speaker 2: You did go to the Olympics. 503 00:25:02,080 --> 00:25:02,720 Speaker 5: There, I did not. 504 00:25:03,080 --> 00:25:06,000 Speaker 4: I didn't compete at I'm devastated to say. It feels 505 00:25:06,000 --> 00:25:09,080 Speaker 4: like a steep bill for my ambitions. 506 00:25:09,640 --> 00:25:13,520 Speaker 2: Eric, I'm wondering about competition here because you guys were 507 00:25:14,160 --> 00:25:16,440 Speaker 2: pretty much the only game in town for a while 508 00:25:16,600 --> 00:25:19,680 Speaker 2: with what you did. At least Copy Trainer was around before. 509 00:25:19,800 --> 00:25:23,240 Speaker 2: But just this week, Training Peaks bought Indie Vello and 510 00:25:23,280 --> 00:25:26,080 Speaker 2: now they have Training Peaks Virtual. I remember before I 511 00:25:26,200 --> 00:25:28,680 Speaker 2: joined Strava, I used Training Peaks and I quit Training 512 00:25:28,680 --> 00:25:31,359 Speaker 2: Peaks during the pandemic to go to Swift excuse me, 513 00:25:31,400 --> 00:25:36,080 Speaker 2: not Strava. How are you thinking about competition right now. 514 00:25:36,480 --> 00:25:40,919 Speaker 8: Well, we have a lot of competition. It's not surprising 515 00:25:41,760 --> 00:25:46,119 Speaker 8: and we've had it all along. I think the Training 516 00:25:46,119 --> 00:25:50,520 Speaker 8: Peaks and indievelop makes absolute sense for Training Peaks. I mean, 517 00:25:50,560 --> 00:25:54,639 Speaker 8: we are partners with many different training platforms that are 518 00:25:54,640 --> 00:25:57,840 Speaker 8: out there. We launched something called the Training API, and 519 00:25:57,960 --> 00:26:03,560 Speaker 8: we've onboarded multiple training apps. So we continue to will 520 00:26:03,600 --> 00:26:08,359 Speaker 8: continue to be a platform where coaches and these coaching 521 00:26:08,400 --> 00:26:13,480 Speaker 8: apps can push activities and event you know, activities where 522 00:26:13,480 --> 00:26:16,240 Speaker 8: you can actually do the event on swift, so that 523 00:26:16,280 --> 00:26:20,080 Speaker 8: won't change. It'll be really and I don't know the 524 00:26:20,119 --> 00:26:23,280 Speaker 8: strategy behind training peaks and what they'll do with in 525 00:26:23,359 --> 00:26:26,040 Speaker 8: development doesn't really change what we need to focus on 526 00:26:26,760 --> 00:26:30,880 Speaker 8: and our focus is really to do everything to continue 527 00:26:30,920 --> 00:26:34,639 Speaker 8: to add value and features for a community. That's really 528 00:26:34,680 --> 00:26:36,280 Speaker 8: the important asset that we have. 529 00:26:36,640 --> 00:26:39,000 Speaker 4: Wellt's talk a little bit more about the future. This 530 00:26:39,080 --> 00:26:41,840 Speaker 4: is something I love to ask private companies. Are you 531 00:26:41,920 --> 00:26:45,639 Speaker 4: thinking about IPO? Would you be open to either acquiring 532 00:26:45,640 --> 00:26:47,920 Speaker 4: a business or being acquired? What are you thinking about 533 00:26:47,960 --> 00:26:48,800 Speaker 4: along those lines? 534 00:26:50,080 --> 00:26:54,400 Speaker 8: I think we should always look at opportunities to acquire merge. 535 00:26:55,160 --> 00:26:57,600 Speaker 8: Those are opportunities we should be looking at all the time. 536 00:26:58,000 --> 00:27:01,880 Speaker 8: In terms of you know, you know, what is our 537 00:27:02,440 --> 00:27:05,679 Speaker 8: end goal in terms of like a liquidity event, I 538 00:27:05,680 --> 00:27:08,800 Speaker 8: think that just will take some time. But I think 539 00:27:08,800 --> 00:27:11,960 Speaker 8: we all have aspirations of being a public listic company. 540 00:27:12,280 --> 00:27:14,960 Speaker 8: Whether that happens you know, in three years or five years, 541 00:27:15,160 --> 00:27:18,159 Speaker 8: I don't know whether you know, we do that alone 542 00:27:18,240 --> 00:27:20,760 Speaker 8: or we do it with with others. You know, these 543 00:27:20,760 --> 00:27:23,440 Speaker 8: are all I think things time will only tell and 544 00:27:23,560 --> 00:27:29,280 Speaker 8: how that unfolds. But absolutely our board, my co founders, 545 00:27:29,400 --> 00:27:34,560 Speaker 8: my management team, and investors have big aspirations for this business, 546 00:27:34,560 --> 00:27:38,240 Speaker 8: so that hasn't changed. It's just timing, is everything right. 547 00:27:38,600 --> 00:27:40,520 Speaker 2: I mentioned that you raised more than six hundred million 548 00:27:40,560 --> 00:27:44,240 Speaker 2: dollars since inception. Last time you and I spoke, you 549 00:27:44,280 --> 00:27:47,320 Speaker 2: said you didn't need to raise money in the near future. Yeah, 550 00:27:47,359 --> 00:27:49,399 Speaker 2: how's the cash balance looking right now? 551 00:27:49,400 --> 00:27:55,280 Speaker 8: We're very fortunate. We we we didn't spend all that capital, 552 00:27:55,880 --> 00:27:59,000 Speaker 8: so we have a pretty strong balance sheet. I don't 553 00:27:59,000 --> 00:28:01,920 Speaker 8: think we need to raise any more capital. That's helpful, 554 00:28:01,960 --> 00:28:06,280 Speaker 8: and that gives us ever ever, I just don't yeah ever, 555 00:28:06,920 --> 00:28:09,879 Speaker 8: which is great. It gives us a lot of optionality. 556 00:28:11,160 --> 00:28:13,520 Speaker 8: But you know, look, having just a lot of cash 557 00:28:13,520 --> 00:28:16,600 Speaker 8: doesn't help either. We need to deploy it and smartly, 558 00:28:16,680 --> 00:28:20,360 Speaker 8: and we need to think of how we can leverage 559 00:28:20,359 --> 00:28:22,240 Speaker 8: that to build a business. 560 00:28:22,480 --> 00:28:25,280 Speaker 2: Last question, how do you you know the cycling business? 561 00:28:25,320 --> 00:28:27,720 Speaker 2: There's a ceiling there. There are only so many people 562 00:28:28,320 --> 00:28:31,439 Speaker 2: who want to be riding bikes in their basement. How 563 00:28:31,440 --> 00:28:32,480 Speaker 2: do you get people like Katie? 564 00:28:33,720 --> 00:28:35,960 Speaker 8: Well, first you have to get rid of the basement 565 00:28:36,080 --> 00:28:38,880 Speaker 8: or the garage thing. And that's why we launched the ride. 566 00:28:39,040 --> 00:28:43,720 Speaker 8: It's beautiful, it's in white. We deliberately picked white instead 567 00:28:43,760 --> 00:28:47,640 Speaker 8: of black because in our testing it resonated really well 568 00:28:47,680 --> 00:28:48,680 Speaker 8: with the with women. 569 00:28:48,720 --> 00:28:49,280 Speaker 2: It's interesting. 570 00:28:49,360 --> 00:28:53,240 Speaker 8: Yeah, and I think you know, we're not just going 571 00:28:53,240 --> 00:28:57,280 Speaker 8: after cyclists. We're going after people who want to exercise 572 00:28:57,480 --> 00:29:01,000 Speaker 8: and who want to get fit and cycling the indoor 573 00:29:01,000 --> 00:29:03,239 Speaker 8: bike and cycling in general happens to be just a 574 00:29:03,280 --> 00:29:05,880 Speaker 8: great activity. You can do it for a long time. 575 00:29:05,920 --> 00:29:09,120 Speaker 8: It's low impact, and you have access with your hands, 576 00:29:09,120 --> 00:29:11,560 Speaker 8: and you can get engaged with an experience like Swift, 577 00:29:12,240 --> 00:29:15,360 Speaker 8: So it's not just for cyclist. We hope that the 578 00:29:15,400 --> 00:29:17,719 Speaker 8: bike really opens up the addressable. 579 00:29:17,160 --> 00:29:20,320 Speaker 2: Market for us. Eric Min always good to see you. 580 00:29:20,440 --> 00:29:21,800 Speaker 8: Yeah, thank you for coming. 581 00:29:21,600 --> 00:29:23,760 Speaker 2: By when you're in New York. Really appreciated. Eric Min 582 00:29:23,800 --> 00:29:26,400 Speaker 2: is the co founder and CEO of Swift. He joins 583 00:29:26,480 --> 00:29:31,200 Speaker 2: us here in the Bloomberg Interactive Brokers studio. All right, Well, 584 00:29:31,600 --> 00:29:34,320 Speaker 2: one person who didn't expect to be talking to the 585 00:29:34,360 --> 00:29:37,200 Speaker 2: CEO of Swift when she came on our program today 586 00:29:37,400 --> 00:29:40,120 Speaker 2: is Amanda Robello. She's head of Extrackers Sales over at 587 00:29:40,240 --> 00:29:43,360 Speaker 2: US on Shores over at DWS Group. She normally focuses 588 00:29:43,360 --> 00:29:45,400 Speaker 2: on China, but I found out from Eric that you're 589 00:29:45,440 --> 00:29:47,040 Speaker 2: actually a swifter too. 590 00:29:47,240 --> 00:29:48,600 Speaker 9: I'm gonna convert Katie. 591 00:29:48,760 --> 00:29:51,440 Speaker 2: Oh yeah, yeah, it's for women as well. 592 00:29:51,440 --> 00:29:55,080 Speaker 9: It's fantastic and I definitely had some really wonderful experiences 593 00:29:55,120 --> 00:29:57,960 Speaker 9: during the pandemic. I was already into cycling. It helped 594 00:29:58,000 --> 00:30:00,240 Speaker 9: me train for a ride from London to Paris when 595 00:30:00,280 --> 00:30:02,760 Speaker 9: I was sure shut time. So yeah, I'm all for it. 596 00:30:02,920 --> 00:30:03,960 Speaker 5: That is so cool. 597 00:30:04,760 --> 00:30:05,960 Speaker 2: You never know who you're going to meet in the 598 00:30:06,000 --> 00:30:06,720 Speaker 2: green room, you. 599 00:30:06,640 --> 00:30:10,680 Speaker 5: Never know, the interactive broker studio, you never know. 600 00:30:10,760 --> 00:30:13,800 Speaker 2: You never know. Amanda, Let's talk a little bit about 601 00:30:13,880 --> 00:30:16,120 Speaker 2: what's going on in China. You were on with us, 602 00:30:16,200 --> 00:30:19,080 Speaker 2: or I should say with Carol and Barry at future 603 00:30:19,120 --> 00:30:24,040 Speaker 2: Proof back in September, and a lot has changed in 604 00:30:24,160 --> 00:30:27,200 Speaker 2: terms of how investors are thinking about China, how the 605 00:30:27,280 --> 00:30:31,520 Speaker 2: Chinese government is using stimulus money or not using stimulus 606 00:30:31,600 --> 00:30:34,200 Speaker 2: money to stimulate different parts of the economy. What's your 607 00:30:34,280 --> 00:30:36,120 Speaker 2: view on investing in China right now. 608 00:30:36,360 --> 00:30:39,000 Speaker 9: Yeah, it's incredible the tailwinds that we've seen in China 609 00:30:39,040 --> 00:30:41,080 Speaker 9: over the past couple of weeks. So we've actually been 610 00:30:41,160 --> 00:30:44,280 Speaker 9: very fortunate to see one point six billion dollars worth 611 00:30:44,280 --> 00:30:46,640 Speaker 9: of AUM go into our asher ETF It's kind of 612 00:30:46,640 --> 00:30:49,440 Speaker 9: a price discovery tool in the market for lack of 613 00:30:49,520 --> 00:30:52,920 Speaker 9: like a decent future basically. But what's interesting is that 614 00:30:52,960 --> 00:30:56,520 Speaker 9: we haven't just seen fast money you go into the ETF. 615 00:30:57,280 --> 00:30:59,640 Speaker 9: Really it's down to the fact that you know, I 616 00:30:59,640 --> 00:31:01,760 Speaker 9: think in the year we did see some of the 617 00:31:01,800 --> 00:31:07,080 Speaker 9: wire houses, for example, maybe neutralize their bullish tone on China. 618 00:31:07,840 --> 00:31:10,240 Speaker 9: The Chinese government has been very aware and has continued, 619 00:31:10,240 --> 00:31:12,720 Speaker 9: you know, over the past decade with things like the 620 00:31:12,760 --> 00:31:16,920 Speaker 9: Connect program to while it doesn't really need foreign investment, 621 00:31:17,040 --> 00:31:19,240 Speaker 9: you know, to try and stimulate that a little bit more. 622 00:31:19,640 --> 00:31:21,320 Speaker 9: And so in light of the fact that they have 623 00:31:21,400 --> 00:31:27,000 Speaker 9: been like outflows internationally for internationally from Chinese equities, you know, 624 00:31:27,240 --> 00:31:30,160 Speaker 9: very aware of maybe some of the cynicisms that they 625 00:31:30,160 --> 00:31:34,440 Speaker 9: have been amongst Western investors in China. We all know 626 00:31:34,560 --> 00:31:37,640 Speaker 9: that the GDP growth rate had beforehand been six point 627 00:31:37,680 --> 00:31:40,920 Speaker 9: five percent. That was reduced down to five percent, and 628 00:31:40,960 --> 00:31:43,840 Speaker 9: there were some concerns about whether the five percent was achievable. 629 00:31:44,440 --> 00:31:46,960 Speaker 9: So these stimulus measures are very much about confirming to 630 00:31:47,080 --> 00:31:50,360 Speaker 9: the market that that is feasible. That started off about 631 00:31:50,360 --> 00:31:52,520 Speaker 9: three weeks ago at the you know, prior to the 632 00:31:52,520 --> 00:31:57,720 Speaker 9: Golden Week where we had cuts on the reserve requirement 633 00:31:57,920 --> 00:32:01,120 Speaker 9: ratio and then also the seven days repo rate as well. 634 00:32:01,400 --> 00:32:03,400 Speaker 9: And so what that did was that freed up about 635 00:32:03,400 --> 00:32:07,160 Speaker 9: one trillion new one of bank capital. What's been really 636 00:32:07,200 --> 00:32:09,960 Speaker 9: interesting is that that's not just been about corporate lending 637 00:32:10,000 --> 00:32:12,760 Speaker 9: for example, or you know, commercial real estate lending. It's 638 00:32:12,800 --> 00:32:15,680 Speaker 9: also trickled down to the retail market. And so what 639 00:32:15,720 --> 00:32:17,880 Speaker 9: you've seen then is that mortgage rates ended up being 640 00:32:17,920 --> 00:32:21,640 Speaker 9: cut typically by around fifty basis points or so, and 641 00:32:21,680 --> 00:32:23,920 Speaker 9: that had freed up about one hundred and fifty billion 642 00:32:24,000 --> 00:32:27,120 Speaker 9: U one for the retail investor ultimately spend. 643 00:32:27,360 --> 00:32:29,760 Speaker 4: So, well, let's talk a little bit about China in 644 00:32:29,800 --> 00:32:31,760 Speaker 4: the context of the US election. 645 00:32:32,000 --> 00:32:33,640 Speaker 5: Yeah, just six days away. 646 00:32:33,920 --> 00:32:34,920 Speaker 2: Uh, the countdown. 647 00:32:35,480 --> 00:32:38,440 Speaker 5: I know, I've been counting down since like forty seven days. 648 00:32:38,760 --> 00:32:43,040 Speaker 2: So yeah, for some reason, this week just seems really long. 649 00:32:43,240 --> 00:32:43,600 Speaker 6: It does. 650 00:32:44,480 --> 00:32:45,240 Speaker 9: It's only Wednesday. 651 00:32:46,640 --> 00:32:50,840 Speaker 4: It does feel like a long week. Next week is 652 00:32:50,880 --> 00:32:52,480 Speaker 4: going to feel long as well. And you think about, 653 00:32:52,560 --> 00:32:57,040 Speaker 4: of course, these two parties. It's pretty you know, across 654 00:32:57,080 --> 00:33:00,360 Speaker 4: the aisle, this sort of haarkish tone on China, and 655 00:33:00,480 --> 00:33:03,640 Speaker 4: from the perspective of the Western investor coming into the 656 00:33:03,680 --> 00:33:06,160 Speaker 4: Chinese market, I wonder how that factors in. 657 00:33:06,440 --> 00:33:09,040 Speaker 9: Yeah, it's super interesting because you know, especially always in 658 00:33:09,080 --> 00:33:11,120 Speaker 9: these weeks in the run up to election, you start 659 00:33:11,160 --> 00:33:14,320 Speaker 9: to see these kind of dichotomized views basically. And what's 660 00:33:14,360 --> 00:33:16,760 Speaker 9: been really interesting about China. You would think, you know, 661 00:33:16,840 --> 00:33:19,560 Speaker 9: if we were speaking six months ago, that you know, 662 00:33:20,000 --> 00:33:23,040 Speaker 9: being long China might be a more pro Harris kind 663 00:33:23,040 --> 00:33:27,080 Speaker 9: of stance, and then you know, being short China would 664 00:33:27,080 --> 00:33:30,480 Speaker 9: be more a pro Trump stance. But in reality, actually 665 00:33:30,520 --> 00:33:32,400 Speaker 9: we've not seen too much wavering in terms of those 666 00:33:32,400 --> 00:33:35,680 Speaker 9: flows that we've been seeing, which which is surprising. Touchwood 667 00:33:35,720 --> 00:33:37,680 Speaker 9: that continues over the next few days. But I think 668 00:33:37,680 --> 00:33:39,520 Speaker 9: that even you know, Trump came out with this comment 669 00:33:39,600 --> 00:33:43,120 Speaker 9: about you know that she respects him because he knows 670 00:33:43,120 --> 00:33:45,080 Speaker 9: he's crazy kind of right, So either way, it was 671 00:33:45,120 --> 00:33:48,040 Speaker 9: like a positive tone really on China, his words, not yours. 672 00:33:48,080 --> 00:33:53,040 Speaker 2: Yes, Yeah, So I was thinking about this recently because 673 00:33:53,640 --> 00:33:58,440 Speaker 2: Elon Musk has turned into this figure in the Republican Party, 674 00:33:58,640 --> 00:34:01,520 Speaker 2: especially over the last few weeks. Yeah, giving so much 675 00:34:01,560 --> 00:34:06,040 Speaker 2: money to the Superpack doing the sweepstakes in Pennsylvania, and 676 00:34:06,120 --> 00:34:10,040 Speaker 2: he has a unique relationship with China because of Tesla's 677 00:34:10,080 --> 00:34:14,239 Speaker 2: operations in China. Yeah, and I find that sort of 678 00:34:14,280 --> 00:34:16,680 Speaker 2: adding to the story of him and Trump being kind 679 00:34:16,719 --> 00:34:21,600 Speaker 2: of strange bedfellows because Elon has to stay on China's 680 00:34:21,640 --> 00:34:24,200 Speaker 2: good side, and I'm wondering if having him as a 681 00:34:24,280 --> 00:34:29,560 Speaker 2: voice close to the former president and perhaps future president 682 00:34:30,320 --> 00:34:32,400 Speaker 2: might be a bullish sign for China. 683 00:34:32,760 --> 00:34:36,560 Speaker 9: I think that what Mask kind of understands is that, 684 00:34:37,200 --> 00:34:39,400 Speaker 9: you know, in the past year, basically we've seen like 685 00:34:39,480 --> 00:34:42,480 Speaker 9: sanctions not just from the US but also from Europe 686 00:34:42,480 --> 00:34:45,560 Speaker 9: as well in terms of Chinese goods, and so most 687 00:34:45,960 --> 00:34:50,400 Speaker 9: likely understands that if China's antagonized, there could be like 688 00:34:50,480 --> 00:34:54,160 Speaker 9: further sanctions on like selling US evs into China, which 689 00:34:54,200 --> 00:34:56,800 Speaker 9: is still a big market. Right. We talk about declining population, 690 00:34:57,200 --> 00:34:59,560 Speaker 9: but it's still over a billion, right, still three times 691 00:34:59,600 --> 00:35:02,200 Speaker 9: bigger than in the US. That's still a lot of 692 00:35:02,239 --> 00:35:05,919 Speaker 9: consumers that you know are a target market. I think 693 00:35:06,000 --> 00:35:09,359 Speaker 9: then perhaps supplicate this a little bit. We do have 694 00:35:09,520 --> 00:35:14,200 Speaker 9: like some conversations with clients about thinking about DMX China. 695 00:35:14,239 --> 00:35:16,880 Speaker 9: We've been speaking a lot about EMX China, and so 696 00:35:17,480 --> 00:35:19,919 Speaker 9: we are very aware of the fact that a lot 697 00:35:19,960 --> 00:35:23,200 Speaker 9: of US equity names, a lot of DEVELOPM market global 698 00:35:23,520 --> 00:35:27,560 Speaker 9: equity names have this intrinsic link to revenues from China too, 699 00:35:28,480 --> 00:35:31,160 Speaker 9: you know, supply chains from China which Musk is reliant on. 700 00:35:31,560 --> 00:35:33,680 Speaker 9: And so if you do have this very strong view 701 00:35:33,719 --> 00:35:36,320 Speaker 9: tim of like, you know what, if the pipe gets 702 00:35:36,480 --> 00:35:40,400 Speaker 9: cut right, then CRTC is probably our best solution for that. 703 00:35:41,120 --> 00:35:43,000 Speaker 4: When it comes to investing in China though, you know, 704 00:35:43,000 --> 00:35:46,160 Speaker 4: I think about twenty twenty two and the narrative there 705 00:35:46,280 --> 00:35:48,480 Speaker 4: was that you were going to have this fantastic reopening 706 00:35:48,520 --> 00:35:51,160 Speaker 4: in China. It's going to lift their markets, their risk assets. 707 00:35:51,440 --> 00:35:53,200 Speaker 4: It did not turn out that way. You take a 708 00:35:53,200 --> 00:35:55,960 Speaker 4: look at what the CSI three hundred did in twenty 709 00:35:56,000 --> 00:35:59,600 Speaker 4: twenty two, down nearly twenty eight percent, down down another 710 00:35:59,680 --> 00:36:03,799 Speaker 4: fourteen teen percent in twenty twenty three, and I just 711 00:36:04,160 --> 00:36:07,640 Speaker 4: when it comes to investors, do they feel burned by 712 00:36:07,640 --> 00:36:10,319 Speaker 4: that experience? Do they feel shy about that experience because 713 00:36:10,360 --> 00:36:13,600 Speaker 4: you just saw a massive inflows into Chinese ETFs that year, 714 00:36:13,640 --> 00:36:15,960 Speaker 4: and then it took a long time to see the 715 00:36:15,960 --> 00:36:18,680 Speaker 4: flows start coming in in this current episode of optimism. 716 00:36:18,840 --> 00:36:21,600 Speaker 9: Yeah, that's absolutely a fair comment. We did see short 717 00:36:21,640 --> 00:36:25,160 Speaker 9: positions earlier on in the year, but what's been fantastic 718 00:36:25,200 --> 00:36:27,560 Speaker 9: to see is that actually the CSI three hundred year 719 00:36:27,600 --> 00:36:31,480 Speaker 9: to date is up fifteen percent, and actually from the 720 00:36:31,480 --> 00:36:35,440 Speaker 9: lows of February it's up thirty percent. So we do 721 00:36:35,560 --> 00:36:38,200 Speaker 9: see that the market is having conviction in the Chinese 722 00:36:38,239 --> 00:36:40,800 Speaker 9: economy again, at least bringing it back to a neutral 723 00:36:40,840 --> 00:36:42,600 Speaker 9: position rather than an overweight position. 724 00:36:43,239 --> 00:36:45,879 Speaker 4: And just quickly here, we don't have much time left, 725 00:36:45,920 --> 00:36:47,200 Speaker 4: but I do want to broaden out. I do want 726 00:36:47,239 --> 00:36:48,839 Speaker 4: to talk a little bit about the bond market because 727 00:36:48,840 --> 00:36:52,000 Speaker 4: I'm taking a look at your notes. You make the 728 00:36:52,080 --> 00:36:54,960 Speaker 4: case for high yield bond. What is the case for 729 00:36:55,040 --> 00:36:55,960 Speaker 4: high yield bonds? 730 00:36:56,080 --> 00:36:59,279 Speaker 9: Yeah, so we know that the FOMC is meeting next week, 731 00:36:59,320 --> 00:37:01,520 Speaker 9: we will have an invasion of what's going to happen 732 00:37:01,560 --> 00:37:05,239 Speaker 9: in the direction of travel five percent, That kind of 733 00:37:05,239 --> 00:37:07,920 Speaker 9: five handle became like, you know, the norm for us 734 00:37:07,960 --> 00:37:10,120 Speaker 9: for a little while, right in terms of yield in 735 00:37:10,200 --> 00:37:14,160 Speaker 9: portfolios just from having a cash allocation, and so clearly 736 00:37:14,200 --> 00:37:17,200 Speaker 9: that's not you know, reliable anymore. And so what we 737 00:37:17,320 --> 00:37:20,440 Speaker 9: see with investors on the insurance side, on the pension 738 00:37:20,440 --> 00:37:23,400 Speaker 9: fund side in particular where there's liability management to consider, 739 00:37:23,640 --> 00:37:27,840 Speaker 9: but also within retail searching for income is moving down 740 00:37:28,320 --> 00:37:31,239 Speaker 9: the credit spectrum and we do actually think that high 741 00:37:31,320 --> 00:37:34,600 Speaker 9: quality high yield makes sense just in light of the 742 00:37:34,600 --> 00:37:37,480 Speaker 9: fact that you've basically seen a harving of default rates 743 00:37:37,719 --> 00:37:39,200 Speaker 9: over the last eighteen months. 744 00:37:39,400 --> 00:37:43,160 Speaker 5: High quality, high yield, It's no naximorantem. 745 00:37:42,360 --> 00:37:45,000 Speaker 2: Okay, I'll take it. There you go, Amanda Rabello, thanks 746 00:37:45,000 --> 00:37:46,920 Speaker 2: for stopping by, Thank you for having me. Good to 747 00:37:46,920 --> 00:37:49,440 Speaker 2: see you. Amanda's head of X Trackers Sales US on 748 00:37:49,480 --> 00:37:52,319 Speaker 2: shore over at DWS Groups. She joins us here in 749 00:37:52,360 --> 00:37:54,640 Speaker 2: the Bloomberg Interactive Brokers Studio. 750 00:37:55,200 --> 00:38:00,120 Speaker 1: This is the Bloomberg Business Week podcast on Spotify and 751 00:38:00,239 --> 00:38:04,319 Speaker 1: anywhere else you get your podcasts. Listen live weekday afternoons 752 00:38:04,320 --> 00:38:07,320 Speaker 1: from two to five pm Eastern on Bloomberg dot Com, 753 00:38:07,360 --> 00:38:10,680 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business App. 754 00:38:10,760 --> 00:38:13,719 Speaker 1: You can also watch us live every weekday on YouTube 755 00:38:13,920 --> 00:38:15,920 Speaker 1: and always on the Bloomberg terminal.