WEBVTT - Stocks in Record Territory, Reddit IPO Reaction

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News. Good morning, I'm Nathan

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<v Speaker 1>Hager and I'm Karen Moscow. Here are the stories we're

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<v Speaker 1>following today.

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<v Speaker 2>Stocks are closing out the weekend record fashion optimism that

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<v Speaker 2>the FED will be able to engineer a soft landing

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<v Speaker 2>propelled the S and P five hundred to its twentieth

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<v Speaker 2>record this year. The Nasdaq one hundred also hit an

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<v Speaker 2>all time high. Cheryl Smith is portfolio manager at Trillia

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<v Speaker 2>Masset Management.

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<v Speaker 3>Equity market wants to believe, and wants to believe hard,

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<v Speaker 3>and is looking for every possible sign to go higher.

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<v Speaker 3>The fact is that we are twenty four months into

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<v Speaker 3>a FED tightening cycle, and that is about when we

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<v Speaker 3>normally see interest rate hikes begin to really affect the

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<v Speaker 3>economy truly.

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<v Speaker 2>Massive Management's Cheryl Smith notes, in just three months, the

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<v Speaker 2>S and P five hundred is already trading above the

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<v Speaker 2>average year end forecast of strategists tracked by Bloomberg Well Nathan.

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<v Speaker 1>Helping to fuel optimism was another successful trading debut of

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<v Speaker 1>an IPO social media company. Reddit rose forty eight percent yesterday.

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<v Speaker 1>Chief operating officer Jen Wong says the artificial revolution is

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<v Speaker 1>at the center of reddits value proposition.

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<v Speaker 4>Large language models need data to train on, and when

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<v Speaker 4>you look at Reddit's corpus nineteen years of human experience

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<v Speaker 4>organized by topic with well in moderation and relevance, that's

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<v Speaker 4>incredibly important to building both a chat capability and the

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<v Speaker 4>freshness of information. So that's an area where you know,

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<v Speaker 4>we see opportunity.

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<v Speaker 1>And Reddit's gen Wong Kele's Bloomberg. The firm is also

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<v Speaker 1>in the early stages of allowing third parties to license

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<v Speaker 1>access to data on the platform.

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<v Speaker 2>In yesterday's closing price of fifty dollars and forty four cents, Karen,

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<v Speaker 2>Reddit has a market value of eight billion dollars includes

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<v Speaker 2>stock options and restricted share units. The company's fully diluted

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<v Speaker 2>valuation runs closer to nine and a half billion. Bloomberg

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<v Speaker 2>and Elligence analyst man Deep Singh explains what going public

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<v Speaker 2>means for Reddit as.

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<v Speaker 5>A public company. I think they'll be forced to improve

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<v Speaker 5>their act in terms of, you know, showing more profitability.

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<v Speaker 5>I don't think there is scare in terms of cash

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<v Speaker 5>burn or you know, them running out of money. They've

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<v Speaker 5>got a perfectly fine balance sheet, but now it's all

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<v Speaker 5>about showing monetization. And the LM. The generator bi aspect

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<v Speaker 5>is huge.

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<v Speaker 2>Bloomberg Intelligence analyst man Deep Sing argued even before the

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<v Speaker 2>pricing that Reddit could be worth as much as ten

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<v Speaker 2>billion dollars.

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<v Speaker 1>On Nathan, several stocks are on the move this morning.

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<v Speaker 1>Shares of FedEx at more than twelve percent. Cost cutting

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<v Speaker 1>help the courier deliver better than expected earnings. FedEx also

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<v Speaker 1>plans to buy back five billion dollars of its shares.

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<v Speaker 2>On the flip side, Careen shares of Lululemon are down

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<v Speaker 2>nearly thirteen percent. The athletic maker forecast lower than expected

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<v Speaker 2>sales outlook for the first quarter and the full year.

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<v Speaker 2>Lulu says visits to its stores in the US slowed

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<v Speaker 2>at the beginning of the year.

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<v Speaker 1>Also lower this morning. Shares of Nike they are down

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<v Speaker 1>almost seven percent this morning Nathan, the world's largest sports

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<v Speaker 1>where retailer, warning investors that sales will take a hit

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<v Speaker 1>later this year. Nike says it's working to realign merchandise

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<v Speaker 1>to better match what shoppers want.

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<v Speaker 2>To buy, and investors have also taken a big bite

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<v Speaker 2>out of Apple's market value. In fact, that dropped one

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<v Speaker 2>hundred and thirteen billion dollars yesterday. This latest slide comes

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<v Speaker 2>after Attorney General Merrick Garland announced an antitrust lawsuit against

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<v Speaker 2>the company, accusing it of blocking rivals from accessing hardware

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<v Speaker 2>and software features on the iPhone.

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<v Speaker 6>We allege that Apple has employed a strategy that relies

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<v Speaker 6>on exclusionary, anti competitive conduct that hurts both consumers and developers.

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<v Speaker 6>For consumers, that has meant fewer choices, higher prices and fees,

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<v Speaker 6>lower quality smartphones, apps and accessories, and less innovation from

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<v Speaker 6>Apple and its competitors.

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<v Speaker 2>In Merrick Garland's Justice Department lawsuit has been strongly refuted

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<v Speaker 2>by Apple. It says it is wrong on the facts

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<v Speaker 2>and the law on we.

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<v Speaker 1>Turn to the economy Nathan and criticism of the Federal

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<v Speaker 1>Reserve by a former Treasury secretary, Larry Summers is questioning

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<v Speaker 1>why the Fed is continuing to signal that it's prepared

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<v Speaker 1>to lower interest rates despite a strong economy that's giving

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<v Speaker 1>off projections of still too high inflation.

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<v Speaker 7>My sense is still that the Fed is itchy fingers

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<v Speaker 7>to start cutting rates, and I don't fully get it.

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<v Speaker 7>I don't know why we're in such a hurry to

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<v Speaker 7>be talking about moving towards the accelerator.

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<v Speaker 1>And Larry Summers added that the Fed's current neutral policy

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<v Speaker 1>rate is more restrictive than it needs to be. Here

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<v Speaker 1>the full conversation on Bloomberg Wall Street Week today at

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<v Speaker 1>six pm Wall Street Time, on Bloomberg Radio and television on.

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<v Speaker 2>Capitol Hill, Karen. Another partial government shut down deadline is

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<v Speaker 2>just hours away. Funds run out for about seventy percent

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<v Speaker 2>of federal agencies at midnight tonight, but later this morning,

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<v Speaker 2>the House will vote on a one point two trillion

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<v Speaker 2>dollar measure to keep them open through the end of September.

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<v Speaker 2>Speaker Mike Johnson's bringing this bill up under a streamlined

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<v Speaker 2>process that requires two thirds support. Bloomberg's Kate Actly reports

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<v Speaker 2>the clock is ticking.

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<v Speaker 8>There's this sort of the pressure building two week recess

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<v Speaker 8>on the horizon. Everybody wants to get back to their districts. Yes,

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<v Speaker 8>it could fall apart, of course, but we have seen

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<v Speaker 8>them again and again try to wrap things up so

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<v Speaker 8>that they don't in an election year, you know, sort

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<v Speaker 8>of draw attention to the dysfunction of government.

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<v Speaker 2>Bloomberg's Kate Actly reports some Republicans are crying foul over

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<v Speaker 2>the process. Speaker Johnson is bypassing a House rule that

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<v Speaker 2>gives lawmakers seventy two hours to review a bill before

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<v Speaker 2>they vote on it.

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<v Speaker 1>Well, now, Nathan, to the latest on the war in

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<v Speaker 1>the Middle Age. There are signs of progress toward a

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<v Speaker 1>possible Gaza peace agreement. At the same time, there are

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<v Speaker 1>threats of an invasion of Rolfa on Bloomberg's and Baxter

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<v Speaker 1>has the details.

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<v Speaker 9>Delegations from Israel, the US, Cutter, and Egypt will meet

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<v Speaker 9>today to try to draw up a plan so that

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<v Speaker 9>the invasion does not have to happen. But Israel's Minister

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<v Speaker 9>for Strategic Affairs, Ron Dermer, on a US podcast, hamas

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<v Speaker 9>infrastructure remains in Rava.

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<v Speaker 10>Which you saw in October seventh, was a genocidal force

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<v Speaker 10>that wants to wipe out all the Jews. And it's

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<v Speaker 10>the first program that we've had since the birth of

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<v Speaker 10>the State of Israel. We have the ability to defend ourselves.

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<v Speaker 11>He says.

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<v Speaker 9>If there is not a peace deal, the assault will happen.

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<v Speaker 9>Ed Baxter, Bloomberg Radio, All right.

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<v Speaker 1>Ed, thank you, and it's time now for a look

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<v Speaker 1>at some of the other stories making news in New

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<v Speaker 1>York and around the world. And for that we're joined

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<v Speaker 1>by Bloomberg's Michael Varr Michael, good Morning.

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<v Speaker 11>Good Morning, Karon, and battled New Jersey Senator Bob Menendez

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<v Speaker 11>says he won't be seeking re election as a Democrat,

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<v Speaker 11>but is keeping the door open to an independent run

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<v Speaker 11>for his seat. Menendez and his wife Nadine are facing

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<v Speaker 11>federal corruption charges. Prosecutors alleged they took gifts in exchange

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<v Speaker 11>for doing official favors for the governments of Egypt and Cutter.

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<v Speaker 11>In the video he posted on social media, Menendez talented

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<v Speaker 11>the work he's done in the Senate and declared his

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<v Speaker 11>innocence on churges.

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<v Speaker 12>This would allow me the time to not only remind

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<v Speaker 12>New Jerseyans of how I've succeeded in being your champion,

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<v Speaker 12>but how we will secure our financial futures, meet the

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<v Speaker 12>challenges of raising a family, owning a home, provide for

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<v Speaker 12>a college education, and secure a more peaceful world for

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<v Speaker 12>all of us to live in.

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<v Speaker 11>If Menendez does run as an independent, he would face

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<v Speaker 11>one of two Democratic candidates in November, Governor Phil Murphy's

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<v Speaker 11>wife Tammy Murphy, or Representative Andy Kim. Russian missile and

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<v Speaker 11>drone attacks damage electricity and transmission systems in several Ukrainian regions,

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<v Speaker 11>causing power cuts in some areas. Two New York City

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<v Speaker 11>squatters wanted for murder are being sought in Pennsylvania. It

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<v Speaker 11>began last week when fifty two year old Nadia Vittel

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<v Speaker 11>arrived from Spain the check on her deceased mother's luxury

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<v Speaker 11>Manhattan apartment. Police say she encountered two squatters, a man

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<v Speaker 11>and a woman living in the apartment. Police say a

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<v Speaker 11>struggle broke out. The tail was thrown into a sheet

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<v Speaker 11>rock wall and died from blunt forced trauma to her head.

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<v Speaker 11>Her body was stuffed in a Duffel bag and put

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<v Speaker 11>in a closet. The victim's son came to check on her,

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<v Speaker 11>only to discover a foot sticking out of the Duffel bag.

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<v Speaker 11>The building superintendent says the sun then called authorities.

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<v Speaker 13>We directed them to the closet because all the clothes

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<v Speaker 13>had been pulled out, and he said there was a

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<v Speaker 13>bag underneath it, and he said, can you open the

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<v Speaker 13>bag because I believed as a body in there.

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<v Speaker 11>It's believed the suspected squanders took the Dell's car and

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<v Speaker 11>fled to Pennsylvania. Adult film actress Stormy Daniel says she

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<v Speaker 11>is absolutely ready to testify against her former President Trump

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<v Speaker 11>in his New York hush money criminal trial. Daniel says,

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<v Speaker 11>though she's somewhat surprised by the strong threats she's received

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<v Speaker 11>after the case was announced.

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<v Speaker 3>Suddenly the indictment happens and all of this stuff and

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<v Speaker 3>it was just as why I it was like twenty

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<v Speaker 3>eighteen all over again, except now they're more vicious.

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<v Speaker 11>Stormy. Daniel spoke on ABC's The View Global News twenty

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<v Speaker 11>four hours a day and whenever you want it with

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<v Speaker 11>the Bloomberg News. Now, I'm Michael Barr, and this is Bloomberg. Hearin.

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<v Speaker 1>All right, Michael, thank you. Time now for the Bloomberg

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<v Speaker 1>Sports Update, brought to you by Tri State Audian.

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<v Speaker 14>For that, we bring in John Stanshower. John, good morning,

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<v Speaker 14>Good morning Karen. First round is what makes the NCAA

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<v Speaker 14>tournament so special. So we see it every year, smaller

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<v Speaker 14>schools who play in small James, very often not on TV.

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<v Speaker 14>The players don't get nil money, and the upset a heavyweight.

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<v Speaker 14>We saw two years ago with Saint Peter's last year,

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<v Speaker 14>Fairley Dickinson and last night the Cinderella Slipper belonged to

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<v Speaker 14>Oakland University from Rochester, Michigan, a loser of eleven games,

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<v Speaker 14>a fourteen seed who had never before won an NCAA

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<v Speaker 14>first round game, The Golden Grizzlies knocked off Kentucky eighty

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<v Speaker 14>to seventy six. Jack Goldkie scored thirty two, made ten

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<v Speaker 14>threes and has asked how David go live.

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<v Speaker 15>Obviously we come in were the underdog by all measures,

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<v Speaker 15>but you just gotta as a player, you can't think

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<v Speaker 15>that way. You got to go out there and you

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<v Speaker 15>got to think that you have the same talent level

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<v Speaker 15>as them. I know they have draft picks, and I

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<v Speaker 15>know I'm not going to the NBA, but I know

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<v Speaker 15>on any given night, I can compete with those type

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<v Speaker 15>of guys, and our team can compete with those type

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<v Speaker 15>of guys.

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<v Speaker 16>As for Saint Peter's no run this year, they lost

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<v Speaker 16>by thirty four to Tennessee. Wagner lost to North Carolina

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<v Speaker 16>by twenty eight. Dan Monson now joins the unemployment line.

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<v Speaker 16>He got fired by Long Beach State, but his team

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<v Speaker 16>surprisingly won the Big West Turney. They then lost to

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<v Speaker 16>Arizona by twenty The Knicks lost in Denver, won thirteen

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<v Speaker 16>to one hundred too much. Nicola Jochus thirty points triple double.

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<v Speaker 16>Jalen Brunson scored twenty six. He averaged thirty seven a

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<v Speaker 16>game on the road trip that saw the Knicks go

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<v Speaker 16>three and one. They're back home tomorrow afternoon to play

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<v Speaker 16>the Nets, who lost their fifth in a row one

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<v Speaker 16>fifteen to one oh eight in Milwaukee. Rangers won five

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<v Speaker 16>to two in Boston Artemi Panera and two goals in

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<v Speaker 16>the second period. Adam Fox snapped at two all time

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<v Speaker 16>in the third, and the Rangers then with two empty netters,

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<v Speaker 16>the second one by Pinera and to complete the hat trick.

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<v Speaker 16>He's now the fifth leading score in the NHL. Islanders

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<v Speaker 16>lost six to three at Detroit. Devil's beat Winnipeg four

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<v Speaker 16>to one. The NFL says it will not outlaw the

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<v Speaker 16>quarterback sneak Push Push John Stashcheller Bloomberg.

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<v Speaker 17>Sports Coast to coast on Bloomberg Radio, nationwide on Sirius XM,

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<v Speaker 17>and around the world on Bloomberg dot Com, Bloomberg Television

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<v Speaker 17>and the Bloomberg Business app. This is Bloomberg Daybreak. Good morning.

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<v Speaker 17>I'm Nathan Hager.

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<v Speaker 2>Social media company read It made its much anticipated trading

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<v Speaker 2>debut yesterday, marking the fourth largest initial public offering on

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<v Speaker 2>a US exchange this year. Shares swored forty eight percent

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<v Speaker 2>above their IPO price, closing at fifty dollars forty four cents.

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<v Speaker 2>Investors are betting big on Reddit's vision of profit from

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<v Speaker 2>the growth in artificial intelligence. Reddit's chief operating officer, Jen

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<v Speaker 2>Wong joined Bloomberg's Caroline Hyde and Ed Ludlow to talk

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<v Speaker 2>about how Reddit plans to leverage AI to increase its

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<v Speaker 2>value and how going public is giving the company plenty

0:12:01.080 --> 0:12:01.760
<v Speaker 2>of momentum.

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<v Speaker 4>Well, it's certainly a lot of press on a day

0:12:05.400 --> 0:12:08.920
<v Speaker 4>like today, it is a special day. But becoming a

0:12:08.920 --> 0:12:12.200
<v Speaker 4>public company has just made us a better company. We've

0:12:12.200 --> 0:12:16.160
<v Speaker 4>actually been in this process longer than most almost two

0:12:16.240 --> 0:12:19.839
<v Speaker 4>years actually, and that process has made us more disciplined,

0:12:20.280 --> 0:12:24.160
<v Speaker 4>more operationally rigorous, and actually allowed us to get to

0:12:24.240 --> 0:12:28.120
<v Speaker 4>know investors better and tell our story. And so this

0:12:28.240 --> 0:12:31.400
<v Speaker 4>whole process has made us a better company, and we're

0:12:31.400 --> 0:12:33.840
<v Speaker 4>prepared to be a public company. I think it's actually

0:12:33.880 --> 0:12:38.360
<v Speaker 4>been really good for us, and I think companies that

0:12:38.640 --> 0:12:39.520
<v Speaker 4>you can.

0:12:39.800 --> 0:12:41.880
<v Speaker 18>Go public it's sort of a duty.

0:12:41.880 --> 0:12:45.240
<v Speaker 4>It's part of the you know, process of maturing as

0:12:45.280 --> 0:12:45.840
<v Speaker 4>a company.

0:12:46.240 --> 0:12:47.640
<v Speaker 18>And then the benefit of.

0:12:47.600 --> 0:12:52.240
<v Speaker 4>Having our sharehold our employee employees have liquidity which we

0:12:52.320 --> 0:12:55.520
<v Speaker 4>promise to them, and in addition, have our communities and

0:12:55.640 --> 0:12:57.280
<v Speaker 4>users be able to be shareholders.

0:12:57.520 --> 0:12:58.920
<v Speaker 18>Makes a lot of sense for Reddit.

0:12:59.720 --> 0:13:03.040
<v Speaker 19>The evolution of the story is for you moving away

0:13:03.080 --> 0:13:06.800
<v Speaker 19>from a solely advertising based business model to one way

0:13:06.840 --> 0:13:10.440
<v Speaker 19>you license your user data to the companies that are

0:13:10.440 --> 0:13:13.240
<v Speaker 19>building large language models. I just asked if you could

0:13:13.280 --> 0:13:16.240
<v Speaker 19>explain to our audience how that works in practice, how

0:13:16.280 --> 0:13:17.720
<v Speaker 19>you're going to grow that business.

0:13:18.360 --> 0:13:21.679
<v Speaker 4>Yeah, Well, just ahead of addressing that, I just wanted

0:13:21.720 --> 0:13:24.880
<v Speaker 4>to write context. One of the things that's so special

0:13:24.880 --> 0:13:29.320
<v Speaker 4>about Reddit is that we play in three big addressable markets.

0:13:29.400 --> 0:13:32.600
<v Speaker 4>We have this core advertising business. Adds is a great business,

0:13:32.679 --> 0:13:35.239
<v Speaker 4>it's still early, we have great traction and momentum.

0:13:35.440 --> 0:13:36.560
<v Speaker 18>That's our core business.

0:13:36.920 --> 0:13:39.520
<v Speaker 4>We have an emerging data licensing business that we built

0:13:39.520 --> 0:13:42.719
<v Speaker 4>the foundations for last year because Reddit's corpus of information

0:13:43.280 --> 0:13:47.000
<v Speaker 4>is incredibly important to the training of large language models

0:13:47.160 --> 0:13:50.280
<v Speaker 4>and also for insights for different kinds of businesses. And

0:13:50.320 --> 0:13:54.120
<v Speaker 4>the third is a user economy where our communities go

0:13:54.160 --> 0:13:57.240
<v Speaker 4>beyond conversation and to be able to transact with each other.

0:13:57.440 --> 0:13:59.679
<v Speaker 4>Now you asked about the data licensing business, which we

0:13:59.720 --> 0:14:01.560
<v Speaker 4>built the foundations for last year.

0:14:01.880 --> 0:14:03.240
<v Speaker 18>That has two pieces to it.

0:14:03.400 --> 0:14:05.800
<v Speaker 4>It is a piece that's sort of well established, where

0:14:06.040 --> 0:14:10.719
<v Speaker 4>there's social listening for marketing for companies who want to

0:14:10.760 --> 0:14:12.440
<v Speaker 4>understand what's happening on reddits.

0:14:12.120 --> 0:14:13.480
<v Speaker 18>And for marketing campaigns.

0:14:13.640 --> 0:14:16.760
<v Speaker 4>There's also financial services companies who are interested in that.

0:14:16.800 --> 0:14:20.520
<v Speaker 4>Those are well established markets. And then there's the new

0:14:20.640 --> 0:14:25.880
<v Speaker 4>emerging market of AI where large language models need data

0:14:25.960 --> 0:14:28.160
<v Speaker 4>to train on. And when you look at Reddit's corpus,

0:14:28.600 --> 0:14:34.040
<v Speaker 4>nineteen years of human experience organized by topic with well

0:14:34.200 --> 0:14:38.760
<v Speaker 4>in moderation and relevance, that's incredibly important to building both

0:14:38.760 --> 0:14:42.840
<v Speaker 4>a chat capability and the freshness of information. So that's

0:14:42.880 --> 0:14:45.640
<v Speaker 4>an area where you know, we see opportunity. I think

0:14:45.680 --> 0:14:47.800
<v Speaker 4>what that signals, you know, whether it shows up honestly

0:14:47.800 --> 0:14:49.800
<v Speaker 4>in our revenue or it shows up in the value

0:14:49.800 --> 0:14:52.920
<v Speaker 4>of Reddit is how valuable Reddit is? You know, the

0:14:53.000 --> 0:14:56.320
<v Speaker 4>more that we move toward this AI world, that corpus

0:14:56.320 --> 0:15:00.000
<v Speaker 4>and that knowledge and refreshment of human experience becomes more valuable.

0:15:00.240 --> 0:15:03.200
<v Speaker 20>Those lms, the models are being built a new and

0:15:03.600 --> 0:15:08.880
<v Speaker 20>different ways. This actual technology also develops. I'm interested as

0:15:08.880 --> 0:15:11.120
<v Speaker 20>to really whether this goes on in perpetuity. Do you

0:15:11.160 --> 0:15:15.880
<v Speaker 20>see this sort of licensing being steady and secure for ten.

0:15:15.760 --> 0:15:16.360
<v Speaker 18>Years from now?

0:15:16.680 --> 0:15:21.600
<v Speaker 4>This is so early in this emergence of this technology,

0:15:21.960 --> 0:15:24.840
<v Speaker 4>it's hard to see far out. The way I think

0:15:24.880 --> 0:15:27.240
<v Speaker 4>about it, the way we think about it is this,

0:15:27.640 --> 0:15:30.440
<v Speaker 4>the redd Its corpus of data is incredibly valuable, and

0:15:30.480 --> 0:15:35.520
<v Speaker 4>it gets more valuable because as there's more more content

0:15:35.560 --> 0:15:40.040
<v Speaker 4>that's generated, maybe by AI or computers, original human thoughts

0:15:40.040 --> 0:15:43.560
<v Speaker 4>and ideas increase in value. Right if you think about it,

0:15:43.800 --> 0:15:46.120
<v Speaker 4>a new car comes out, who's going to review it?

0:15:46.440 --> 0:15:47.640
<v Speaker 18>A real life.

0:15:47.400 --> 0:15:49.600
<v Speaker 4>Family of six can actually tell you what it's like

0:15:49.680 --> 0:15:53.280
<v Speaker 4>to drive that car. That's always going to be valuable.

0:15:53.640 --> 0:15:55.600
<v Speaker 4>And so you know, whether that shows up in data

0:15:55.640 --> 0:15:59.120
<v Speaker 4>licensing or in the products that Reddit built, it is valuable.

0:16:02.000 --> 0:16:05.080
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