1 00:00:00,120 --> 00:00:04,360 Speaker 1: Bloomberg is now on your dashboard with Apple CarPlay and 2 00:00:04,360 --> 00:00:08,160 Speaker 1: Android Auto. It gives you access to every Bloomberg podcast, 3 00:00:08,280 --> 00:00:11,560 Speaker 1: live audio feeds from Bloomberg Radio, print stories from Bloomberg 4 00:00:11,640 --> 00:00:14,920 Speaker 1: News in audio form, and the latest headlines of the 5 00:00:14,920 --> 00:00:18,640 Speaker 1: click of a button with Bloomberg News. Now it's free 6 00:00:18,680 --> 00:00:21,439 Speaker 1: with the latest version of the Bloomberg Business App. That's 7 00:00:21,680 --> 00:00:24,400 Speaker 1: the Bloomberg Business App. Get it on your phone in 8 00:00:24,440 --> 00:00:27,760 Speaker 1: the Apple App Store or on Google Play. Just download 9 00:00:27,800 --> 00:00:30,560 Speaker 1: the app, connect your phone to your car and get started. 10 00:00:30,960 --> 00:00:34,400 Speaker 1: And it's all presented by our sponsor, Interactive Brokers. 11 00:00:35,400 --> 00:00:38,600 Speaker 2: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 12 00:00:38,640 --> 00:00:39,720 Speaker 2: my co host Matt Miller. 13 00:00:40,200 --> 00:00:44,279 Speaker 1: Every business day we bring you interviews from CEOs, market pros, 14 00:00:44,320 --> 00:00:48,160 Speaker 1: and Bloomberg experts, along with essential market movin news. 15 00:00:48,720 --> 00:00:51,839 Speaker 2: Find the Bloomberg Markets podcast called Apple Podcasts or wherever 16 00:00:51,960 --> 00:00:55,080 Speaker 2: you listen to podcasts, and at Bloomberg dot com slash podcast. 17 00:00:55,240 --> 00:00:58,000 Speaker 2: All right, let's get out to Vegas to the Craps Table, Bellagio, 18 00:00:58,640 --> 00:01:00,600 Speaker 2: the high Rollers Craft Table, which is where I tend 19 00:01:00,600 --> 00:01:05,600 Speaker 2: to sit. Ed Ludlow's out there ostensibly at the CES 20 00:01:05,720 --> 00:01:07,960 Speaker 2: Converence the Consumer Electronics Show. Wheres I like to call 21 00:01:08,000 --> 00:01:11,920 Speaker 2: it the auto show with some gadgets around it. Edward, 22 00:01:12,600 --> 00:01:16,319 Speaker 2: what's the buzz out there in Vegas this year? Is 23 00:01:16,360 --> 00:01:19,640 Speaker 2: it pretty much AI driven across the board? 24 00:01:21,920 --> 00:01:22,160 Speaker 3: Yeah. 25 00:01:22,280 --> 00:01:24,440 Speaker 4: I put a newsletter or a column out this morning 26 00:01:24,560 --> 00:01:27,880 Speaker 4: saying it's AI everywhere, and not necessarily in the ways 27 00:01:27,920 --> 00:01:30,240 Speaker 4: you'd expect, just almost like you just said, there is 28 00:01:30,280 --> 00:01:32,840 Speaker 4: a heavy automotive presence here, and we can get into that. 29 00:01:33,000 --> 00:01:35,240 Speaker 4: But I think there are two kind of key things 30 00:01:35,280 --> 00:01:38,399 Speaker 4: you're seeing. This kind of abstract conversation around AI and 31 00:01:38,440 --> 00:01:42,600 Speaker 4: particularly generative AI, translate into real world things. So, for example, 32 00:01:42,680 --> 00:01:45,960 Speaker 4: I spent the afternoon yesterday with Walmart, and if you 33 00:01:46,000 --> 00:01:48,240 Speaker 4: are an iOS user, you have an iPhone, you bring 34 00:01:48,320 --> 00:01:50,800 Speaker 4: up your Walmart app. You no longer have to search 35 00:01:50,920 --> 00:01:55,600 Speaker 4: for hot dog buns or beer specifically by brand. What 36 00:01:55,640 --> 00:01:57,720 Speaker 4: you can do is go into their generative AI tool 37 00:01:57,880 --> 00:02:02,080 Speaker 4: and say I am hosting a Super Bowl weekend party, 38 00:02:02,520 --> 00:02:05,120 Speaker 4: what should I buy? And it will list a complete 39 00:02:05,120 --> 00:02:07,720 Speaker 4: shopping cart for you, ready to go. Then you have 40 00:02:07,720 --> 00:02:09,040 Speaker 4: the option to click it. So that's kind of a 41 00:02:09,080 --> 00:02:12,800 Speaker 4: real world manifestation of AI. I know what, who needs that? Actually? 42 00:02:12,800 --> 00:02:15,560 Speaker 2: It works really well for the demo, like the Englishman 43 00:02:16,120 --> 00:02:20,120 Speaker 2: the English DA hosting the Super Bowl party. 44 00:02:21,960 --> 00:02:24,160 Speaker 4: Guys, as you know, I am a fair Weather forty 45 00:02:24,240 --> 00:02:29,600 Speaker 4: nine have no interest, but it's an interesting experiment to do. 46 00:02:30,040 --> 00:02:31,880 Speaker 4: The Other side of it as well, is that there 47 00:02:31,880 --> 00:02:35,799 Speaker 4: are dozens of pieces of consumer devices or hardware where 48 00:02:35,840 --> 00:02:38,120 Speaker 4: the selling point is AI and that looks different in 49 00:02:38,160 --> 00:02:39,079 Speaker 4: different ways. 50 00:02:39,400 --> 00:02:42,160 Speaker 5: Making it easier for us a shop and spend money. 51 00:02:43,560 --> 00:02:47,519 Speaker 5: And so Paul had mentioned about how there's more car 52 00:02:47,560 --> 00:02:50,239 Speaker 5: companies there. Car is a big thing. We spoke yesterday 53 00:02:50,240 --> 00:02:53,480 Speaker 5: about this Goodyear tire that was released. If you could 54 00:02:53,480 --> 00:02:55,359 Speaker 5: tell us a little bit more about this, because I 55 00:02:55,360 --> 00:02:58,640 Speaker 5: hadn't even realized that that EVS really we're and tearing 56 00:02:58,639 --> 00:02:59,680 Speaker 5: those tires a lot faster. 57 00:03:02,040 --> 00:03:02,280 Speaker 6: Yeah. 58 00:03:02,280 --> 00:03:04,800 Speaker 4: Something that happened just before the pandemic is that the 59 00:03:04,880 --> 00:03:07,880 Speaker 4: kind of classic car shows think about the Detroit Auto 60 00:03:08,000 --> 00:03:10,720 Speaker 4: Show or the munich Auto Show had kind of lost 61 00:03:10,720 --> 00:03:14,120 Speaker 4: their shine, and you saw companies choose Ces to be 62 00:03:14,200 --> 00:03:17,600 Speaker 4: the place that they unveiled their EVS four years later. 63 00:03:17,680 --> 00:03:21,160 Speaker 4: That's not necessarily true. Honda did unveil its next generation 64 00:03:21,560 --> 00:03:25,560 Speaker 4: EVS here, and Honda's important right. Many Americans driver Honda 65 00:03:25,600 --> 00:03:27,680 Speaker 4: but when I spoke to the CEO about the plan, 66 00:03:27,840 --> 00:03:29,960 Speaker 4: he basically told me we don't really have a plan. 67 00:03:30,280 --> 00:03:32,840 Speaker 4: We just know that sometime in twenty twenty six, this 68 00:03:32,960 --> 00:03:35,839 Speaker 4: ev concept we've shown you just now may or may 69 00:03:35,840 --> 00:03:38,880 Speaker 4: not appear on US roads, which didn't fill me of confidence. 70 00:03:39,840 --> 00:03:42,280 Speaker 4: And then away from that, it's all about automotive tech, 71 00:03:42,560 --> 00:03:46,560 Speaker 4: think about advanced driver assistance, driving safety, the experience in 72 00:03:46,600 --> 00:03:49,320 Speaker 4: the cockpit. Mercedes were on the show with me yesterday 73 00:03:49,560 --> 00:03:53,320 Speaker 4: and they've brought a virtual assistant into the Mercedes cockpit 74 00:03:53,680 --> 00:03:56,480 Speaker 4: where you literally say to Missilla, I'm driving home. Hey, Mercedes, 75 00:03:56,800 --> 00:04:00,280 Speaker 4: I need to shop. Go to Walmart, put some stuff 76 00:04:00,280 --> 00:04:03,000 Speaker 4: in my basket. By the way, there are other retailers 77 00:04:03,040 --> 00:04:04,640 Speaker 4: and big boxes available other than the Walmart. 78 00:04:04,640 --> 00:04:07,000 Speaker 2: That was just one example, right, So, Ed, I mean, 79 00:04:07,000 --> 00:04:08,840 Speaker 2: it's just I know, I can see from the background 80 00:04:08,840 --> 00:04:12,560 Speaker 2: you're in the exhibit hall here, what's the traffic been 81 00:04:12,680 --> 00:04:14,920 Speaker 2: like there? And kind of what's the makeup of the crowd, 82 00:04:14,920 --> 00:04:17,840 Speaker 2: because when I went, I was surprised at how global 83 00:04:18,480 --> 00:04:20,800 Speaker 2: the attendance really is it this week of people from 84 00:04:20,839 --> 00:04:21,920 Speaker 2: everywhere come to Vegas. 85 00:04:24,080 --> 00:04:27,320 Speaker 4: Yeah, the data gives us a good read on post pandemic, 86 00:04:27,440 --> 00:04:30,360 Speaker 4: business travel, and some insight into the economy. Right there 87 00:04:30,360 --> 00:04:32,760 Speaker 4: are one hundred and thirty thousand, one to three zero 88 00:04:33,200 --> 00:04:36,880 Speaker 4: attendees expected for this year's CEES. That's up from about 89 00:04:36,880 --> 00:04:39,960 Speaker 4: one hundred and fifteen thousand last year, but it's still 90 00:04:40,000 --> 00:04:43,800 Speaker 4: significantly below pre pandemic levels in terms of footfall and attendance. 91 00:04:44,279 --> 00:04:47,400 Speaker 4: The international angle is interesting. One third of all attendees 92 00:04:47,400 --> 00:04:51,480 Speaker 4: this year have come from overseas, and you know, just anecdotally, 93 00:04:51,560 --> 00:04:54,640 Speaker 4: when you fly into to the airport, when you're waiting 94 00:04:54,680 --> 00:04:57,279 Speaker 4: for a taxi, when you are in the casinos, there 95 00:04:57,320 --> 00:05:00,000 Speaker 4: is a real sense that actually there is strong attendance 96 00:05:00,240 --> 00:05:03,600 Speaker 4: this year, strong spend, and that that business travel component 97 00:05:03,720 --> 00:05:06,240 Speaker 4: is back. And when I speak to sources, the reason why, 98 00:05:06,279 --> 00:05:09,600 Speaker 4: it's very clear it's speed dating. And I mean that seriously. 99 00:05:09,880 --> 00:05:12,200 Speaker 4: If you are the CEO of a big company, or 100 00:05:12,240 --> 00:05:14,680 Speaker 4: you are trying to meet with the CEO of a company, 101 00:05:14,880 --> 00:05:18,000 Speaker 4: everyone's in one place for just two days. Get it done. 102 00:05:18,080 --> 00:05:21,479 Speaker 2: That's a great point. And what's the sense of you know, 103 00:05:21,520 --> 00:05:22,800 Speaker 2: one of the things I think a lot of people 104 00:05:22,839 --> 00:05:24,960 Speaker 2: are trying to get a hold of, particularly investors, is 105 00:05:25,400 --> 00:05:28,920 Speaker 2: you know, this AI is such a new growth driver 106 00:05:29,000 --> 00:05:31,680 Speaker 2: for technology. How much of it is incremental spending? Do 107 00:05:31,720 --> 00:05:34,160 Speaker 2: you think, I mean, do you hear companies saying we're 108 00:05:34,200 --> 00:05:37,800 Speaker 2: amping up our tech spending because of AI or is 109 00:05:37,839 --> 00:05:40,440 Speaker 2: it kind of replacing other tech spending? You get any 110 00:05:40,480 --> 00:05:41,960 Speaker 2: sense from the companies out. 111 00:05:41,800 --> 00:05:47,800 Speaker 4: There, Yeah, it's definitely a case of prioritizing rather than 112 00:05:47,839 --> 00:05:50,599 Speaker 4: increasing overall spend. You know, we've seen this particularly on 113 00:05:50,680 --> 00:05:54,159 Speaker 4: cloud spend right where a number of companies will say, okay, 114 00:05:54,200 --> 00:05:57,160 Speaker 4: we have to be involved in AI, so we're adjusting 115 00:05:57,200 --> 00:06:00,880 Speaker 4: the proportion that we're spending on a compute power versus 116 00:06:01,000 --> 00:06:05,080 Speaker 4: data storage for example. There is really interesting ways that 117 00:06:05,120 --> 00:06:07,160 Speaker 4: it manifests itself. Bear with me on this one. I 118 00:06:07,200 --> 00:06:11,640 Speaker 4: spoke to Lorreal CEO Nicola Himus and they have a 119 00:06:11,680 --> 00:06:16,760 Speaker 4: new device, the devices in beauty stores. It registers a 120 00:06:16,880 --> 00:06:20,479 Speaker 4: reading of your skin. And that sounds abstract and silly, 121 00:06:20,520 --> 00:06:23,000 Speaker 4: but the reason that AI is important that they've invested 122 00:06:23,040 --> 00:06:25,120 Speaker 4: in it. They're saying that if you're a human in 123 00:06:25,160 --> 00:06:27,080 Speaker 4: one in a store that's buying a loreal products and 124 00:06:27,120 --> 00:06:29,080 Speaker 4: you go up to the counter and speak to another human, 125 00:06:29,440 --> 00:06:32,320 Speaker 4: there is a nine percent chance that that sales rep 126 00:06:32,360 --> 00:06:36,000 Speaker 4: converts the sale. If you use this AI powered machine. 127 00:06:36,120 --> 00:06:39,359 Speaker 4: Lorel thinks that this chance of a sale increases to 128 00:06:39,440 --> 00:06:42,200 Speaker 4: seventy three percent. Wow, because the AI can give you 129 00:06:42,240 --> 00:06:47,000 Speaker 4: such a convincing read on your face and suggests products 130 00:06:47,000 --> 00:06:50,440 Speaker 4: directly relevant to you. So there is evidence that there's 131 00:06:50,520 --> 00:06:53,480 Speaker 4: kind of very focus spend on how AI can convert 132 00:06:53,520 --> 00:06:55,679 Speaker 4: sales opportunities and boost margins. 133 00:06:55,920 --> 00:06:58,440 Speaker 5: You know, I have to agree with that because if 134 00:06:58,480 --> 00:07:00,120 Speaker 5: I went to a computer and it told me, I've 135 00:07:00,160 --> 00:07:02,360 Speaker 5: had a lot of people in the you know, a 136 00:07:02,400 --> 00:07:04,800 Speaker 5: beauty story that have told me the wrong shade. 137 00:07:04,480 --> 00:07:06,599 Speaker 2: For my face, and I'm out of there looking like 138 00:07:06,600 --> 00:07:07,080 Speaker 2: an orange. 139 00:07:07,120 --> 00:07:08,240 Speaker 7: And and if the. 140 00:07:08,240 --> 00:07:09,800 Speaker 5: Computer told me, I think I might believe it a 141 00:07:09,840 --> 00:07:13,440 Speaker 5: little bit better. Ed wanted to quickly TikTok. A lot 142 00:07:13,520 --> 00:07:16,240 Speaker 5: of companies teaming up with them. Now we're hearing Google 143 00:07:16,400 --> 00:07:18,920 Speaker 5: is doing it to stream those videos from your phone 144 00:07:19,160 --> 00:07:19,880 Speaker 5: to TVs. 145 00:07:22,200 --> 00:07:25,040 Speaker 4: Yeah, so broadly, Google's whole Cees thing was the ability 146 00:07:25,080 --> 00:07:27,320 Speaker 4: to take content from the cell phone stream it to 147 00:07:27,360 --> 00:07:29,720 Speaker 4: the TV. They're taking on Apple's airplane in that respect. 148 00:07:30,040 --> 00:07:32,520 Speaker 4: But the TikTok tie up, God, that's a tongue twister 149 00:07:33,360 --> 00:07:35,440 Speaker 4: is an interesting one because this time a year ago, 150 00:07:35,920 --> 00:07:39,280 Speaker 4: we were lamenting the fate of TikTok in this country, 151 00:07:39,600 --> 00:07:43,520 Speaker 4: that it was going to face seriously regulatory and government scrutiny. 152 00:07:43,840 --> 00:07:45,400 Speaker 4: Now in the space of a week, it has a 153 00:07:45,480 --> 00:07:47,600 Speaker 4: deal with Peloton, and it has a deal with Google 154 00:07:47,920 --> 00:07:52,880 Speaker 4: to amplify the distribution of their content and also TikTok's content, 155 00:07:53,160 --> 00:07:55,080 Speaker 4: And it just shows there's a bit of traction going here. 156 00:07:55,080 --> 00:07:57,640 Speaker 4: And remember, you know, there are a lot of users 157 00:07:57,640 --> 00:08:00,280 Speaker 4: of TikTok in this country who don't necessarily already have 158 00:08:00,320 --> 00:08:03,280 Speaker 4: any interest in that regulatory scrutiny that we reported so 159 00:08:03,360 --> 00:08:04,160 Speaker 4: much on last year. 160 00:08:04,520 --> 00:08:07,440 Speaker 2: Hey, thanks so much for joining us. Great color as always, 161 00:08:07,680 --> 00:08:10,320 Speaker 2: from the floor of the Consumer Electronics Show out in 162 00:08:10,600 --> 00:08:14,120 Speaker 2: Las Vegas, and Ed was just reporting, Boy, everybody is 163 00:08:14,160 --> 00:08:16,560 Speaker 2: out there, not just tech companies, but pretty much every 164 00:08:16,640 --> 00:08:19,920 Speaker 2: CEO is out there because technology impacts their companies one 165 00:08:19,960 --> 00:08:21,280 Speaker 2: way or the other, and they need to be out there. 166 00:08:21,360 --> 00:08:24,720 Speaker 2: Ed Ludlow, he's the host of Bloomberg Technology, is reporting 167 00:08:25,360 --> 00:08:28,840 Speaker 2: live from the event space, the Event Haul out there 168 00:08:28,880 --> 00:08:30,600 Speaker 2: in Las Vegas. 169 00:08:31,600 --> 00:08:34,960 Speaker 8: You're listening to the team Ken's are live program Bloomberg 170 00:08:35,080 --> 00:08:37,359 Speaker 8: Markets weekdays at ten am Eastern. 171 00:08:37,120 --> 00:08:38,440 Speaker 3: On Bloomberg dot Com. 172 00:08:38,520 --> 00:08:41,640 Speaker 8: The iHeartRadio app and the Bloomberg Business app, or listen 173 00:08:41,720 --> 00:08:43,840 Speaker 8: on demand wherever you get your podcasts. 174 00:08:45,960 --> 00:08:48,680 Speaker 2: All right, let's talk about Boeing here. This is really interesting. 175 00:08:48,760 --> 00:08:51,080 Speaker 2: I mean, I love this company because I just to me, 176 00:08:51,559 --> 00:08:56,000 Speaker 2: it's always seemed like a real symbol of American engineering 177 00:08:56,520 --> 00:09:00,520 Speaker 2: ingenuity leadership. You think about the amazing fist they have 178 00:09:00,559 --> 00:09:04,120 Speaker 2: out there in Seattle, when you're driving on the highway 179 00:09:04,200 --> 00:09:06,560 Speaker 2: from the SeaTac Airport into Seattle, you just kind of 180 00:09:06,559 --> 00:09:09,680 Speaker 2: pass it by. It's just mile after mile after mile 181 00:09:09,760 --> 00:09:12,120 Speaker 2: of their facilities there and jets all over the place. 182 00:09:12,440 --> 00:09:14,679 Speaker 2: Just amazing. But boy, they've had some real challenges over 183 00:09:14,679 --> 00:09:17,360 Speaker 2: the last really three four five years, and the latest 184 00:09:17,360 --> 00:09:20,960 Speaker 2: being with this seven three seven max jet with a 185 00:09:21,040 --> 00:09:24,199 Speaker 2: side blowing out. George Ferguson, he's the senior Airspace Airline 186 00:09:24,240 --> 00:09:28,480 Speaker 2: analyst for Bloomberg Intelligence. He follows this company very very closely. George, 187 00:09:28,480 --> 00:09:31,400 Speaker 2: what are we hearing from the company today about where 188 00:09:31,440 --> 00:09:34,200 Speaker 2: they are in terms of I guess kind of getting 189 00:09:34,200 --> 00:09:37,160 Speaker 2: these birds back in the air here and maybe you 190 00:09:37,160 --> 00:09:40,160 Speaker 2: know kind of what they're thinking is about what happened. 191 00:09:41,400 --> 00:09:44,280 Speaker 9: So I think we're still waiting to hear from the 192 00:09:44,360 --> 00:09:49,120 Speaker 9: regulator from the FAA an agreement on the inspection plan 193 00:09:49,200 --> 00:09:53,880 Speaker 9: to get the airplanes back back into the air. It's 194 00:09:53,920 --> 00:09:57,200 Speaker 9: a fast moving story, so I don't know that I 195 00:09:57,240 --> 00:09:58,880 Speaker 9: may have missed something in the last couple of minutes, 196 00:09:58,880 --> 00:10:01,920 Speaker 9: but I still don't think we've agreed on an inspection 197 00:10:02,040 --> 00:10:02,559 Speaker 9: plan yet. 198 00:10:02,600 --> 00:10:03,880 Speaker 6: And yesterday, what I. 199 00:10:03,880 --> 00:10:06,160 Speaker 9: Think we heard was it was at all hands meeting, 200 00:10:07,160 --> 00:10:10,960 Speaker 9: you know, we're CEO, Calhun told the employees that, you know, 201 00:10:10,960 --> 00:10:12,600 Speaker 9: they had to sort of own up to their mistakes, 202 00:10:12,600 --> 00:10:15,720 Speaker 9: I guess was what he kind of said. So sounded 203 00:10:15,760 --> 00:10:19,360 Speaker 9: a little bit controit there, but I think that's the 204 00:10:19,440 --> 00:10:21,960 Speaker 9: latest for us. The biggest issue is, well, this spread 205 00:10:22,000 --> 00:10:25,559 Speaker 9: past the seven thirty seven Max nine. If it goes 206 00:10:25,600 --> 00:10:29,200 Speaker 9: and you know, we end up having to park the 207 00:10:29,240 --> 00:10:32,240 Speaker 9: Max eight fleet, that would be a major issue. Right now, 208 00:10:32,240 --> 00:10:35,440 Speaker 9: we don't see that happening. It looks like it's not 209 00:10:35,720 --> 00:10:39,400 Speaker 9: going to interrupt deliveries I think for twenty twenty four 210 00:10:39,800 --> 00:10:41,560 Speaker 9: in the form it is right now, And that's what 211 00:10:42,320 --> 00:10:44,720 Speaker 9: we're watching very closely too, right because if that impacts 212 00:10:44,920 --> 00:10:47,360 Speaker 9: the potential for deliveries, well, if this started to knock 213 00:10:47,400 --> 00:10:51,120 Speaker 9: those down and that changes cash flow, you know, income 214 00:10:51,679 --> 00:10:54,520 Speaker 9: all those all those great audieens that we focus on in. 215 00:10:54,400 --> 00:10:58,160 Speaker 5: The markets, now, George, yesterday we heard from CEO Dave Calhoun. 216 00:10:58,240 --> 00:11:00,840 Speaker 5: He was basically kind of fighting back tears. He was 217 00:11:00,920 --> 00:11:04,120 Speaker 5: kind of owning up to the company's shortcomings. What was 218 00:11:04,200 --> 00:11:07,120 Speaker 5: the reaction to that, What did people think about his reaction? 219 00:11:07,200 --> 00:11:10,160 Speaker 5: And also we haven't heard from the supplier much as well. 220 00:11:11,840 --> 00:11:14,480 Speaker 9: Yeah, I mean the I guess from the supplier. 221 00:11:14,640 --> 00:11:15,520 Speaker 6: This player put. 222 00:11:15,320 --> 00:11:19,760 Speaker 9: Out a press release. I think it was Monday morning. Well, 223 00:11:20,320 --> 00:11:22,160 Speaker 9: you know, Spirit air Systems, the supplier. 224 00:11:22,760 --> 00:11:25,360 Speaker 6: We're not sure that it necessarily happened. It's Spirit Air Systems. 225 00:11:25,559 --> 00:11:28,319 Speaker 9: They do make the fuselage to we do believe they 226 00:11:28,320 --> 00:11:30,880 Speaker 9: put the plug in there, but Boeing may take the 227 00:11:30,920 --> 00:11:34,680 Speaker 9: plug out to load the airplane. So but they seem 228 00:11:34,720 --> 00:11:37,240 Speaker 9: to be much slower in doing much of anything and 229 00:11:37,320 --> 00:11:39,360 Speaker 9: letting Boeing take the lead. I think that's probably fair. 230 00:11:39,600 --> 00:11:45,920 Speaker 9: It's Boeing's airplane, and I think it was interesting to see. Yeah, yeah, 231 00:11:47,000 --> 00:11:49,440 Speaker 9: it's a whole issue. But I think you know, at 232 00:11:49,480 --> 00:11:52,520 Speaker 9: the end of the day, everybody's trying still trying to 233 00:11:52,520 --> 00:11:56,000 Speaker 9: figure out where the problem is, how far it reaches, 234 00:11:56,280 --> 00:11:59,120 Speaker 9: and you know, what the what the financial what the 235 00:11:59,160 --> 00:12:01,800 Speaker 9: travel impact. So there wasn't a lot new in that, 236 00:12:02,040 --> 00:12:05,000 Speaker 9: just that it seemed like maybe he was indicating that 237 00:12:05,080 --> 00:12:07,479 Speaker 9: it was going to be Boeing's fault or Boeing supplier's 238 00:12:07,480 --> 00:12:08,160 Speaker 9: fault at the end. 239 00:12:08,800 --> 00:12:10,760 Speaker 2: So at the end of the day, George, this is 240 00:12:10,840 --> 00:12:13,400 Speaker 2: I mean Boeing's did the name that that's on the 241 00:12:13,400 --> 00:12:16,520 Speaker 2: plane here? I mean, what's the feeling within the aerospace 242 00:12:16,760 --> 00:12:18,640 Speaker 2: circles that you travel in, Georgie? I mean, and no, 243 00:12:18,720 --> 00:12:21,080 Speaker 2: you go to all the air shows, you talk to 244 00:12:21,120 --> 00:12:25,160 Speaker 2: all these buyers, the folks that lease these planes. Does 245 00:12:25,200 --> 00:12:30,520 Speaker 2: Bowling have a real fundamental engineering slash manufacturing problem? Do 246 00:12:30,559 --> 00:12:30,880 Speaker 2: you think? 247 00:12:32,520 --> 00:12:36,000 Speaker 9: I think that sense is in the aerospace circles that 248 00:12:36,080 --> 00:12:40,720 Speaker 9: there is a fundamental problem, you know. In this case, 249 00:12:40,840 --> 00:12:43,200 Speaker 9: I would say it's not so much engineering, right, engineering 250 00:12:43,240 --> 00:12:47,040 Speaker 9: was really around the mcast system. In this case, it's 251 00:12:47,040 --> 00:12:49,959 Speaker 9: a fundamental manufacturing problem. But I mean, those are the 252 00:12:49,960 --> 00:12:52,240 Speaker 9: two most important things they do every day, right They 253 00:12:52,559 --> 00:12:56,439 Speaker 9: engineer aircraft and then they build them and send them 254 00:12:56,440 --> 00:13:00,360 Speaker 9: out into the fleet. But definitely we've had a number 255 00:13:00,400 --> 00:13:04,640 Speaker 9: of problems in the manufacturing process, either at suppliers like Spirit, 256 00:13:05,960 --> 00:13:07,880 Speaker 9: you know, or even up at Boeing we had these 257 00:13:08,000 --> 00:13:11,360 Speaker 9: we had bolts loose on the back of rudders of 258 00:13:11,720 --> 00:13:14,720 Speaker 9: aircraft that came out in the news over the over 259 00:13:14,760 --> 00:13:18,440 Speaker 9: the holidays. It really feels like the stability isn't there 260 00:13:18,559 --> 00:13:21,439 Speaker 9: in the in the build process, and it's something that 261 00:13:21,520 --> 00:13:24,360 Speaker 9: going really needs to get you know it. Really it's 262 00:13:24,600 --> 00:13:27,160 Speaker 9: it's arms around quickly. I mean, I thought they would 263 00:13:27,200 --> 00:13:30,600 Speaker 9: have felt this way midyear last year. Right everyone talking 264 00:13:30,679 --> 00:13:34,120 Speaker 9: supply chain, you'd think they've been digging into spirit air systems, 265 00:13:34,400 --> 00:13:37,240 Speaker 9: digging into all their suppliers to make sure there's stability there. 266 00:13:37,559 --> 00:13:40,720 Speaker 9: It's a very, very challenging process. There are lots of suppliers, 267 00:13:40,760 --> 00:13:43,080 Speaker 9: there are lots of parts that get put together to 268 00:13:43,080 --> 00:13:46,280 Speaker 9: make an airplane. But I think this just just re 269 00:13:46,440 --> 00:13:49,520 Speaker 9: emphasizes the fact that they really have to dig into 270 00:13:49,520 --> 00:13:52,920 Speaker 9: their supply chain and their suppliers and make sure they 271 00:13:52,920 --> 00:13:55,840 Speaker 9: have stability in this manufacturing process if they need this, 272 00:13:56,000 --> 00:13:58,680 Speaker 9: if they want this recovery to continue in the in 273 00:13:58,679 --> 00:13:59,599 Speaker 9: the companies. 274 00:13:59,320 --> 00:14:00,520 Speaker 6: Delivers so joy. 275 00:14:00,559 --> 00:14:03,080 Speaker 5: We've been hearing about this every day, we're hearing some 276 00:14:03,120 --> 00:14:05,719 Speaker 5: more information about it. What is all this bode for 277 00:14:06,320 --> 00:14:08,719 Speaker 5: Boeing's earnings? I mean, how are they doing before and 278 00:14:09,120 --> 00:14:10,080 Speaker 5: how do you expect them to be? 279 00:14:11,559 --> 00:14:15,400 Speaker 9: Yeah, so you know, we were not ready to take 280 00:14:15,480 --> 00:14:18,199 Speaker 9: down the number of deliveries we think they can make 281 00:14:18,240 --> 00:14:22,240 Speaker 9: in twenty twenty four based on what we've seen so far. Again, 282 00:14:22,360 --> 00:14:25,840 Speaker 9: I think if we saw the grounding stretch to the 283 00:14:25,960 --> 00:14:29,880 Speaker 9: max eight that would be very, very concerning. Then I 284 00:14:29,880 --> 00:14:32,720 Speaker 9: think we'd start to think about, you know, what the 285 00:14:32,760 --> 00:14:35,080 Speaker 9: real potential was to get all those deliveries out the door. 286 00:14:36,160 --> 00:14:38,320 Speaker 6: But right now it. 287 00:14:38,240 --> 00:14:40,040 Speaker 9: Does seem to be contained to this fleet of two 288 00:14:40,080 --> 00:14:41,400 Speaker 9: hundred and fifteen airplanes. 289 00:14:42,280 --> 00:14:43,360 Speaker 6: We've heard a couple of. 290 00:14:43,440 --> 00:14:46,120 Speaker 9: Instances where there are other loose bolts, but we haven't 291 00:14:46,160 --> 00:14:50,800 Speaker 9: heard it's absolutely widespread. And the inspection that they need 292 00:14:50,800 --> 00:14:52,120 Speaker 9: to do the last we heard on it was a 293 00:14:52,160 --> 00:14:56,360 Speaker 9: four to eight hour inspection. That's not horrible, something that 294 00:14:56,400 --> 00:14:58,760 Speaker 9: ought to be able to be done in a couple 295 00:14:58,800 --> 00:15:00,800 Speaker 9: of months to get the rest of the fleet again. 296 00:15:00,800 --> 00:15:03,200 Speaker 9: If it stretches from that, everyone will have to take 297 00:15:03,200 --> 00:15:05,680 Speaker 9: out their pencils again and think about what delivers will 298 00:15:05,720 --> 00:15:08,080 Speaker 9: be and that's going to knock down cash flows and 299 00:15:08,200 --> 00:15:10,360 Speaker 9: that's going to knock down profitability and Boeing. If we've 300 00:15:10,360 --> 00:15:11,120 Speaker 9: got to knock it down. 301 00:15:11,360 --> 00:15:15,080 Speaker 2: George, what is our concern here among investors and just 302 00:15:15,080 --> 00:15:19,600 Speaker 2: observers that the federal government, Congress from a regulatory perspective, 303 00:15:19,640 --> 00:15:21,880 Speaker 2: might take a look at Boeing and put it Boeing 304 00:15:21,880 --> 00:15:22,720 Speaker 2: in its sites here. 305 00:15:23,720 --> 00:15:27,440 Speaker 9: I mean Boeings. Sorry, Congress has done at once already. 306 00:15:27,760 --> 00:15:31,040 Speaker 9: They are they are the national aerospace champion. And if 307 00:15:31,040 --> 00:15:34,080 Speaker 9: something is amiss at Boeing, I think it does not 308 00:15:34,480 --> 00:15:37,160 Speaker 9: bode well for America. So I wouldn't be surprised to 309 00:15:37,160 --> 00:15:39,800 Speaker 9: see Congress digging and they take a little bit of time. 310 00:15:41,120 --> 00:15:42,640 Speaker 6: There's even I think even some concern. 311 00:15:42,720 --> 00:15:45,320 Speaker 9: You know, the FAA has had its challenges, it's been 312 00:15:45,360 --> 00:15:49,560 Speaker 9: short staffed, it's had turnover issues, and they've you know, 313 00:15:49,600 --> 00:15:52,240 Speaker 9: they've been maybe a little more intense on some of 314 00:15:52,280 --> 00:15:54,520 Speaker 9: these issues that I guess that's a good thing when 315 00:15:54,520 --> 00:15:55,840 Speaker 9: it comes It's definitely a good thing when it comes 316 00:15:55,840 --> 00:15:56,400 Speaker 9: to safety. 317 00:15:57,560 --> 00:15:57,800 Speaker 6: You know. 318 00:15:58,400 --> 00:16:01,760 Speaker 9: Right now they seem to be I imagine the right way 319 00:16:01,800 --> 00:16:04,040 Speaker 9: to put this is they'll take this as far as 320 00:16:04,040 --> 00:16:07,280 Speaker 9: they think they need to do to preserve their reputation, 321 00:16:07,440 --> 00:16:10,400 Speaker 9: which got mighty to mcass, which maybe you know, which 322 00:16:10,440 --> 00:16:12,880 Speaker 9: may be even further given that. 323 00:16:12,920 --> 00:16:16,440 Speaker 5: History and George yesterday, the chief safety officer. He was 324 00:16:16,560 --> 00:16:20,800 Speaker 5: right alongside the CEO talk about a pressure position. I 325 00:16:20,800 --> 00:16:24,640 Speaker 5: mean his position was created after those two fatal crashes 326 00:16:24,640 --> 00:16:27,160 Speaker 5: about five years ago. So what do you think, what's 327 00:16:27,160 --> 00:16:28,880 Speaker 5: his thought process? What's going through his mind? 328 00:16:28,880 --> 00:16:29,120 Speaker 6: Now? 329 00:16:31,120 --> 00:16:36,040 Speaker 9: You know, I think the supply chain is it's like 330 00:16:36,080 --> 00:16:39,440 Speaker 9: an octopus, and that's got to be the hardest job 331 00:16:39,560 --> 00:16:43,560 Speaker 9: inside inside going right, or inside any company, especially Boeing. 332 00:16:43,880 --> 00:16:45,800 Speaker 9: And I'm sure he's not getting a lot of sleep 333 00:16:45,840 --> 00:16:48,880 Speaker 9: at night thinking about all the different things that can 334 00:16:48,920 --> 00:16:51,560 Speaker 9: go wrong. It's it's like lack of mole, right, And 335 00:16:51,600 --> 00:16:53,400 Speaker 9: my sense is that's what they've been doing. They've been 336 00:16:53,440 --> 00:16:56,840 Speaker 9: finding problems fixing them. And as they do at the 337 00:16:56,960 --> 00:16:58,760 Speaker 9: look they look to the right and there's another one 338 00:16:58,880 --> 00:17:02,320 Speaker 9: rising up that they've got a man, it would be 339 00:17:02,400 --> 00:17:05,080 Speaker 9: nice if they got some stability inside these workforces, you 340 00:17:05,119 --> 00:17:08,600 Speaker 9: know that. I think the turnovers getting better. The longer 341 00:17:08,640 --> 00:17:11,480 Speaker 9: you keep that better turnover, the longer folks are on 342 00:17:11,520 --> 00:17:15,560 Speaker 9: the line getting trained doing the job. You know, numbers 343 00:17:15,560 --> 00:17:19,120 Speaker 9: of repetitions, the better it's going to get. But right now, 344 00:17:19,119 --> 00:17:21,480 Speaker 9: it just looks it looks pretty pretty rough, right, That's 345 00:17:21,480 --> 00:17:22,359 Speaker 9: a really hard job. 346 00:17:22,520 --> 00:17:24,600 Speaker 2: All right, George, thanks so much for joining us. We 347 00:17:24,600 --> 00:17:28,000 Speaker 2: always appreciate getting your insight here on all things aerospace airlines. 348 00:17:28,000 --> 00:17:30,760 Speaker 2: At George Ferguson, he covers the aerospace and airlines industry 349 00:17:30,760 --> 00:17:33,040 Speaker 2: for Bloomberg Intelligence decades of experience. 350 00:17:33,320 --> 00:17:36,400 Speaker 8: You're listening to the tape Can's are live program Bloomberg 351 00:17:36,480 --> 00:17:40,359 Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, tune 352 00:17:40,400 --> 00:17:42,080 Speaker 8: in app Bloomberg dot Com and. 353 00:17:42,040 --> 00:17:43,359 Speaker 3: The Bloomberg Business App. 354 00:17:43,400 --> 00:17:46,199 Speaker 8: You can also listen live on Amazon Alexa from our 355 00:17:46,240 --> 00:17:52,240 Speaker 8: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 356 00:17:52,840 --> 00:17:55,679 Speaker 2: So we're trying to show plan sees out in Vegas. 357 00:17:55,720 --> 00:17:59,080 Speaker 2: One hundred and thirty thousand tech geeks get together out 358 00:17:59,119 --> 00:18:00,840 Speaker 2: in Vegas and look at all the new gadgets and 359 00:18:00,840 --> 00:18:03,320 Speaker 2: stuff like that. I've actually done it many, many times. 360 00:18:03,400 --> 00:18:05,639 Speaker 2: It's a lot of fun out there. Boy, there's crowded. 361 00:18:05,680 --> 00:18:08,240 Speaker 2: You got to wait long lines to get taxi. 362 00:18:08,359 --> 00:18:09,960 Speaker 5: Do you go for the tech or for Vegas? 363 00:18:10,119 --> 00:18:12,720 Speaker 2: I'm both, Let's be honest. You know, I go to 364 00:18:12,720 --> 00:18:14,879 Speaker 2: the crafts table Blagie and they know exactly where to 365 00:18:14,920 --> 00:18:17,159 Speaker 2: find me if you're looking for me. We got some 366 00:18:17,200 --> 00:18:19,880 Speaker 2: smart people out there. Mark Davis, Mark Douglas, I'm sorry, 367 00:18:19,920 --> 00:18:22,520 Speaker 2: the CEO of Mountain. We've talked to him a lot 368 00:18:22,560 --> 00:18:25,160 Speaker 2: about the digital advertising space. He's joins us here along 369 00:18:25,160 --> 00:18:28,440 Speaker 2: with Mark Penn, a president at Stagwell and a former 370 00:18:28,480 --> 00:18:31,520 Speaker 2: chief strategy officer at Microsoft. Gentlemen, thanks so much for 371 00:18:31,960 --> 00:18:35,480 Speaker 2: joining us from Vegas. Looks like a pretty staid place 372 00:18:35,520 --> 00:18:37,360 Speaker 2: where you guys are, not typically where you would find 373 00:18:37,359 --> 00:18:40,439 Speaker 2: me if we were doing a live remote. Guys, I 374 00:18:40,440 --> 00:18:43,040 Speaker 2: know you guys kind of have a partnership that you 375 00:18:43,440 --> 00:18:45,680 Speaker 2: recently announced. Talked to us about that. 376 00:18:47,680 --> 00:18:51,679 Speaker 10: Well, I can start. So what we're focused on is 377 00:18:52,040 --> 00:18:56,119 Speaker 10: essentially performance marketing for some of the world's largest brands. 378 00:18:56,160 --> 00:18:58,119 Speaker 10: We've talked about performance marketing a lot, but what do 379 00:18:58,119 --> 00:19:03,400 Speaker 10: you see happening is with the demise of Nielsen brands Essentially, 380 00:19:03,680 --> 00:19:06,560 Speaker 10: you know, want real metrics, they want real targeting. 381 00:19:06,840 --> 00:19:07,240 Speaker 3: They don't. 382 00:19:07,240 --> 00:19:10,480 Speaker 10: They're not happy with just spending hundreds of millions of 383 00:19:10,480 --> 00:19:13,359 Speaker 10: dollars and having no real data and no real control 384 00:19:13,400 --> 00:19:16,680 Speaker 10: over it. So both of us, Mark Penn, his company 385 00:19:16,960 --> 00:19:21,560 Speaker 10: is kind of the premier performance marketing holding company for agencies, 386 00:19:21,840 --> 00:19:25,040 Speaker 10: and obviously you guys know mount ebented performance TV. So 387 00:19:25,080 --> 00:19:28,560 Speaker 10: we're teaming up with an offering geared to directly at 388 00:19:28,600 --> 00:19:31,320 Speaker 10: the world's largest brands to now enter the world of 389 00:19:31,400 --> 00:19:32,480 Speaker 10: performance marketing. 390 00:19:32,880 --> 00:19:35,920 Speaker 2: Hey, Mark, talk to us about Stagwell what you guys 391 00:19:35,960 --> 00:19:39,600 Speaker 2: do there and how you guys can serve advertisers and 392 00:19:39,680 --> 00:19:43,400 Speaker 2: the networks and you know, really kind of help out 393 00:19:43,400 --> 00:19:44,160 Speaker 2: with measurement there. 394 00:19:45,119 --> 00:19:50,359 Speaker 11: Sure you know Stagwell announced dec listed companies. We're uh, 395 00:19:50,600 --> 00:19:53,760 Speaker 11: we manage about five billion dollars of media for our 396 00:19:53,760 --> 00:19:57,560 Speaker 11: clients and so this this partnership is very important to 397 00:19:57,640 --> 00:20:04,760 Speaker 11: extend you know, our performance oriented media into connected TV, 398 00:20:05,280 --> 00:20:08,439 Speaker 11: where Mountain has a real specialty. And also we have 399 00:20:08,520 --> 00:20:13,199 Speaker 11: a series of digital platform products and research communications and 400 00:20:13,280 --> 00:20:17,200 Speaker 11: media which Mountain can take to its primarily small business market. 401 00:20:17,600 --> 00:20:20,840 Speaker 11: So we think this is a win win partnership for 402 00:20:20,920 --> 00:20:23,720 Speaker 11: digital marketers and for both of us in terms of 403 00:20:23,760 --> 00:20:26,679 Speaker 11: the billions of dollars of media that we manage at 404 00:20:26,680 --> 00:20:27,960 Speaker 11: Stague Well, I mean. 405 00:20:28,480 --> 00:20:32,440 Speaker 2: That certainly seems like a solution here to a growing problem, 406 00:20:32,520 --> 00:20:35,680 Speaker 2: because the growing problem is we now consume our media 407 00:20:35,680 --> 00:20:39,960 Speaker 2: on so many different platforms and it's almost impossible, I 408 00:20:39,960 --> 00:20:43,160 Speaker 2: would think, to measure that accurately and you mentioned it talk. 409 00:20:43,280 --> 00:20:48,040 Speaker 2: It's been a huge challenge for Nielsen. So what do 410 00:20:48,119 --> 00:20:51,840 Speaker 2: the brands actually need and what can you guys deliver 411 00:20:51,960 --> 00:20:54,800 Speaker 2: because I got to make sure I'm reaching my audience here. 412 00:20:55,840 --> 00:20:59,840 Speaker 11: Well, brands need results, right, and so the real question 413 00:20:59,880 --> 00:21:02,800 Speaker 11: is how much you invest and how much you kind 414 00:21:02,800 --> 00:21:05,200 Speaker 11: of get back in return. Is it a two to one, 415 00:21:05,400 --> 00:21:07,960 Speaker 11: three to one, four to one, or or you're just 416 00:21:08,040 --> 00:21:11,439 Speaker 11: building your brand right? And so what we have been 417 00:21:11,520 --> 00:21:15,639 Speaker 11: has been more performance oriented, and the primary measurement of 418 00:21:15,680 --> 00:21:19,159 Speaker 11: that is going to be sales. We do have attribution tools, 419 00:21:19,200 --> 00:21:22,400 Speaker 11: We do have location data, so we generally know if 420 00:21:22,400 --> 00:21:24,920 Speaker 11: you've gone to the store or not gone to the store. 421 00:21:25,760 --> 00:21:27,960 Speaker 11: But by and large, Performance Media has a set of 422 00:21:28,040 --> 00:21:32,879 Speaker 11: KPIs which are really rigorous. That means that of the 423 00:21:32,920 --> 00:21:36,399 Speaker 11: two thousand ads that people see a day, we'll be 424 00:21:36,440 --> 00:21:39,120 Speaker 11: able to track how yours do now. 425 00:21:38,960 --> 00:21:40,040 Speaker 2: Mark and mark. 426 00:21:40,200 --> 00:21:42,880 Speaker 5: You're making it easiest for us here the same name. 427 00:21:43,320 --> 00:21:44,560 Speaker 2: You guys are out in the middle of it. 428 00:21:44,720 --> 00:21:47,560 Speaker 5: Sees talked about about some of the things that you're 429 00:21:47,560 --> 00:21:49,040 Speaker 5: seeing there. What are some of the hot items that 430 00:21:49,359 --> 00:21:49,920 Speaker 5: catch your eye? 431 00:21:51,000 --> 00:21:53,960 Speaker 10: They well, I've been on the show floor. I mean 432 00:21:54,240 --> 00:21:58,679 Speaker 10: I honestly the hot topic is AI. But you know, 433 00:21:58,800 --> 00:22:03,200 Speaker 10: AI is just becoming pervasive. It's like electricity one hundred 434 00:22:03,240 --> 00:22:07,159 Speaker 10: years ago. Everything will be electrically powered. Everything will be 435 00:22:07,560 --> 00:22:11,080 Speaker 10: AI powered. So you know, you go to the big boots. 436 00:22:11,119 --> 00:22:14,080 Speaker 10: Some of these booths are like the size of large homes. 437 00:22:14,240 --> 00:22:18,600 Speaker 10: And you see, I know LG had transparent televisions. You 438 00:22:18,720 --> 00:22:20,880 Speaker 10: kind of see the future when you come to see us. 439 00:22:21,200 --> 00:22:23,800 Speaker 10: You don't see the product they're launching today. You see 440 00:22:23,800 --> 00:22:26,159 Speaker 10: what they're going to launch five years from now. And 441 00:22:26,200 --> 00:22:28,760 Speaker 10: there's a lot. I mean, the transparent televisions I think 442 00:22:28,800 --> 00:22:32,080 Speaker 10: are really capturing everyone's attention. Just see through the TV 443 00:22:32,720 --> 00:22:36,560 Speaker 10: and watch and watch television. That's the one that What 444 00:22:36,600 --> 00:22:38,120 Speaker 10: are you gonna do with that one? I know I'm 445 00:22:38,160 --> 00:22:42,160 Speaker 10: not sure, so I have to buy it at. 446 00:22:42,200 --> 00:22:46,600 Speaker 11: Some Uh you know, I think I think this year, Uh, 447 00:22:47,000 --> 00:22:51,119 Speaker 11: I'm going to the floor more intensively this afternoon. But 448 00:22:51,119 --> 00:22:53,919 Speaker 11: but really this year is a year or too early. 449 00:22:54,600 --> 00:22:56,919 Speaker 11: Next year I think it's going to be amazing because 450 00:22:57,080 --> 00:23:00,359 Speaker 11: next year people will have had the time to great 451 00:23:00,880 --> 00:23:04,280 Speaker 11: AI with hardware, and that's where I think you're gonna 452 00:23:04,280 --> 00:23:08,760 Speaker 11: see incredible advance. I think here's people talking AI showing 453 00:23:08,840 --> 00:23:11,720 Speaker 11: some AI, but they haven't really had time to build 454 00:23:11,760 --> 00:23:16,040 Speaker 11: the consumer products that really incorporated it. Next year, I 455 00:23:16,080 --> 00:23:17,360 Speaker 11: believe we'll be spectacular. 456 00:23:17,480 --> 00:23:21,480 Speaker 10: Yeah, agree with that, and I'll bring my transparent TV 457 00:23:22,000 --> 00:23:24,200 Speaker 10: to witness. 458 00:23:25,480 --> 00:23:27,919 Speaker 2: So Hey, Mark doug Leat's talk to us about just 459 00:23:28,000 --> 00:23:30,439 Speaker 2: kind of when you're looking at at the metas of 460 00:23:30,480 --> 00:23:35,040 Speaker 2: the world, the facebooks, the Googles, the Amazons, give us 461 00:23:35,040 --> 00:23:37,320 Speaker 2: a state of the advertising market out there in terms 462 00:23:37,359 --> 00:23:41,480 Speaker 2: of linear versus digital, because we hear the linear television 463 00:23:41,600 --> 00:23:44,320 Speaker 2: is just brutal and it just seems like it's in 464 00:23:44,440 --> 00:23:47,199 Speaker 2: a secular, secular decline. 465 00:23:47,920 --> 00:23:51,199 Speaker 10: Yeah, I mean, I think that's true. One of the 466 00:23:52,280 --> 00:23:56,359 Speaker 10: the number of people watching TV is not changing, and 467 00:23:56,480 --> 00:24:00,679 Speaker 10: so it's the business models of these media companies are 468 00:24:00,760 --> 00:24:04,120 Speaker 10: having to evolve. But the user, the viewers are there, 469 00:24:04,200 --> 00:24:07,359 Speaker 10: the dollars are there. They're having the change how they 470 00:24:07,359 --> 00:24:10,040 Speaker 10: acquire media. That actually, by the way, kind of fits 471 00:24:10,119 --> 00:24:12,520 Speaker 10: right in on what Mark p and I. Penn and 472 00:24:12,560 --> 00:24:16,560 Speaker 10: I are talking about in terms of the brands realize 473 00:24:16,600 --> 00:24:19,040 Speaker 10: this and they're like, Okay, well I'm not going to 474 00:24:19,080 --> 00:24:21,960 Speaker 10: rely on linear data anymore. I want something holistic. I 475 00:24:22,000 --> 00:24:25,320 Speaker 10: think NBC made a really interesting announcement They announced this 476 00:24:25,400 --> 00:24:28,159 Speaker 10: year their goal was sixty percent of all ads that 477 00:24:28,240 --> 00:24:33,200 Speaker 10: they serve NBC on peacocks, CNBC, you know, like NBC Sports. 478 00:24:33,440 --> 00:24:37,240 Speaker 10: They expect those to be now targeted in a digital way, 479 00:24:37,359 --> 00:24:40,560 Speaker 10: in the way that like like Stagwell and Mountain are 480 00:24:40,720 --> 00:24:43,640 Speaker 10: focusing on. And that's a huge announcement. I mean that's 481 00:24:43,680 --> 00:24:47,080 Speaker 10: like they're basically saying, like they expect twenty billion dollars 482 00:24:47,080 --> 00:24:50,119 Speaker 10: in their ad spend to now be digitally targeted across 483 00:24:50,160 --> 00:24:53,600 Speaker 10: linear TV and streaming TV. That's an announcement they made 484 00:24:53,640 --> 00:24:54,080 Speaker 10: this week. 485 00:24:54,680 --> 00:24:58,040 Speaker 2: What is the competitive response from ac Nielsen company, the 486 00:24:58,080 --> 00:25:02,320 Speaker 2: traditional measurement company, the currency for that one hundred billion 487 00:25:02,359 --> 00:25:03,440 Speaker 2: dollar TV business. 488 00:25:04,040 --> 00:25:08,000 Speaker 11: Yeah, people are people continue to seek the holy grail 489 00:25:08,240 --> 00:25:13,280 Speaker 11: of complete measurement, which continues to be somewhat evasive in nature. 490 00:25:13,359 --> 00:25:17,479 Speaker 11: But but again more of it is performance oriented. You 491 00:25:17,520 --> 00:25:20,280 Speaker 11: look at the partnership that we have. The partnership is 492 00:25:20,320 --> 00:25:24,200 Speaker 11: really designed to capture the expanding market in connected TV. 493 00:25:24,840 --> 00:25:29,680 Speaker 11: That really what's happening is linear TV is becoming connected TV. Yeah, 494 00:25:30,119 --> 00:25:32,560 Speaker 11: those people who said they would never ever do ads 495 00:25:32,600 --> 00:25:36,240 Speaker 11: like Netflix, they're doing ads like Amazon. They're doing ads. 496 00:25:36,520 --> 00:25:40,080 Speaker 11: So ads are back all that time which people were 497 00:25:40,080 --> 00:25:44,280 Speaker 11: spending without ads, is coming back to advertise time, and 498 00:25:44,320 --> 00:25:47,240 Speaker 11: that's good for us, good for companies like Stagwell. 499 00:25:47,000 --> 00:25:49,560 Speaker 10: Yeah, I think this mark this year is the start 500 00:25:49,880 --> 00:25:52,120 Speaker 10: of the TV pee. A lot of people don't realize 501 00:25:52,119 --> 00:25:56,280 Speaker 10: the TV industry grows at one percent rate while streaming 502 00:25:56,320 --> 00:25:59,840 Speaker 10: has grown obviously much fast. I think this is ticking 503 00:25:59,880 --> 00:26:03,440 Speaker 10: of the year where the whole industry starts growing again. 504 00:26:03,280 --> 00:26:05,440 Speaker 11: And we're gonna have a big political season. Remember there's 505 00:26:05,480 --> 00:26:09,200 Speaker 11: going to be twelve billion dollars on top of regular 506 00:26:09,280 --> 00:26:10,160 Speaker 11: advertising here. 507 00:26:10,280 --> 00:26:13,959 Speaker 2: And does that still go to primarily local broadcast? 508 00:26:15,320 --> 00:26:16,360 Speaker 6: It is now. 509 00:26:16,160 --> 00:26:19,720 Speaker 11: More distributed across all platforms, but I would still say 510 00:26:19,720 --> 00:26:22,520 Speaker 11: it's more. You know, it used to be about eighty 511 00:26:22,640 --> 00:26:27,439 Speaker 11: percent local broadcast. I think that'll come down more like 512 00:26:27,600 --> 00:26:31,680 Speaker 11: fifty sixty percent, with the forty percent going to as 513 00:26:31,800 --> 00:26:33,720 Speaker 11: local as you can get your digital Yeah. 514 00:26:33,800 --> 00:26:35,960 Speaker 2: All right, guys, all right, thanks so much for joining us, 515 00:26:35,960 --> 00:26:38,000 Speaker 2: both of you, guys, Mark Douglas, president and CEO of 516 00:26:38,160 --> 00:26:42,359 Speaker 2: Mountain and Mark Penn, president of Stagwell, they're out there 517 00:26:42,400 --> 00:26:46,200 Speaker 2: at the CEES, the Consumer Electronics Show out in Las Vegas, 518 00:26:46,240 --> 00:26:50,640 Speaker 2: as is seemingly everybody else in almost every any industry 519 00:26:50,640 --> 00:26:53,080 Speaker 2: that has any kind of technology aspirations one way or 520 00:26:53,080 --> 00:26:53,360 Speaker 2: the other. 521 00:26:54,000 --> 00:26:57,119 Speaker 8: You're listening to the tape cans are live program Bloomberg 522 00:26:57,200 --> 00:27:01,080 Speaker 8: Markets weekdays at ten am Eastern on bloom Radio, tune 523 00:27:01,119 --> 00:27:04,080 Speaker 8: in app, Bloomberg dot Com, and the Bloomberg Business App. 524 00:27:04,119 --> 00:27:06,919 Speaker 8: You can also listen live on Amazon Alexa from our 525 00:27:06,960 --> 00:27:11,359 Speaker 8: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 526 00:27:13,160 --> 00:27:16,320 Speaker 2: I'm looking at bitcoin forty five, four hundred, pretty much 527 00:27:16,359 --> 00:27:19,320 Speaker 2: unchanged on the day. I think today's the day where 528 00:27:19,320 --> 00:27:21,560 Speaker 2: the SEC is going to give us a thumbs up, 529 00:27:21,600 --> 00:27:27,160 Speaker 2: our thumbs down on this spot. Bitcoin ETF, which people 530 00:27:27,200 --> 00:27:29,960 Speaker 2: have been in, particularly the crypto space, are really really 531 00:27:29,960 --> 00:27:32,040 Speaker 2: waiting for it, because that would be a real seal 532 00:27:32,080 --> 00:27:35,040 Speaker 2: of credibility here in the US trading at least. Our 533 00:27:35,040 --> 00:27:37,560 Speaker 2: next guest is all over this stuff, Greg Taylor. He's 534 00:27:37,600 --> 00:27:41,159 Speaker 2: the CIO of Purpose Investments, whose Purpose Investments, Well, Purpose 535 00:27:41,160 --> 00:27:46,719 Speaker 2: Investments launched Purpose Bitcoin ETF, the first direct custody bitcoin 536 00:27:46,960 --> 00:27:49,760 Speaker 2: ETF in the world, in twenty twenty one, and they've 537 00:27:49,800 --> 00:27:52,879 Speaker 2: been managing it ever since. So he knows what's happening here. Hey, Greg, 538 00:27:53,000 --> 00:27:55,000 Speaker 2: I kind of we all got a head fake yesterday. 539 00:27:55,119 --> 00:27:56,840 Speaker 2: First of all, thanks for joining us, Greg. We all 540 00:27:56,880 --> 00:28:00,600 Speaker 2: got a head fake yesterday with the you know X 541 00:28:00,640 --> 00:28:02,680 Speaker 2: whatever it is putting out a tweet that maybe they 542 00:28:02,680 --> 00:28:05,639 Speaker 2: did get the approval then apparently was not. What do 543 00:28:05,680 --> 00:28:08,560 Speaker 2: you expect to happen today with the SEC? 544 00:28:09,880 --> 00:28:11,639 Speaker 6: Yeah, I think the excitement yesterday was kind of on 545 00:28:11,680 --> 00:28:15,320 Speaker 6: brand for crypto surprising age one too much. But I 546 00:28:15,320 --> 00:28:16,720 Speaker 6: think this is a space and at the end of 547 00:28:16,720 --> 00:28:18,520 Speaker 6: the day, it does feel like the SEC has run 548 00:28:18,560 --> 00:28:20,960 Speaker 6: out of reasons not to do this ETF. So it 549 00:28:21,000 --> 00:28:22,840 Speaker 6: does feel like today was today We're going to get 550 00:28:22,880 --> 00:28:25,280 Speaker 6: the approval. It seems like a long time coming. I 551 00:28:25,359 --> 00:28:27,840 Speaker 6: Canada approve the ETF almost three years ago, and I 552 00:28:27,880 --> 00:28:29,480 Speaker 6: think we've had a pretty good track record all the 553 00:28:29,520 --> 00:28:32,200 Speaker 6: way through. So it feels like today is today. We'll 554 00:28:32,200 --> 00:28:34,800 Speaker 6: get the announcement that the SEC has made the approval, 555 00:28:34,800 --> 00:28:37,359 Speaker 6: and I think that's a good stamp of credibility for 556 00:28:37,400 --> 00:28:38,120 Speaker 6: the entire space. 557 00:28:38,360 --> 00:28:40,920 Speaker 5: Now, Greg, take us through this approval process. I mean 558 00:28:40,960 --> 00:28:43,680 Speaker 5: there's a lot of moving parts for that. Can you 559 00:28:43,680 --> 00:28:44,320 Speaker 5: walk us through it? 560 00:28:45,800 --> 00:28:46,000 Speaker 10: Well? 561 00:28:46,200 --> 00:28:47,720 Speaker 6: I think the big thing I can speak to is 562 00:28:47,760 --> 00:28:50,560 Speaker 6: the way the Canadian regulators did and they were really 563 00:28:50,640 --> 00:28:53,840 Speaker 6: trying to make sure that we had a good, safe ecosystem, 564 00:28:53,880 --> 00:28:57,080 Speaker 6: and really when we approved, when we've initially launched it 565 00:28:57,200 --> 00:28:59,920 Speaker 6: or applied for a CRYPTOETF back in that twenty sixteen 566 00:29:00,560 --> 00:29:03,320 Speaker 6: the OSC, the Ontario Securities Commission, declined that at that 567 00:29:03,400 --> 00:29:05,680 Speaker 6: time point in time because they thought the space was 568 00:29:05,720 --> 00:29:08,400 Speaker 6: really not up and ready for it to happen. A 569 00:29:08,440 --> 00:29:10,880 Speaker 6: lot has happened since then, and I think the exchanges 570 00:29:10,880 --> 00:29:14,040 Speaker 6: have gotten better, the whole ecosystem has gotten stronger, and 571 00:29:14,080 --> 00:29:16,320 Speaker 6: when we got our green light to go in February 572 00:29:16,320 --> 00:29:18,480 Speaker 6: twenty twenty one, it was all about working with the 573 00:29:18,480 --> 00:29:20,720 Speaker 6: regulators to show that this is something that you can 574 00:29:20,840 --> 00:29:23,080 Speaker 6: invest in, that it's going to be a lot safer 575 00:29:23,120 --> 00:29:25,560 Speaker 6: for the average investor to get access to this through 576 00:29:25,720 --> 00:29:28,800 Speaker 6: in ETF versus just buying through a crypto exchange. And 577 00:29:28,840 --> 00:29:31,240 Speaker 6: I think that proved out in twenty twenty two when 578 00:29:31,240 --> 00:29:33,080 Speaker 6: we saw a number of exchanges fail and a lot 579 00:29:33,080 --> 00:29:35,520 Speaker 6: of people lost money and had the bad experience in 580 00:29:35,560 --> 00:29:38,440 Speaker 6: the whole crypto ecosystem, but those who had exposure through 581 00:29:38,480 --> 00:29:42,160 Speaker 6: a regulated ETF on a good regulated exchange were able 582 00:29:42,200 --> 00:29:44,360 Speaker 6: to just deal with the price volatility instead of the 583 00:29:44,400 --> 00:29:45,720 Speaker 6: whole financial system claps. 584 00:29:46,160 --> 00:29:48,480 Speaker 2: So Greg, you guys, again you're the ones with the 585 00:29:48,520 --> 00:29:51,000 Speaker 2: experience in this, with your purpose Bitcoin ETF. Talk to 586 00:29:51,080 --> 00:29:54,120 Speaker 2: us about your ETF kind of how has it evolved 587 00:29:54,160 --> 00:29:56,280 Speaker 2: in terms of assets and just kind of how it 588 00:29:56,360 --> 00:29:59,320 Speaker 2: trades and give us some sense of how that's been. 589 00:30:00,600 --> 00:30:02,760 Speaker 6: Yeah, so we've been pretty happy with the whole trading 590 00:30:03,040 --> 00:30:05,440 Speaker 6: assets through it. It's again we're getting close to three years. 591 00:30:05,720 --> 00:30:08,240 Speaker 6: We pretty much traded at NAV the entire time. We 592 00:30:08,360 --> 00:30:11,080 Speaker 6: pretty much traded also with a one penny bit ass spread, 593 00:30:11,160 --> 00:30:15,080 Speaker 6: so keeping very much institutional style investments, and I think 594 00:30:15,120 --> 00:30:17,440 Speaker 6: that's why it's gotten a lot of credibility and a 595 00:30:17,440 --> 00:30:20,680 Speaker 6: lot of attention from both the retail and institutions through 596 00:30:20,880 --> 00:30:23,680 Speaker 6: Canada and rust of the world that are using our product. 597 00:30:23,800 --> 00:30:25,800 Speaker 6: Is a good way to get access to this. We've 598 00:30:25,840 --> 00:30:28,840 Speaker 6: been trading on average around fifteen to twenty million dollars 599 00:30:28,880 --> 00:30:31,280 Speaker 6: a day, but we've also had big days where we've 600 00:30:31,320 --> 00:30:34,000 Speaker 6: had inflows and outflows around one hundred million. And I 601 00:30:34,040 --> 00:30:36,320 Speaker 6: think the big credibility to the system that we've designed 602 00:30:36,480 --> 00:30:38,760 Speaker 6: and done this is that we've not lost a single 603 00:30:38,800 --> 00:30:41,280 Speaker 6: coin through this, and we've also not really impacted the 604 00:30:41,320 --> 00:30:44,640 Speaker 6: market or impacted the way our nav is traded. So 605 00:30:44,840 --> 00:30:46,840 Speaker 6: I think it's all about making sure that your process 606 00:30:46,840 --> 00:30:49,400 Speaker 6: are up and running, and I think it's also dealing 607 00:30:49,440 --> 00:30:53,040 Speaker 6: really with credible counterparties. That's the most important thing we've 608 00:30:53,040 --> 00:30:57,000 Speaker 6: been focusing on is dealing with strong custodians, strong trading partners, 609 00:30:57,440 --> 00:31:00,000 Speaker 6: and not really going forward to something that's easy, because 610 00:31:00,360 --> 00:31:03,080 Speaker 6: this is a volatile sector and I think you really 611 00:31:03,120 --> 00:31:04,760 Speaker 6: want to make sure that people are going to get 612 00:31:04,920 --> 00:31:06,680 Speaker 6: access to it and not have to worry about any 613 00:31:06,720 --> 00:31:08,120 Speaker 6: of the underlying volatility. 614 00:31:08,280 --> 00:31:10,000 Speaker 5: Yeah, I want you to expand on that a bit, Greg, 615 00:31:10,040 --> 00:31:13,080 Speaker 5: So we talked about the crypto landscape in itself. I mean, 616 00:31:13,120 --> 00:31:14,480 Speaker 5: it seemed like it had a pretty good run in 617 00:31:14,720 --> 00:31:17,040 Speaker 5: twenty twenty three. Where do you see it going heading 618 00:31:17,040 --> 00:31:18,280 Speaker 5: into twenty twenty four. 619 00:31:19,320 --> 00:31:21,240 Speaker 6: Well, well, that's the big question. And I think one 620 00:31:21,280 --> 00:31:23,120 Speaker 6: of the things that people are really looking for is 621 00:31:23,120 --> 00:31:26,360 Speaker 6: this bought this US etf to come because really it's 622 00:31:26,360 --> 00:31:28,640 Speaker 6: tough to value bitcoin. I think everyone's trying to come 623 00:31:28,680 --> 00:31:30,520 Speaker 6: up with models and trying to come up with a 624 00:31:30,520 --> 00:31:33,200 Speaker 6: way to look at this versus physical gold or something else. 625 00:31:33,520 --> 00:31:34,720 Speaker 6: But at the end of the day, it comes down 626 00:31:34,720 --> 00:31:37,280 Speaker 6: to supply and demand and demand. We know it is 627 00:31:37,320 --> 00:31:39,400 Speaker 6: really fixed, so it's going to be looking at stories. 628 00:31:39,560 --> 00:31:42,040 Speaker 6: Supply is really fixed, so when you look at demand, 629 00:31:42,200 --> 00:31:45,880 Speaker 6: having bringing in new investors in a US ETF is 630 00:31:45,920 --> 00:31:48,040 Speaker 6: really opening this up to a whole new market. And 631 00:31:48,080 --> 00:31:50,440 Speaker 6: I think when you get that more demand coming back 632 00:31:50,480 --> 00:31:54,160 Speaker 6: into this and people are looking for alternative currencies and 633 00:31:54,400 --> 00:31:57,720 Speaker 6: people are losing interest in US dollars some other VAT currencies, 634 00:31:58,200 --> 00:32:00,920 Speaker 6: having a sleeve of their assets in something like crypto 635 00:32:01,200 --> 00:32:03,560 Speaker 6: could bring in more investors. So I think that could 636 00:32:03,560 --> 00:32:05,920 Speaker 6: be positive for the entire ecosystem and in particular and 637 00:32:05,960 --> 00:32:08,880 Speaker 6: for bitcoin. The next big thing throughout the year is 638 00:32:08,920 --> 00:32:10,800 Speaker 6: the HAVING which is going to come out probably in 639 00:32:10,880 --> 00:32:13,360 Speaker 6: Q two of this year, which is really going to 640 00:32:13,360 --> 00:32:16,840 Speaker 6: be something that takes down the incentive for bitcoin minors again, 641 00:32:16,920 --> 00:32:19,320 Speaker 6: so that will gain the limits supplies. So we could 642 00:32:19,320 --> 00:32:21,400 Speaker 6: be setting up for twenty twenty four that if we 643 00:32:21,440 --> 00:32:23,760 Speaker 6: do have a risk on environment, you've got more people 644 00:32:23,760 --> 00:32:26,440 Speaker 6: looking for access to crypto and also less supply out there, 645 00:32:26,480 --> 00:32:28,479 Speaker 6: so could be setting up for a bulowsh here. But 646 00:32:28,640 --> 00:32:30,800 Speaker 6: as we know, this is a volatile, aastic class and 647 00:32:30,880 --> 00:32:31,680 Speaker 6: anything can happen. 648 00:32:32,200 --> 00:32:34,480 Speaker 2: Greg what do you expect to happen when we get 649 00:32:34,520 --> 00:32:39,800 Speaker 2: the big heavyweight brands like you know, Vanguard and black 650 00:32:39,880 --> 00:32:42,120 Speaker 2: Rock and Kathy Woods Ark, I'm going to get the 651 00:32:42,160 --> 00:32:45,600 Speaker 2: big big names coming in this ETF space. How do 652 00:32:45,640 --> 00:32:47,480 Speaker 2: you think it's going to play out over the coming 653 00:32:47,520 --> 00:32:48,240 Speaker 2: weeks and months. 654 00:32:49,320 --> 00:32:50,840 Speaker 6: Well, at the end of the day, it is going 655 00:32:50,880 --> 00:32:53,280 Speaker 6: to open it up to a whole new sleep investors. 656 00:32:53,680 --> 00:32:55,840 Speaker 6: Our products has going to have been running for almost 657 00:32:55,840 --> 00:32:57,520 Speaker 6: two years, but really at the end of the day, 658 00:32:58,120 --> 00:32:59,840 Speaker 6: over almost three years. But at the end of the day, 659 00:33:00,120 --> 00:33:02,520 Speaker 6: really want to get more US retail investors involved in 660 00:33:02,560 --> 00:33:05,000 Speaker 6: this and that's something that I think this will only help. 661 00:33:05,080 --> 00:33:07,720 Speaker 6: So that should bring in more buyers to the space, 662 00:33:07,720 --> 00:33:10,440 Speaker 6: and that again should add more credibility to the space. 663 00:33:10,880 --> 00:33:13,360 Speaker 6: I think the SEC finally getting around and more comfortable 664 00:33:13,360 --> 00:33:15,560 Speaker 6: the ecosystem again will be a stamp of approval for 665 00:33:15,600 --> 00:33:18,440 Speaker 6: the whole space. So this is a positive development and 666 00:33:18,560 --> 00:33:20,520 Speaker 6: I think should at the end of the day lead 667 00:33:20,560 --> 00:33:23,960 Speaker 6: to further advancements. Maybe the next thing we'll see is 668 00:33:24,000 --> 00:33:26,720 Speaker 6: an ethereum ETF coming down the road, and I think 669 00:33:26,760 --> 00:33:28,240 Speaker 6: that would be good for the space as well. 670 00:33:28,520 --> 00:33:31,400 Speaker 5: Anyway, so does an approval from the sec. Does that 671 00:33:31,520 --> 00:33:34,440 Speaker 5: basically mean that it's a yes for everyone else? I mean, 672 00:33:34,720 --> 00:33:36,320 Speaker 5: what does that mean if they say yes to let's 673 00:33:36,320 --> 00:33:37,160 Speaker 5: say one application. 674 00:33:38,520 --> 00:33:41,080 Speaker 6: Well, I've hard time seeing how they'd approve one and 675 00:33:41,120 --> 00:33:44,600 Speaker 6: not the others because everyone is basically using the same format, 676 00:33:44,880 --> 00:33:47,040 Speaker 6: which is again very similar to where we have with 677 00:33:47,600 --> 00:33:50,719 Speaker 6: similar custodians, with the Gemini and coin Base, and similar 678 00:33:50,760 --> 00:33:53,680 Speaker 6: trading partners and as similar structures. So I think at 679 00:33:53,720 --> 00:33:55,480 Speaker 6: the end of the day they will approve all of 680 00:33:55,480 --> 00:33:58,160 Speaker 6: them versus just one offs and then it's going to 681 00:33:58,200 --> 00:34:00,520 Speaker 6: be as we're seeing a competition see who's going to 682 00:34:00,520 --> 00:34:03,080 Speaker 6: be the one to get into the market share. We 683 00:34:03,080 --> 00:34:05,160 Speaker 6: were fortunate to be the first in Canada and that 684 00:34:05,280 --> 00:34:08,040 Speaker 6: was a good advantage to go, but you really at 685 00:34:08,040 --> 00:34:10,560 Speaker 6: the end of the day then have to deliver. There's 686 00:34:10,600 --> 00:34:12,600 Speaker 6: one thing being first to market, but if you have 687 00:34:12,760 --> 00:34:15,520 Speaker 6: investors a bad experience, then that's something where you can 688 00:34:15,600 --> 00:34:17,920 Speaker 6: lose a lot of credibility and really be a mark 689 00:34:18,000 --> 00:34:20,799 Speaker 6: on the whole ecosystem. So I think what we were 690 00:34:20,840 --> 00:34:22,160 Speaker 6: hoping for is that this is going to be a 691 00:34:22,200 --> 00:34:24,280 Speaker 6: good experience, that there aren't going to be any problems 692 00:34:24,280 --> 00:34:26,440 Speaker 6: in the first day of trading and that would be 693 00:34:26,480 --> 00:34:28,680 Speaker 6: at the end of the day positive for the space. 694 00:34:29,000 --> 00:34:30,680 Speaker 2: At Greg Taylor, thanks so much for joining us. Really 695 00:34:30,680 --> 00:34:33,520 Speaker 2: appreciate it. Greg Taylor, He's the CIO of Purpose Investments 696 00:34:33,560 --> 00:34:36,160 Speaker 2: for the good folks up in Canada. They that came 697 00:34:36,200 --> 00:34:41,279 Speaker 2: out with the world's first direct custody Bitcoin ETF. They 698 00:34:41,320 --> 00:34:44,000 Speaker 2: did that in twenty twenty one, so Canadians ahead of 699 00:34:44,040 --> 00:34:44,840 Speaker 2: the US market. 700 00:34:44,840 --> 00:34:47,840 Speaker 8: Here you're listening to the tape can't our live program 701 00:34:47,880 --> 00:34:51,840 Speaker 8: Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, 702 00:34:52,000 --> 00:34:54,080 Speaker 8: the tune in app, Bloomberg dot Com, and. 703 00:34:54,040 --> 00:34:55,359 Speaker 3: The Bloomberg Business App. 704 00:34:55,400 --> 00:34:58,200 Speaker 8: You can also listen live on Amazon Alexa from our 705 00:34:58,239 --> 00:35:02,200 Speaker 8: flagship New York station Alexa playing Bloomberg eleven. 706 00:35:04,800 --> 00:35:08,719 Speaker 2: Right now, let's get back out to Vegas. The high 707 00:35:08,800 --> 00:35:11,880 Speaker 2: rollers table at the Bellagio. Uh Wu jin Ho. He 708 00:35:11,920 --> 00:35:17,280 Speaker 2: covers all the technology stuff for Bloomberg Intelligence. Wooge. First question, 709 00:35:18,120 --> 00:35:20,279 Speaker 2: what hotel you staying at? 710 00:35:20,880 --> 00:35:26,280 Speaker 7: I'm at the Alara which one health and Alarau. 711 00:35:27,239 --> 00:35:31,040 Speaker 2: Trouble all right? All right, Uh, I'm a Bolagio guy 712 00:35:31,080 --> 00:35:33,680 Speaker 2: myself at anyway, good stuff, woo talk to us about 713 00:35:33,719 --> 00:35:37,520 Speaker 2: this deal that we see with HPE and this other 714 00:35:37,800 --> 00:35:40,400 Speaker 2: I mean, does this make sense for that the sector, 715 00:35:40,440 --> 00:35:43,479 Speaker 2: because I know there's a lot of uncertainty out there 716 00:35:43,719 --> 00:35:46,960 Speaker 2: just about you know, kind of what this deal means 717 00:35:47,840 --> 00:35:49,200 Speaker 2: for the companies here. 718 00:35:50,440 --> 00:35:55,719 Speaker 7: Sure. So for for HPE, they've been looking to diversify 719 00:35:55,760 --> 00:36:00,160 Speaker 7: their core computing business for quite some time now. One 720 00:36:00,160 --> 00:36:02,000 Speaker 7: of the things that they've done several years back and 721 00:36:02,080 --> 00:36:05,560 Speaker 7: made the room of acquisition flow start. But that's one 722 00:36:05,600 --> 00:36:10,239 Speaker 7: of the more probable businesses for HPE. In making this 723 00:36:10,280 --> 00:36:14,920 Speaker 7: acquisition with Juniper, they've actually doubled down on networking. The 724 00:36:14,960 --> 00:36:18,440 Speaker 7: networking business is as large as their compute business, and 725 00:36:18,480 --> 00:36:21,600 Speaker 7: the hope over the long term is to drive better 726 00:36:21,640 --> 00:36:23,400 Speaker 7: margin expansion going forward. 727 00:36:23,640 --> 00:36:25,480 Speaker 2: What do you think about the price here is? And 728 00:36:25,520 --> 00:36:27,160 Speaker 2: I guess the bigger issue is is this a good 729 00:36:27,239 --> 00:36:28,680 Speaker 2: use of cash, good use of capital? 730 00:36:29,560 --> 00:36:31,319 Speaker 7: You know, that's a really good question, and I think 731 00:36:31,360 --> 00:36:35,560 Speaker 7: that's one of the reasons why you know, investors were 732 00:36:36,080 --> 00:36:38,960 Speaker 7: not too happy reflected by the share price, right. I 733 00:36:39,000 --> 00:36:42,760 Speaker 7: think there was an expectation of some money coming due 734 00:36:42,880 --> 00:36:45,759 Speaker 7: from the H three C divestia share roughly about three 735 00:36:45,800 --> 00:36:50,680 Speaker 7: billion coming back into better capital returns. Now, now that 736 00:36:50,840 --> 00:36:55,200 Speaker 7: being said, you know, the question is is that you 737 00:36:55,239 --> 00:36:59,399 Speaker 7: know with that fourteen billion dollars used for Juniper, will 738 00:36:59,400 --> 00:37:02,279 Speaker 7: that drive multi full expansion. Let me give you a 739 00:37:02,280 --> 00:37:06,239 Speaker 7: case in point. If you think about traditional Dell, HP 740 00:37:07,520 --> 00:37:11,000 Speaker 7: and HPE, they trade roughly around eight to nine times 741 00:37:11,040 --> 00:37:15,360 Speaker 7: forward arnings. The networking guys on average trade or for 742 00:37:15,440 --> 00:37:19,560 Speaker 7: about fifteen times forward arnings fifteen sixteen times if it 743 00:37:19,600 --> 00:37:22,439 Speaker 7: goes back, If if we start reverting to the mean 744 00:37:23,880 --> 00:37:26,840 Speaker 7: to the two multiples, you could probably get about a 745 00:37:26,880 --> 00:37:29,920 Speaker 7: thirty percent valuation bump if this deal works out for 746 00:37:30,600 --> 00:37:31,320 Speaker 7: HPE's favor. 747 00:37:32,080 --> 00:37:34,640 Speaker 2: Is that the sphere behind you that is very well? 748 00:37:34,719 --> 00:37:36,680 Speaker 7: That is the sphere that is very well. I pick 749 00:37:36,719 --> 00:37:38,640 Speaker 7: this hotel? Yeah, why I pick this hotel? 750 00:37:39,360 --> 00:37:39,799 Speaker 11: Very good? 751 00:37:39,840 --> 00:37:41,319 Speaker 2: I mean I gotta get out there because it looks 752 00:37:41,800 --> 00:37:44,479 Speaker 2: really awesome out there. So anyway, all right, Wou Jinho, 753 00:37:44,560 --> 00:37:46,640 Speaker 2: Thanks Sank for taking some time out there. I'll let 754 00:37:46,680 --> 00:37:49,080 Speaker 2: you get back to the conference floor there. 755 00:37:50,040 --> 00:37:53,080 Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can 756 00:37:53,160 --> 00:37:56,880 Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever 757 00:37:57,040 --> 00:37:58,479 Speaker 1: podcast platform you prefer. 758 00:37:58,880 --> 00:37:59,680 Speaker 2: I'm Matt Miller. 759 00:38:00,040 --> 00:38:03,360 Speaker 1: I'm on Twitter at Matt Miller nineteen seventy three and 760 00:38:03,480 --> 00:38:04,160 Speaker 1: I'm Paul Sweeney. 761 00:38:04,200 --> 00:38:06,800 Speaker 2: I'm on Twitter at pt Sweeney. Before the podcast, you 762 00:38:06,880 --> 00:38:09,239 Speaker 2: can always catch us worldwide at Bloomberg Radio.