WEBVTT - A Bitcoin ETF Could Make The Cryptocurrency Safer: SEC’s Peirce 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm Pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:33.239 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Yesterday, 0:00:33.240 --> 0:00:36.599 the Curious Exchange Commission rejected her request to list a 0:00:36.680 --> 0:00:40.279 Bitcoin e t F run by the Winklevoss Brothers. They 0:00:40.280 --> 0:00:43.160 were study concerns about the reliability of trading and volume 0:00:43.240 --> 0:00:47.440 data for the cryptocurrency. Hester Purse was the only SEC 0:00:47.640 --> 0:00:50.760 commissioner to dissent from that ruler ruling, saying that she 0:00:50.760 --> 0:00:53.239 would have allowed the Bitcoin e TF to listen. She 0:00:53.320 --> 0:00:55.480 joins US now, commission or thank you so much for 0:00:55.560 --> 0:00:57.800 joining us. I want to start with why did you 0:00:57.840 --> 0:01:01.080 disagree with your colleagues on this issue? Sure, thanks for 0:01:01.120 --> 0:01:04.520 having me on. I I disagreed because it was really 0:01:04.560 --> 0:01:08.720 a technical disagreement. I think that the way this was 0:01:08.840 --> 0:01:12.759 presented to US is an exchange presented to US um 0:01:13.040 --> 0:01:16.400 this this a rule change which would allow them to 0:01:17.640 --> 0:01:22.399 trade this particular product and um, the standards by which 0:01:22.400 --> 0:01:25.000 we review that should be whether or not the exchange 0:01:25.160 --> 0:01:29.440 can manage trading in that product, and instead, I think 0:01:29.480 --> 0:01:33.520 we looked to the underlying bitcoin market and we um, 0:01:33.600 --> 0:01:36.959 we looked at things in that market that we we 0:01:37.040 --> 0:01:39.360 didn't like, and we said we're not going to let 0:01:39.400 --> 0:01:42.840 the product trade, which to me doesn't seem like the 0:01:42.920 --> 0:01:45.560 right approach at all. Commissioner person, I was reading your 0:01:45.560 --> 0:01:48.840 descent and I found it really interesting. The implication seemed 0:01:48.880 --> 0:01:52.080 to be that a bitcoin e t F may help 0:01:52.200 --> 0:01:56.200 actually bring more transparency to the market. Was I reading 0:01:56.200 --> 0:01:59.200 that correctly right? I think that in this case, it 0:01:59.240 --> 0:02:02.520 wasn't an e t F specifically, but an exchange traded product, 0:02:02.560 --> 0:02:07.240 which would would allow institutions to play a bigger role 0:02:07.280 --> 0:02:09.680 in the bitcoin market, which I think would would be 0:02:09.720 --> 0:02:11.600 good for the market, and I think would be good 0:02:11.639 --> 0:02:15.880 for retail investors as well. Just can you offer your 0:02:16.480 --> 0:02:20.680 definition of what is a cryptocurrency and what is behind 0:02:20.880 --> 0:02:25.520 the potential value in a cryptocurrency? Well, I think there 0:02:25.560 --> 0:02:30.160 are many different cryptocurrencies, so I think it's hard to 0:02:30.440 --> 0:02:34.800 provide one definition for all cryptocurrencies. Um. You know, bitcoin 0:02:34.880 --> 0:02:38.320 has been traded for quite some time, and and offers 0:02:38.400 --> 0:02:42.079 the ability for people to exchange value in a very 0:02:42.120 --> 0:02:46.680 efficient way. UM. And So you know, I think that 0:02:46.720 --> 0:02:49.160 there there are a lot of people think that there's 0:02:49.360 --> 0:02:53.040 real potential in bitcoin. UM. As I said in my descent, 0:02:53.080 --> 0:02:55.240 I'm not trying to make a judgment one way or 0:02:55.280 --> 0:02:58.520 the other on bitcoin or any cryptocurrency. I'm just trying 0:02:58.520 --> 0:03:02.880 to give investors an opportunity to participate in this market. So, 0:03:03.200 --> 0:03:06.359 Commissioner I was interested by a study that came out 0:03:06.400 --> 0:03:09.440 by coin Metrics this week that showed that up to 0:03:09.480 --> 0:03:12.440 two thirds of the transaction activity registered on the bitcoin 0:03:12.520 --> 0:03:17.040 network has no economic value, with volumes being more influenced 0:03:17.040 --> 0:03:21.080 by reshuffling balances between accounts and outright scams. So how 0:03:21.160 --> 0:03:25.480 did the Winklevoss brothers propose to offset that with their 0:03:25.480 --> 0:03:27.919 e t F that would give sort of more confidence 0:03:27.919 --> 0:03:31.520 to the institutional investors. Well, the way this product was 0:03:31.560 --> 0:03:34.040 set up, as it was pegged to the price on 0:03:34.040 --> 0:03:37.920 on one exchange to the auction the closing auction at 0:03:37.960 --> 0:03:41.480 the end of the day, and so that was that 0:03:41.560 --> 0:03:43.520 was how they chose to do it. There are other 0:03:43.840 --> 0:03:46.840 there are other approaches that one could take, and others 0:03:46.960 --> 0:03:51.200 have come in with different potential potential suggestions of how 0:03:51.240 --> 0:03:54.880 to do that. But again, I mean as you get 0:03:55.160 --> 0:03:59.920 more institutions involved, the markets are going to become more regular, regularized, 0:04:00.080 --> 0:04:02.920 and you know as to whether or not there's economic 0:04:03.080 --> 0:04:05.480 value in particular trading. I think we need to be 0:04:05.560 --> 0:04:08.800 careful in making those kind of kinds of judgments UM 0:04:09.000 --> 0:04:11.240 in our equity markets to there are people who are 0:04:11.320 --> 0:04:14.000 involved in the markets for all different reasons. We have 0:04:14.080 --> 0:04:16.920 people who are who are planning to buy and hold 0:04:16.960 --> 0:04:19.440 for long term, we have people who are holding for 0:04:19.560 --> 0:04:22.560 much shorter for much shorter time frames. And we have 0:04:22.600 --> 0:04:25.840 people who are UM providing liquidity and who are trading 0:04:25.839 --> 0:04:28.680 in and out quite rapidly, and all of those different 0:04:28.680 --> 0:04:31.560 people have a different function in the market. But but 0:04:31.720 --> 0:04:35.160 I don't think we need to make judgments about UM 0:04:35.279 --> 0:04:38.840 whether their their activity has value or not. Commissioner, do 0:04:38.880 --> 0:04:42.200 you think that there's a regulatory bias against bitcoin right 0:04:42.200 --> 0:04:46.240 now and cryptocurrencies because there are people questioning whether they 0:04:46.240 --> 0:04:48.560 have inherent value and whether they are a bubble that 0:04:48.680 --> 0:04:52.560 have sort of nothing behind them. Well, I think there 0:04:52.560 --> 0:04:55.680 are people who are questioning the value of bitcoin UM, 0:04:55.720 --> 0:04:59.560 and I think that as regulators, our role is not 0:04:59.720 --> 0:05:03.240 to judge investments, what the what the value of an 0:05:03.279 --> 0:05:05.880 investment is. It's to give people an opportunity to make 0:05:05.880 --> 0:05:09.080 those judgments themselves. UM. And you know, there are a 0:05:09.120 --> 0:05:12.880 lot of very very smart people who are very engaged 0:05:12.920 --> 0:05:17.400 in the crypto space and have UM have real ideas 0:05:17.400 --> 0:05:19.440 about how it could transform our lives. And I think 0:05:19.440 --> 0:05:23.040 we need to give those people an opportunity to UM 0:05:23.279 --> 0:05:26.599 work work with with what they have, and to to 0:05:26.680 --> 0:05:29.000 see what they can make of it. And and I'd 0:05:29.120 --> 0:05:32.960 rather that we as regulators make sure that disclosure is good, 0:05:33.120 --> 0:05:35.600 which is which is certainly a key part of our 0:05:36.080 --> 0:05:40.800 responsibility UM, but then allow investors to make their own choices. Commissioners, 0:05:40.920 --> 0:05:45.000 do you expect that your fellow commissioners will change their 0:05:45.040 --> 0:05:48.880 mind and could approve a bit coin or other cryptocurrency 0:05:48.960 --> 0:05:52.920 e t F in the near future. Well, I do 0:05:53.000 --> 0:05:55.240 think it's possible. I mean, things in this space are 0:05:55.320 --> 0:05:58.200 changing fast and and UM some of the concerns that 0:05:58.240 --> 0:06:01.000 have been laid out by the commission are ones that 0:06:01.360 --> 0:06:05.000 you know every day people are working on developing solutions 0:06:05.040 --> 0:06:07.960 and addressing those concerns. So I think if we work 0:06:08.040 --> 0:06:11.440 with people in this space, UM, we may be able 0:06:11.440 --> 0:06:14.560 to get more comfortable about things that that have, uh, 0:06:14.720 --> 0:06:18.080 that have raised concerns from my colleagues. So I can't 0:06:18.120 --> 0:06:20.880 speak for them, you know, I can say from my perspective, 0:06:20.960 --> 0:06:23.600 I think we could have gone forward with this with 0:06:23.720 --> 0:06:28.320 this particular et P, and I think that, uh, doing 0:06:28.360 --> 0:06:31.080 so would have been would have been the right thing 0:06:31.160 --> 0:06:34.679 to do for investors. What do you think should happen 0:06:34.680 --> 0:06:38.279 in order to mitigate the agency's concerns over fraudulent and 0:06:38.400 --> 0:06:46.200 manipulative acts or practices that could be perpetrated using cryptocurrencies. Well, 0:06:46.240 --> 0:06:50.599 I think that in many underlying you know, in many 0:06:50.920 --> 0:06:54.960 many assets, underlying products that trade on our exchanges, their 0:06:55.000 --> 0:06:59.000 concerns about manipulation and so um. Yeah, But what could 0:06:59.000 --> 0:07:01.800 specifically be in order to mitigate this having to do 0:07:01.839 --> 0:07:06.480 with cryptocurrencies because this is an unregulated offshore market, Well, 0:07:07.480 --> 0:07:11.400 there there are onshore markets and offshore markets, so you're 0:07:11.520 --> 0:07:15.520 you're right, it's a global marketplace, uh, And and there 0:07:15.560 --> 0:07:19.160 are players involved in this space who are very interested 0:07:19.200 --> 0:07:22.640 in making sure that there's no manipulation. And so there 0:07:22.880 --> 0:07:26.000 is quite a bit of self regulation going on right 0:07:26.040 --> 0:07:29.880 now to address manipulation or or charges The manipulation, and 0:07:29.960 --> 0:07:32.920 I think that's valuable um and I think if we 0:07:32.920 --> 0:07:37.800 were to bring in the possibility of more institutionalization in 0:07:37.840 --> 0:07:40.880 the market, I think there would be even more watching 0:07:40.960 --> 0:07:43.400 for manipulation that would be going on by people who 0:07:43.480 --> 0:07:48.080 definitely have skin in the game. So, yes, there there 0:07:48.200 --> 0:07:51.920 is manipulation and and and there is the potential from 0:07:52.040 --> 0:07:57.320 manipulation and lots of markets and and we uh, we 0:07:57.360 --> 0:08:00.560 can see that that people involved in the those markets 0:08:00.600 --> 0:08:04.720 take steps to address that. And and so obviously the 0:08:04.840 --> 0:08:07.520 exchange that would be offering this product has a real 0:08:07.640 --> 0:08:10.880 interest in making sure that it's offering a product that 0:08:11.680 --> 0:08:14.480 isn't being manipulated, and if it sees problems in the 0:08:14.560 --> 0:08:17.640 underlying it can step in and stop trading. We've got 0:08:17.640 --> 0:08:18.920 to leave it there, But I want to thank you 0:08:19.000 --> 0:08:21.480 very much for your time and your comments. Hester Purse, 0:08:21.840 --> 0:08:26.680 Securities and Exchange Commissioner, speaking about the rejection of the 0:08:26.760 --> 0:08:45.520 VINKL Boss Twins Crypto e t F. Another company that 0:08:45.559 --> 0:08:48.720 has been in the news is n XP a semiconductor 0:08:49.120 --> 0:08:54.040 Why because Qualcom was looking to acquire the company, but 0:08:54.480 --> 0:08:57.360 that deal has gone by the wayside. And here to 0:08:57.360 --> 0:08:59.720 tell us a little bit more about it is Rick Klemmer, 0:09:00.240 --> 0:09:04.360 President and the chief executive of an XP Semiconductors. Thank 0:09:04.360 --> 0:09:07.320 you very much for being here. Maybe just explain why 0:09:07.360 --> 0:09:10.720 do you believe the deal didn't get done. Well, you know, 0:09:10.760 --> 0:09:13.000 it's hard for us to understand completely. We don't think 0:09:13.000 --> 0:09:16.240 there was any real regulatory issue that prevented the transaction 0:09:16.320 --> 0:09:19.120 from being approved in China. It was approved by twenty 0:09:19.200 --> 0:09:22.600 something other countries around the world, so it really wasn't 0:09:22.600 --> 0:09:25.720 a true regulatory issue, So it was probably a political issue. 0:09:25.760 --> 0:09:28.320 But you know, at this point in time, it's all 0:09:28.360 --> 0:09:30.280 about how we move forward and how we can get 0:09:30.320 --> 0:09:32.800 back to driving the growth that's the best for our 0:09:32.840 --> 0:09:35.760 company and our shareholders. When you talk about moving forward, 0:09:35.800 --> 0:09:38.199 I have to wonder did you get about ten calls 0:09:38.280 --> 0:09:42.360 from other potential acquirers right after that saying hey, I 0:09:42.400 --> 0:09:45.520 want to meet for coffee. We haven't, and you know 0:09:45.640 --> 0:09:47.720 we don't plan on doing that. I mean, with the 0:09:47.840 --> 0:09:50.760 issue being the regulatory approval process, I don't know why 0:09:50.800 --> 0:09:53.000 it would be any different with anyone else. So you know, 0:09:53.040 --> 0:09:54.920 we have a bright future when you look at where 0:09:54.960 --> 0:09:58.280 we are, we're the leading semiconductor supplying to the automotive market, 0:09:58.559 --> 0:10:01.800 very focused on autonomas driving, which really in the next 0:10:01.840 --> 0:10:04.800 few years are actually probably next ten years, is about drive, 0:10:05.040 --> 0:10:09.240 making driving safer, not really automatic driving, and so we're 0:10:09.280 --> 0:10:12.520 focused on that. We're focused on facilitating the Internet of Things, 0:10:12.559 --> 0:10:15.360 which you know is going to have seventy five billion 0:10:15.360 --> 0:10:19.200 connected devices by three times what it is today. And 0:10:19.200 --> 0:10:22.440 our technology really is in a position where it can 0:10:22.480 --> 0:10:25.199 take advantage of that and really provides some useful solutions 0:10:25.280 --> 0:10:27.439 for everyone. Now, just to knowe you have a career 0:10:27.440 --> 0:10:28.679 that goes all the way back to the world of 0:10:28.760 --> 0:10:32.640 Texas instruments. Correct, Okay, Uh. The reason I bring that 0:10:32.760 --> 0:10:38.120 up is because an XP Semiconductor Phillips. I mean, that's 0:10:38.120 --> 0:10:41.560 really can you look forward into and tell us what 0:10:41.600 --> 0:10:43.920 do you think the chip company of the future is 0:10:43.920 --> 0:10:46.080 really gonna look like? Well, you know, we're trying to 0:10:46.080 --> 0:10:48.160 be sure that we're that. So I I get I 0:10:48.200 --> 0:10:50.520 get that. But it's come through a lot of acquisitions 0:10:50.520 --> 0:10:53.360 and combinations, and so we did a merger of equals 0:10:53.360 --> 0:10:55.680 about three years ago with three freest which was the 0:10:55.720 --> 0:10:59.959 Motorola Semiconductor company, and and that's proved to be very 0:11:00.040 --> 0:11:02.559 successful for us in the automotive space where we can 0:11:02.600 --> 0:11:05.600 bring the combination of both technologies together to be able 0:11:05.640 --> 0:11:08.920 to make a difference for our customers in the car industry. 0:11:09.080 --> 0:11:12.400 And so I think that those opportunities are really key. 0:11:12.640 --> 0:11:14.960 But it's about focusing on the future. And you know, 0:11:15.120 --> 0:11:17.520 we are in a unique position where we can provide 0:11:17.559 --> 0:11:20.640 the processing and the security because with all the hacking 0:11:20.720 --> 0:11:24.160 and risk of of hacking, being able to provide security 0:11:24.200 --> 0:11:28.199 in the connected world as a critical value. What did 0:11:28.200 --> 0:11:30.360 it do to morale to have this deal after so 0:11:30.480 --> 0:11:33.680 much hype and so much drama fall apart. You know, 0:11:33.760 --> 0:11:37.200 it was really interesting. Initially our organization was very excited 0:11:37.200 --> 0:11:40.000 about the combination with Qualcom. When the confusion came in 0:11:40.120 --> 0:11:43.800 when Broadcom made the hostile bid for Qualcom late last year, 0:11:44.040 --> 0:11:48.640 it really created a damper on the environment because no 0:11:48.679 --> 0:11:50.559 one was looking forward to be in a position to 0:11:51.120 --> 0:11:54.000 be there. But you know, we've gotten through that fatigue. 0:11:54.040 --> 0:11:57.240 Now the organization is re energized. We we had an 0:11:57.240 --> 0:11:59.960 all hands meeting after the morning after it was announced, 0:12:00.000 --> 0:12:02.320 and everyone was quite excited about the future and just 0:12:02.440 --> 0:12:05.559 having certainty and clarity about where we're going. Just to 0:12:05.679 --> 0:12:09.720 quickly when a client or a customer goes to a 0:12:09.840 --> 0:12:14.160 store and pays using their mobile phone like Apple Pay 0:12:14.280 --> 0:12:18.280 or Google Pay. What are they using an an XP product? 0:12:19.080 --> 0:12:22.280 Most likely they are. We have roughly a d eighty 0:12:22.320 --> 0:12:25.000 five percent market share in the mobile wallet. We invented 0:12:25.080 --> 0:12:29.640 NFC some near field communications, yes absolutely, which facilitates the 0:12:29.679 --> 0:12:32.360 mobile wallet, and so we're designed in and most of 0:12:32.360 --> 0:12:34.680 those applications to be able to do that. We see 0:12:34.679 --> 0:12:38.199 that expanding, especially in Asia where it's becoming much more 0:12:38.280 --> 0:12:42.280 useful used for transit and other applications. Uh in India, 0:12:42.320 --> 0:12:44.800 they're actually where people don't have a bank account are 0:12:44.840 --> 0:12:48.320 now using their phone basically as their bank account to 0:12:48.360 --> 0:12:51.400 facilitate transactions, to be able to store money, save money. 0:12:51.640 --> 0:12:54.360 So we're seeing a real boom in usage in the 0:12:54.400 --> 0:12:57.360 India for the population that really doesn't even have a 0:12:57.400 --> 0:13:00.880 bank account today. So you know, Apple talking about your 0:13:00.920 --> 0:13:05.560 smartphone use and and the smart pay. Apple has talked 0:13:05.640 --> 0:13:09.840 about possibly creating more of its own chips and trying 0:13:09.880 --> 0:13:13.160 to create more of its own infrastructure. How concerned are 0:13:13.160 --> 0:13:17.360 you about that? Well, you know, Apple has certainly got 0:13:17.360 --> 0:13:20.440 a bright future and they've clearly moved towards where they're 0:13:20.480 --> 0:13:24.040 creating a significant amount of their own technology. I think 0:13:24.080 --> 0:13:27.559 we're uniquely positioned with some key technology that they probably 0:13:27.600 --> 0:13:30.000 don't want to invest in to be able to drive 0:13:30.120 --> 0:13:33.280 based on the broad usage from a broad customer base 0:13:33.320 --> 0:13:35.480 where they wouldn't be able to serve. So I think, 0:13:35.920 --> 0:13:37.719 based on our experience, we think we have a good 0:13:37.760 --> 0:13:41.920 relationship with OLI our uh you know, mobile handset customers, 0:13:41.920 --> 0:13:44.360 and I think we can continue to make good progress there. 0:13:44.920 --> 0:13:47.839 Biometric passports. I love the details of this stuff, so 0:13:47.880 --> 0:13:51.320 I mean that's you as well, right, Biometric chips. We 0:13:51.320 --> 0:13:54.240 we do the chip that's used in the electronic passport 0:13:54.320 --> 0:13:58.760 that helps facilitate you know, processing information. So we do that. 0:13:58.840 --> 0:14:02.240 And I think any six countries around the world, what 0:14:02.280 --> 0:14:04.600 do you think is going to be the biggest smart 0:14:04.720 --> 0:14:07.959 market that is not smart right now? In other words, 0:14:08.120 --> 0:14:11.920 where chips going to be in the future that where 0:14:11.920 --> 0:14:14.120 they aren't today. You know it's gonna be ever place. 0:14:14.200 --> 0:14:16.559 You know, as you start thinking about seventy five billion, 0:14:17.000 --> 0:14:19.560 you know it's huge. And so like your thermostat, all 0:14:19.600 --> 0:14:23.160 thermostats are going to be connected. Security, your security and 0:14:23.200 --> 0:14:25.680 your home or office or industry is all going to 0:14:25.720 --> 0:14:28.200 be connected so you can see what's going on wherever 0:14:28.280 --> 0:14:32.400 you are around the during your work day or around 0:14:32.520 --> 0:14:36.480 travel or whatever. So I have regulators been working closely 0:14:36.520 --> 0:14:39.000 with you Is they start to get concerned about surveillance 0:14:39.040 --> 0:14:41.720 and safety and all that. We we work with a 0:14:41.840 --> 0:14:46.240 number of governments relative to how to provide that best security. 0:14:46.320 --> 0:14:48.960 But you know, with the new implementation of the you know, 0:14:49.000 --> 0:14:51.360 the new acts in Europe, we have to be very 0:14:51.360 --> 0:14:54.000 careful about that information and certainly we're working with them 0:14:54.000 --> 0:14:56.400 to be able to protect it but not ensure that 0:14:56.400 --> 0:15:01.080 it's not abused. Alright, well, I guess that uh, the 0:15:01.120 --> 0:15:04.200 future of an XP semiconductor as you see it right 0:15:04.240 --> 0:15:09.480 now independent. Absolutely, we look forward to continuing to drive 0:15:09.520 --> 0:15:11.880 a bright future. And is the M and A wave 0:15:11.960 --> 0:15:14.800 in the semiconductor space dead? You know, I don't know 0:15:14.840 --> 0:15:17.600 that it's dead. It's clearly going to go through a 0:15:17.720 --> 0:15:22.040 very thoughtful process. If this transaction didn't get approved in China, 0:15:22.080 --> 0:15:25.280 where it was approved by the twentysomething countries around the world, 0:15:25.400 --> 0:15:27.480 I think people are gonna have to really think about, 0:15:27.760 --> 0:15:29.600 you know, how much risk they want to take. Twenty 0:15:29.640 --> 0:15:32.120 one months is a long time to put your organization 0:15:32.200 --> 0:15:35.720 into a disruptive nature. So I think there will have 0:15:35.760 --> 0:15:38.920 to be a reflection associated with that. Did you feel 0:15:39.000 --> 0:15:43.640 any of the effects of the ban on purchasing products 0:15:43.720 --> 0:15:50.120 from China's ZTE Corporation purchase shipping product in Yes, we 0:15:50.400 --> 0:15:52.600 z T is a good customer of ours, and just 0:15:52.720 --> 0:15:55.760 last quarter we announced thirty one million dollar impact for 0:15:55.880 --> 0:15:59.120 the fact that the US had had prevented that from 0:15:59.200 --> 0:16:02.160 taking place. So I think they're a good customer. I think, 0:16:02.200 --> 0:16:05.360 you know, it's important that you know the UH the 0:16:05.520 --> 0:16:09.760 appropriate steps are taken to provide the security about information. 0:16:09.840 --> 0:16:12.280 But with the proper oversight, it seems like it's only 0:16:12.280 --> 0:16:16.200 appropriate for the company to be able to to be competitive. 0:16:16.280 --> 0:16:19.240 There are no US companies that are still in that 0:16:19.360 --> 0:16:22.960 market the ZT serves, so it's not certainly not like 0:16:23.040 --> 0:16:26.680 it's UH anti competitive for any US company. And they 0:16:26.720 --> 0:16:29.440 probably purchased around three and af or four billion dollars 0:16:29.480 --> 0:16:32.360 a year of semiconductor components, and my guess is sent 0:16:33.080 --> 0:16:36.280 percent of that is from US companies are US manufactured 0:16:36.360 --> 0:16:39.080 like our product is. So you know, I think it's 0:16:39.080 --> 0:16:41.920 a big decision, and you know, I I applaud what's 0:16:41.960 --> 0:16:45.160 been done recently where they're putting them in a little 0:16:45.200 --> 0:16:48.760 bit different fashion with appropriate oversight to protect U s 0:16:48.880 --> 0:16:53.000 national security, but yet at less, at least letting them 0:16:53.040 --> 0:16:56.280 continue to operate as an independent company. Rick Clamora, thank 0:16:56.320 --> 0:16:58.480 you so much for being with us. Really a pleasure 0:16:58.480 --> 0:17:01.160 to speak with you. You're such a celebrity and sort 0:17:01.160 --> 0:17:03.360 of star of this soap opera we've been talking about 0:17:03.400 --> 0:17:06.920 for so long. Uh, the potential tie up of Qualcom 0:17:06.960 --> 0:17:09.560 and n XP. Rick Klemmer as a president and chief 0:17:09.600 --> 0:17:14.080 executive of n XP Semiconductor's NXP Semiconductors to remain independent 0:17:14.480 --> 0:17:33.879 for the foreseeable future, you know, talk about another curveball. 0:17:34.280 --> 0:17:37.520 Investors in Twitter got a nice curveball and they whipped 0:17:38.000 --> 0:17:41.640 down right now. And here to tell us a little 0:17:41.640 --> 0:17:44.800 bit about Twitter's results and the changing nature of social 0:17:44.840 --> 0:17:48.000 media is Jim Anderson. He is the chief executive of 0:17:48.200 --> 0:17:52.960 social Flow. Uh. They are a company that sort of 0:17:53.080 --> 0:17:57.879 measures and monitors flows of information on social media. And 0:17:58.040 --> 0:18:01.119 in full disclosure, social Flow is a platform used by 0:18:01.320 --> 0:18:05.479 Bloomberg for social media purposes. Jim Anderson, thanks very much 0:18:05.480 --> 0:18:08.320 for being here. Tell us, did I describe what you 0:18:08.400 --> 0:18:11.480 do at all accurately? You did. We're the platform most 0:18:11.520 --> 0:18:13.320 of the big media companies used to get their content 0:18:13.400 --> 0:18:15.800 out to Twitter, Facebook, and other social platforms. We do 0:18:16.000 --> 0:18:17.840 a measure and sort of if you think about stock 0:18:17.880 --> 0:18:20.440 market analysts, we're not an analyst of the stocks, where 0:18:20.440 --> 0:18:23.800 an analysts consumer attention, right, And that's important because as 0:18:23.840 --> 0:18:27.239 a publisher, you want to know whether real people are 0:18:27.320 --> 0:18:30.399 really looking at your content. That's exactly right, that's the 0:18:30.560 --> 0:18:32.320 entire game. If you can't get real people to pay 0:18:32.359 --> 0:18:34.879 attention to what you're doing, why are you doing it? Okay? 0:18:35.119 --> 0:18:38.200 Is Twitter getting more real people to do what they're 0:18:38.240 --> 0:18:41.000 supposed to do on the Twitter platform? The irony is yes. 0:18:41.119 --> 0:18:42.680 I mean you wouldn't know it from their stock price, 0:18:43.040 --> 0:18:45.480 and I think the takeaway and Facebook in the same category. 0:18:45.520 --> 0:18:47.720 When you're a tech growth stock and you're not growing 0:18:47.800 --> 0:18:50.040 as much as is the market expected you to grow, 0:18:50.080 --> 0:18:52.320 you're you're going to be punished. But the reality is 0:18:52.359 --> 0:18:54.920 there are just as many, if not more, real people 0:18:55.080 --> 0:18:58.800 using Facebook and Twitter today then there were six months ago, 0:18:59.200 --> 0:19:01.760 three months ago, yesterday. I mean they're still growing, they're 0:19:01.800 --> 0:19:04.439 just not growing as fast as they were and as 0:19:04.480 --> 0:19:07.200 the market expects. And Twitter's results are sort of complicated 0:19:07.200 --> 0:19:08.920 a little bit by this whole bond problem, and they're 0:19:08.920 --> 0:19:10.600 trying to clean up their ecosystem when I think they 0:19:10.640 --> 0:19:13.440 deserve amazing credit for trying to do that. But the numbers, 0:19:13.720 --> 0:19:15.719 you know, the total accounts, and whether they report them 0:19:15.760 --> 0:19:17.440 and whether they were including the numbers, you see a 0:19:17.480 --> 0:19:19.000 lot of you know, sort of questions about how you 0:19:19.119 --> 0:19:22.560 count these things. Well, Jim, you know, it's interesting that 0:19:22.760 --> 0:19:25.280 you say that there are more real users that are 0:19:25.320 --> 0:19:29.560 paying attention and signing up for Twitter and Facebook. Roger mcnameee, 0:19:29.680 --> 0:19:34.000 one of the original investors in Facebook and currently head 0:19:34.040 --> 0:19:36.760 of Elevation Partners, was on Bloomberg Television yesterday and he 0:19:36.880 --> 0:19:39.960 said that he thinks that Facebook in particular is running 0:19:40.040 --> 0:19:43.600 out of potential users in its more profitable markets. Do 0:19:43.640 --> 0:19:46.800 you agree, yes. I mean Facebook's over two billion people 0:19:46.920 --> 0:19:48.960 and there's seven and a half billion people on the planet. 0:19:49.040 --> 0:19:51.000 You know that a significant number of them aren't going 0:19:51.040 --> 0:19:53.520 to be candidates for for Facebook for all kinds of reasons. 0:19:53.520 --> 0:19:56.919 So I think that's absolutely uh been on their horizon 0:19:57.000 --> 0:19:59.160 for a long time. It's an open question how far 0:19:59.240 --> 0:20:01.080 can they grow. Of course, you have to wrap up 0:20:01.119 --> 0:20:03.240 Instagram in there, which is owned by Facebook. You have 0:20:03.320 --> 0:20:05.359 to wrap up What'sapp. So again you get into these 0:20:05.440 --> 0:20:07.960 counting questions. But without a doubt that that point I 0:20:08.040 --> 0:20:09.840 think has to be front and center. How big can 0:20:09.840 --> 0:20:14.360 you possibly grow? Having said that, if you are an advertiser, 0:20:15.000 --> 0:20:19.639 what is the alternative? Is it Amazon? Well? Increasingly so. 0:20:19.840 --> 0:20:21.600 I mean I think it's interesting. You know, we talked 0:20:21.600 --> 0:20:24.680 about the fang stocks, right, Facebook, Apple, Amazon, Netflix, Google, 0:20:24.720 --> 0:20:27.120 and now you see the analysts starting to decouple Amazon. 0:20:27.560 --> 0:20:29.800 Amazon didn't hit his revenue target either, and there are 0:20:29.840 --> 0:20:33.480 stocks up four percent, but their profitability to make sense 0:20:33.680 --> 0:20:36.280 of Wall Street, which I know, it's it's kind of crazy. 0:20:37.200 --> 0:20:40.280 Well except for the fact that Amazon has demonstrated the 0:20:40.359 --> 0:20:43.359 ability to layer on higher margin services on top of 0:20:43.400 --> 0:20:46.920 a relatively low margin, low profit commerce business, and so 0:20:47.720 --> 0:20:51.320 Amazon is closer to the point of purchase than anybody 0:20:51.400 --> 0:20:53.280 out there, even Google. I mean, look at how profitable 0:20:53.320 --> 0:20:55.120 Google is. It knows when you type in the search 0:20:55.200 --> 0:20:57.479 box I want to, you know, go on a vacation 0:20:57.600 --> 0:20:59.360 or whatever. They know you're shopping for a vacation. That's 0:20:59.359 --> 0:21:01.320 one of the reasons Google is able to make so 0:21:01.440 --> 0:21:05.040 much money off of advertising. Amazon is poised to become 0:21:05.080 --> 0:21:08.920 an advertising powerhouse that they have fift of e commerce 0:21:09.000 --> 0:21:11.159 revenue in the US goes to Amazon. They know what 0:21:11.280 --> 0:21:13.879 I'm buying, and I say that in all candor, they 0:21:13.960 --> 0:21:16.080 know what probably what you're buying is once they get 0:21:16.119 --> 0:21:18.679 you in this store. Yeah yeah, But Jim, that raises 0:21:18.720 --> 0:21:22.680 a question for the profitability and usefulness of Facebook and 0:21:23.160 --> 0:21:27.320 UH and Twitter as advertising advertising behemoths because they don't 0:21:27.400 --> 0:21:30.679 have the direct channel to the actual retailers. I mean, 0:21:30.760 --> 0:21:33.760 could this be part of the issue that from a 0:21:33.880 --> 0:21:38.080 consumer engagement standpoint, Twitter and Facebook just are not the 0:21:38.119 --> 0:21:40.720 best places to advertise. I don't know that. I would 0:21:40.720 --> 0:21:43.359 say that. I I put Twitter and Facebook more in 0:21:43.440 --> 0:21:45.520 the category of Netflix, which may seem odd I mean, 0:21:45.520 --> 0:21:47.640 they they're completely different business models. You know, ones ad 0:21:47.680 --> 0:21:50.840 supported and free and the other is subscription and doesn't 0:21:50.920 --> 0:21:54.240 have ads. But they all three of those companies, Facebook, Twitter, 0:21:54.359 --> 0:21:56.879 and Netflix are really trying to get as much of 0:21:57.000 --> 0:22:01.080 your consumer attention as possible, essentially your recreational entertain information time. 0:22:01.320 --> 0:22:03.280 Amazon is really quite different. I don't know too many 0:22:03.280 --> 0:22:05.600 people who go to Amazon just to entertain themselves, right, 0:22:05.640 --> 0:22:09.760 I go to Amazon when I need to. You know, 0:22:09.960 --> 0:22:15.480 shopping is uh, shopping is an activity fair points, So okay, 0:22:15.480 --> 0:22:18.080 I guess my male bias here. I don't go to 0:22:19.320 --> 0:22:21.040 I'm just saying, you know, you look at what people 0:22:21.240 --> 0:22:24.800 purchase and how they purchase it, and you think did 0:22:24.880 --> 0:22:27.040 you need that? You know, you didn't need that, but 0:22:27.200 --> 0:22:29.840 you were there and you started clicking around and pretty soon, 0:22:29.960 --> 0:22:31.879