'Bloomberg Technology' Full Show (11/12/2021)
From the heart of where innovation money and power collide. In Silicon Valley and beyond. This is Bloomberg Technology with Emily Chang. I'm Emily Chang in San Francisco and this is Bloomberg Technology coming up in the next hour. It was quite the week for break ups and company breakups. That is G.E. Toshiba and now Johnson and Johnson all announcing a business split. Could this trend spill into the tech sector where so many have been calling for the breakup of big tech. We'll discuss. Plus a Disney plus
stumble puts a damper on the streaming services birthday party. How the less than expected subscriber growth overshadowed their celebration. And outspoken short seller Carson BLOCK is back talking about Elon Musk and retail investors. What he has to say about what he calls the Reddit crowd and mean traders. Later this hour we'll
get to all that in a moment. But first let's get a look at the markets. US equities climbing led by tech and communications as inflationary pressures continued to reverberate through the markets are at Ludlow. Here to paint the picture and take it away. Yeah it's interesting because inflation is the story of the week right.
But no worries. Looks at equity markets. We get past those concerns and technology leads the way. What a nice way to end the week on a Friday. NASDAQ. One hundred tech heavy index of course outperforming the S&P 500. Also strength in those mega caps. We see that in the NYSE FANG plus index names like Alphabet the parent company of Google Facebook Apple of course and Tesla in there. And also semiconductors up eight tenths of 1 percent.
Inflation is the name of the game. We've got the strongest print in October the fastest pace of inflation growth since 1990. To be honest with you I wasn't around in 1990 to see the last one. But if you look at the categories in which prices are rising there is concern here. Why. Well because of this consumer. The US consumer is what's been driving economic recovery supercharge spending but with energy rising goods like televisions. What happens if the American consumer cools off and that falls down. The other part of it as well is that if inflation is overshooting got this hot print could we see tighter monetary
policy. In other words the Federal Reserve. Be more aggressive with the way it tapers its asset purchases along with the right path going forward. You look at the US 10 year yield though we're not at the highs we were at were in say March of this year or even mid-October when we were above one point seven percent. U.S. technology stocks rising. The equity market at least is saying we're one corporate story we have to talk about to finish on Johnson and Johnson splitting off spending off the consumer business to become two separate entities. You can see it kind of had a mixed week largely trading lower and then a jump of around one and a half percent on Friday. That's an interesting reaction. But as you said this is something that we've seen before Toshiba G.E. and we've seen it before in the pharmaceutical space as well as something to
dig into Emily. All right Ed thanks much. I want to stick with the split of Johnson and Johnson. Chiron CEO Alex Gorski joining Bloomberg earlier saying both businesses will have many single digit growth potential. Take a listen. Both of these businesses have the potential to be growing at least mid single digits and above going forward and we think this is going to better position our consumer business in this evolving environment that I mentioned earlier to be even more agile more flexible and even more innovative to reach more consumers around the world. And this isn't the only company that recently announced a split into multiple companies. Earlier this week G.E. and Toshiba also announced they're splitting up. Could it happen in big tech too. I want to bring in Bloomberg's Naomi next to discuss. So obviously Naomi there have been lots of calls for breakup of big tech. But do you think this is something that we could see Facebook Google Amazon go down the
route of you know with these companies paving the way. I don't think we're there yet. But what we are seeing in these companies is they're increasingly diversifying their businesses right. So Facebook renamed itself Metta. It says it's now a metaverse company. Last quarter it said it would be splitting up how it reports its sort of revenue and expenses for its virtual
reality division and separating that from how it reports its social media business statistics. We've got Google investing in health care. We've got Amazon which just spot MGM and obviously has its e-commerce business and its cut services business. And so the more these companies try to pursue these disparate lines of business the stronger the case becomes for this kind of spin off. How difficult would it be for Facebook or matter at this point to break up. It almost feels like with the rebranding they're almost paving the way to make it make a break potentially cleaner. Yeah I mean people see the conversation has been abound. Would Facebook try to split up from you know Instagram from its Facebook core app or WhatsApp. And you know what we've seen in that area is the company has been increasingly intertwining
those services in little ways in and big for functionality but also behind the scenes you know. But this but this virtual reality businesses is different. So I think it really depends on how much these companies decide to interlock those services you know makes that kind of that proposition harder or easier. Well and the big question is will regulators force their hand. Facebook or others they could write. We're not we're not quite there yet. But obviously Facebook is in a battle
with the Federal Trade Commission over its acquisitions of Instagram and WhatsApp. The agency has said that the company acted in a competitively and has sought to unwind those mergers. You know we have state pressure on that level as well for Facebook. Google is facing a lawsuit from the Justice Department over its search business. We reported not too long ago that the
DOJ is also looking into its digital advertising business. Google is also facing state probes. And so the more and more that that drumbeat increases for these tech companies the more pressure they're under to make that kind of move. And you know and essentially spin off their businesses. OK. Bloomberg's now next. Thank you for giving us your viewpoints there. Meantime Morgan Stanley says the metaverse will only get real when Apple decides to join. Facebook and Google have been investing in virtual and artificial reality. But a Morgan Stanley research note says mass market adoption of either technology won't happen
until Apple enters the race. The bank estimates the hardware market for the new gadgets could be one hundred billion dollars by 2030. Coming up when one door closes another one opens and four open door quite a few have opened with Zillow leaving the home flipping market. My conversation next with Open Door CSO about how it can succeed where others have failed. This is Bloomberg. Zillow may not have been able to make the home flipping business profitable Openshaw. Open Door sure has. The San Francisco based
company announced it's bought more than 15 thousand homes in the third quarter a seventy nine percent increase from the last quarter. Zillow on the other hand ending its slipping business and selling two thousand of its homes. Joining me now Carrie Wheeler. She is the sea XO of Open Door. Carrie great to have you with us. So how will Open Door avoid what happened to Zillow. Emily thanks for having me. I think there's a lot in being purpose built. And when you think about our business all of what we do is think about how to take the traditional listing process that is so broken and move it online and making it simple. A mean for home sellers. And that's all of what we do. It's on our side. Business is our business. And we've got seven years of investment in the team the data the modeling the low cost
operating platform to be able to do that repeatedly. It's scale with a whole lot of growth behind it. What do you think they did wrong. Why couldn't they get it right. You know we're really just focused on how we're executing a we can do right for customers. No one's working harder for customers right now to give them an alternative to the
traditional listing process than we are and quarter what we do or those two things I just mentioned. One is pricing and we we have a robust pricing systems we've been investing in since our inception seven years ago. And two is having a flexible low cost operating platform that lets us do things like acquire 15000 homes last quarter. So these fifteen thousand homes. That's more than 160 homes a day. A lot of homes. I'd love for you to walk us through the logistical challenges of making all of this work. Buying renovate waiting and selling that many properties. How do you do it.
You know one of the things we did a couple of years ago that is served us very well is we centralize our operations. And so being able to operate a scale. A lot of that comes with the fact that we have built the automation built the tooling and the platform to let us be able to do things like repair homes at scale managed by vendor network sometimes remotely bring them onto our platform. Let us understand the quality controls we need to have and be able to do that so that we can not just acquire but we can sell through homes and realize the kinds of margins we need to meet margin where we need to manage to. Now Bloomberg has reported that more than a quarter of the homes open door has sold were acquired by investors and I'm curious if helping institutional landlords convert owner occupied homes into rentals. Does that resonate with the company's core mission
of adding liquidity to the market. Well you're right that our core mission is about infusing liquidity into our market. Our targets home buyer is nothing. The vast majority who were selling homes to a small minority of what we do is selling to institutional buyers because we really view for the average homeowner. We want to make sure that we're putting as much liquidity into the market as possible again to make people give given the ability to buy and sell a home and a lot more reason to have today. There's a huge inertia to selling just given how uncertain and tough and time consuming and stressful. The traditional home selling buying process is having a share of the market. Do you think I buying can become.
You know today when we get a seller with high intent someone who really wants to sell the item say within the next couple months well over a third of those buyers and they come to us accept our offer and that number is ticked up consistently quarter over quarter. Do you think about over time our ability to be nationwide be able to offer on more and more homes as we increase what we call our buyback. Just the surface area we cover in a given market. You think about that conversion rate and or the 35 percent and we can be a huge portion of the real estate market over time. All right Carrie Wheeler CFO of Open Door. Thank you for sharing your viewpoint with us. Appreciate it. While just days after Disney came out with less than expected subscriber growth its streaming service has unveiled its latest lineup of movies and television shows to lure new viewers. Among them theater hits like Shonky and Jungle Cruise will soon be available on Disney Plus along with new offerings from their biggest franchises like Marvel Star Wars and Pixar. But will it
work. For more I'm joined by Bloomberg's Chris Paul. Mary in L.A.. Chris will it. I don't know I've watched. They did a press preview on Thursday a lot of the clips from the news shows in that part of the problem is this is stuff they'd announced back in December a year almost a year ago. So they got it made which is good but it
sort of seems kind of familiar. One of the issues is people are criticizing Disney plus for there's not a lot of it for adults. People who don't have kids. And if you're not a Marvel or Star Wars fan compared to the deluge of content available at Netflix or HBO Max in that. And so I didn't see anything that was particularly surprising in the lineup. Rich Greenfield was on the show yesterday of Light Shed very
vocal about the problems he sees with Disney and Disney. Plus take a listen to what he had to say. They could have a really comprehensive service that could be driving subscribers at far higher prices. Instead they're stuck in their silos and they're trying to balance all of their legacy businesses with Disney plus and balancing this whole dabbling balancing they're losing they're just not winning the way they could. What do you think of Rich's criticism there. Well I you know I think he's spot on in some way. I mean one of
the dilemmas it is he finds itself in is you know he's got three services in the U.S. He's got Hulu and it's got ESPN Plus in addition to Disney Plus. And some people are saying let's put all that together. They already have a bundled price. You can get all four for 14 dollars. And hey by the way the reason why everyone went to streaming is because they were tired of that
big cable bundle price. Right. So. So they're still trying to work it in a way that you can do an all card service. But but clearly all of the focus is on Disney plus one hundred and eighteen million customers worldwide. They think it's going to get to 260 million. And to get to that. You really got to get beyond the just the families and the Star Wars fans. What are you hearing that Disney is doing about this. I mean I think listening to people like Rich Greenfield they're not
they're still very much focusing in their lane. Typical was as some Wednesday if there's any categories Disney Plus needs to be in. And he said more. And he said preschool which is not exactly the direction most people are saying they should go. I mean obviously Disney should have a free school a lot of free school content. But you know people want to want to see other content for. For adults if you're going to keep subscribing they say they're going to double more than double the number of countries there. And that's going to add to growth. And they're going to have 340 programs in the works in a short while 9 billion in spending across all the various services. So. So they're certainly
creating a lot more content. And whether this more family focused channel works as the big big big business that they hope that that that's going to be the test. Bloomberg. Chris Palmeri thanks for your reporting on this. Coming up how to make app building easy. How air table will help you build apps even if you don't know how to code and what opportunities that is opening up in a post pandemic workforce. That's next. And while tech earnings are wrapping up it's all
about retail. Next week we're gonna get a quarterly report from a number of big box stores. Wal-Mart Target and Macy's. See how e-commerce is playing into their business strategies. All the details here on Bloomberg. This is Bloomberg. Cloud collaboration company Air Table is out with a new product to make building apps easier for everyone. Interface Designer is
a new tool that aims to help companies digitize their operations especially amidst a shortage of tech talent. Let's talk about this more with Air Table CEO Howie Lu. How great to have you back with us. So how do you allow people to build apps without even knowing how to code. How does it work. So we started with this database product that anyone could use
to create their own business objects so you can track customers inventory etc. and the new launch of Interface Scale Builder now allows you to create a custom interface on top of that and to really supply the workflow whether it's for somebody a field service or a marketing analyst. Now they can actually see just the view of the data they want and perform their work as part of this broader business process. We're moving into a post pandemic future. Much more of the workforce is hybrid or remote only. How game changing do you think a product like this can be in that environment. So I think we have been definitely big beneficiaries of this shift towards hybrid work. I think in the old way of working there you kind of get away with ad hoc ways
of tracking data sharing data. You would meet with people send emails back and forth Tom Keene on the shoulder. And I think today when you have all these people street in different places that just doesn't steal anymore. And so we've seen this massive increase in appetite from enterprises to consolidate all of their informational workflows as part especially at the departmental process not just team or user level collaboration but to really rethink how the entire content production process works. For instance a streaming content provider or the marketing campaigns are orchestrated at a retail company. Those are the things that are now being you know that are up for grabs. I think in the software landscape and we've seen you
there's this increased appetite for our product you know 30 percent growth on the enterprise side of our business doubling the number of large error accounts over the past year. And so it's definitely been a big shift in our space. There are other productivity tools out there gaining traction. I'm thinking notion. I'm thinking Monday dot com. How do you differentiate yourself from them. So there's roughly two buckets of products in this space notion and other products like it are sort of canvas canvas space products and I think of them as almost a re imagination of what if you took Microsoft Word and Excel and all these other products and kind of mash it up into a new fluid experience. I think there's a lot of value there. Microsoft itself it gets recognized the space and came out with a product called Loop. They have a framework called
fluid framework that's trying to deliver on the same type of value proposition. But I think ultimately that's it's a very organic and kind of you know smaller teams oriented nature of usage. And then separately I think what Airtel is doing is going after low code and enabling businesses to go and create their own structured applications and actually try to tackle entire departmental processes. And I think that is something that Monday a smart sheet to some extent Asana are also going after.
But in our table's case we've sort of been trying from day one to become this this true application platform. And so where we see our advantage is being able to scale up to more complex deployments. We see a very very large enterprises building entire department wide or even company wide processes onto our table. Well speaking of large enterprises Microsoft and Facebook a.k.a. Matt have announced new workplace products in the metaverse. What's your take on the metaverse. Is there a play for air table there. Yeah. So I think there's kind of two extremes of how you interpret the metaverse. One is you know it's literally this virtual space you put on this Oculus headset and you go in and you're immersed in this 3D environment. You
have an avatar et cetera. I think there is something to that. I mean I'm not going to dismiss it entirely. I think there's a lot of promise to that. But I think it's probably a long way off before the technology is good enough. And there's enough kind of an ecosystem to where we're all spending a large percent of our day wearing a headset and immersed in that virtual reality. So I think the metaverse is overhyped. Is that what you're saying. I think I think there's a lighter weight interpretation of the metaphors which is it's a set of principles. It's about creating a digital representation of yourself. I think we're already starting to see that with with a lot of collaboration products. You know you have lighter avatars. I mean just the fact that in
our table where stigma where these other collaborative products you are able to create this virtual space and collaborate within it. And I think you know the the actual 3D VR aspect of the metaverse is still a while off. So speaking of the path forward air tables obviously become a much bigger companies since we lack top last talked. What is the path forward to you. Are you thinking about going public. Are you open to a big deal. Yeah we've always been very committed to building a really large independent business. I mean I think the opportunity to basically change the way that you know hundreds
of millions of people work and in fact empower all of these creators in the world to go and build useful applications and share those with other users. I think this is a once in a lifetime opportunity. And I think you know the winner of this category will be a multi-billion revenue business that could trade in the public markets in you know the hundred billion dollar plus market cap range. And so we're all in on trying our best to become that winner. We think we have a good shot at it. And so at this point we're just firmly focused on building the largest independent business we can. I think IPO is somewhere on the horizon. I mean we're at nine figures in revenue growing very quickly. And so we very much could be in the realm of of you know being a publicly tradable business. But for now we'd have no pressure or anxiety to to do so too quickly. We're
really focused on just executing really well. And I think IPO is probably you know kind of at least you know years down the road. Oh that's too far. How we're going to check in with you for that. Thank you for sharing the ambitions with us. Air Table co-founder and CEO Howie Lu. Appreciate it. Coming up it is a game changer. I'm going to speak to one of the co-founders behind the infinity of a game that pays you in dough to just well play. That is next. This is Bloomberg.
Welcome back to Bloomberg Technology and Emily Chang in San Francisco. Let's take a look at how crypto perform this week. Let's get back to our at Ludlow. I take it away. Yeah I want to zero in on bitcoin and it's easy to do right. We tracked so many other coins these days but at the end of the day bitcoin is where it's at in terms of the market cap in terms of the volume and five days of bitcoin. Right. We end the week sixty four thousand US dollars per token. But some volatility is creeping back in. You know like two days ago we were up near its a sixty nine thousand. We swung down to just above sixty two thousand. We find some normalcy. A lot of the news flow that the FCC decided against listing the ban Bitcoin ETF is kind of a snub for spot listing. You know the FCC is turning up the heat on some of these cryptocurrency based
startups and looking at what they're doing. But it's you know I like to strap late out spring coming into my bedroom at a time. But look at this chart at Bitcoin over a longer time horizon a couple of years. This is 14 day RSI. The red line. Seventy level being overbought territory green
line thirty oversold territory. And if you just look over the last two years Bitcoin loves hanging out. It's just hanging out that over overbought territory. Right. And you know that a lot of the market's looking at these technicals saying what's going to happen with Bitcoin. Where do we go next. So we had a floor. Do we go up or do we go down. It doesn't really matter. You know
we we've been hanging out in this spot for weeks at a time. And yet Bitcoin can continue to climb higher or stay as it is. So I just thought that was interesting pointing out in a week where volatility comes up again. And Lassie come back. What happened in the middle of the week. Coinbase earnings. Everybody panics volumes down in the third quarter. Volatility down in the third quarter. A selloff in the stock marathon of course scripts I might have followed suit. Everyone just chill out. We end the week on a high. And investors look past it. You know there's as we see the same old trend is crypto currencies rise broadly which we saw over the last couple of sessions. The crypto related stocks follow
suit. So you know it's this whole age old lesson. Don't look just in the short time a strap lay out to the bigger picture and then try and find some direction in these markets which is really hard to do. All right. And we'll see if they chill this weekend or not. Thank you. We're gonna stick with crypto which keeps expanding into more and more avenues including gaming. The idea of playing games and earning money in the process is catching on and no one has done it better than DAX Infinity. It's down by Skype makes Skype Mavis which was only founded in 2018 and is now valued at about three billion dollars. Joining
me now for our weekly cryptocurrency segment is the co-founder of AXA Infinity. Jeff Zarrillo. And Jeff great to have you with us. So so much excitement around play to earn and obviously AKC Infinities take on this. Do you think this is the future of gaming and if so how big a part of that future will be. I think that this is way more than the future of gaming. This is a fundamental shift in the future of work. We are creating new types of jobs which I think is so important because we're starting to see the many types of work automated away destroyed during the pandemic. So we need to figure out what are the types of opportunities that are going to be accessible on a global scale. Anyone anywhere in the future. And
believe it or not gaming is going to be a huge aspect of that equation. For the people who haven't played or don't understand what we're talking about what do you mean by new kinds of jobs that are being created. Sure so within our product it's called actually infinity. Players can battle select breed and even earn tokens with real value just by playing your game. So this is this is creating opportunities in places like the Philippines Venezuela Indonesia places where people are surviving on you know dollars per day. They're able to earn
actually more than minimum wage in their countries by simply playing. Absolutely. Still it's kind of hard to dive in onboarding is not easy. You have to download all these different things just to start earning money. How do you make that process easier and do you think that will be a critical part of really scaling this. Definitely it's still very hard to get started but you know we came from the generation where when we were playing Starcraft Diablo as kids. We couldn't take phone calls at our house right. So new technology always has a little bit of a entry barrier. There's no restriction. That always gets solved by builders. And that's one of the things that we're really focused on. Sky Neighbors is making sure that it's super easy to get started with these
games. He's blocking hard games. And over the last few years it's gotten much easier. There's still a long long way to go. Does the volatility of the crypto market impact you. I will say that one of the advantages that we had as a community is that we started in 2018. During a bear market that actually I think really toughened up our community and made our community a group of missionaries long term thinkers that weren't always just thinking about short term gains. I think that's really difficult in this market where people are coming in. Right seeing a lot of opportunity. And I think their incentives and
their their way of looking at the market are a little bit different. I think that the future of consumer apps are going to be built by builders and and communities that are kind of impervious to market conditions. I think crypto is about empowering people to take back ownership of their of their data of their digital items and identities. It's so about so much more than just like market fluctuations bitcoin price. I think that's the amazing thing that NFTE do right. They created the create this accessible window into crypto that great. If you're not just interested in purely financial applications it's now it's much more accessible. Everyone is talking about the metaverse how a little of our table just told us and basically
that he thinks it's overhyped. How big a deal do you think the metaverse will be for the gaming world and how soon does it actually materialize. Sure. So different people have different definitions of the metaphors. I tend to think of it as the culmination of a trend where our digital lives start to take more and more importance over what's happening in the physical world. So we're starting to see these platforms these real digital economies where you're
able to form relationships. Both social and economic with anyone anywhere in the world. I think Hollywood has kind of planted this conception of the metaverse. That's a little bit I think harmful in that people think that oh my require 3D technology or VR glasses. I think that the metaverse needs to be accessible to anyone anywhere regardless of the hardware that they have. So
with actually 80 percent of our players come are playing on Android devices which is the most accessible hardware in the world. I think that that's really important. And I think I kind of I'm against any definition of the metaverse that requires people to have like advanced expensive equipment. All right. Appreciate that perspective. Jeff Sterling co-founder of Sky Mavis and of course behind actually Infinity. Thank you for joining us. Coming up we're going to take a look at digital optimisation company Amplitude. Third quarter results which also how things have changed since going public. We'll speak with CEO Spencer Scates up next. This is Bloomberg. People.
The data analytics company Amplitude posted its very first earnings earlier this week as a public company. Third quarter revenue growing 72 percent year on year. The company also announcing a partnership with the data cloud company Snowflake. I'm joined now by Amplitude co-founder and CEO Spencer Scates. Spencer great to have you with us. So you had a solid first
quarter but shares tumbled. What do you make of the investor reaction. You know I think we're a high growth company so we're gonna have volatility in the stock. You know I think there's there's two things from my standpoint. The first is I love prices. I think prices are a great instrument of capitalism. And so people can make a lot of money if they think what they know what the correct prices. The second thing I'll say is that I think people are a little over focused. And where are the prices. You know I think we open the stock way back when we first listed a fifty
dollars a share. You know we've obviously gone up a whole bunch since then. Stuff has come back down. But frankly from my standpoint I'm glad that we're done with the process. We can move back and focus on execution and growing the company. I think of what I tell the amplitude team is that it's equivalent of having a lot of very highly paid Vegas bookies speculating on your future performance which you know it's a data point but not much beyond that. All right. So what's the outlook for Q for what are the bookies going to be looking at. You know we're excited. We updated our Q4 guidance which we increased relative to our when we first listed as a company. So I'm excited about that. The other thing I did want to highlight
is our customer growth that actually I was really happy to be able to share in our earnings call earlier this week. So our customer base grew 54 percent year on year. We got to share a bunch of awesome stories on the call. Two in particular Spirit Airlines which uses us which we which grew their relationship with us. They use us to increase mobile check ins and they're actually pacing ahead of their year on year growth. All thanks to some of the work that we've done with them. Another one is square. I know fintech. We're just talking about crypto earlier. One of the interesting things is we're actually seeing a lot of customer facing teams at square users. So it's not just the data science and product teams. They're actually having a lot of
customer usage and it just goes to show how important product data is across all parts of a company. You just released a report on emerging digital products and trends finding that the use of digital products up over 50 percent over the last year. How did you come up with this list and what did you find most surprising or enlightening about it. Yeah so one of the awesome things about amplitude is we have a very unique lens into how people are using products. We collect
data from over 6000 different companies and we have some really unique insights into how consumers are changing their digital trends. What. So so one of the big things that stuck out is that since the start of the pandemic average usage of products overall has gone up 54 percent. So the average product has had a fifty four percent increase in daily active usage since the start of 2020. So that's been crazy. One of the other ones in particular was that fintech has had the biggest lift of all. I think it's not just crypto but a lot of mainstream fintech companies including PayPal Square Chase Bank. They have seen their increase their usage skyrocket since the start of pandemic. It's been up there. Their usage of it up a total of three hundred and thirty percent on average. And so I think it just goes to show first product led digital companies are
winning. And then you know it's really interesting to see the sector by sector comparison as well. All right. Well we had that list up there the 10 next hottest products in the US as you call it. Call it some newer names there that I hadn't seen before. So we'll keep our eye on them. And you Spencer CEO of Amplitude. Thank you for stopping by. While the richest person in the world is now at the top of another rich list and that is Tesla CEO Elon Musk number one on Bloomberg Green's list of 15 billionaires Musk's fortune stems from a company that's revolutionized electric powered transport and is speeding up the demise of the internal combustion engine. Meantime it may take more time more than Musk's green ambitions to sway short sell our cars and walk. The CEO and CIO of Muddy Waters didn't mince words when talking about the Tesla CEO with my colleague Lisa Abramowitz as part of the Bloomberg Analysts Development Series.
I used to be very negative on him as a person. You know I am in the sense that the like he lies a lot. And please don't push back on that because we could get into the examples. But so every now and then when I say that on TV somebody says like oh well if that were true then people would have sold the stock. It's like. Oh I I'm. Up the. But.
So what are the good things about Enron. He built the car. He built the rocket. And that is something that I think a lot of these a lot of these managements are not and the companies are not going to do. You know like Lordstown Motors. All right. That seems that you know. I mean they at least to date the people who initially were with the company when an IPO. I think there are things several of them are gone and they were pretenders. We shorted a company earlier this year called Xcel Fleet which is in a sense we deal vehicle electrification space. And I mean we were just you know so we play you know I like to say this. When we do something like this when we're looking at these tech you know these next generation green tech or whatever whatever hot technology is we play the man not the ball. Playing the ball would be really. The technology doesn't work. And you know let
me get my scientist out here by the way our scientists are arguing publicly with the company's scientists. Our scientists will always losing them in the minds of the long holders. But if you play the person OK you know what. Just what is this person's background. And look what are some of the egregious thing. What are some of the things that they've said that are really core to the thesis and that if we scratch the surface oh my God these are not true or these are massive exaggerations. So if we see
exaggerations and you know misdirection and lies that are significant enough then we say OK this is not Elon Musk. This is not a guy who's exaggerating but in the most fundamental important ways delivers. This is just you know basically the same kind of guy whose existence and stock markets markets existed a promoter who sells a dream that ultimately has no substance. So that's how we play it. And this does offer opportunities obviously for us to do it. But you know it's pretty crazy when you look at like Nikola in Lordstown. I mean they still have these massive market caps and that goes to this phenomenon. You know every now and then I joke that 700 million is the new zero. And actually you could say you know even
something in the billions is the new zero. I mean these you know there are all these companies that are really valueless that have real cap. Carson BLOCK there never holds back. He also talked about how the short seller operates around mean traders. Take a listen to that. The good thing from our perspective or one good thing is that they're loud so they tell you where they're at.
So. Right. And then let's get back to that whole point that we were discussing about position sizing. We don't run a lot of money in you know by asset management standards. I mean we're at between the two funds. You know we're not even you know we're like 250. Little bit less than that. So we're able to get out of the way of most of these things. But yeah I mean you when you look at what happened it was just I think last week another short activist came out on company. I think cassava is the name. The ticker is Sava Day after that short activist came out. That stock was up 50 5 0 percent. And I think it's been up since then. So yeah the bottom line is you cannot be large in these
positions if you need to get out of the way quickly of the Reddit crowd and in the mean traders. And again like they don't you know you don't you know they don't necessarily start with the question well what's a really good company. They you know sometimes start with a question of like who do we hate and who would be punished by my buying this. And so yeah when you're in that environment be small be nimble hands you know and and just manage risk. I mean it's on the short side it's always been about risk management but never more so than now. There's also been a huge trend with a discussion about moving to
ESG and putting money into greener companies greener types of technologies. I think about some of the electric vehicle companies that have gotten completely pumped up. And I'm not just talking about Tesla I'm also talking about a review in which I just IPO the IPO this idea that it has now a market cap basically as big or bigger than Ford even though it has only delivered a couple of cars. Is this a concern or is it just something specific to the moment that you don't want to get in on one way or another. Well we we've done some shorting in that space. So I think it's. The trick with the trick with shorting something like like in the Eevee space or a technology that might really have a future and that future could be important is it's separating the two CEOs or the founders who actually are going to do something substantive from those who are just total pretenders. Muddy Waters short seller Carson BLOCK coming up.
Then I said by the way how China is taking the connected car to a whole new level. We'll show you what happened when our reporter took one for a spin. Anything. This is Bloomberg. Carpool karaoke has been a hit in the US for some time in China. Now some electric car makers are trying to make it part of everyday life. Bloomberg's John Lu reports on the evolution of connected cars including in car payments social media and karaoke. Said by me. Maybe that's enough. China is the world's most important car market today. Every year
there are some 25 million cars sold here far more than any other market in the world. Big global brands like Volkswagen like BMW like GM have had great success. At the same time it's become increasingly clear that in some significant ways they are starting to fall behind some of the local competition. One facet that really stands out is the connected car.
I'm going to keep looking here. Hopefully over my life opportunities I get to look at it. You have a cohort of up and coming Chinese companies. They're increasingly allowing Chinese consumers to live their digital lives at home and on the road. That means in the car they can have their social media. They can have their gaming. And they can have things like karaoke bar me. It's not your usual road trip. It's big business for companies like Expo Deo and Li Auto who are at the forefront of
this trend busting Western rivals by offering bottles with karaoke microphones. So stellar from Myanmar was just showing us some of the functionality in the car. And I do as I take my phone out there's a QR code here in the car. Scan the QR code and attach you directly to your social media account. So we're here at Expo. We're in the Expo P7. So the Expo card by default the entertainment function. So the karaoke the gaming
the movies are not able to work when you're driving. So they're by default turned off when you're driving. But after the car has been purchased the owner can change the settings so the passengers can enjoy the functions. For many Chinese drivers the car is more than just a way to get from A to B. It's also a place when parked where they can enjoy time with friends for a
bit of karaoke or even a picnic. Electric car makers in China are competing on what happens inside the cabin from social media integration to voice recognition software. I know me play by women photo good cars. Digital technology is particularly key to luring China's consumers. As you're shopping for a car how important are these
functions you reach at karaoke these digital functions in your decision of what car to buy. She gonna be the RB. I talk to someone on a cool chain suicide thing. The idea for a 100 year old song I'll tell you this honey send out a year cookie. By gosh could you. I'm gonna hang out for her for noodling VR. How you only Jihye Lee demo. Electric vehicle sales have surged in China. Therefore it has to more than double the three million units this year from one point thirty seven million in 2020. So some are.