Magnificent Seven Momentum and GameStop's AGM | Bloomberg Technology
>> FROM THE HEART OF WHERE INNOVATION AND POWER COLLIDE, THIS IS "BLOOMBERG TECHNOLOGY" WITH CAROLINE HYDE AND ED LUDLOW CAROLINE: I AM CAROLINE HYDE IN NEW YORK. ED LUDLOW IS OFF. THIS IS "BLOOMBERG TECHNOLOGY." BULL MARKET COVERAGE AHEAD AS THE MAGNIFICENT SEVEN SEE A MOMENTUM RALLY LIKE NEVER BEFORE. PLUS WE PUSH AHEAD TO GAME STOP’S C.E.O. IS UP TO DELIVER REMARKS. WE LOOK AT THE BOX OFFICE AS INSIDE OUT 2 RAKES IN OVER $150 MILLION OVER THE WEEKEND. FIRST LET’S CHECK IN ON THE
MARKET BECAUSE WE ARE SEEING SOME PAUSE. WE ARE LOOKING AT WHAT THE FEDERAL RESERVE COMMENTS WILL BE AFTER THE POLICY LAST WEEK SIGNALED MAYBE ARE WE GOING TO GET THE RATE CUTS THE MARKET IS ANTICIPATING? IS THE POLITICAL TENSION STILL HAPPENING IN EUROPE? THE YIELD SELLING OFF SIGNIFICANTLY AFTER THERE WAS A PUSH FOR HAVENS LAST WEEK. THAT CALMS A LITTLE. WHY? BECAUSE LE PEN, RIGHT WING PERSON THAT WE COULD SEE BECOME PRIME MINISTER IF WE DO SEE THIS VOTE GO HER DIRECTION, SHE’S TRIG TO CALM THE MARKET, TRYING TO CALM THE BROADER FRENCH POPULATION TO SAY SHE WOULD BE STILL BACKING INSTITUTIONS AND SUPPORT MACRON IF SHE DID BECOME PRIME MINISTER WHILE HE WAS PRESIDENT. WE MOVE ON TO SEE WHAT IS HAPPENING ON THE INDIVIDUAL MOVERS TODAY. WE ARE SEEING A LITTLE BIT OF MOVEMENT ON WHAT IS HAPPENING IN THE CHIP SECTOR. WE DIAL BACK FROM THE HIGH AS
NVIDIA SINKS. WE ARE GETTING BIG INVESTORS AND ANALYSTS SAYING WE COULD GO AS HIGH AS $160. WE PERHAPS TAKE PROFITS AS WE HIT A NEW RECORD HIGH. MICRON UP MOTHER -- ANOTHER 2%. BROADCOM ALSO WINNING AS WE
LOOK TOWARDS THE STOCK SPLIT, THEY FOLLOW HOT ON THE HEELS OF NVIDIA. LOOK, WE HAVE SEEN THESE PARTICULAR CHIP NAMES DO PHENOMENALLY WELL OVER THE COURSE OF THIS YEAR AND MANY ARE SAYING THIS IS MOMENTUM STRATEGY THAT’S WINNING. WHAT DO YOU DO? YOU BUY THE WINNERS AND SELL THE LAGGARDS. RIGHT NOW IT IS A COMPLETE TEAR
ON A SCALE WE HAVE NEVER SEEN BEFORE. WE WANT TO BREAK IT ALL DOWN NOW. A GREAT BIT OF REPORTING COMING FROM BLOOMBERG, REALLY TALKING ABOUT HOW MUCH THIS MOMENTUM TRADE CAN STICK BECAUSE IT’S WORKING. >> YES. IT’S WORKING ON A SCALE NEVER SEEN BEFORE. RELATIVE PERFORMANCE HAS SURPASSED THAT OF THE DOT-COM BUBBLE, AROUND 24 YEARS.
IT’S REALLY SIMPLE. YOU BUY WHAT IS WINNING. YOU SELL WHAT IS LOSING. THE QUESTION IS, WILL IT LAST? MOMENTUM HAS A TENDENCY TO GO ON AND ON UNTIL SOMETHING STOPS IT. WORTH NOTING THAT THIS STRETCH HAS BEEN GOING ON FOR LONGER THAN USUAL.
WHAT IS CONCERNING IS HOW THE DRIVING FORCE IS REALLY MOSTLY VALUATIONS. IT’S NOT ABOUT EARNINGS. THIS IS WHY SOME PATRIOTISM WORRIED THAT IT MIGHT BUCKLE ANYTIME NOW BUT JUST WITH ANYTHING, THERE WILL ALWAYS BE A LOSING TRADE. IF YOU ARE INVESTED IN MOMENTUM, IT’S A GREAT YEAR SO FAR. THE STRATEGIES THAT BLOOMBERG TRACKS ARE TOP OF THE LIST, 6%. CAROLINE: SOME OF THE WORRY IS ON VALUATION AND SOME ON EARNINGS. SOME WOULD SAY NVIDIA’S
EARNINGS INCREASES DO INDICATE THE VALUATION UPTICK BUT IS IT SOME OF THE OTHER NAMES GETTING SWEPT IN ON THIS THAT ARE MOVING IN VALUATION? >> THAT’S FAIR. EVERY TIME I ASK ABOUT NVIDIA, I GET BOTH. THERE IS NO CONSENSUS. THE THING IS THE BIG WINNERS ARE GETTING BIGGER. TAKE A LOOK AT APPLE. APPLE SAW ONE OF ITS BEST WEEK IN YEARS BECAUSE OF ONE ANNOUNCEMENT.
IT’S INTERESTING THAT THESE ANNOUNCEMENTS WOULDN’T ROLL OUT IN THE NEAR FUTURE. HOW WILL WE TEST WHETHER THEY WILL WORK? FOR THE LONGEST TIME MICROSOFT’S LEAD AGAINST APPLE SEEMED FAR BUT APPLE IS INCHING TOWARDS MICROSOFT BECAUSE OF ONE ANNOUNCEMENT ABOUT A.I. TO COMPETE WITH MICROSOFT. WHETHER THE MOMENTUM TRADE WILL LAST REMAINS TO BE SEEN. IS A.I. GOING TO BE A FORMATIVE TECHNOLOGY OR IS IT GOING TO GIVE SOME COMPANIES A HANDLE OF CASH FOR THE MEAN TIME? CAROLINE: I AM SURE THE COMPANIES ARE LIKING THE HANDLE OF CASH FOR THE MEAN TIME. ISABELLE, BREAKING IT ALL DOWN. PLEASED TO WELCOME MEGAN
HORNEMAN, VERDENCE CAPITAL C.I.O. TO THAT POINT THIS HAS BEEN A RUNAWAY TRADE. WHAT COULD STOP IT? MEGAN: YOU MENTIONED IT’S A MOMENTUM TRADE. SO TO BE ABLE TO FIGURE OUT EXACTLY WHAT WILL STOP IT, IT’S BASICALLY IMPOSSIBLE. BUT WE THINK THAT THERE’S A COUPLE THINGS TO KEEP IN MIND.
INTEREST RATES RIGHT NOW, WE DID GET THE FLIGHT TO QUALITY SO YIELDS WENT DOWN. MARKETS LIKE THAT. TAKE A LOOK WHAT IS HAPPENING TODAY. YIELDS ARE BACKING UP. THAT CAN TAKE SOME OF THIS MOMENT MOMENTUM OUT OF THIS RALLY. PEOPLE WILL START LOOKING AT VALUATIONS AND WITH THE UNCERTAINTY AROUND WHERE INTEREST RATES ARE GOING, WE KNOW THAT EVENTUALLY THE FED WILL CUT-RATES. WE JUST DON’T KNOW WHEN. WHEN YOU ARE LOOKING AT THE TREASURY MARKET, THE DYNAMICS IN THE TREASURY MARKET ARE FOR HIGHER YIELD BECAUSE WE HAVE SO MUCH ISSUANCE THAT’S OUT THERE. IT CAN BE A VALUATION CORRECTION. CAROLINE: REALLY INTERESTING THAT YOU ARE
LOOKING AT WHAT IS HAPPENING IN TERMS OF SUPPLY SIDE WITH TREASURIES. WHAT ABOUT THE INFLATION PICTURE? WHAT HAVE YOU BEEN TAKING FROM THE P.P.I., THE C.P.I. AND WHETHER OR NOT WE ARE COOLING OR WHETHER WE ARE STILL TOO HIGH FOR TOO LONG? MEGAN: IT IS COOLING. THE DATA WE GOT WAS GOOD NEWS.
BUT KEEP IN MIND IT WAS ONE MONTH’S DATA. WE ARE FAR AWAY FROM WHERE THE FED WANTS TO BE. WHEN YOU DIG INTO SOME OF THOSE REPORTS, THIS IS A GOODS DEFLATION STORY. THIS ISN’T A SERVICE DEFLATION STORY. IN FACT WE ARE STILL LOOKING AT SERVICE PRICES THAT ARE QUITE STICKY AND HOUSING IS ANOTHER THING THAT’S STICKY. THESE ARE THINGS THAT THE FED IS GOING TO BE TAKING INTO CONSIDERATION.
THIS IS WHY WE THINK -- WE LEAN IN THE CAMP HIGHER FOR A LITTLE LONGER. WE MIGHT GET SOMETHING IN DECEMBER. BUT WE NEED A LOT MORE INFORMATION BEFORE WE CAN SAY THAT THE FED CAN DO THAT. CAROLINE:
JUST ADD IN THAT FLIGHT TO QUALITY, THE VOLATILITY THAT WE SEE, BECAUSE OF POLITICAL RISK IN FRANCE. HOW MUCH DO YOU HAVE TO TAKE IN THE GLOBAL GEOPOLITICAL RISKS RIGHT NOW? MEGAN: I THINK IT’S SOMETHING WE HAVE TO CONSIDER, COMING INTO THIS YEAR WE KNEW WE HAD A LOT OF ELECTIONS AND POLITICAL RISKS GLOBALLY. KEEP IN MIND, WE HAVEN’T GOTTEN TO NOVEMBER HERE IN THE U.S., SO THERE’S A LOT FROM A POLITICAL STANDPOINT THAT CAN KEEP THE MARKETS ON EDGE. IT TENDS TO BE WHEN THERE IS SO MUCH RISK OUT THERE BUT THE MARKETS ARE SO IS HIGH. WHAT IS THE UPSIDE RISK FROM HERE? THAT’S WHAT I DON’T SEE.
I SEE A LOT MORE DOWNSIDE RISKS THAN I DO UPSIDE CATALYSTS. CAROLINE: SO WHAT TO DO AS A CHIEF INVESTMENT OFFICER? WHERE DO YOU SEE -- IS IT PROTECTING YOUR DOWN SIDE OR IS IT HEDGING OR IS IT MORE REALLOCATIONS IN SOME WAY? MEGAN: AT THIS POINT, HOLD CASH. KEEP A GOOD AMOUNT OF DRY POWDER THAT YOU CAN TAKE ADVANTAGE OF OPPORTUNITIES. THAT’S WHAT WE HAVE BEEN DOING,
CASH ISN’T HURTING YOU RIGHT NOW. YOU ARE GETTING 5% OR MORE. EVENTUALLY THAT WON’T BE THE CASE. BUT FOR NOW, YOU HAVE THE CASH TO LOOK FOR OPPORTUNITIES. AND THERE WILL BE OPPORTUNITIES. RIGHT NOW IF YOU LOOK AT THE MARKET, PARTS OF THE MARKET THAT ARE UNLOVED, LOOK AT SMALL AND MID CAP STOCKS. THE ECONOMY STARTS TO ROLL
OVER, THEY’RE GOING TO STRUGGLE BUT THAT’S THE TIME TO TAKE ADVANTAGE BECAUSE THAT’S WHERE YOU SEE THE BEST UPSIDE AS WE GET OUT OF THIS ECONOMIC SLOW DOWN. THEY’RE PRICED ON A RELATIVE BASIS VERSUS LARGE CAP THE CHEAPEST WE HAVE EVER SEEN. CAROLINE: WHEN YOU ARE THINKING OF A TECHNOLOGY SHOW SUCH AS OURS AND MANY WANT TO UNDERSTAND THE REALITIES YOU NEED TO BE DIVERSIFIED BUT THEY WANT TO UNDERSTAND WHERE THE OPPORTUNITIES ARE IN TECHNOLOGY, IS THERE A PLAY FOR TECH OR A.I. IN SMALL OR MEDIUM SIZED COMPANIES? MEGAN: THE A.I. IS HERE WITH US. IT’S BEEN HERE, BUT IT’S ONLY GOING TO EVOLVE GOING FORWARD.
THE ONE THING WHEN YOU THINK ABOUT A.I., IT’S NOT JUST TECHNOLOGY. I KNOW IT’S A TECHNOLOGY SHOW, BUT LET’S LOOK AT OTHER AREAS OF THE MARKET THAT WOULD BENEFIT FROM A.I. WHAT ARE THE COMPANIES THAT
WILL BENEFIT FROM IMPLEMENTING A.I.? WE CAN SEE THAT IN THEIR EARNINGS. THOSE ARE SOME THINGS WE ARE LOOKING AT. INDUSTRIALS IS AN IDEA. SOME CONSUMER STOCKS, I THINK IT’S RIGHT NOW A LITTLE CAUTIOUS BECAUSE THE ECONOMY IS WEAKENING AND CONSUMERS ARE STRETCHED BUT THINK OF WHERE THE COMPANIES THAT ARE GOING TO BENEFIT FROM THE USE OF A.I. GOING FORWARD. CAROLINE: WHAT ABOUT ENERGY? THERE IS A GREAT STORY, VERY WELL READ, ABOUT THE FOLKS LIKE BILL GATES ON NUCLEAR ENERGY. I AM WONDERING WHETHER YOU ARE SEEING A INFRASTRUCTURE NEED AS A PLACE? MEGAN: ABSOLUTELY. THAT IS AN AREA -- LOOK AT WHAT
UTILITIES HAVE BEEN DOING BECAUSE OF THE USE FOR IT. BUT THE INFRASTRUCTURE SIDE WE DON’T HAVE YET TO BE ABLE TO SUPPORT WHAT THIS A.I. IS GOING TO LOOK LIKE IN THE NEXT DECADE. SO WE DO NEED FROM AN INFRASTRUCTURE STANDPOINT, THOSE ARE AREAS WE WILL LOOK AT AS WELL AS WE SEE BROADER WEAKNESS IN THIS MARKET. CAROLINE: IT’S GREAT TO GET A TAKE THAT ENCAPSULATES TECH BUT HOW TO DIVERSIFY AROUND IT.
MEGAN HORNEMAN, WE REALLY APPRECIATE IT. STAY WELL. COMING UP THERE HAS BEEN A FRENZY IN GAME STOP’S ANNUAL MEETING WHICH KICKS OFF TED AFTER IT WAS POST TONED DUE TO TECHNICAL ISSUES. FOR DETAILS, THAT’S COMING AHEAD. MEANWHILE KEEP AN EYE ON SHARES OF T.M.C.
WE LOOK AT WHAT HAPPENS IN TERMS OF TRADING OF A.D.R.’S. THERE IS A STRATEGY WHERE YOU BUY IT IN TAIPEI AND SHORT THE U.S. A.D.R.’S. THE PREMIUM IS PUSHING HIGHER. WILL WE SEE IT TURN AROUND? THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: FERRARI WILL OPEN ITS OWN TECHNOLOGY NEXT YEAR. YOUNGER BUYERS FAVOR ELECTRIC.
ESTABLISHED CUSTOMERS ARE HESITANT TO GIVE UP THE TRADE TRADEMARK ROAR. FERRARI OFFERS A TRADITIONAL HYBRID AND ELECTRIC OPTIONS. LET’S TALK MORE ABOUT THE ELECTRIC VEHICLE ROUTE BECAUSE TESLA HAS GOTTEN APPROVAL TO TEST ITS ADVANCED DRIVER ASSISTANCE SYSTEM ON STREETS. HOW IMPORTANT IS THIS FOR THE TESLA BUSINESS MODEL? >> IT’S AN INCREMENTAL STEP AND I DO THINK THAT THERE’S SOME POTENTIAL FOR WHAT TESLA MARKETS AS FULL SELF-DRIVING TO BE A MORE MEANINGFUL CONTRIBUTOR TO THEIR BUSINESS IN CHINA WHICH THEY COULD USE. WHAT WE DON’T KNOW IS HOW LONG IT’S GOING TO TAKE THEM TO BE ABLE TO OFFER THIS MORE WIDELY.
EVEN THIS INCREMENTAL STEP THAT WE ARE REPORTING ON TODAY REALLY JUST APPLIES TO THE CITY OF SHANGHAI AND POTENTIALLY ANOTHER CITY, AND SO WE ARE NOT NECESSARILY SEEING CHINA TAKE THE SAME HANDS-OFF APPROACH THAT WE HAVE SEEN IN THE U.S. WHERE THEY’VE BEEN ABLE TO OFFER F.S.D. NATIONWIDED AND IT WASN’T ALL THAT MUCH TROUBLE FOR THEM TO MAKE THIS AVAILABLE TO CONSUMERS. ON THE OTHER HAND IN CHINA, THEY’RE REALLY GOING TO HAVE TO IN PIECE PIECEMEAL FASHION HIT THE -- TICK THE BOXES THAT THEY NEED TO WITH IN ORDER FOR CONSUMERS TO VACT VAIT -- ACTIVATE THIS. CAROLINE: IT FEELS AS THOUGH MUSK HAS
REALIZED HE NEEDS THIS FROM REGULATORS. HAVING TO PLAY ALONGSIDE THE OTHER CHINESE E.V. MAKERS. >> THIS HAS BEEN MONTHS IN THE MAKING EVEN BEFORE THAT RECENT TRIP THAT YOU MENTIONED. THIS IS A CASE OF TESLA HAVING OFFERED THE ABILITY TO BUY THIS IF YOU ARE A CUSTOMER IN CHINA, BUT NOT BEING ABLE TO ACTIVATE IT AND BE DEPLOYED, THIS ABILITY TO TURN THIS ON. SO I THINK THERE ARE STILL
QUESTIONS ABOUT JUST HOW WILLING TESLA IS TO CONTINUE TO CHARGE AS MUCH AS IT HAS FOR THIS SYSTEM, DEPENDING ON HOW MUCH SORT OF CAPABILITY IT’S ABLE TO OFFER BECAUSE THIS IS ALL GOING TO BE UP TO THE REGULATORS AND I THINK THEY’RE GOING TO -- THE LIKELIHOOD THEY’RE GOING TO BE AS PERMISSIVE AS THE U.S. HAS BEEN, WHERE WASHINGTON HAS TAKEN THIS VIEW THAT WE DON’T WANT TO STAND IN THE WAY, WE WANT TO OFFER DRIVER ASSISTANCE SYSTEMS, PLENTY OF PLEESH TO OFFER -- LEASH TO OFFER THE SAFETY BENEFITS WITHOUT GETTING IN THE WAY. THAT STILL REMAINS VERY MUCH AN OPEN QUESTION. CAROLINE: THANK YOU SO MUCH. TESLA HAS A LOYAL SHAREHOLDER FOLLOWING.
SO TOO DOES GAME STOP, SO LOYAL THEY’LL HAVE TO RESCHEDULE THEIR ANNUAL MEETING. IT KICKS OFF TODAY, 12:30 LOCAL NEW YORK TIME. IT WAS DELAYED LAST TIME BECAUSE OF TECHNICAL ISSUES. WE WILL BREAK THIS DOWN. TOO MANY PEOPLE WANTED TO LOG ON ALL AT THE SAME TIME. >> COMPUTER SHARES SAYING THEY HAD TO RESCHEDULE IT FROM THURSDAY AFTERNOON TO YOUR POINT TO TODAY. WE HAD TO RESORT TO TWITCH STREAMS, YOUTUBE STREAMS, X STREAMS WHICH WAS INTERESTING BECAUSE THERE WERE TENS OF THOUSANDS OF PEOPLE FLOCKING TO THESE CHANNELS.
PEOPLE TRIG TO FIND A WAY TO STREAM IT. CAROLINE: WHY IS THERE SO MUCH DEMAND? WHO WILL WE BE HEARING FROM? >> NO ONE KNOWS. WHEN YOU LOOK AT LAST YEAR’S A.G.M., RYAN COHEN, FIRST TIME AS CHAIRMAN, HE SPOKE FOR 90 SECONDS. CAROLINE: 90 SECONDS?
>> THE ENTIRE CALL LASTED ABOUT 15 FROM START TO FINISH. NO ONE KNOWS WHAT WILL HAPPEN. THERE IS SO MUCH INTEREST IN WHETHER THEY COULD APPEAR OR BE MENTIONED IN ANY WAY. THE COMPANY DID RAISE $3 BILLION THROUGH SALES OF NEW SHARES OVER THE LAST TWO MONTHS. SO WILL THEY ADDRESS THE CASH HAUL THAT THEY HAVE NOW? WILL THEY ADDRESS THE STRATEGY? NO ONE REALLY KNOWS. THAT’S PART OF THE REASON THAT PEOPLE HAVE TO TUNE IN, BECAUSE IF RYAN COHEN APPEARS, HOW LONG DOES HE SPEAK? DOES SOMEONE ELSE MAKE A GUEST APPEARANCE? CAROLINE: HAVING TUNED IN TO KEITH GILL’S YOUTUBE CHANNEL, IT DOESN’T SIEM LIKE -- SEEM LIKE HE KNOWS MUCH ABOUT THE STRATEGY BUT HE DOES SEEM TO BE MOVING AROUND HIS HOLDINGS. HE IS CHANGING HIS OPTIONS INTO
ACTUAL SHAREOWNERSHIP. THAT SEEMED TO BE PUSHING UP THE STOCK. >> THERE WAS SOME EXCITEMENT ABOUT THAT. WE SAW A WEEK AGO HE POSTED A SCREEN SHOT, 120,000 OPTIONS.
A CULL DAYS LATER, HE EXITED THAT POSITION AND REPORTED NORTH OF NINE MILLION SHARES. THAT MAKES HIM A TOP FOUR HOLDER IF WE TAKE IT AT FACE VALUE. ON PAPER WORTH ABOUT $262 MILLION. WHERE DID HE GET THE CASH FROM? HOW RICH IS HE? A LOT OF UNCERTAINTY AROUND THAT. NONETHELESS IF YOU TAKE IT AT FACE VALUE, TOP FOUR HOLDER FROM A RETAIL SHAREHOLDER WHO WAS PREACHING THE RYAN COHEN VISION. CAROLINE:
LET’S FOCUS ON RYAN COHEN BECAUSE IF YOU HAVEN’T BEEN A COMPLETE GAME STOP FANATIC, WHY DO WE CARE SO MUCH ABOUT THIS INDIVIDUAL? >> CO-FOUNDER OF CHEWY, PEOPLE BET AGAINST THAT, VERY SUCCESSFUL SALE TO PET SMART. ULTIMATELY WEPT PUBLIC. MADE A NICE FORTUNE FROM THAT. HE TOOK AN ACTIVIST STAKE IN 2020 IN GAME STOP, THEN PUSHED AND REALLY HELPED TRIGGER IN EARLY 2021 GETTING SEATS ON THE BOARD, PUSHING FOR CHANGES, OUSTING THE ENTIRE MANAGEMENT TEAM AND NOW IS THE CHAIRMAN, C.E.O. AND PRESIDENT OF THE COMPANY AND REALLY THE WHOLE BELIEF IN GAME STOP WITH KEITH GILL’S THESIS IS THAT COHEN WILL BE ABLE TO TURN THE COMPANY FROM A BRICK AND MOORER TER -- BRICK-AND-MORTAR COMPANY AND COMPLETELY REVAMP THE WHICH IS -- THE BUSINESS. NO ONE REALLY KNOWS BUT THAT’S THE GROUP MENTALITY BEHIND THE RETAIL INVESTORS WHO REALLY LIKE THE STOCK IS THAT RYAN COHEN KNOWS. HE WON’T TELL US, BUT AT SOME POINT THIS WILL END UP WORKING OUT.
THAT’S WHY WE HAVE SEEN SUCH A WILD RIDE OVER THE LAST THREE YEARS. YOU HAVE TO TIP YOUR HAT BECAUSE RYAN COHEN OWNS ABOUT 8.5% OF THE COMPANY. HE HAS PUT HIS MONEY WHERE HIS MOUTH IS. CAROLINE: ENED AND PUT SOME MONEY IN THE BALANCE SHEET OF GAME STOP. ALWAYS GREAT TO GET ALL OF THE BACK STORY WHEN IT COMES TO GAME STOP. TUNE IN AT 12:30. COMING UP GOOGLE DEEP MIND SHIFTS FROM A RESEARCH LAB TO AN A.I. PRODUCT FACTORY.
WE WILL TALK ABOUT THE MOVE. THAT’S NEXT. KEEP AN EYE ON SOME OF THESE CHIP STOCKS BECAUSE A.M.D. HAS BEEN UNDER PRESSURE ALL DAY. NEWS AROUND SOME NEW C.P.U.’S WON’T BE OFFERING CO-PILOT FEATURES IT LAUNCHED.
THAT’S BEING REPORTED BY OTHER OUGHTLETS AT THE MOMENT BUT WE KEEP AN EYE ON THEM. THIS IS "BLOOMBERG TECHNOLOGY." ♪ CAROLINE: GOOGLE WHICH HAS LONG BEEN A PIONEER IN NEW TECHNOLOGIES, HAS WATCHED RIVALS HARNESS ITS RESEARCH AND LEAPFROG IT. THE COMPANY HAS REORGANIZED. ORIGINALLY GOOGLE HAD TWO SEPARATE A.I.
LABS, GOOGLE BRAIN WHERE RESEARCHERS PURSUE PASSION PROJECTS WITH LOOSE OVERSIGHT AND THE ACQUIRED DEEP MIND CO-FOUNDED BY A MAN WHO HAD THIS TO SAY. >> I THINK A.I. IS OVERHYPED IN THE SHORT TERM AND UNDERESTIMATED OVER THE LONG TERM. I THINK THAT’S PROBABLY TRUE OF A LOT OF BREAKTHROUGH TECHNOLOGY. I THINK WE ARE SEEING BECAUSE OF THE POPULARITY OF A.I. IN THE LAST COUPLE OF YEARS LOTS OF PEOPLE TRYING TO GET INTO THE SPACE WHO MAYBE HAVEN’T THOUGHT ABOUT THIS AS LONG AS PEOPLE LIKE US WHO HAVE BEEN IN IT FOR DECADES. AND I THINK WE WILL SEE A
RATIONALIZATION PROCESS HAPPENING. CAROLINE: INDEED THAT RATIONALIZATION PROCESS IS UPON US WITH A COMBINATION OF GOOGLE’S TWO A.I. LABS INTO A SUPERUNIT CALLED GOOGLE DEEP MIND. SEVERAL EMPLOYEES ARE SAYING THIS MOVE HAS BEEN UNDERMINING THE COMPANY’S EDGE IN FOUNDATIONAL RESEARCH. IT’S A GREAT STORY.
WE WANT MORE ON THIS. IS THERE ATTENTION INTERNALINGLY AFTER ONE YEAR DOWN OF AN AMALGAMATION? >> TO BE CLEAR, IT’S GOOGLE, A BIG MESSY COMPANY. I THINK WHAT UNFOLDS HERE IS PART OF IT IS GEOGRAPHICAL. DEEP MIND HAS BEEN LONDON BASED. GOOGLE IS OUT OF ITS
HEADQUARTERS. YOU HAVE THESE COMPETING LABS THAT OPERATE VERY DIFFERENTLY. DEEP MIND HAS BEEN INCREDIBLY WELL FUNDED, RESEARCH OPERATION, DOING CUTTING EDGE A.I., PROBABLY THE WORLD’S MOST CUTTING EDGE A.I. IS NOT ALWAYS CONNECTED TO GOOGLE SERVICES, COMMERCIAL CENTER. NOW THEY’RE ATTEMPTING TO SWING MUCH MORE IN A FOCUS ON PRODUCTS TO BE -- GEMINI BEING THE FLAPSHIP WON, COMPETING WITH OPEN A.I. THERE ARE STILL BUMPS AND WARTS IN THAT MERGER.
AND THERE IS A CONFLICT HOW MUCH DOING THESE CORE PRODUCTS VERSUS MORE EXPLORATORY RESEARCH. CAROLINE: TALKING OF BUMPS AND WARTS, THE COMMERCIALIZATION HASN’T GONE THAT SMOOTHLY AND THAT IS KIND OF THE PROBLEM OF BEING SUCH A BIG COMPANY, WHERE THEY CAN’T ACT LIKE A START-UP ALL THE TIME. >> YEAH, I THINK SO. YOU WOULD THINK THAT CLEARLY GOOGLE IS UNDER MUCH MORE SCRUTINY FOR THE MESSUPS THEY HAVE. THE GEMINI ONE WHICH WE TALKED ABOUT. I THINK THAT’S TOTALLY UNDERSTANDABLE GIVEN HOW BIG OF
THEIR SERVICES ARE. HOW MANY PEOPLE ARE USING GOOGLE SEARCH ON A DAILY BASIS AND HOW MUCH RESPONSIBILITY THAT HAS NOT JUST FOR THEIR BOTTOM LINE BUT OBVIOUSLY THE REGULATORY SCRUTINY THEY’RE UNDER AND INTERNALLY I THINK THOSE SCREWUPS THEY’VE HAD RECENTLY, THERE WILL BE INTERESTING TENSION ABOUT WHAT CHANGES THEY MAKE WHEN THEY LAUNCH. THEY HAVE BEEN CRITICIZED FOR A LONG TIME PARTICULARLY INTERNALLY FOR MOVING TOO SLOWLY. I THINK MICROSOFT HAS PUSHED
GOOGLE TO MOVE FAST. YOU COULD SAY THESE PUBLIC SNAFUS THEY’VE HAD WITH GEMINI MIGHT BE A CONSEQUENCE OF THAT. CAROLINE: WE SEE HOW GEMINI CONTINUES TO EVOLVE. IT’S A GREAT STORY. GO READ IT.
DEEP DIVE ON GOINGS ON AT THE TOP WHEN IT COMES TO A.I. LABS BECOMING ONE AT GOOGLE OF THE COMING UP WE WILL TALK ABOUT GOINGS ON IN TERMS OF M&A. CLEMENT DELANGUE IS WITH US TALKING ABOUT THE LANDSCAPE IN ARTIFICIAL INTELLIGENCE AS HE DOES A DEAL. HE TEASED IT A LITTLE BIT AGO. THIS IS "BLOOMBERG TECHNOLOGY." ♪ CAROLINE: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." I AM CAROLINE HYDE IN NEW YORK. QUICK CHECK ON THE MARKETS FOR YOU.
WE ARE CURRENTLY UP .4% ON THE BIGGER BENCH MARK, NASDAQ 100 MANAGING TO SHAKE OFF ANXIETY OVER EUROPEAN TRADING. WE SEE THE RIGHT WING CONTENDER TRYING TO TAKE THE PRIME MINISTERIAL ROLE. SHE SAYS SHE WILL WORK WITH MACRON. THE POLITICAL ANXIETY IS THERE. BITCOIN OFF BY ALMOST 2%. WE ARE ONLY AT 65,000 THERE. WE HAVE SEEN PROFIT TAKING IN CRYPTO.
SOME INDIVIDUAL MOVERS AND SHAKERS, WE ARE SEEING SOME CORPORATE MOVES, UP 5% FOR AUTODESK. THE SOFTWARE COMPANY MORE THAN $500 MILLION, THEY WANT TO PUSH FOR CHANGES. INVESTORS LIKE THAT. DELL TECHNOLOGIES, THE C.E.O. IS SELLING OUT $300 MILLION WORTH OF THE STOCK BUT THAT DOES NOT MATTER IN TERMS OF THE SELLING PRESSURE. WE ARE CURRENTLY UP 6%. THAT SEEMS TO BE MORE ANALYSTS SAYING THIS IS STILL A STOCK YOU SHOULD BE BUYING. IT WAS MORGAN STANLEY
REITERATING THE TOP PICK. META IS OFF BY .7%, BEING FORCED TO THINK ABOUT HOW MUCH THEY LOOK AT A.I. CHATBOTS BUT MORE BROADLY HOW
MUCH THEY ALSO LOOK AT FOCUSING ON THE SURGEON GENERAL CALLS FOR SOME WARNINGS OF ADDICTION. LET’S MOVE ON TO A LOOK AT WHAT IS HAPPENING WITH ADOBE. UP BY MORE THAN 3%, HAVING BEEN TRADING HIGHER -- WELL, DOWN EARLIER BUT STILL OFF. THE F.T.C. IS TAKING ACTION AGAINST THE SOFTWARE MAKER APPARENTLY FOR DECEIVING CONSUMERS BY HIDING EARLY TERMINATION FEES AND MAKING IT DIFFICULT TO CANCEL YOUR SUBSCRIPTION. THE F.T.C. JUST RELEASING THAT ACTION. SOME STELLAR RESULTS LAST WEEK
THAT PUSHED THE STOCK UP 10%. BUT LET’S TURN TO ANOTHER CORPORATE STORY BECAUSE WE HAVE ALL BEEN THINKING ABOUT HOW A.I. IS AFFECTING MICROSOFT, WELL AHEAD OF APPLE, BUT NOW NOT SO MUCH THE CASE. EVER SINCE APPLE UNVEILED ITS
OWN A.I., THE I-PHONE, SUDDENLY IT FEELS LIKE THE LEAD ISN’T SO MUCH ANYMORE. YOU WROTE ABOUT YOUR PERSONAL FEELINGS OF WHETHER MICROSOFT HAS SLIPPED HERE. WHAT IS YOUR TAKEAWAY FROM
APPLE? WHY DO YOU THINK THEY’VE GOT IT RIGHT? >> I AM AN I-PHONE USER AND WINDOWS USER. I HAVE BEEN USING THE A.I. THAT’S COME WITH WINDOWS FOR A LITTLE OVER A YEAR NOW. MICROSOFT HAD THIS BIG LEAD, BUT APPLE LAUNCHED OR ANNOUNCED THESE A.I.
FEATURES LAST WEEK FROM EASIER WAYS TO SEARCH FOR YOUR FOE PHOTOS TO MAKING CUSTOM EMOJIS IN YOUR SOCIAL INTERACTIONS, INTERACTING WITH SIRI. SUDDENLY I GOT THE SAME EXCITEMENT I HAD WITH MICROSOFT ABOUT A YEAR AGO BUT WHICH I HAVEN’T HAD SINCE THEN. THESE ARE ALL NEW PRODUCTS THAT ARE COMING TO THE I-PHONE. THEY’LL IPT GREAT VERY WELL -- INTEGRATE VERY WELL WITH MY DAY TO DAY USE. IT’S REALLY INTERESTING THAT YEAH, APPLE WAS SO FAR BEHIND A WEEK AGO AND SUDDENLY A LOT OF CONSUMERS ARE REALLY EXCITED ABOUT THESE PRODUCTS THEY’RE LAUNCHING DESPITE THEIR SIMPLICITY WITH WHAT MICROSOFT IS LAUNCHING BY COMPARISON. CAROLINE: INVESTORS ARE EXCITED, TOO.
NEW RECORD HIGHS, ECLIPSING AND BACK TO THE MOST VALUABLE COMPANY ON THE INDICES. WHAT IS IT MORE BROADLY THAT THEY’RE MANAGING TO INTEGRATE? IS IT JUST THERE ARE CONSUMER FACING? >> I THINK ONE OF THE UPSIDES THEY HAVE IS A LOT OF THESE SERVICES ARE ALREADY IN PEOPLE’S HANDS. THEY’RE SPRIFNGLING A.I. ON TOP OF I MESSAGE. WE DON’T HAVE TO DOWNLOAD A NEW APP. YOU ALREADY HAVE SIRI.
IT MAKES IT SMARTER. BY COMPARISON MICROSOFT HAS TO DO A LOT OF LEG WORK. WE DON’T HAVE A WINDOWS PHONE. YOU HAVE WINDOWS P.C.’S OR MICROSOFT EXCEL. BUT IT DOESN’T DOMINATE YOUR DAY-TO-DAY LIFE THE SAME WAY APPLE DOES. THAT’S THE UPSIDE THAT A COMPANY LIKE APPLE HAS. YOU WERE TALKING EARLIER ABOUT GOOGLE. THEY RUN INTO A LOT OF THESE
ISSUES BECAUSE PEOPLE EXPECT THEIR GEM GEMINI PRODUCT TO BE AS GOOD AS GOOGLE SEARCH. APPLE IS SAYING WE ARE GOING TO DO A LOT OF SIMPLE THINGS AND DO THEM VERY WELL AND ADD THEM TO THE PRODUCTS YOU ARE ALREADY USED TO. THEY’RE NOT REINVENTING, TRYING TO BECOME A CHAT G.P.T. COMPETITOR. THEY’RE INTEGRATING WITH CHAT G.P.T. THEY’LL BOOT YOU OVER TO CHAT
G.P.T., AN INNOVATION I AM SURE MICROSOFT IS JEALOUS OF. CAROLINE: TRUE. AUSTIN, A GREAT READ. THANKS SO MUCH FOR GIVING US THE FEELS AROUND APPLE. IT WOULD SEEM LIKE WE HAVE ENTERED THE A.I. START-UP M&A SEASON. THEY’RE LOOKING TO SELL THEIR COMPANIES. WHY? BECAUSE IT’S SO COMPETITIVE.
HUGGING FACE ACQUIRED A SMALL COMPANY, $10 MILLION, FOURTH ACQUISITION TO DATE. HE TOLD US THIS MIGHT BE OCCURRING IN THE MARKET. CLEMENT DELANGUE JOINS US, C.E.O. OF HUGGING FACE. WHAT WAS IT, A MONTH OR SO AGO, YOU WERE LIKE THIS IS HAPPENING, THIS IS REAL AND I AM GETTING A LOT OF CALLS OFFERING TO SELL THEIR START-UP TO ME. BUT YOU WENT OUT AND FOUND THIS ONE YOURSELF. CLEMENT: YES, I THINK IT’S JUST THE BEGINNING. I THINK WE WILL SEE MAYBE MORE
ACQUISITIONS IN THE NEXT FEW MONTHS. THIS ACQUISITION IS A GOOD EXAMPLE. IT’S BASED OUT OF SPAIN, WORKING ON A TREMENDOUSLY IMPORTANT TOPIC, DATA SETS FOR A.I. THEIR NAME ARGILLA MEANS CLAY IN SPANISH. THEY’RE KIND OF LIKE THE FOUNDATION, THE SOIL THAT ALLOWS MACHINE LEARNING AND A.I. TO GROW.
SO WE ARE SUPER EXCITED ABOUT THIS AND I FEEL LIKE THIS IS JUST THE BEGINNING FOR IT. CAROLINE: OK. SO WHEN YOU LOOK AT A $10 MILLION DEAL THAT I THINK THE TEAM WILL REMAIN INTACT AND THEY’RE GOING TO CONTINUE TO OPERATE AS THEY HAVE BEEN, HOW ELSE WOULD YOU WANT M&A TO HAPPEN FOR HUGGING FACE? WILL YOU DO STAND ALONE DEALS? WILL THEY GET BIGGER? CLEMENT: MAYBE. I THINK IT ALL DEPENDS ON THE TALENTS, ON THE OPPORTUNITIES.
AS I WAS SHARING WITH ONE OF YOUR REPORTERS, THE VOLUME OF ACQUISITION OPPORTUNITIES HAS REALLY SKYROCKETED IN THE PAST FEW MONTHS, JUST HUGGING FACE ALONE WE ARE RECEIVING OVER 10 ACQUISITION OPPORTUNITIES PER WEEK THESE DAYS. CAROLINE: PHONE CALLS OR EMAILS? HOW ARE YOU GETTING IT? CLEMENT: EMAILS, YEAH, EMAILS MOSTLY OR CONNECTING WITH ME ON SOCIAL MEDIA. DEFINITELY INCREASED. IT’S REALLY INTERESTING TO SEE. I THINK THERE IS THIS NATURAL TENDENCY OF LIKE CONCENTRATION IN A.I. AND SOME COMPANIES LIKE HUGGING FACE BECOMING SOME SORT OF MAGNETS BECAUSE OF THE VISIBILITY THAT WE HAVE, THE TALENT THAT WE HAVE, THE COMPUTE THAT WE HAVE AND FOR ALL THE START-UPS THAT HAVE GOOD TEAMS THAT HAVE MAYBE EARLY TRACTION BUT MIGHT NOT ATTRACT THE FUNDING THAT IS REQUIRED FOR A.I., THERE’S GOING TO BE OPPORTUNITIES FOR THEM TO JOIN OTHER TEAMS WHICH IS AN INTERESTING TREND. CAROLINE:
YOU HAVE RAISED HUNDREDS OF MILLIONS AND THERE’S GOOGLE, AMAZON, ALL THE WHO’S WHO OF CORPORATE V.C.’S INVESTED IN YOUR PREVIOUS ROUNDS SO YOU HAVE THE CASH TO MAKE THESE ACQUISITIONS. YOU HAVE THE COMPUTE POWER. IS THERE ANY THEME OF WHERE THESE COMPANIES THAT ARE WANTING TO SELL THEMSELVES IS COMING FROM? IS IT GEOGRAPHICAL? WHAT ARE THE PROBLEMS THEY’RE TRYING TO SOLVE? CLEMENT: I THINK A LOT OF IT IS RELATED TO THE CONCENTRATION OF V.C.
BETS IN A WAY. I THINK RIGHT NOW BUSINESSES ARE TAKING HEAVY BETS ON A COUPLE OF VERY HOT TOPICS, LIKE FOR EXAMPLE LARGE LANGUAGE MODELS. YOU’VE SEEN MAYBE THE FUNDRAISING OUT OF FRANCE, COUPLE OF DAYS AGO. SO WHEN THE START-UPS ARE WORKING ON TOPICS THAT ARE A LITTLE BIT LESS HYPE, LIKE FOR EXAMPLE HERE IT’S DATA SETS, IT’S LIKE A DIFFERENT PICTURE. IT’S A DIFFERENT LIFE.
IT’S LIKE A -- QUOTING ROCKY BALBOA. THE WORLD AIN’T ALL SUNSHINE AND RAINBOWS. CAROLINE: YEAH. CLEMENT: WE SEE OPPORTUNITIES IN THERE. AND IT’S SUPER EXCITING BECAUSE, FOR EXAMPLE, HERE FOR ARGILLA WORKING ON DATA SETS, WHICH IN MY OPINION NOW IS BECOMING LIKE THE MOST IMPORTANT TOPIC FOR A.I.
BECAUSE BETTER DATA ALLOWS COMPANIES TO TAKE THE BASE AND FINE-TUNE IT AND GET BETTER RESULTS THAN BEFORE. ALL THESE ARE THINGS THAT ARE SUPER INTERESTING. CAROLINE: HAVE TO LEAVE IT THERE, CLEMENT DELANGUE MAKING THE UNSEXY SEXY, C.E.O. OF HUGGING FACE. COMING UP, WHERE THE VALUE LIES. FVP VENTURES WESLEY CHAN JOINS US. THE F.T.C. IS TAKING ACTION AGAINST ADOBE
FOR HIDING FEES, PREVENTING CONSUMERS FROM EASILY CANCELING SOFTWARE SUB SCHIPTIONS -- SUBSCRIPTIONS. THIS IS "BLOOMBERG TECHNOLOGY." TERMINAL, WHEREVER YOU GET YOUR POD KAS. THIS IS BLOOMBERG. CAROLINE: TIME NOW FOR TALKING TECH. THE U.S. SURGEON GENERAL IS CALLING FOR WARNING LABELS ON SOCIAL MEDIA SITES SIMILAR TO THOSE THAT YOU WOULD FIND ON A CIGARETTE CARTON. TOP HEALTH OFFICIALS ARE
CALLING ON SITES SUCH AS TIKTOK AND INSTAGRAM TO INCLUDE A WARNING TO PARENTS THAT IT COULD HARM THE MENTAL HEALTH OF CHILDREN. LEGISLATION HAS YET TO BE INTRODUCED. AN INDIAN FIRM IS IN TALKS TO SELL ITS FIRM AS IT LOOKS TO UNLOAD ITS ASSETS. TALKS ARE IN ADVANCED STAGES. OTHER SUITORS HAVE VOICED INTEREST. THE U.S. SUPREME COURT HAS AGREED TO REHAVE YOU A CASE OVER NVIDIA’S CRYPTO MINING REVENUE.
NVIDIA IS SEEKING TO STOP A SUIT ACCUSING THE COMPANY BEING DEACCEPT TIFF ABOUT ITS REVENUE. THE JUSTICES SAY THEY WILL HEAR THE CONTENTIONS. THE COMPANY LACKS ENOUGH SPECIFICITY TO GO FORWARD. NOW, TIME FOR S.C. -- V.C. SPOTLIGHT.
JOINING US IS WESLEY CHAN, IT’S INTERESTING THAT WE TALKED ABOUT NVIDIA AND YOU ARE THE ANTI-AI VOICE IN THE ROOM AT THE MOMENT. WHY? WHAT ARE YOU FEELING? WESLEY: I THINK THERE ARE TOO MANY PEOPLE. WHEN I INVESTED IN THE SERIES EIGHT, THERE WERE 100 INVESTORS THAT TOLD THEM NO, YOU ARE TOO FAR AWAY.
WE DON’T GET HOW THIS IS GOING TO WORK WITH ADOBE AND MICROSOFT HAVING THESE AMAZING TOOLS. ALL OF A SUDDEN, CANVA IS BEING USED BY PEOPLE AROUND 35. I LOOK AT IT AS WHAT IS THE CONTRARIAN BET WE CAN BE MAKING? WHAT FIRE SHOULD WE BE RUNNING INTO? IT’S LIKE GOING TO EUROPE IN THE MIDDLE OF THE SUMMER WHEN EVERYBODY IS OFF IN SCHOOL. YOU GET CROWDS. YOU OVERPAY.
YOU WANT TO BE GOING IN THE MIDDLE OF WINTER WHEN IT’S EMPTY AND YOU CAN GET THE ENTIRE MUSEUM TO YOURSELF. WE ARE NOT SOAF ANTI-AI AS WE ARE CONTRARIAN. CAROLINE: SO WHERE IS THE TIMING RIGHT FOR RIGHT NOW? WHERE IS THE ORIGINAL CHECK LURING -- LAYING? CAROLINE: SOME INTERESTING BETS ARE IN AREAS WHERE NOBODY THINKS A.I. CAN MAKE A DIFFERENCE. SO ONE AREA WE ARE SPENDING A LOT OF TIME IN IS DRUG DEVELOPMENT AND DISCOVERY. CAROLINE: I HEAR A LOT OF PEOPLE THINKING A.I. IS GOING TO CHANGE IT. WESLEY:
IF YOU LOOK AT COMPANIES, IT’S HALF DEAD. THERE ARE INVESTORS INVESTING IN DATA MANAGEMENT. SOME OF THEM ARE INVESTING INTO DRUG DISCOVERY BUT NOT MUCH. WE DID A BIG INVESTMENT IN A COMPANY CALLED DATA. THEY USE A.I.
TO TRAIN ON MASS SPECK TROCTRY DATA. THEY’RE TRAINING FROM DATA LIKE THE MACHINES YOU SEE ON C.S.I. AND THEY’RE TRYING TO USE THAT TO DISCOVER NEW MOLECULES THAT CAN CURE CANCER, THAT CAN CURE MAJOR DISEASES IN NATURAL COMPOUNDS. THEY FOUND QUITE A FEW. MICROSOFT MADE A BIG INVESTMENT. IT WAS NOT OBVIOUS WHEN WE MADE THE INVESTMENT. EVERYONE SAYS CHAT G.P.T.
IS GREAT FOR WRITING ESSAYS AND HELPING HIGH SCHOOL STUDENTS RESEARCH AND WE HAVE A COMPANY WHO HAS FIGURED OUT NEW MOLECULES. THAT’S NOT OBVIOUS. A LOT OF PEOPLE THOUGHT THAT WAS CRAZY. CAROLINE: YOU ARE MAKING VERY EARLY BETS. I AM INTERESTED IN HOW LONG YOU RIDE WITH THE ABOUT THE -- WITH THE BET BECAUSE WE ARE GETTING CORPORATE V.C.’S WANTING A CLEANER CAPITAL BASE, ARE THEY WANT TOG PUSH INVESTORS OUT? WESLEY: I AM FINE WITH THEM COMING IN. IT MAKES ME LOOK GOOD IF THEY’RE COMING INTO THE ROUND AFTER WE MADE THE INVESTMENT. WE HAVE TO FIND THE RIGHT TIMING AND FIND THE RIGHT MOMENT WHEN FOUNDERS HAVE DISCOVERED A UNIQUE INSIGHT USING A.I.
OR USING TOOLS THAT A.I. PROVIDES TO HELP THEM FIGURE OUT HOW AT THAT MAKE SOMETHING MAJORLY DIFFERENT WHETHER IT’S DRUG DISCOVERY OR HELPING PEOPLE BALANCE THEIR CHECKBOOKS. THAT MOMENT IN TIME WHEN THE FOUND IRSAYS THIS WILL CHANGE BECAUSE OF A.I. OR THIS WILL CHANGE AND I AM USING A.I., THAT’S WHERE WE GET EXCITED. CAROLINE: YOU CAN CONTINUE THROUGHOUT THE -- WESLEY: WE ARE A VENTURE FUND. WE HAVE 10 YEAR LIFE FIEM ON
THE -- LIFETIME ON THE FUND. OUR L.P.’S ARE LONG TERM INVESTORS. THEY’RE ENDOWMENTS. THEY’RE CHARITABLE INSTITUTIONS OR UNIVERSITY ENDOWMENTS. THEY KNOW THERE IS A 10 YEAR TIME HORIZON. THAT’S ONE OF THE GREATEST THINGS WE HAVE GOING FOR US. I AM NOT MAKING THE BET FOR TOMORROW THAT SOME BIG CORPORATE MARKS UP THE DEAL.
WE ARE PLACING THE BET 10 YEARS DOWN THE ROAD. PEOPLE FORGET GOOGLE TOOK A DECADE TO REALIZE ITS POTENTIAL. IT WAS 10 YEARS WHEN YOUTUBE AND WHEN ANDROID AND SOME OF THE BETS THEY PLACED EARLY ON CAME TO FRUITION. IT’S BEEN 10 YEARS AND NOW EVERYBODY IS SEEING HOW OBVIOUS IT IS. BACK FOR THE FIRST FIVE YEARS EVERYBODY SAT THERE AND SAID I DIDN’T GET IT. CAROLINE: WHAT ABOUT GETTING OUT LIKE WHAT ABOUT A COMPANY THAT DOES INITIALLY SEEM TO DO INCREDIBLE WORK AND HAS SOME TENSIONS AT THE TOP AND REORGANIZATION? DO YOU STICK WITH THEM THROUGHOUT THAT ITERATION? WESLEY: ABSOLUTELY.
I HOLD EVERY SHARE OF FLEX PORT STOCK THAT I INVESTED IN. I BELIEVE IN RYAN THAT MUCH. IT’S THE SAME WITH GOOGLE. A LOT OF PEOPLE SAID LET’S DUMP THE STOCK. THIS COMPANY HAS HIT ITS PEAK. I THINK IT’S AT $17,000 A SHARE.
THAT I.P.O. INVESTMENT AT GOOGLE IS ONE OF THE BEST VENTURE INVESTMENTS OF ALL TIME. TOO BAD WE DON’T DO PUBLIC EQUITIES. DOES THIS COMPANY HAVE 10 YEARS OF INFLECTION POINTS AND THE FOUND IRS WE -- FOUNDERS WE INVEST IN, WHEN THEY CREATE WHAT THEY’RE CREATING, THOSE ARE THE ONES WE CARE ABOUT. I STILL REMEMBER MEL’S 100 YEAR PLAN.
SHE GRAPHED IT OUT ON A PIRATE SHIP MAP. CAROLINE: YOU WERE OVER AT GOOGLE ANALYTICS. WESLEY, IT’S ALWAYS GET TO -- GREAT TO GET YOUR CONTRARIAN VIEWS. WESLEY: THANKS FOR HAVING ME. CAROLINE: COMING UP WE WILL TALK ABOUT THE BOX OFFICE ACTUALLY GETTING ITS BIGGEST DEBUT SINCE BARBIE. INSIDE-OUT 2 DRAWS CROWDS BACK
TO THE THEATERS. LET’S CHECK OUT WHAT IS HAPPENING WITH A.M.C. THE STOCK UP 1.2% BUT WE ARE SEEING INSIDE-OUT 2 PROBABLY HELPING A.M.C. BUT THEY’RE ALSO PERHAPS TALKING MORE ABOUT THE RECORDS, U.S. ATTENDANCE THREE MILLION OVER THE WEEKEND, SO SAYS A.M.C. WE WILL KEEP AN EYE ON ITS LONG
TERM PATH. THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: IT WAS A BIG WEEKEND AT THE BOX OFFICE. INSIDE OUT 2 SEEING THE BEST FILM DEBUT SINCE BARBIE. MEANWHILE SOCIAL MEDIA HAS BEEN ABUZZ WITH THE STREAMING DEBUT OF SEASON 2 HOUSE OF DRAGON WHICH PREMIERED LAST NIGHT. IT WAS A LOT IN TERMS OF CONTENT NOT TO MENTION THE LATEST FILM THAT WILL BE ALLOWED IN CHINA FROM WALT DISNEY. LET’S TALK ABOUT IT NOW. FOCUSING ON DISNEY FOR A MOMENT AND THE CONTENT AND THE FACT WE HAVE PEOPLE GOING BACK TO THE THEATERS, DO THEY JUST NEED THE RIGHT MOVIE AT THE RIGHT TIME WITH THE RIGHT KIND OF AUDIENCE? >> I ABSOLUTELY THINK SO. DISNEY IS BACK IN A BIG WAY,
PICKS AR IS BACK IN A BIG WAY AND SO IS THE BOX OFFICE. THE BOX OFFICE HAS BEEN REALLY SLEEPY. THE WHOLE OF THIS YEAR AND ESPECIALLY THE SUMMER SEASON AND FOR DISNEY IN PARTICULAR, WE KNOW THEY HAVE HAD A STRING OF MISFIRES. THEY RELEASED THREE MOVIES DURING THE PANDEMIC ERA AND AFTER THAT THEY HAD A LIGHT YEAR, THEY HAD ELEMENTAL BUT IT LOOKS LIKE INSIDE-OUT 2 IS RESONATING WITH EVERYBODY AND I THINK OF COURSE IT IS A MOVIE THAT APPEALS TO KIDS BUT ALSO TO PARENTS LIKE YOU AND ME. IT’S SUCH AN EMOTIONALLY CHARGED FILM.
BOX OFFICE IS ALL ABOUT EMOTIONS. THEY GOT THE FORMULA RIGHT. CAROLINE: EVERY PARENT OF TEEN GIRLS I AM TALKING TO WANTS TO DISCUSS ANXIETY AND HOW WE COMBAT THIS AND SO THIS IS ONE WAY.
I AM INTERESTED THOUGH ABOUT THE GLOBAL BOX OFFICE. INTERESTINGLY WE GOT ON SOCIAL MEDIA, WALT DISNEY SAYING WE ARE GOING TO BRING DEAD POOL AND WOLVERINE TO CHINA. THAT’S A BIG DEAL. >> IT’S A HUGE DEAL. WHAT WE HAVE SEEN OVER THE PAST
FEW YEARS WITH CHINA IS WESTERN MOVIES HAVE FALLEN OUT OF FAVOR A LITTLE BIT. IF YOU JUST LOOK AT HOW THE CHINESE BOX OFFICE HAS PERFORMED, CHINA IS ONE OF THE LEADING MARKETS IF YOU LOOK AT YEAR TO DATE BOX OFFICE RECEIPTS, THEY’RE AHEAD OF THE U.S., SO CHINA IS CRITICAL TO THE GLOBAL BOX OFFICE EQUATION. IF YOU LOOK AT HOW HOLLYWOOD
MOVIES HAVE PERFORMED IN CHINA, ABOUT 10 YEARS AGO THEY MADE UP ALMOST 50% OF THE CHINESE BOX OFFICE. THAT KIND OF HAS BEEN SHRINKING. THAT WAS DOWN TO 35% IN 2019 AND THIS YEAR IT’S PROBABLY DOWN TO ABOUT 10%.
SO HAVING A BIG MOVIE LIKE THIS AND ESPECIALLY ONE OF THE MOST ANTICIPATED MOVIES OF THE SUMMER GO OUT IN CHINA, IT IS BIG NEWS FOR DISNEY. HOPEFULLY IT WILL BE BIG FOR THE CHINESE BOX OFFICE TOO. CAROLINE: WHAT IS INTERESTING, YOU SAY THE TENSION AROUND WHETHER ANY OF US CAN BE BOTHERED TO GO TO THE THEATER WHEN WE CAN CONSUME SUCH GREAT CONTENT AT HOME, TO A LARGE EXTENT HOUSE OF DRAGON IS EXACTLY THAT. WE ARE STILL WANTING TO SEE NEW CONTENT BUT QUITE OFTEN FROM FRANCHISES WE KNOW. >> WELL, ABSOLUTELY. AND THAT’S EXACTLY WHAT SOME OF THESE STREAMING PLATFORMS ARE BETTING ON, MAKING THESE INVESTMENTS IN WHAT THEY KNOW WILL BE APPOINTMENT TELEVISION.
HBO AND MAX HAVE BEEN THE GLOBAL LEADERS WHEN IT COMES TO THAT AND OF COURSE HOUSE OF DRAGON, GAME OF THRONES, THESE ARE HUGE TITLES FOR THEM AND THEY WANT TO MAKE THAT AN EVENT. BUT YOU ARE ABSOLUTELY RIGHT. THIS PAST WEEKEND HAS BEEN SUCH A BIG WIN NOT JUST FOR BOX OFFICE AND MOVIE GOING AND PEOPLE ARE GOING AND WATCHING MOVIES MORE IN BIG SCREENS. THAT IS HUGE NEWS. THEY’RE MAKING IT LIKE A BIG EVENT BUT THEY’RE ALSO COMING BACK HOME AND KIND OF RELAXING ON THEIR COUCHES AND WATCHING GREAT STREAMING CON TENT AS WELL. CAROLINE: WE THANK YOU. BLOOMBERG INTELLIGENCE, GREAT
ANALYSIS. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY." DON’T FORGET TO CHECK OUT OUR PODCAST. FIND IT ONLINE AS WELL
2024-06-19 06:16
