Bloomberg Technology 12/12/2022 - Arianna Huffington on FTX
>> I AM CAROLINE HYDE AND WE ARE AT BLOOMBERG'S HEADQUARTERS IN NEW YORK. >> AND I AM ED LUDLOW IN SAN FRANCISCO. THIS IS BLOOMBERG TECHNOLOGY. >> THE U.S. DEALMAKERS RAISING TO GET TECH TRANSACTIONS ACROSS THE LINE. AND WRITE THEM DOWN. >> IT COULD BE A HUGE WIN FOR THE BIDEN ADMINISTRATION TO PUSH BEIJING ACCESS TO THE CHIP INDUSTRY.
AS THERE ARE CURBS ON CHINA. >> AND ELON MUSK AND SAM BANKMAN-FRIED THEIR BOARD MEMBER -- FORMER BOARD MEMBER JOINS US TO EXPLAIN WHY IT IS BAD. WAS CHECK THE MARKETS WE SEE SENTIMENT A LITTLE BIT BUOYANT. WE SEE DATA FOR CENTRAL BANK
RUNNING THROUGH. UP -- S&P 500 UP 1.4%. THE NASDAQ UP 1.2%. A LITTLE OPTIMISM AROUND THE CPI PRINT THE INFLATION DATA COMING OUT TOMORROW.
LAST MONTH, IT INJECTED FIRE INTO THE RISK OF TRADERS. AND THERE IS A DESIRE TO GET AHEAD OF THE MARKET -- IN THE MARKET BEFORE THIS NUMBER. THE 10 YEAR YIELD WITH YIELDS PUSHING HIGHER. IT IS INTERESTING TO SEE TECH
MOVE HIGHER. THE REASON THE 10 YEAR TREASURY HAD THE LAST SALE IN THE END OF THE YEAR -- MAYBE PEOPLE NOT WANTING TO GO LONG DURATION AHEAD OF THE CPI NUMBER AND THE FED ANTICIPATING A RAISE IN RATES THIS WEEK. LET'S LOOK IT ON IN TERMS OF CURRENCIES, THE DOLLAR IS STICKING HIGHER ON THE DAY. BITCOIN OVER THE LAST 12 TRADING DAYS IN A RANGE. AND CUMBERLAND SAYING DO NOT EXPECT THIS TO CHANGE BUT NEXT YEAR AMID THESE CONCERNS, WHEN WE LOOK AT THE HEARINGS AT THE HOUSE AND SENATE AND WITH FTX WE MAY HAVE SOME SPRINKLING COME IN. ED:
WHEN IT COMES TO ORACLE WE HAVE A STRONG TOP-OF-THE-LINE IN THE SECOND QUARTER. THEY SAID THE NUMBERS WOULD BE EVEN BETTER IF IT WAS NOT FOR THE STRONG DOLLAR IMPACTING REVENUES OUTSIDE OF U.S.. THE STOCK IS HIGHER BY 2.4%. IT'S A RISK ON MOVE. THERE IS ONE THAT JUMPS OUT AT US WHICH IS TESLA DOWN AT A THREE WEEK LOW.
6.3 PERCENT IN THIS SESSION. NO BIG NEWS WE WILL GET LATER INTO THE REASONS BEHIND THAT. AND YOU MENTIONED SOME OF THE NAMES WE'VE BEEN TRACKING COUPA SOFTWARE UP 26% TODAY AND LOOKING TO BUY A COMPANY.
AND AMGEN IN A DEAL THAT'S LOOKING IN THERAPEUTICS. SO MUCH NEWS BREAKING WHEN IT COMES TO MA. CAROLINE: NOT TO MENTION THE MARKET CHANGE IT HAS BEEN A WHIRLWIND GETTING INTO THE WEEK OF M&A SPACE. THERE'S $70 MILLION OF HIM AND A RUSH BEFORE THE HOLIDAY. AND LET'S TALK WITH KATIE. TALK US THROUGH THE REASONING BEHIND THE FLOW IN THIS. KATIE:
WE SEE A LOT OF DEALS HAPPENING BEFORE THE END OF THE YEAR. SOMETIMES THERE IS AN EAGERNESS TO WRAP THINGS UP OVER THE HOLIDAYS. PEOPLE DO NOT WANT DEALS TO DIE BEFORE THE HOLIDAYS. WE HAD BEEN REPORTING ON THE COUPA SITUATION FOR A WHILE. OUR UNDERSTANDING WAS THAT THEY WERE IN TALKS FOR MONTHS.
BUT THIS IS A WAVE OF TAKE PRIVATES THIS YEAR PARTICULAR BY, LOOKING AT SOFTWARE. AND WITH THE ENGINE -- AMGEN SITUATION. ONE OF THEM BACKED OUT YESTERDAY. LATE LAST NIGHT WE BROKE THE STORY THAT THEY CAME THROUGH AND MADE AN OFFER. THIS IS QUITE THE MERGER MONDAY.
YOU MAY HAVE MENTIONED THAT MICROSOFT TOOK A STAKE IN THE AND IN STOCK EXCHANGE. ED: IT'S AN INTERESTING TIME OF YEAR FOR THIS TO HAPPEN. AND BRAVO'S WILLING TO PUT ON COUPA 77% PREMIUM WHICH IS OVER THE PRICE FROM THE DATE AS YOU GUYS FIRST REPORTED THAT.
IT'S AN INTERESTING DEVELOPMENT. A LOT HAS HAPPENED IN 48 HOURS. IT'S A SPRINT TO FINISH THE YEAR. HOW DOES THAT SET US UP FOR 2023? KATIE: ABSOLUTELY, WE ARE EXPECTING, FROM WHAT WE HEAR FROM DEALMAKERS, 2023 WILL BE ACTIVE ON THE M&A FRONT. ESPECIALLY WITH TECH. OBSERVERS OF THE STOCK MARKET HAVE NOTICED THAT TECH STOCKS ARE DOWN SUBSTANTIALLY.
IT TOOK A WHILE FOR SELLERS AND BUYERS TO AGREE ON A PRICE ESPECIALLY WITH VOLATILITY. PEOPLE ARE EXPECTING AT THIS POINT, TECH COMPANIES WILL LESS LIKELY TO BE IN DENIAL OF WHERE THEY ARE WORTH. IT IS A GOOD TIME FOR BUYERS TO BUY THINGS ON THE CHEAP. AND: THANK YOU ED: KATIE IS NEVER IN ONE PLACE. IT IS NO WONDER SHE IS ABLE TO KEEP THIS ALL IN HER MIND. WE HAVE SO MUCH MORE TO DISCUSS WITH YOU. THANK YOU VERY MUCH.
LET'S DISCUSS THIS MORE WITH ROBERT PROFUSEK WHO IS AT JONES DAY. WE HAVE MERGER MONDAY WHY IS THAT HAPPENING NOW? >> 2022 IS DOWN COMPARED TO 2021. THAT 2021 WAS $5 TRILLION IT WAS JUST FABULOUS. ONE OF THE THINGS THAT HAPPENS WITH A MARKET CORRECTION IS THAT IT TAKES TIME FOR BUYERS AND SELLERS TO FIGURE OUT WHAT TIME -- WHAT IS THE REAL NUMBER. WHAT AM MY REALLY WORTH? A FAMOUS QUOTE IS YOU ARE WHAT YOUR RECORD SAYS YOU ARE.
IN WALL STREET TERMS THAT MEANS THAT MARKET DICTATES YOUR WORTH TO THAT POINT IN TIME. IT IS HARD TO ADJUST. THE AMGEN DEAL WAS INTERESTING ALMOST AT AN ALL-TIME HIGH FOR THE TARGET RISE. IT IS NOT DIFFICULT -- IT'S NOT SURPRISING IT IS DIFFICULT TO GET TO A DEAL. THEY WERE TRADING AT FOUR TIMES EVALUATE MONTHS AGO. THEY HAVE TWO ISSUES THAT ARE HAPPENING IN THE CIRCUMSTANCES, ONE OF THEM IS DISLOCATION OF VALUE. WHAT IS IT REALLY WORTH?
THINGS ARE STARTING TO SETTLE OUT MAY BE. IN TERMS OF WITH THE MARKETS HAVE TO SAY. CAROLINE: WITH ALL YOUR YEARS OF EXPERIENCE, THE TOP WITH M&A AND THE GOVERNMENTS OUT THERE. WHEN YOU TALK WITH THE
BUSINESSES, WHAT FROM A MACRO PERSPECTIVE DO THEY WANT TO SEE? IS IT COLUMNIST WHEN IT COMES TO OVER VOLATILITY? WHAT IS INTERESTING IS THAT WE'VE HAD A SETTLE FOR OVER THE MARKET BUT FOR EXAMPLE THE FEAR GAUGE OF VOLATILITY HAS NOT BEEN AT A ANIMATED LEVEL. WITH THE DISCUSSIONS YOU HAVE WITH PEOPLE THAT WANT TO USE THE HUGE AMOUNT OF CASH THEY WANT TO PUT TO WORK WHAT DO THEY WANT TO SEE? >> INSTABILITY. ONE OF THE THINGS THIS MATCHES 2022 THE MOST RECENT PERIOD IS CAN MORE STUFF HAPPEN? IN A SHORT PERIOD OF TIME WE BEEN THROUGH. USA MENTIONED AND I MENTIONED EARLIER WE WENT THROUGH 12 YEARS OF QUIET INTEREST RATES. NOTHING GOING ON IN THE ENVIRONMENT. AND SUDDENLY THE DEBATE IS THE
10 YEAR GOING TO 550 OR 600. HOW DOES THAT HAPPEN? PART OF IT IS JUST STABILITY. AND WHEN YOU THINK ABOUT IT FROM AMGEN'S POINT OF VIEW, VERIZON, I AM NOT AN EXPERT ON THIS, BUT I UNDERSTAND THEY HAVE GREAT DRUGS AND AMGEN LIKE EVERY OTHER FARMER ALWAYS HAS TO REPLENISH ITSELF. AND THEY HAVE TWO -- HAVE A POWERFUL BALANCE SHEET. AND THEY GOT A BREACH LOAN FOR THE DEAL FOR $28 BILLION. THIS IS IN THE SAME MARKET WHERE PEOPLE SAY YOU CANNOT BORROW MONEY. WELL, IT'S NOT THAT EVERYBODY
CANNOT. SOME PEOPLE CAN BUT NOT EVERYBODY CAN. BUT THEY COULD IN 2021. SO YOU SAY IT'S GOING TO BE A MORE FUNDAMENTAL MARKET RATHER THAN A FINANCIAL MARKET. THE JOB -- ONE OTHER THING, THERE IS A TREMENDOUS AMOUNT OF PRIVATE EQUITY THAT WAS RAISED IN THE LAST SEVERAL YEARS.
LITERALLY TRILLIONS OF DOLLARS. THAT HAS TO BE PUT TO USE BECAUSE OF THE WAY THE ECONOMICS WORK. THEY DO DEALS THAT THEY THINK ARE GOOD DEALS BUT THERE IS SOME PRESSURE TO GET THE MONEY APPLIED. CAROLINE: SOME COMPANIES IN THE TECHNOLOGY AND BIOTECH SPACE ALSO HAVE A LOT OF MONEY. THEY ARE KEEN TO DO DEALS, BUT
THE REGULATORS, WE WERE TALKING LAST WEEK, THOSE THE PROMINENCE OF THE FTC EVERYWHERE LOOKING AT WHAT META HAS BEEN DOING AND WHAT MICROSOFT IS BUYING IN THE GAMING SPACE, HOW MUCH IS REGULATION WORTH IT TO YOU? >> IT IS A FACTOR. LIKE MICROSOFT AND THE DIVISION DEAL. AND SIMON & SCHUSTER WHICH IS A SMALLER DEAL BUT IT'S IMPORTANT IN SOME WAY IN TERMS OF WHAT IT SAYS. BUT THAT DEAL WAS BLOWN OUT BY ANTITRUST TREASURIES. BUT ON THE OTHER HAND THE TRACK RECORD HAS NOT BEEN TOO GOOD. UNITEDHEALTH, ALUMINA, THE SUGAR DEAL, A LOT OF THINGS. JUST BECAUSE THEY MOVED TO
BLOCKED SALE DOES NOT MEAN IT WILL BE BLOCKED. BUT A CERTAIN FACTOR IN THIS ADMINISTRATION IS TAKING AN AGGRESSIVE VIEW OF THIS. IN ALL CANDOR, I'M NOT SURE THAT IT'S ALL THAT MORE AGGRESSIVELY DONE THAN THE TRUMP ADMINISTRATION. IS JUST A FACTOR. THE MICROSOFT DEAL, I KNOW PEOPLE WERE ACTING LIKE THAT WAS SURPRISING, I WOULD HAVE BEEN SURPRISED IF THEY SAID OK IT IS MICROSOFT AFTER ALL. YOU HAVE TO TAKE A LOOK AT IT. DO THEY HAVE TO SUE? I DON'T KNOW.
-- I DON'T THINK SO. THEY HAVE CHANGED AND THERE'S A LOT OF RHETORIC. ED: WE WERE TALKING ABOUT THE BIG NAMES OUT THERE GOING SHOPPING BECAUSE THEY SEE OPPORTUNITY. THE OTHER SIDE OF THE TABLE THERE ARE THOSE THAT ARE THE FOR SELLERS.
WHEN WE THINK ABOUT THE MARKET RIGHT NOW IN THE MARKET 2023, WHAT ROLE DOES THE FOR SELLER PLAY IN GLOBAL ACTIVITY? >> USUALLY, IT IS WHEN THINGS BOTTOM. IT IS THE FOR SELLERS THAT START THE LEVEL OF ACTIVITY. USUALLY IT IS BECAUSE OF OVERLEVERAGED.
THAT WILL NOT BE THE CASE THIS TIME. IT IS JUST A FUNCTION OF THE WORLD WE HAVE LIVED IN OVER THE LAST SEVERAL YEARS. THERE WERE -- WAS EQUITY AVAILABLE AT VERY AGGRESSIVE PRICES. THOSE MARKETS ARE CLOSE. BUT THE PUBLIC MARKETS ARE ABSOLUTELY CLOSE FOR THAT SORT OF STUFF AND THE PRIVATE MARKETS ARE DIFFICULT.
NOT LIKE THEY WERE. A LOT OF BUSINESSES WERE FINANCED BASED ON THE ASSUMPTION THAT EQUITY COULD BE THERE. IT WILL NOT BE THERE AND THEY CANNOT BORROW MONEY UNTIL THEY START OPENING. SO THERE WILL BE A LOT OF -- START BROKERING. SO THERE WILL BE A LOT OF MERGING.
THEY ARE GOING TO HAVE TO BE A LOT OF ACTIVITY BECAUSE SOME COMPANIES ARE GOING TO GET BLISTERED AROUND IN THEIR OWN MONEY THEY DO NOT HAVE A REVENUE AND THEY HAVE TO PAY THE BILLS. ED: WE WILL SEE IF THAT HAPPENS. THANK YOU FOR JOINING US. COMING UP, A POTENTIAL WIN FOR THE U.S. >> BLOOMBERG HAS LEARNED THAT JAPAN AND THE NETHERLANDS MAY JOIN THE U.S. IN TIGHTENING CHIP EXPORTS TO CHINA. THAT IS A POTENTIAL BLOW TO BEIJING'S TECHNOLOGY INDUSTRY. THE TWO COUNTRIES SAY THAT THEY
WOULD AT LEAST ADOPT SOME OF THE MEASURES THAT THE U.S. ROLLED OUT IN OCTOBER. SENIOR ANALYST OF U.S. SEMICONDUCTORS. WE SPEAK WITH STACY AARON RASGON . THEY ARE CONSIDERING CURBS ON
CHIPMAKING EQUIPMENT. AND I WENT TO GET STRAIGHT TO WHETHER THAT HAS ANY RESULT OR HELPS THE U.S. REACH THE RESULT IT IS AIMING FOR. AND IT SAYS IT IS AIMING TO STOP THE CHINESE GOVERNMENT FROM HAVING ACCESS FOR EQUIPMENT THAT THEY COULD USE FOR MILITARY USE. YOU CAN USE SOME OF THOSE CHIPS IN MILITARY FUNCTIONS. DOES THIS ACTUALLY GET THE RESULT THAT THE U.S.
IS PUSHING FOR? >> IT DEPENDS ON WHAT YOU'RE DOING THERE ARE MILITARY APPLICATIONS THAT ARE USEFUL TO GENERATION OF CHIPS. AND MANY OF THE GENERATIONS USE ALL KINDS OF CHIPS. BY ELIMINATING THE ACCESS, YOU WILL LIMIT ACCESS THAT IS HIGHER PERFORMANCE ESPECIALLY ON THE COMPUTE SIDE OF THINGS. THAT IS WHERE YOU WILL SEE ADVANCED LOGIC.
THIS WILL PREVENT THOSE CHIPS AND PRINCIPAL FROM GETTING INTO THE MILITARY. CAROLINE: MEANWHILE CHINA'S DISPUTE OVER THE EXPORT FOR THE WTO. HELP ULTIMATELY -- ULTIMATELY HOW DAMAGING IS THIS TO BEIJING PRODUCTION OF CHIPS? >> IT WILL STOP THEM FROM DEVELOPING THEIR OWN ECOSYSTEM TO DESIGN, MANUFACTURE, AND BUILD SEMICONDUCTORS.
THEY ARE NOT PREVENTED FROM DEVELOPING THE CAPABILITY TO BUILD OLDER GENERATION PARTS, THEY CAN DO THAT, BUT ANYTHING THAT CAN BE USED FOR COMPUTING AND EVEN FROM A DESIGN SIDE OR MANUFACTURING SIDE WE WANT TO STOP THEM. IT WILL BE DIFFICULT IF NOT IMPOSSIBLE FOR THEM TO BUILD FROM A LOCAL STANDPOINT. NOW, WITH THESE NEW BLOCKADES FROM THE NETHERLANDS AND JAPAN, THEY FINALLY CLOSE THE WINDOW ON IT. IF ALL OF IT COMES TOGETHER, WITH THE U.S., THERE'S NOT A WHOLE LOT THAT CHINA CAN DO FROM A LOCAL -- GLOBAL STANDPOINT.
ED: THE REASON WE ARE TRACKING THESE THREE COUNTRIES IS BECAUSE OF THE COMPANIES. KLA, ASML, WHAT IS YOUR ASSESSMENT OF WHAT THESE CURBS ARE DOING TO IMPACT THOSE COMPANIES TOP AND BOTTOM LINES? >> WE HAVE TO REMEMBER WHY THEY ARE DOING THIS WHY DO WE CARE ABOUT THE NETHERLANDS AND DEMAND? CHINA CAN NOT MAKE THE MOST PRODUCTIVE SEMICONDUCTORS THAT HAS ALREADY BEEN BANNED. IF YOU GO A COUPLE GENERATIONS BACK IT IS STILL PRETTY ADVANCED.
THERE ARE ALTERNATIVES TO U.S. COMPANIES. YOU CAN GET AN ALTERNATIVE FOR COMPANIES LIKE NIKON IN JAPAN. AND GET ALTERNATIVES LIKE TOKYO ELECTRON. THAT IS WHY IT IS IMPORTANT TO GET EVERYBODY ON THE SAME PAGE.
IN TERMS OF THE IMPACT ON THE COMPANIES, THE U.S. EMPHASIZE THIS, THERE'S ONLY A FEW OF THEM THAT THE -- WILL BE IMPACTED ON THE PRODUCT SIDE. FOR NOW THEY ARE CLOSING THE GAP. ON THE -- THERE IS $2.5 BILLION A YEAR WITH ASML. THEY THINK THEY CAP BRING THAT DOWN TO -- THAT THEY CAN BRING THAT DOWN TO ONE BILLION OR 1.5 BILLION. FROM AN EQUIPMENT SIDE IT MAY GET LESS OVERTIME BECAUSE YOU FIGURE IF THE CAPACITY IS NEEDED, AND IT IS NOT BEING BUILT IN CHINA, EVENTUALLY IT MAY BE BUILT SOMEWHERE ELSE.
SO THIS IS MADE OUT TO BE SOMEWHAT TEMPORARY. AND THEY MAY FIND THAT SOME OF THE CAPACITY IS NOT PERMANENTLY LOST. BUT IT MAY TAKE TIME AND RE-GENERAL -- REGENERATING SUPPLY CHAINS TO GET IT MOVING. ED: YOU'RE RIGHT ABOUT THIS RESEARCH. WE HAD DUG MESSENGER ON THE SHOW A COUPLE WEEKS AGO THAT POINTED OUT THERE ARE WORK -- WORKAROUNDS ESSENTIALLY IN TERMS OF LICENSING ALTERNATE PRODUCTS.
WILL CHINA HAVE SUCCESS PUSHING THOSE ALTERNATIVES? >> THE SANCTIONS ON THOSE ARE TARGETED ABOUT WHAT IS AND WHAT IS NOT AND. -- NOT BANNED. I MAY USE THE SAME CHAP -- CHIP TO MAKE SEVERAL THINGS. SO THE GENERAL CHARACTERISTICS OF WHAT IS LAMP AND WHAT IS NOT. IT IS PRETTY CLEAR. WHETHER OR NOT IT WILL BE A
VIABLE PATH IT WILL COME. THE MODERN COMPANIES LIKE NVIDIA, IT IS NOT CONCERNED WITH ACTUAL CHIPS. THEY HAVE HAD ALTERNATIVE AVAILABLE PRODUCTS THAT COME IN BELOW THE THRESHOLD. AND NOW THEY CAN SELL THOSE.
THE ISSUE IS THAT THEY WILL NEVER RISE SO THE GAP BETWEEN WHAT IS LEGAL OF WHAT THEY SELL IN CHINA AND WHAT IS AVAILABLE IN THE REST OF THE WORLD WILL GET BIGGER AND BIGGER. EVENTUALLY, THEY MAY NO LONGER BE [INDISCERNIBLE] CAROLINE: THANK YOU FOR JOINING US. MEANWHILE, COMING UP, WE WILL GO ON THE RECORD THERE ARE SO MANY OUTLETS WITH SAM BANKMAN-FRIED ON SOCIAL MEDIA OR OTHER PARTS OF THE MEDIA. THEY HAVE A PANEL HEARING ON
THE FTX COLLAPSE WEDNESDAY. WE WILL DISCUSS WHY COMING UP. ED: TICKETMASTER APOLOGIZES AGAIN. THIS TIME IT INVOLVES BAD BUDDY. MANY WERE -- MONEY. MANY WERE TURNED AWAY FROM THE CONCERT ON FRIDAY. BECAUSE THE TICKETS WERE FAKE. THIS IS AFTER TICKETMASTER SAID
IT SYSTEM HAD BEEN OVERWHELMED WITH AN IMPRESSIVE NUMBER OF PEOPLE WITH FAKE TICKETS. OVER THE WEEKEND THEY SAID FANS WITH LEGITIMATE TICKETS WOULD BE REFUNDED. AND THEY ASK TICKET MASTER A REPORT ON WHAT IS HAPPENING. A LITTLE BIT OF DÉJÀ VU THERE. A LITTLE BIT. CAROLINE: A LITTLE BIT. IT IS ACROSS SOCIAL MEDIA OUTLETS SUCH AS TWITTER IT IS A HEATED SPACES DEBATE. WE TEST OUT SPACES IN WHERE WE
WANT TO CONDUCT OUR CONVERSATION AND BRING IN AN AUDIENCE. BUT IT IS INTERESTING IF SPF IS GOING TO BE IN THE SENATE HEARING. AND THE FACT WE GET THIS IS FROM TWITTER SPACES THE IDEA OF JOURNALISM COMING TO A FULL. AND IT IS STARTED BY CRYPTO. ED: AND YOU MENTIONED SPF WHY WILL HE GO OR NOT GO BEFORE CONGRESS ON CAPITOL HILL WHEN YOU CAN GET ALL THE INFORMATION FROM HIM LIVE ON A SOCIAL MEDIA PLATFORM.
I THINK THAT IS WHAT -- PART OF THE FRUSTRATION LAWMAKERS HAVE AS WELL. CAROLINE: A LOT OF PEOPLE HAVE BEEN CRITICAL OF THEIR UNDERSTANDING OF SOCIAL MEDIA. BUT WHAT ABOUT THEIR UNDERSTANDING OF CRYPTO AS WELL AND PEOPLE ASKING QUESTIONS ON THE TWITTER SPACES. >> WELCOME BACK TO BLOOMBERG TECHNOLOGY I AM CAROLINE HYDE WITH ED LUDLOW IN SAN FRANCISCO. WITH THE STOCKS PUSHING HIGHER BEEN NASDAQ 100 WAS UP. BUT ONE NAME IS WISHING AT THE
MOMENT. ED: YES IT IS TESLA AND IT IS HARD TO UNDERSTAND WHY. THE STOCK IS DOWN MORE THAN 6% TRADING AT A THREE WEEK LOW. THERE ARE SOME HEADLINES OVER THE AGGREGATE OF THE WEEK.
THE PULLBACK IN PRODUCTION IN SHANGHAI. AND THE NEWS REPORT THAT ELON MUSK IS CONSIDERING SWITCHING SOME OF THE UNSECURED DEBT FOR MARGIN LOAD -- LOANS IN HIS FINANCING. THAT COULD BRING DOWNWARD PRESSURE. AND THERE IS ELON MUSK HIMSELF ON TWITTER. AND HIS ACTIONS AND ALLEGATIONS OVER THE WEEKEND. I WANT TO BRING UP A CHART WE DO NOT HAVE TO DO THIS BUT IS INTERESTING.
2021 HIGH THERE IS A CLEAR DOWNWARD TREND FOR TESLA STOCK. THAT IS WITH KEY LEVELS OF RESISTANCE AND IT CONTINUES A DOWNWARD SLIDE. IT IS HARD TO PICK OUT WHY. A LOT OF ANALYST DO NOT AGREE WITH WHAT IS SUPPORTING OR NOT SUPPORTING THE STOCK OR WHATEVER THE CASE MAY BE.
WHEN WE REPORT ABOUT QUESTIONS ON DEMAND FOR CHINA A LOT OF RETAILERS PUSH BACK AND SAY THAT CANNOT BE THE CASE. BUT WE ALSO REPORTED THAT TESLA HAS CUT PRICES. IN A QUESTION IS HOW MUCH IS IT JUST ELON MUSK? IS THERE A DISTRACTION ELEMENT? CAROLINE: YES WE WANT TO DIG INTO THIS WITH ELON MUSK'S MANAGEMENT STYLE WITH SOMEONE WHO IS KEEN ON BUSINESSES. AND IS FIRST ON BEHAVIORAL CHANGE INSIDE OF THEM. ARIANNA S HUFFINGTON SHE SAYS THAT ELON MUSK EXAMPLE IS -- IS AN EXAMPLE OF POOR BUSINESS STRATEGY.
AND SHE SAID THE WORKER OF MENTAL HEALTH IS -- WORKER MENTAL HEALTH IS MORE IMPORTANT THAN EVER WITH EMPLOYEE PRODUCTIVITY, RECRUITMENT AND RETENTION. SHE POINTED OUT BURNOUT DENIER. HEALTHIER CORPORATE ENVIRONMENTS HAVE THRIVED. SHE IS WITH US NOW. YOU WRITE THAT MUSK IS A COUNTER CASE STUDY FOR LEADERSHIP. TALK WITH US ABOUT WHY HE IS
SUCH A POWERFUL COUNTER CASE. >> AT THE VERY MOMENT WHERE WE HAVE MAJOR MARKET COMPANIES LIKE PFIZER, WALMART, SALESFORCE AND OTHERS INVESTING. AND SEEING THE BUSINESS RESULTS IN TERMS OF RECRUITMENT AND PROTECTION AND PRODUCTIVITY. WE HAVE ELON MUSK WHO IS AS GENIUS WHEN IT COMES TO UNDERSTANDING ENERGY AND CARS. CLEARLY NOT UNDERSTANDING HUMAN ENERGY. AND ACTING AND EXPECTING HIS EMPLOYEES TO WORK AND BURNOUT LEADS TO A FALL IN -- IT DOES NOT LEAD TO PEAK RESULTS.
IT COMPROMISES DECISION-MAKING. WHICH IS NOT BENEFITING TWITTER. AND IT IS NOT BENEFITING TESLA. TO YOUR POINT ABOUT WHY TESLA IS TRENDING DOWN, THERE IS NO QUESTION THAT ELON MUSK IS THE GENIUS BEHIND TESLA. WHEN THAT GENIUS IS DISTRACTED BY AUCTIONING HIS MACHINES ON TWITTER AND MOVING BEDS INTO CONFERENCE ROOMS AND FOLLOWING FOUND SHE ON TWITTER, EVEN WHEN YOU ARE INVESTED IN TESLA YOU ARE WORRIED ABOUT WHY HE IS NOT FOCUSED ON TESLA ESPECIALLY IN A TIME OF GROWING COMPLICATION. CAROLINE: THERE'S A HARROWING STATUS OF SWEET -- SLEEPING IN THE OFFICE.
THE CRYPTO WORLD FALLING ASLEEP ON BEANBAGS. AND IT ALMOST BEING SOMETHING THAT THEY WANTED TO SHOW POTENTIAL INVESTORS TO SAY LOOK HOW DYNAMIC AND FOCUSED HE IS THE MINUTE HE WAKES UP. WHEN CAN WE STOP HAVING THIS IDEA OF CULTISH FANATICISM AROUND CERTAIN PEOPLE. >> THE MAJORITY OF THE WORLD HAS ALREADY STOPPED.
THAT IS FASCINATING. ESPECIALLY BECAUSE OF THE PANDEMIC. WE WENT FROM SLEEP DEPRIVATION, EXHAUSTION, BURNOUT BEING A BADGE OF HONOR AND CELEBRATED THE OPPOSITE. WE HAVE MAJOR CEOS SUCH AS JEFF BEZOS AND OTHERS TALKING ABOUT GETTING EIGHT HOURS OF SLEEP. WE HAVE MAJOR ATHLETES LIKE LEBRON JAMES AND TOM BRADY TALKING ABOUT THE IMPORTANCE OF RECOVERY. AND ALL THESE PEOPLE ARE HARD-WORKING. I WANT TO STRESS THIS IS NOT
ABOUT NOT WORKING HARD IT IS ABOUT WORKING SMART. AND NOT HAVING DIMINISHING RETURNS THAT WE ALL HAVE EXPERIENCE WHEN WE ARE EXHAUSTED, BURNED OUT, AND RUNNING ON EMPTY. THE DATA IS SO CRITICAL. I'M A BIG ADMIRER OF ELON MUSK HE IS UNQUESTIONABLY A GENIUS, BUT IF SOMEONE WHO UNDERSTANDS SO PERFECTLY ENERGY AND RENEWABLE ENERGY WHEN IT COMES TO CARS, HE IS MISSING OUT HE'S USING INCREDIBLY OUTDATED MODES OF HUMAN ENERGY WHEN IT COMES TO HOW HE WANTS TO RUN HIS BUSINESSES. ED: IS ELON MUSK NOT GOING BACK TO HIS PLAYBOOK? I WANT TO BRING UP SOMETHING YOU SAID IN YOUR OP-ED THAT HE IS SHOWING THE DOWNSIDES OF THE MODEL FUELED BY BURNOUT AND LACK OF SLEEP IN HIS OWN DECISION-MAKING.
AND THAT MADE ME THINK ABOUT REPORTING FROM 2018 WHEN MUSK SAID HE WAS SLEEPING ON THE PRODUCTION LINE WITH HIS ENGINEERS. HE DOES HAVE A GOOD TRACK RECORD OF GETTING THESE COMPANIES BE IT TESLA OR SPACEX THROUGH MOMENTS OF DISTRESS AND YOU LOOK AT THE TWO COMPANIES NOW THEY ARE THE CLEAR MARKET INCUMBENTS FOR ELECTRIC VEHICLES AND COMMERCIALS A SLOT. -- COMMERCIAL SPACE LAUNCH. >> ABSOLUTELY NOTHING TO THINGS HAVE HAPPEN. THE CULTURE HAS MOVED ON. PANDEMIC HAS ACCELERATED THE CULTURAL SHIFT AWAY FROM CELEBRATING BURNOUT AND WEARING IT AS A BADGE OF SUCCESS. WHEN ELON MUSK ASKED HIS TWITTER EMPLOYEES TO COMMIT TO A INTENSE WAY OF WORKING 1200 OF THEM RESIGN. THAT WOULD NOT HAVE HAPPENED IN
2018. WHAT HAPPENED WITH THE PANDEMIC IS PEOPLE LOOKED AT THEIR LIVES. AND WHAT THEY VALUE. AND MILLIONS OF PEOPLE SAID WE VALUE HARD WORK AND BEING COMPLETELY GAUGED BY OUR WORK BUT WE DO NOT WANT TO BE DEFINED BY OUR WORK. AND WE ALSO WANT TO PRIORITIZE OUR OWN HEALTH AND WELL-BEING. THAT IS THE MOMENT WE LIVE IN RIGHT NOW. I HAVE NO DOUBT THAT IF ELON
MUSK STARTED APPLYING THAT CLEAR DATA POINT AROUND HARD WORK HE WOULD BE EVEN MORE PHENOMENALLY AMAZING ACROSS ALL OF HIS COMPANIES. ED: YOU HAVE BEEN A BOARD MEMBER AND EXECUTIVE LEADER IN A NUMBER OF COMPANIES, TECHNOLOGY SECTOR AND MEDIA, GIVE ME CONCRETE PROPOSALS YOU THINK ELON MUSK SHOULD PUT INTO PLAY TO FIX THE SITUATION IN TWITTER AND IMPROVE PERFORMANCE IN TESLA. WHAT ADVICE WOULD YOU GIVE HIM THERE TO CHANGE WHAT HAS BEEN THE CASE SO FAR? >> THE FIRST THING IS ALONG THE LINES OF WHAT WE BEEN DISCUSSING. RECOGNIZING HE WILL MAKE BETTER DECISIONS WHEN HE IS NOT RUNNING ON EMPTY.
WHEN HE IS NOT EXHAUSTED. ED: GET A GOOD NIGHT SLEEP IN OTHER WORDS. >> YES. AND WORK HARD HE WILL ALWAYS WORK HARD WE ALL WORK HARD. THAT DAYS, BUT WE ALL KNOW ALSO
THAT OUR WORK DEPENDS ON JUDGMENT. AND HIS WORK AND ACHIEVEMENTS AND WHAT HE DOES FOR HIS COMPANIES DEPENDS ON THE QUALITY OF HIS DECISIONS. LOOK AT THE QUALITY OF HIS DECISION IT HAS NOT BEEN GOOD. THERE'S BEEN A STRUGGLING WITH TWITTER FILES AND THAT IS A HUGE DISTRACTION AND THAT REALLY IS BY BIG HOPE THAT HE RECOGNIZES HOW MUCH MORE EFFECTIVE HE WOULD BE AS A LEADER AND HOW MUCH BETTER THE BUSINESS WOULD BE IF HE LOOKED AT THE SCIENCE AND DATA OF PEOPLE PERFORMANCE. CAROLINE:
IT'S INTERESTING THAT WE MENTIONED YOU HAVE BEEN A BOARD MEMBER. HOLDING EXECUTIVES TO ACCOUNT, MANY MAY LOOK AT THESE TWO LEADERS YOU SINGLED OUT ELON MUSK AND SAM BANKMAN-FRIED THEY MAY NOT HAVE A BOARD AT ALL. YOU THINK AS WE HAVE AN ECONOMIC SLOWDOWN PEOPLE PUT MORE FOCUS ON CORPORATE GOVERNANCE? >> ABSOLUTELY. FTX DID NOT HAVE A BOARD. ISN'T IT ASTOUNDING THAT THE MAJOR OF THEM INVESTED IN A COMPANY WITHOUT A BOARD. I KNOW I SAW THE DANGERS
FIRSTHAND OF BURNOUT AND THE DECISIONS IT LED TO. IT ALMOST BROUGHT DOWN THE COMPANY. AND WE SAW WHATEVER IN FTX. WE HAVE SO MANY EXAMPLES AND IT IS NOT TIME TO STOP CELEBRATING THAT WAY OF WORKING. ACTUALLY, WHERE THIS STARTED IT GOES BACK TO THE INDUSTRIAL REVOLUTION. WHERE WE STARTED REVERING MACHINES AND TRYING TO MINIMIZE DOWNTIME AND THE SAME WITH SOFTWARE.
BUT FOR THE HUMAN OPERATING SYSTEM DOWNTIME IS NOT A BANK IT IS A FEATURE. AND WHEN WE RECOGNIZE THAT IT CHANGES THE WAY WE RUN BUSINESSES. CAROLINE: WE STRUCTURE MONDAY THROUGH FRIDAY IN A WAY HENRY FORD DID BACK THEN. AS A WOMAN WHO LED THE CHARGE
IN A NEW FORM OF MEDIA, YOU MUST BE FASCINATED TO WATCH WHAT TWITTER IS DOING AS A NEW FORM OF MEDIA. HOW DO YOU THINK ABOUT THE LANDSCAPE OVERALL? >> WHEN I LAUNCHED THAT IN 2005 BEFORE YOU'RE BORN, THE FOCUS AND VISION MUST DEMOCRATIZE MEDIA. NOW WE SEE THE DEMOCRATIZATION OF MEDIA AND THERE'S A LOT OF GREAT STUFF ABOUT IT, BUT I ALSO SEE HOW PEOPLE ARE GATHERING AROUND JUST WHAT THEY BELIEVE. THE DANGER OF CONFIRMATION BIAS AND ONLY READING THINGS YOU AGREE WITH IS A TREMENDOUS DANGER FOR DEMOCRACY AND THE TRUTH. ED:
SORRY, ON THAT LINE, I STILL FIND TWITTER TO BE A CHAOTIC EXPERIENCE. AND I USE THE PLATFORM I CANNOT TELL IF IT HAS IMPROVED OR GOTTEN WORSE. IT IS CERTAINLY CHANGING. WHAT IS YOUR VIEW ON THE PLATFORM ITSELF? THE CONTENT THAT IS GENERATED FROM IT AND THE NEWS THAT SPREADS THROUGH IT? >> IT IS DEFINITELY CHANGING BUT WE DO NOT KNOW HOW FAR IT WILL NEED TO CHANGE. I THINK IT'S INTERESTING THAT ELON MUSK STILL AGREES THAT SOME PEOPLE SHOULD BE BANNED.
ISSUES THAT HE MAY THINK THE PEOPLE HE WOULD BAN ARE THE PEOPLE -- DIFFERENT FROM THE -- IT IS JUST THAT THE PEOPLE HE MADE MAN ARE DIFFERENT FROM THE PEOPLE WE WOULD BAN. IT IS STILL PREVAILING WHICH IS INTERESTING. CAROLINE: WHAT IS THE POSITIVE SAY -- SIDE? THAT IS WHAT WERE TRYING TO DO ULTIMATELY HERE ON BLOOMBERG TECHNOLOGY IS GO TO PEOPLE WHERE THEY ARE AT.
WE DID OUR -- ASK OUR AUDIENCE IF THEY TRUST ULTIMATELY TWITTER AS A VERIFICATION SYSTEM. DOES IT GIVE YOU CONFIDENCE IN THE SOURCE OF CITIZEN JOURNALISM AND 61% SAID NO. ULTIMATELY, EVERY TIME WE SPEAK WITH YOU WE FEEL LIKE YOU ARE AN OPTIMIST. AT THIS TIME, WHEN WE READ ABOUT HOW TECHNOLOGY COMPANIES HAVE BEEN GROWING IN THE WAY IN WHICH WE SEE IN A SLOWER ECONOMY. WOULD YOU SEE POSITIVE
INNOVATION IN THAT? >> ABSOLUTELY I AM POSITIVE. WE WORK WITH HUNDREDS OF COMPANIES AROUND THE WORLD AND WE SEE THE CRISIS OF THE PANDEMIC HAS BEEN USED AS A CATALYST FOR FUNDAMENTAL CHANGE IN THE WAY THE WORK FACES -- WORKPLACES ARE RUN. AND ACTUALLY SEEING THE RESULT IN THE BUSINESS METRICS. THAT MAKES ME INCREDIBLY OPTIMISTIC. CAROLINE: YOU'RE STARTING TO SEE THE FIDDLE GO FROM EMPLOYEE TO EMPLOYER. EVEN THOUGH THERE ARE LAYOFFS AND HIRING FREEZES, WE HAVE GATHERED OVER 100 MAJOR COMPANIES TO TAKE A PLEDGE THAT THEY WILL NOT REGRESS WHEN IT COMES TO INVESTING IN THE EMPLOYEES MENTAL HEALTH.
BECAUSE AS WE KNOW WE HAVE A HUGE MENTAL HEALTH CRISIS. IN A WAY IT IS THE SECOND PANDEMIC. FOR BUSINESSES, THESE ARE NOT WARM AND FUZZY DECISIONS. THESE ARE CENTRAL TO THE BUSINESS STRATEGY BECAUSE YOU DO NOT WANT YOUR EMPLOYEES TO BE FALLING APART WHY YOU WANT THEM -- WHILE YOU WANT THEM TO BE PRODUCTIVE. ED: THANK YOU FOR YOUR SHARING YOUR TIME WITH US.
CAROLINE: ALL EYES ARE STILL ON THE FTX FOUNDER SAID TO TESTIFY ON CAPITOL HILL. SONALI BASAK IS HEADED THERE IN REAL LIFE RIGHT AFTER THE SHOW. THANK YOU FOR STICKING AROUND WITH US. WHAT ARE WE ANTICIPATING THAT IS NEW THAT WE HAVE NOT ALREADY HEARD IN SOME FORM? >> IF YOU HAVE A NEW CEO JOHN RAY SPEAKING FIRST AND SAM BANKMAN-FRIED SPEAKING AFTER THAT. THERE IS A BIT OF TIME IN BETWEEN AND TO WHAT EXTENT DOES HE START TO ANSWER THE THINGS THAT WE KNOW THAT JOHN RAY HAS PUT ON THE BANKRUPTCY FILING.
AND THE TESTIMONY THAT IS ON THE HOUSING FINANCIAL SERVICES COMMITTEE RIGHT NOW. AND THE FAILURE TO IMPLEMENT ANY SYSTEMS OR CONTROLS NECESSARY FOR A COMPANY TO BE ENTRUSTED WITH OTHER PEOPLE'S MONEY. WE KNOW HE HAS SPOKEN A LOT IN --INCLUDING TODAY ON TWITTER SPACES AS WELL. AND LOOKING AT WHAT HE SAID.
WE EXPECT HIM TO REITERATE SOME ABOUT TOMORROW. HE HAS NO DATA ABOUT ANYTHING SO THAT ALL HE CAN GO OFF OF IS HIS MEMORY. HE IS NO LONGER CEO OF THE COMPANY SO THERE IS SOME DATA HE'S NOT ALLOWED TO BUT AT THE BEGINNING HE WAS CHARGED WITH THE IMPACT OF FTX. AND HE BARED THE RESPONSIBILITY OF MAKING SURE THINGS HAPPEN AT FTX WE KNOW THAT HE HAS TAKEN RESPONSIBILITY FOR SOME THINGS BUT AT THE END OF THE DAY HE HAS BEEN CAREFUL TO RECUSE HIMSELF FROM THE IDEA OF FTX INVESTING CUSTOMER ASSETS TO HIS KNOWLEDGE. ED:
AND THEN WE GET AN ACT ONE AND ACT TO WITH JOHN RAY THE THIRD WHO IS THE CURRENT CEO ADMINISTRATOR TESTIFYING. IT IS NOT AS THOUGH THEY WILL BUMP INTO EACH OTHER AND HAVE AN AWKWARD INTERACTION SOMEDAY. >> NOT A LOT OF HUGGING THESE DAYS FOR SURE. HE IS TESTIFYING VIRTUALLY.
AND HE IS SPLIT -- PLAN TO TESTIFY. AND THE IDEAS THAT THE SENATE HAS ALREADY SAID THAT THEY ARE UNWILLING TO EXCEPT SERVICE OF THE SUBPOENA. THE WHY HE IS TESTIFYING AT ONE BRANCH AND NOT THE OTHER IS AN INTERESTING QUESTION.
WHAT HE SAID EARLIER TODAY ON THIS PODCAST IS THAT HE WANTS TO BE ABLE TO GIVE A FULL ACCOUNT RATHER THAN INCOMPLETE ACCOUNT. THE POINT WE BEEN MAKING ALL DAY IS WHY IS HE WILLING TO GIVE THE INCOMPLETE ACCOUNTS TO THE MEDIA BUT NOT THE LAWMAKERS WHO ARE RESPONSIBLE FOR CONSTITUENTS. AND ALSO IN LARGE PART TAKING MONEY FROM HIM IN FORM OF POLITICAL DONATIONS AS WELL. CAROLINE: TALKING ABOUT MEDIA. THIS PIECE BY THE FINANCIAL
REVIEW ABOUT THE INNER CIRCLE AND POWERHOUSE OF FTX THAT WE ARE USING TELEGRAM FOR A FORM OF COMMUNICATION SIGNAL. BUT OF A CALL THE NAME OF THE CHAT? AND HOW DO WE SEE THEM RESPOND TO THAT? >> WIRE FRAUD WAS THE NAME OF THE CHAT OF THE CIRCLE. HE RESPONDED IMMEDIATELY ON TWITTER HE SAID IF THIS IS TRUE I WAS NOT PART OF A GROUP. I AM SURE IT IS FALSE I NEVER
HEARD OF A GROUP LIKE THIS. AND IF HE HAS ASKED ABOUT IT IN THE WHALES PODCAST THEY ASK HIM ABOUT THE MONEY HE GAVE TO THE BLOCK EXECUTIVE AND THAT IS SOMETHING HE DID NOT ANSWER AND GOT ALSO PODCASTED THAT POINT. BETWEEN THE LAWMAKERS THAT GAVE MONEY TO HIS MEDIA ORGANIZATIONS HE MAY GET A LOT OF QUESTIONS ABOUT THE INFLUENCE HE WAS TRYING TO WIELD AND WHY. ED: THANK YOU CHANEL HE. >> I AM GOING TO MAKE NOISE FOR THE RICHEST MAN IN THE WORLD.
[APLAUSE] >> YOU WERE NOT EXPECTING THIS WERE YOU? IT SOUNDS LIKE SOME PEOPLE FLOATED -- PEOPLE WOULD FIRE YOU IN THE AUDIENCE. [LAUGHTER] CAROLINE: THE VIDEOS GOING VIRAL WITH ELON MUSK ON THE DAVE CHAPELLE SHIRT. WEARING AI LOVE TWITTER SHIRT. AND IT WAS BOOS FROM THE CROWD. HE WAS BASICALLY SET OFF THE STAGE. AND THE VIDEO WAS TAKEN BEFORE HIS TWITTER ACCOUNT GOT DELETED.
IN A TWEET MUST -- MUSK WROTE IT WAS 90% TEARS AND 10% BOOS BUT THAT IS STILL A LOT OF BOOS WHICH IS A FIRST FOR ME IN REAL LIFE. ED: AND WE WILL POINT OUT THAT DAVE CHAPELLE WAS SAYING THAT THE ONES THAT WERE IN THE CROWD ARE THE ONES THAT HE FIRED FROM TWITTER. CAROLINE: COMEDY IS ALWAYS VERY EDGY AND CLOSE TO THE LINE. BUT IT FELT LIKE THAT WAS ORCHESTRATED. ED:
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