Bloomberg Technology 12/21/2023
>> FROM THE HEART OF WHERE INNOVATION AND MONEY COLLIDE IN SILICON VALLEY AND BEYOND, THIS IS “BLOOMBERG TECHNOLOGY” WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: I AM CAROLINE HYDE AT BLOOMBERG’S WORLD HEADQUARTERS IN NEW YORK. ED: I AM ED LUDLOW IN SAN FRANCISCO AND THIS IS “BLOOMBERG TECHNOLOGY.” CAROLINE: PARAMOUNT, WARNER BROS., ARE THEY IN TALKS OF THE MERGER? A BREAKDOWN ON WHAT WE KNOW ABOUT TALKS BETWEEN THE TWO BIGGEST MEDIA COMPANIES IN THE WORLD. ED: THE OUTLOOK FOR THE TECH SECTOR AS IT BOUNCES BACK FROM A SELLOFF THAT KNOCKED IT OUT OF RECORD HIGHS. CAROLINE:
APPLE RAMPS UP PRODUCTION OF THE VISION PRO HEADSET AND STAYED FOR LUNCH THIS FEBRUARY. WHAT WE KNOW ABOUT THE DEBUT AND DISCUSS MORE THROUGHOUT THIS HOUR, INCLUDING THE RETURN TO BUYING ON THE NASDAQ AFTER YESTERDAY’S PULLBACK. IT WAS NOTABLE THAT WE SAW SOME SIGNIFICANT SAILING TOWARDS THE END OF TRADE. WE ARE NOT MAKING UP ALL OF YESTERDAY’S LOSSES AND WE ARE OFF OF THE RECORD HIGHS, BUT THE NASDAQ IS UP TWO THIRDS OF THE PERCENTAGE POINT. IT MANAGED TO BEAT EXPECTATIONS FOR THE FORECAST DRIVING STOCKS HIGHER. THE 10 YEAR YIELD, LITTLE BIT OF SELLING PRESSURE,
BUT BACK TO ANALYZING DATA TODAY. THE GDP IS ACTUALLY BELOW EXPECTATIONS, BUT WE ARE SEEING THAT THE INSURANCE, THE JOBLESS CLAIMS, ALL OF THIS IS PAINTING A PICTURE THAT WE HAVE A SLOWING BUT STRONG
HOLLYWOOD. WHAT DO WE KNOW? LUCAS: WARNER BROS.’S CEO HAD LUNCH WITH THE PARAMOUNT GLOBAL CEO. THERE HAVE BEEN INFORMAL CONVERSATIONS BETWEEN THE TWO COMPANIES, ALSO INVOLVING CHERRY RED STONE WHICH CONTROLS PARAMOUNT. IT IS EARLY. WARNER BROS. DISCOVERY CAN’T EVEN DO A DEAL LIKE THIS FOR A FEW MONTHS BECAUSE OF SOME COMPLICATIONS, SOME ISSUES RELATED TO THE DEAL THAT THEY DID. WE HAVE BEEN ASSUMING THAT THERE WOULD BE GREATER CONSOLIDATION IN THE MEDIA BUSINESS OVER THE LAST TWO MONTHS, AND A DEAL BETWEEN THESE TWO IS ONE OF MANY SCENARIOS THAT HAS BEEN PROPOSED. I DON’T THINK
THIS IS A HUGE SHOCK. I THINK THEY WOULD BE SURPRISED AT HOW QUICKLY IT CAME, MAYBE THEY THOUGHT THEY WOULD BE DISCUSSION IN SPRING OF NEXT YEAR. CAROLINE: EVERYONE IS DECIDING HOW WE WILL SEE CONSOLIDATION. EVERYONE HAS BEEN EYEING THE NARRATIVE THAT MAY BE PARAMOUNT WILL BE SELLING OFF SOME ASSETS. ULTIMATELY, HAVE WE OPENED PANDORA’S BOX? CAN IT BE CLOSED THAT THESE COMPANIES ARE A GROWING CONCERN IN THEIR CURRENT FORMS? >> SHE HAS TO DECIDE WHAT SHE WILL DO WITH HER FAMILY COMPANY. THAT COULD MEAN THAT SHE SELLS IT FOR PIECES. THEY HAVE EXPLORED THE
SALE OF BT AND SHOWED SHOWTIME — AND SHOWTIME, OR SHE CAN TRY TO HANG ON. PEOPLE ASSUME THEY WILL GET WORSE BEFORE THEY GET BETTER. THE LINEAR TV BUSINESS IS MOVING IN THE WRONG DIRECTION, BUT WHEN A FAMILY CONTROLS A COMPANY THEY DECIDE WHAT TO DO. CAROLINE: THANK YOU, LUCAS SHAW, WITH WHAT IS HAPPENING IN THE WORLD OF HOLLYWOOD. MORE PERSPECTIVE, OUR ANALYST TO HAS BEEN CALLING THIS JOINING TOGETHER OF TWO THE BIGGEST COMPANIES, MEDIA COMPANIES, AND THE WORLD. LAURA MARTIN. YOU HAVE A BUY RATING ON PARAMOUNT. IN NOVEMBER YOU ARE THINKING ABOUT HOW THE
TWO JUGGERNAUTS COULD BE BIGGER THAN THE SUM OF THEIR PARTS WHEN THEY COME TOGETHER. DO THINK THAT THEY COULD BE BETTER TOGETHER? LAURA: I THINK THEY WOULD BE BETTER TOGETHER BECAUSE BOTH OF THEIR STREAMING ASSETS ARE SUBSCALE. YOU PUT THEM TOGETHER, THEY WOULD BE BETTER THAN NETFLIX OR THE DISNEY PLUS BUNDLE WITH HULU. THEY HAVE WAY TOO MUCH DEBT AT PARAMOUNT. WHEN YOU PUT THESE COMPANIES TOGETHER, ESPECIALLY IF YOU ISSUE EQUITY TO DO THE DEAL, SUDDENLY THE ENTERPRISE IS OVER DELIVERED AND WE HAVE A WORLD-CLASS COST CUTTER IN WARNER BROS. DISCOVERY. WE THINK THAT THEY
CAN GET $1 BILLION TO $2 BILLION OF COST CUTTING IF YOU PUT THESE TOGETHER WHICH WOULD DELEVERAGE THE ENTERPRISE FASTER THAN EACH CAN DELEVER ALONE. AMAZON AND APPLE WOULD NOT BE ALLOWED TO BUY PARAMOUNT, OR ANYTHING ELSE. BECAUSE PARAMOUNT OWNS CBS, A BROADCASTER, DISNEY CANNOT BUY IT BECAUSE THEY OWN ABC. NOR CAN COMCAST, BECAUSE THEY OWN NBC. THE NUMBER OF PEOPLE WHO ARE BIG ENOUGH AND COULD BUY PARAMOUNT, INCLUDING CBS, IS LIMITED TO WARNER BROS.. THEY ARE THE ONLY BIDDER. ED: ON THE POINT OF PARAMOUNT HAVING SOMETHING THAT WARNER BROS. DOESN’T COME CBS, A TRADITIONAL
BROADCAST NETWORK, AND THE AXIOS REPORT THEY MADE THE IDEA THAT WARNER BROS. EXECUTIVES SEE THAT AS A REASON THAT IT MIGHT PASS THE REGULATORY TEST. THAT THEY ARE REQUIRING OR WOULD REQUIRE SOMETHING THAT THEY ALREADY HAVE. LAURA: I AGREE. REGULATORS REALLY CARE ABOUT THE NUMBER OF LOCAL VOICES. CBS BROADCASTER, IN THE HANDS OF PARAMOUNT WHERE THE DEBT IS 15 BILLION AND THE EQUITY IS 10 BILLION, WHICH HAS THE RISK OF FINANCIAL DISTRESS BETWEEN CBS HAVING THE RISK OF CEASING TO EXIST, THEY WOULD BE HAPPY WITH WARNER BROS. DISCOVERY WHEN THE ENTERPRISE BECOMES LESS LEVERAGED OVERALL,
WHICH INCREASES THE CHANCE CBS CAN SURVIVE AS A LOCAL VOICE IN EVERY MARKET. ED: I THINK BACK TO SUN VALLEY, THE SAME EXISTENTIAL QUESTION IS THERE. HOW DO YOU MAKE ANY STREAMING PLATFORM PROFITABLE? IN THAT RESPECT, HOW WOULD THIS DEAL ACHIEVE THAT? LAURA: EVERYONE IS RAISING PRICES. WE HAVE STREAMFLATION. UP 30% TO 50%. EVERYONE IS RAISING PRICES ANY MUST CUT CONTENT COSTS. WE ARE GETTING HIGHER PRICES FOR CONSUMER AND LOWER ORIGINAL CONTENT. THE CONSUMERS ARE GETTING SQUEEZED. WALL STREET AND THE CONSUMER ARE OFTEN AT ODDS AND IT IS TIME TO PLAY WALL STREET’S GAME BECAUSE
THE STOCKS ARE DOWN BECAUSE WALL STREET IS MOVING CAPITAL OUT, UNLESS YOU CONSOLIDATE WHICH DRIVES EARNINGS-PER-SHARE GROWTH OR GET PROFITABILITY IN YOUR STREAMING ASSETS. CAROLINE: WHAT OTHER CONFIGURATIONS DO YOU SEE? IF THIS TO YOU WAS THE BETTER OUTCOME, WHAT ARE THE OTHER ASSET SALES THAT YOU ARE ANTICIPATING? WE KEEP TALKING AROUND PARAMOUNT, BUT SOMETIMES MARKET NARRATIVES GET AHEAD OF WHAT WOULD REALLY OCCUR. LAURA: WE THINK THAT THE STREAMING — RIGHT NOW, CONSUMERS HAVE FIVE STREAMING PLATFORMS. THE BIGGEST FRUSTRATION FOR CONSUMERS IS IT FEELS LIKE NO MATTER WHAT THEY ARE PAYING FOR THE CONTENT IS ON
SOMETHING THEY ARE NOT PAYING FOR. SUPER FRUSTRATING FOR CONSUMERS. I THINK AT THE END OF THE DAY THERE ARE THREE BIG STREAMING PLATFORMS TOTAL. AMAZON PRIME, IN MY OPINION, WILL BE ONE OF THEM BECAUSE AMAZON, THE ENTITY, NEVER NEEDS TO MAKE MONEY ON ITS VIDEO SERVICE. I WOULD GUESS THAT THE DISNEY BUNDLE WINNER, THOUGH I WOULD LIKE TO SEE APPLE BUY DISNEY. IT CAN’T BE DONE AS LONG AS WE HAVE THE CURRENT ADMINISTRATION BECAUSE BIG IS BAD IN WASHINGTON, D.C. NOW. A LOT OF PEOPLE PUT NETFLIX IN THAT CAMP. THAT MEANS THERE ISN’T ROOM FOR
PEACOCK OR PARAMOUNT. IT TELLS YOU THAT THERE SHOULD BE MORE CONSOLIDATION IN THIS GROUP IN LARGER ENTITIES. ED: BUT YOU HAVE DONE IS LIST OFF EVERY SUBSCRIPTION THAT I HAVE IN MY HOUSEHOLD. YOU RAISE A GOOD POINT, THAT THAT IS A LOT. LET’S GO BACK TO THE POINT THAT CONTENT IS KING. WE WILL DO APPLE AND DISNEY ANOTHER DAY. PARAMOUNT AND HBO MAX, FROM A CONTENT PERSPECTIVE — I THINK OF “THE LAST OF US” BEING MY FAVORITE SERIES OF THE YEAR — IS THERE A CONTENT ADVANTAGE TO DOING THIS? LAURA: ABSOLUTELY. ONE OF THE LARGEST
AND MOST HIGH FILM LIBRARIES ON PLANET EARTH IS THE WARNER BROS. LIBRARY. CBS, WHICH WAS THE NUMBER ONE TV NETWORK, WITH NBC TAKING SOME FOR THE LAST 50 YEARS HAS THE LARGEST TELEVISION LIBRARY. PUTTING THESE LIBRARIES TOGETHER YOU END UP WITH AN UNPARALLELED, ENORMOUS IP CONTENT LIBRARY THAT YOU CAN MAKE SEQUELS FROM OR LICENSED TO OTHER PEOPLE. YES, THE LIBRARY WOULD BECOME BEST IN CLASS THAT FEEDS YOUR STREAMING APP, WHICH WOULD BE THE COMBINATION OF HBO, PLUS PARAMOUNT PLUS. SO, YOU GET A REALLY BIG STREAMING APP AND YOU WOULD HAVE THE OPTION TO LICENSE CONTENT
TO OTHER STREAMING APPS IF YOU WANTED, LIKE NETFLIX IF THEY WANTED TO PAY A FORTUNE FOR A COUPLE OF YOUR “MISSION IMPOSSIBLE” MOVIES OR “ER” OR “NCIS.” LONG-RUNNING TV SHOWS. ED: YOU HAVE AN ENCYCLOPEDIC KNOWLEDGE OF WHAT TO WATCH AS WELL AS GETTING INSIDE OF THESE DEALS. GREAT TO HAVE YOU ON THE PROGRAM, HAPPY HOLIDAYS AND HAPPY NEW YEAR. WHAT IS NEXT? WE BREAK DOWN THE TECH RALLY AND PUSH AHEAD TO 2024. THE PORTFOLIO MANAGER ON THE GLOBAL TEAM AT JANUS HENDERSON. CAROLINE: CHIP STOCKS TODAY, MICRON DRIVING UP THE ALMOST 7%. WE SEE THE COMPANY
REALLY MANAGING TO GIVE THAT STRONG FORECAST, DATA CENTER DEMAND SEEMS TO BE GROWING. WE ARE TRYING TO WORK OUT IF ULTIMATELY THE PRICING PRESSURE IS IN THE PAST FOR THESE CHIP COMPANIES. THIS IS BLOOMBERG TECHNOLOGY. ED: A FEW DAYS OF TRADING LEFT IN 2023. THE MARKET MINERS OF THE YEAR HAVE BEEN TECH STOCKS WITH THE NASDAQ 100 OUTPACING THE S&P 500 MORE THAN 50% GAIN YEAR-TO-DATE, PUTTING IT ON TRACK FOR ITS BIGGEST ANNUAL JUMP GOING BACK TO 2009. JOINING US ON SET IS DANNY FISH. IF YOU GO BACK TWO OR FIVE YEARS, WHEN I MOVED
TO THE BAY AREA, ALL WITH RESPECT TO 1995 WHEN YOU MOVE TO THE BAY AREA, TECHNOLOGY COMES OUT ON TOP. WILL IT CONTINUE TO COME OUT ON TOP IS THE QUESTION? DANNY: IT’S A REALLY GOOD QUESTION. GIVEN THE SECULAR TRENDS THAT WE HAVE IN PLACE AND THE FOUNDATION THAT WE’VE LAID OVER THE LAST 25 YEARS, I FIRMLY BELIEVE THAT’S THE CASE. IF YOU LOOK AT THE TECH SECTOR IN GENERAL, AT THIS POINT IN TIME, BY THE END OF 2024, IF YOU LOOK AT THE LARGEST VENDORS ON CAPEX GLOBALLY, SEVEN OUT OF 10 WILL BE TECHNOLOGY
COMPANIES. IF YOU LOOK AT COMPANY SPENDING THE MOST ON R&D ACROSS THE GLOBAL ECONOMY, SIX OR SEVEN OUT OF THE TOP 10 GLOBALLY ARE TECH COMPANIES. THE SCALE THAT IS REQUIRED TO COMPETE ON AN ONGOING BASIS IS AT AN IMMENSE LEVEL THAT CONTINUES TO ADVANTAGE THE MAGNIFICENT SEVEN. IN ADDITION, THERE IS SO MUCH INNOVATION BEING UNLEASHED IN AREAS LIKE ARTIFICIAL INTELLIGENCE THAT ARE TAKING THE HANDOFF FROM THE GENERATIONAL VALUE CREATION THAT WE HAVE SEEN IN CLOUD AND OTHER AREAS OF THE ECONOMY. ED: AI SEEMS LIKE THE EASY CATALYST. IF I BRING UP THE TOP PERFORMERS,
NVIDIA HAS BEEN THE STANDALONE TOP PERFORMER. NEXT YOU HAVE NAMES LIKE META, THEN DOORDASH, TESLA, IS THERE COMMONALITY IN AI? DANNY: THERE IS SOME COMMONALITY. MOST OF THE COMPANIES THAT YOU MENTION IN ONE FORM OR ANOTHER ARE INSTITUTING AI INTO THEIR BUSINESS EITHER TO SELL IT DIRECTLY TO CONSUMERS OR BUSINESSES OR ENHANCE THEIR VALUE PROPOSITION. I VIEW AI AS AN ENABLING TECHNOLOGY. COMPANIES AND LONG-TERM WINNERS WILL LEVERAGE IN WAYS THAT CREATE DURABLE COMPETITIVE ADVANTAGE. THAT WON’T CHANGE IN 2024. THE MARKET FINALLY WOKE UP TO AI IN 20 23 AND AS WE LOOK FORWARD, WHAT WE
HAVE TO THINK ABOUT IS NOW THIS IS WHERE THE RUBBER MEETS THE ROAD AND WE HAVE TO START TO SEE THE REVENUES COME THROUGH. THINGS LIKE IF WE THINK ABOUT MICROSOFT AND COPILOT, THEY ARE A NATURAL WINNER WITH COPILOT. DO WE NEED 15 COPILOTS? WE DON’T AS CONSUMERS OR ENTERPRISES. WE ARE GOING TO SEE COMPANY SEPARATE IN TERMS OF MONETIZING AI AS WE GO FORWARD. CAROLINE: IS IT EARNINGS THAT WE HAVE TO BECOME OBSESSIVE ABOUT? IS IT OTHER GUIDES THROUGH THE YEAR? LAUNCHES? WHAT WILL IT TAKE WHEN WE DECIDE WHICH WINNERS AND LOSERS? DANNY: ALL
OF THE ABOVE. WE ARE IN THE POSITION WHERE THE FINANCIAL PERFORMANCE NEEDS TO COME THROUGH FOR THE COMPANY’S GETTING AN AI HALO EFFECT. I WOULD SAY, YOU WERE TALKING ABOUT MICRON, THERE ARE PARTS OF THE TECHNOLOGY MARKET THAT HAVE UNDERPERFORMED BUT WHERE THERE ARE HIGH-QUALITY BUSINESSES. MEMORY IS AN AREA WHERE THERE ARE THREE PROVIDERS GLOBALLY. IT HAS BEEN IN THE MOST SIGNIFICANT DOWNTURN THAT WE’VE SEEN IN MANY YEARS BECAUSE OF THE OVERBUILD DURING COVID, BUT NOW IT IS STARTING TO IMPROVE. THE MOST IMPORTANT THING FOR STOCKS LIKE THAT IS WHEN THINGS START TO IMPROVE AND
THAT HAS IMPLICATIONS ACROSS MEMORY PROVIDERS AS WELL AS SEMI CONDUCTOR CAPITAL EQUIPMENT PROVIDERS THAT PROVIDE THE EQUIPMENT TO BUILD NEW FABS TO SUPPORT DEMANDS IN MEMORY DRIVEN BY THE THINGS THAT HAVE DRIVEN HISTORICALLY, NOW A KICKER OF AI. ANOTHER AREA IS ANALOG SEMICONDUCTORS. THEY ARE GREAT BUSINESSES. THEY ARE GDP DEPENDENT. THEY GENERALLY GROW AT A MULTIPLE OF GDP. THEY HAVE HIGHER OPERATING MARGINS AND RETURNS THAN THE AVERAGE COMPANY IN THE S&P 500 AND GROW MULTIPLE OF THEM. THEY HAVE REALLY LAGGED. THIS COULD BE AN OPPORTUNITY WITH RATES COMING DOWN WITH A BETTER GLOBAL MACRO ECONOMIC
BACKDROP, THAT YOU START TO SEE AREAS THAT DON’T NECESSARILY GET AN AI HALO, BUT ARE GREAT TECHNOLOGY BUSINESSES. CAROLINE: ISN’T IT WILD AT 68% YEAR-TO-DATE INCREASE ON MICRON IS AN UNDERPERFORMANCE? IT IS WHEN YOU’RE LOOKING AT 232% INCREASE OF NVIDIA OR META. I AM INTERESTED IN WHO ULTIMATELY SHOULD BE AVOIDED, IF ANYONE. I GO TO WHO THE WORST PERFORMING COMPANIES YEAR-TO-DATE FOR THE NASDAQ 100. IT IS PAYPAL. I AM INTERESTED IF FINTECH AND THOSE NAMES WILL BE UNDER PRESSURE? DANNY: THAT’S A REALLY GOOD QUESTION. PAYPAL IS UNIQUE IN THAT IT IS A CLASSIC EXAMPLE OF
WHAT I WOULD CALL A VALUE TRAP, AT LEAST OVER THE LAST COUPLE OF YEARS. THE COMPANY WAS DEEMED A WINNER THROUGH COVID. WHAT HAS HAPPENED IS THE COMPETITIVE ADVANTAGES FOR THE COMPANY HAVE SIGNIFICANTLY DWINDLED. THE TAKE RATE FOR THE COMPANY HAS COME IN. YOU SEE MARGIN PRESSURE IN THE BUSINESS. GENERALLY, THAT IS A RECIPE FOR STOCK UNDERPERFORMANCE BECAUSE TWO THINGS HAPPEN. ONE IS THE FINANCIAL PERFORMANCE OVER THE NEAR TERM PERIOD IS LESS THAN INSPIRING OF WHAT INVESTORS ARE LOOKING FOR, AND THEN INVESTORS DISCOUNT THE STOCK IN THE TERMINAL VALUE BECAUSE OF QUESTIONS ABOUT WHAT THE
STOCK IS GOING TO BE WORTH OVER THE NEXT DECADE. THAT IS WHAT WE HAVE SEEN WITH NAMES LIKE PAYPAL. CAROLINE: IT IS ALWAYS GREAT TO GET YOUR PERSPECTIVE ON INDIVIDUAL NAMES AND THE SECTOR AS A WHOLE. WE LOOK FORWARD TO SEEING YOU IN THE NEW YEAR FROM JANUS HENDERSON. STAY WELL. APPLE RAMPING UP PRODUCTION OF ITS VISION PRO. EVERYTHING YOU NEED TO KNOW, NEXT. ED: LET ME TAKE YOU TO JUNE AND ONE OF OUR MOST POPULAR VIDEOS ON TIKTOK AND REELS. IT WAS MY FIRST IMPRESSIONS OF THE VISION PRO. ED: APPLE VISION PRO FIRST IMPRESSIONS.
THE FIRST THING YOU NOTICE IS THE EXTERNAL BATTERY PACK, EXTERNAL POWER SOURCE WITH A LONG CABLE LEADING TO IT. 12 CAMERAS AND FIVE SENSORS THAT ARE REALLY DISCRETE. AS YOU GO AROUND THE CURVATURE OF THE VISION PRO YOU CAN’T REALLY TELL THAT THEY ARE THERE. THE OUTWARD FACING CAMERA IS A BIG PART OF THE AUGMENTED REALITY FUNCTIONALITY OF VISION PRO. IT LOOKS BEAUTIFUL, BUT 3499 U.S. DOLLARS, AVAILABLE EARLY 2024, WHAT DOES IT MEAN IN TERMS OF THE ROADMAP TO GETTING IT INTO CONSUMER HANDS? WE DON’T KNOW. THE USE CASES THAT THEY DEMOED, APPLE TV OR
DISNEY PLUS THROUGH THE VISION PRO, BUT ALSO ENTERPRISE APPLICATIONS. THEY TALK ABOUT THE COMPATIBILITY WITH MICROSOFT APPS, RUNNING DIFFERENT APPS IN PARALLEL AND A FULL LIBRARY OF IOS AND OPERATING SYSTEMS FOR IPAD BEING ACCESSIBLE. IT’’S BEAUTIFUL. IT’S A BEAUTIFUL-LOOKING AUGMENTED MIXED REALITY HEADSET, BUT WITHOUT GETTING OUR HANDS ON IT AND PUTTING IT ON, IT IS HARD TO SAY WITH THE EXPERIENCE IS LIKE. I AM A GLASSES WEARER AND THERE IS NO ROOM FOR GLASSES. YOU HAVE TO GET OPTICAL CORRECTION SNAP ONS. I AM SHORTSIGHTED AND I WEAR CONTACT LENSES. ALL OF THAT IS FIXABLE. CAROLINE:
THE TIME NOW FOR TALKING TECH. U.S. SEMICONDUCTORS CONTINUE TO FLOW TOWARDS RUSSIAN COMPANIES DESPITE AN EXPORT RESTRICTION AIMED AT CUTTING THEM OFF. MANY OF THEM TRAVELED THROUGH HONG KONG ON THEIR WAY TO THE SANCTIONED COUNTRY. TEXAS INSTRUMENTS INVOLVED AS THE BIGGEST MAKERS OF THE CHIPS. THE BIDEN ADMINISTRATION IS WEIGHING A TARIFF TO INCREASE THAT TARIFF ON CHINESE ELECTRIC VEHICLES AND GOODS TO MAKE U.S. CLEAN ENERGY PRODUCTS MORE COMPETITIVE. THE TALKS ARE PART OF YEARS-LONG DELIBERATIONS THAT BEGAN SHORTLY AFTER BIDEN TOOK OFFICE. AND ANTHROPIC TO TALK ABOUT $750 MILLION IN FUNDING AS AN EVALUATION OF 18.4
BILLION DOLLARS. THE POTENTIAL DEAL IS A STARTUP FOUNDED BY OPENAI DEFECTORS. IT FOCUSES ON RESPONSIBLE AI. ED: ANOTHER TOP STORY, APPLE IS GEARING UP FOR ITS LAUNCH OF THE VISION PRO. JOINING US TO BREAK IT DOWN IS THE MAN WITH THE SCOOP. WE THINK FEBRUARY FOR A LAUNCH. WHAT DO WE KNOW? MARK: APPLE HAS RAMPED UP PRODUCTION OVERSEAS IN CHINA OF THE VISION PRO HEADSET. THIS IS GOING TO BE THE FIRST NEW PRODUCT CATEGORY FOR APPLE SINCE THE APPLE WATCH IN THE BEGINNING OF 2015. RIGHT NOW, THE PLAN IS TO GET UNITS STATESIDE AND READY
TO PUT INTO CUSTOMERS HANDS BY THE END OF JANUARY. THEY ARE RAMPING UP FOR A RETAIL LAUNCH LATE JANUARY, EARLY FEBRUARY TIMEFRAME. BY FEBRUARY IS WHAT WE SAID. THIS IS COMING SOONER THAN MOST PEOPLE ANTICIPATED. WHEN THE APPLE WATCH CAME OUT, APPLE SAID THAT THAT WOULD LAUNCH IN EARLY 2015. FOR APPLE, EARLY 2015 WAS THE LAST WEEK OF APRIL. THIS IS COMING SOONER THAN A LOT OF PEOPLE EXPECTED. WE ARE ONLY A COUPLE OF MONTHS AWAY FROM THIS HEADSET. IT IS GOING TO BE MUTED. I DON’T THINK THAT THEY ARE GOING TO HOLD ANOTHER MEDIA
EVENT TO INTRODUCE FUNCTIONALITY. USERS WILL HAVE TO EITHER EXPERIENCE THAT ON THEIR OWN OR MEDIA, BUT APPLE WILL HAVE A TON OF VIDEOS ON YOUTUBE AND THEIR WEBSITE TO INDICATE THE NEW FEATURES COMING TO THE HEADSET THAT WERE NOT SHOWN AT JUNE AT THE DEVELOPER CONFERENCE. THEY ARE WORKING ON A SUBSEQUENT UPDATE TO THE SOFTWARE ON THE HEADSET, VISION OS V2 AT THE TAIL END OF 2024, SO THIS IS A BIG PRIORITY FOR THE COMPANY. CAROLINE: BIG PRIORITY, GETTING THEIR STAFF TRAINED TO TEACH US HOW IT WORKS. INTERESTED WHEN AT THE SAME TIME APPLE HAS
TO DEAL WITH TAKING APPLE WATCHES OFF OF THE SHELVES SHOWING THAT THEY CANNOT BE SOLD DURING THE HOLIDAY PERIOD, OR THE TAIL END OF IT. WE HAVE AN UPDATE? MARK: TODAY IS WHEN THEY WILL REMOVE THE APPLE WATCH FROM THE ONLINE STORE, 3:00 P.M. EASTERN, NOON PACIFIC. THE REASON THAT THEY HAVE TO DO THIS IS BECAUSE THEY NEED TIME TO IMPORT THE APPLE WATCHES, SHIP THE APPLE WATCHES, GET THEM INTO THE HANDS OF CONSUMERS SO THAT YOU HAVE THE 3-4 DAY WINDOW BEFORE THE BAN COMES INTO PLACE AT THE END OF CHRISTMAS DAY. THEY WILL
BE REMOVED FROM THE PHYSICAL RETAIL CHANNELS BY DECEMBER 24, CHRISTMAS EVE. ALL INDICATIONS STILL SHOW THAT YOU WILL BE ABLE TO GET ONE AT BEST BUY, TARGET, WALMART, WHATEVER, JUST NOT OFFICIAL APPLE STORES. CAROLINE: COMING UP, MEDIA GIANTS PARAMOUNT AND WARNER BROS., RETURNING TO THE STORY OF TALKS ON A POSSIBLE MERGER. CAROLINE: WELCOME BACK TO “BLOOMBERG TECHNOLOGY.” I AM CAROLINE HYDE IN NEW YORK. ED: I AM ED LUDLOW IN SAN FRANCISCO. THE NASDAQ 100 HAS PAIRED A LOT OF ITS GAIN. THE SLIGHT REVISION BACKWARDS OF THE THIRD QUARTER GDP PRINT FOR THE U.S., INCREASING BETS
THAT ACTUALLY DEEPER RATE CUTS MIGHT BE A STORY FOR 2024. BUT THAT CHANGES DAILY. I HAVE BEEN OUT FOR TWO DAYS, BUT LET’S BE A BIT CONSISTENT. TECH STOCKS, INDIVIDUAL NAMES, WE KNOW ABOUT ONE BEING MICRON. THE CURRENT PERIODS FISCAL QUARTER OF 5.1 TO $5.5 BILLION IN SALES. WE KNOW THAT THERE IS STILL WEAKNESS IN PCM SMARTPHONE, BUT RECOVERY, DATA CENTER, AND AI AS PART OF THAT STORY. THE OTHER MOVING MARKETS TO THE DOWNSIDE IS WARNER BROS., DISCOVERY, PARAMOUNT AND TALKS ACCORDING TO SOURCES OF A POSSIBLE MERGER. THE STOCK REACTION IS BOTH ARE DOWN 3%
AS WE SPEAK. CAROLINE: LET’S GET SOME OF THE ANALYSIS ON THIS POTENTIAL SET OF TALKS WE ARE HEARING ABOUT. WE SPOKE WITH LAURA MARTIN. HERE IS HER TAKE ON WHY SHE THINGS THAT THE DEAL WOULD MAKE SENSE. LAURA: YOU PUT THEM TOGETHER, THEY WOULD BE BETTER THAN NETFLIX OR THE DISNEY PLUS BUNDLE WITH HULU. THEY HAVE WAY TOO MUCH DEBT AT PARAMOUNT. WHEN YOU PUT THE COMPANIES TOGETHER, ESPECIALLY IF YOU ISSUE EQUITY TO DO THE DEAL, SUDDENLY THE ENTERPRISE IS NOT OVER LEVERED AND WE HAVE A WORLD -CLASS COST CUTTER AT WARNER BROS. DISCOVERY. WE
THINK THAT THEY CAN GET $1 BILLION TO TWO EARLY IN DOLLARS OF COST CUTTING TOGETHER WHICH WOULD DELEVERAGE THE ENTERPRISE. CAROLINE: LET’S GET ANOTHER TAKE FROM RICH GREENFIELD, A TECHNOLOGY ANALYST WHO HAPPENS TO BE WEARING AN ASSET OF WARNER BROS. DISCOVERY. THEY MADE “BARBIE.” I WONDER IF YOU THINK THAT CONTENT, BARBIE PLUS WHAT PARAMOUNT HAS, WOULD BE A GOOD EQUATION TOGETHER? RICH: PUTTING CONTENT TOGETHER ALWAYS MAKES SENSE HAVING SCALE AND CONTENT. HONESTLY, I COULD NOT DISAGREE MORE WITH THE ANALYST’S VIEWPOINT BEFORE. PUTTING TWO LINEAR TV COMPANIES TOGETHER, ONE PLUS ONE DOESN’T EQUAL TWO AS WE
HAVE SEEN WHEN YOU PUT VIACOM AND CBS TOGETHER ENDING UP WITH .5. PUTTING WARNER MEDIA TOGETHER WITH DISCOVERY WILL LEAD TO MAY BE .5. YOU PUT THESE TWO COMBINED COMPANIES TOGETHER, YOU AREN’T GOING TO GET MORE THAN TWO. YOU WILL GET A LOT LESS. THE END OF THE DAY THE PROBLEM IS LINEAR TV IS COLLAPSING. IT IS AN SECULAR DECLINE FOR TV AND VIEWERSHIP IS AN SECULAR DECLINE. CORD CUTTING, CABLE AND SATELLITE, VIRTUAL CABLE COMPANIES LIKE YOUTUBE TV OR HULU, THE OVERALL NUMBER OF SUBSCRIBERS ARE IN SECULAR DECLINE. PEOPLE ARE MOVING AWAY FROM BUNDLES OF
CHANNELS TO STREAMING SERVICES. THOSE ARE NOT FIXABLE THINGS. WHEN 70% OF YOUR COMPANY IS LINEAR TV, WARNER BROS. DISCOVERY TODAY, AND 150% OF EARNINGS AT PARAMOUNT TODAY ARE FROM LINEAR TV, PUTTING THEM TOGETHER DOESN’T SOLVE THE PROBLEM. THE WAY THAT YOU SOLVE THE PROBLEM IS DRAMATICALLY SHRINKING YOUR LINEAR TV BUSINESS. SCALING IT DOWN DRAMATICALLY. NOT TRYING TO ENLARGE IT AND TRY TO TAKE OUT SOME COSTS. IT MEANS LITERALLY CUTTING 70%, 80% OF THE EMPLOYEES AT THESE CABLE AND BROADCAST NETWORKS. YOU HAVE TO DRAMATICALLY REDUCE COSTS. ED: LET’S PUT TO ONE SIDE WHETHER OR NOT YOU
THINK THAT THE DEAL SHOULD HAPPEN. CAN THE DEAL HAPPEN? WHAT IT PASSED THE REGULATORY TEST? — CAN IT PASS THE REGULATORY TEST? RICH: THAT IS A GREAT QUESTION NOT BEING TALKED ABOUT ENOUGH IN THE LAST 24 HOURS, SO THANK YOU FOR ASKING. THE ODDS ARE SLIM. WE DON’T EVEN KNOW WHAT ADMINISTRATION. LET’S SAY THAT THIS WAS ANNOUNCED IN FEBRUARY OR MARCH. HUMOR ME. YOU WOULDN’T GET APPROVAL WITHIN 12 MONTHS. YOU WOULD NEED THE DOJ ANTITRUST AND FCC APPROVAL. THIS WOULD BE A LONG AND ARDUOUS PROCESS. GIVEN A POTENTIAL SHIFT IN THE ADMINISTRATION, WHETHER THAT HAPPENS
OR NOT I HAVE NO IDEA, BUT THE ODDS THAT THIS GETS APPROVED WOULD BE VERY DIFFICULT IN A DEMOCRATIC ADMINISTRATION THAT WE HAVE TODAY GIVEN THE WAY THAT THEY HAVE LOOKED AT HORIZONTAL MERGERS. I THINK IT WOULD BE VERY DIFFICULT IN A REPUBLICAN ADMINISTRATION GIVEN THEIR DISLIKE OF A LOT OF THE TRADITIONAL MEDIA, NEWS MEDIA ESPECIALLY. YOU WOULD BE TALKING ABOUT PUTTING CNN WITH CBS NEWS. GOOD LUCK. THOSE ARE NOT GOING TO BE EASY TRANSACTIONS. I DON’T THINK THAT IT WILL GET TO THAT BECAUSE I DON’T THINK THAT THERE IS ANY REAL STORY HERE. THERE
ARE REASONS WHY BOTH OF THESE COMPANIES WANT TO BE SEEN AS MERGER CANDIDATES. THEIR BUSINESSES ARE IN SECULAR DECLINE. THEY WANT — THEY WOULD LIKE TO HAVE SOME FORM OF M&A HAPPEN IN 2024. THE REALITY IS, IT IS UNLIKELY. CAROLINE: CERTAINLY UNLIKELY BEFORE APRIL BECAUSE WARNER BROS. HAVE THEIR HANDS TIED DOING ANY DEAL POST THE PRIOR DEAL THEY ARE PUTTING TOGETHER. BOTH OF THESE ASSETS ARE IN PLAY. CONSOLIDATION ACROSS THE ENTIRE INDUSTRY IS IN PLAY. PANDORA’S BOX IS OPEN, WHERE SHOULD WE GO? WHAT SHOULD BE SOLD TO WHO? RICH: GO BACK. OVER THE SUMMER YOU
PROBABLY REMEMBER SUN VALLEY, BOB IGER GOT UP AND SAID LINEAR TV CHANNELS ARE FOR SALE. I THINK THAT EVERYONE IN THE MEDIA SECTOR IS REALIZING THAT WE HAVE HIT THE POINT OF SECULAR DECLINE. EVERYONE IS RUSHING FOR THE EXIT. THE CLASSIC CARTOON WHERE EVERYONE IS TRYING TO SQUEEZE THROUGH THE DOOR. EVERYONE WANTS TO SELL. THE PROBLEM IS, WHO WANTS TO BUY? IF YOU PULL UP STOCK CHARTS ON PARAMOUNT AND WARNER BROS. DISCOVERY YOU WILL SEE BOTH ARE DOWN ON THE NEWS. MORE LINEAR TV IS NOT THE ANSWER. ANYONE WHO SAYS THAT PUTTING LINEAR TV AND
WHEN YOUR WILL MAGICALLY MAKE IT THAT ARE IS JUST WRONG. IT IS A FLAWED THESIS. THESE COMPANIES NEED TO FOCUS LESS ON MERGERS AND FOCUS MORE ON, WHAT IS THE? RIGHT STRATEGY? THE RIGHT STRATEGY IS NOT TRYING TO BE A STREAMING COMPANY. NOT TRYING TO BE NETFLIX. IT IS TOO LATE, THEY DON’T HAVE THE BALANCE SHEETS OR THE FINANCIALS. TAKE THE CONTENT HERE YOU MENTIONED BARBIE AT THE OUTSET. THESE COMPANIES MAKE GREAT CONTENT. HBO IS A GREAT CONTENT ENGINE. STOP TRYING TO BE NETFLIX. FOCUS ON WHAT YOU ARE GOOD AT, CREATING GREAT CONTENT AND MONETIZING
IT TO WHOEVER WANTS TO BUY IT. THAT IS THE KEY. ED: YOU STARTED BY SAYING THAT YOU FUNDAMENTALLY DISAGREE WITH LAURA MARTIN. HER POINT WAS THAT THE CONTENT IS THE KEY. IF YOU COMBINE THEM YOU HAVE A MUCH BIGGER LIBRARY OF CONTENT, MAKING YOU MORE COMPETITIVE AGAINST THE LIKES OF NETFLIX, ETC. LET’S GO BACK TO BASICS. ONE, DO YOU THINK THAT THIS IS A GOOD DEAL? IT SOUNDS LIKE NO. B, WHAT ABOUT THE CONTENT CREATION? RICH: IT IS — YOU ARE MISSING — SHE IS MISSING THE ENTIRE STORY. SURE, IF YOU COULD JUST BUY PARAMOUNT
STUDIO AND COMBINE IT WITH WARNER BROS. DISCOVERY, THAT WOULD BE GREAT. AS WE HAVE WRITTEN, THERE WOULD BE SEVEN OR EIGHT POTENTIAL BUYERS OF PARAMOUNT THE STUDIO IF IT WAS FOR SALE. THE PROBLEM ISN’T THE STUDIO. THE PROBLEM IS THAT — I WANT TO MAKE THIS CLEAR. OVER 150% OF THE EARNINGS OF THIS COMPANY COME FROM THE CABLE NETWORKS, BROADCASTS, LINEAR TV ASSETS. NOT THE CONTENT CREATION VEHICLE, THE LINEAR TV ASSETS. PUTTING LINEAR TV ASSETS TOGETHER ISN’T A SMART IDEA. IT IS WHY THE STOCKS ARE DOWN. ANYONE WHO SAYS THAT THIS IS ABOUT PUTTING THE
CONTENT TOGETHER IS COMPLETELY MISSING THE FACT THAT WHAT YOU ARE ACTUALLY DOING IS PUTTING TWO DYING LINEAR TV BUSINESSES TOGETHER AND NOT SOLVING THE FUNDAMENTAL PROBLEM. CAROLINE: DOESN’T THAT MAKE IT BETTER AS A STREAMING PRODUCT? RICH: SURE. IT WOULD MAKE A STREAMING PRODUCT BETTER, ABSOLUTELY. BUT YOU WOULD BE WEIGHING IT DOWN WITH HAVING AN EVEN GREATER EXPOSURE TO LINEAR TV, WHICH IS IN RAPID SECULAR DECLINE. YES, IT ADDS MORE CONTENT TO THE STREAMING SERVICE BUT YOU HAVE TO ASK, SHOULD YOU ACTUALLY BE IN THE STREAMING BUSINESS OR SHOULD YOU BE AN ARMS DEALER? SONY IS
SMILING AND MAKING HUNDREDS OF MILLIONS OF DOLLARS OF PROFIT. THERE ARE NO LOSSES. THEY’RE LAUGHING AT THE INDUSTRY LOOKING AT HOW EVERYONE ELSE IS BURNING BLACK HOLES IN STREAMING. YOU DON’T HAVE TO BE A STREAMER. YOU DON’T HAVE TO. WE THOUGHT THAT THESE COMPANIES COULD AND I DON’T THINK THAT THEY CAN. PEACOCK IS NOT A BUSINESS. PARAMOUNT PLUS IS NOT A BUSINESS. MAX IS A GOOD IDEA ORIGINALLY. I DON’T THINK THAT THE BALANCE SHEET AND FINANCIAL SITUATION IS CAPABLE. I THINK THAT THEY SHOULD GO BACK TO HBO, BACK TO SOMETHING SMALLER, AND EXECUTE ON WHAT
THEY CAN. SELL THEIR CONTENT. SUITS DID FAR BETTER ON NETFLIX THAN ON PEACOCK. DO WHAT YOU ARE GREAT AT. MAKE A GREAT CONTENT AND STOP TRYING TO BE A STREAMING PLATFORM IF YOU CAN’T DO IT. THE LAST COUPLE OF YEARS HAS REALLY PROVEN, AND I THINK THAT THE CAPITAL MARKETS ARE TELLING YOU, THAT THESE COMPANIES CAN’T DO IT. M&A, IT MAKES BANKERS FEES, I UNDERSTAND WHY BANKERS ARE PROPOSING AND AND THE LEAKS TRYING TO GET SOMETHING TO HAPPEN, BUT I HONESTLY BELIEVE THAT YOU ARE FIXING THE WRONG PROBLEM. THE PROBLEM IS THAT THE STRATEGIES NEED
TO SHIFT. MAKING THESE THINGS BIGGERISN’T THE RIGHT ANSWER. ED: RICH GREENFIELD, WE LOVE HAVING YOU ON THE SHOW. COME BACK IN THE NEW YEAR. THANK YOU SO MUCH. COMING UP ON “BLOOMBERG TECHNOLOGY,” TECH JOBS ARE NOT WHAT THEY USED TO BE. WE WILL DISCUSS IT NEXT WITH THE CULTURE PARTNER’S CHIEF SCIENTIST OF WORKPLACE CULTURE. NICE. THIS IS “BLOOMBERG TECHNOLOGY.” ED: TECH JOBS OVER THE LAST DECADE GAINED A REPUTATION FOR BEING LUCRATIVE, COMFORTABLE, AND STABLE. THIS YEAR, THAT CHANGED. IN SEVERAL ROUNDS OF CUTS MEADOW LAID OFF THOUSANDS OF PEOPLE CITING THE NEED FOR GREATER EFFICIENCY IN
THE TOUGH ECONOMIC ENVIRONMENT. SO DID MICROSOFT, AMAZON, MICROSOFT, AND SALESFORCE AND EVEN SMALLER NAMES. LET’S CONTINUE THAT CONVERSATION AND BRING IN THE CULTURE PARTNER’S CHIEF SCIENTIST OF WORKPLACE CULTURE. A FEW DAYS LEFT OF 2023. THAT WAS OUR SUMMARY OF THE TECH JOBS MARKET. WHAT IS YOURS? JESSICA: 2023 WAS A YEAR OF TRANSITION AWAY FROM THE GREAT RESIGNATION TOWARDS THE NEXT YEAR, WHICH IS GOING TO BE AN ELECTION YEAR. ELECTION YEARS CREATE A LOT OF DYNAMICS IN THE WORKPLACE THAT WILL BE CHALLENGING FOR CEOS AND WHITE-COLLAR WORKERS AND FRONTLINE WORKERS. FRANKLY, EVERYONE WILL STRUGGLE NEXT YEAR.
I DON’T THINK PEOPLE WILL CONTINUE TO LEAVE THEIR JOBS AND I DON’T THINK THAT THERE WILL BE AS MANY LAYOFFS. THERE WILL BE STRIFE AND CONFLICT, AND THAT IS WHAT WE HAVE TO DEAL WITH NEXT YEAR. CAROLINE: NEXT YEAR, POTENTIAL CONFLICT. WE HAVE AN ECONOMIC ENVIRONMENT — IS IT RIGHT THAT THE PENDULUM HAS SHIFTED? WE HAVE PEOPLE ULTIMATELY FEELING THEY WERE EMPOWERED AS EMPLOYEES AND NOW WE HAVE AI PLUS THE FACT THAT PEOPLE ARE STARTING TO RUN TIGHTER SHIPS. WHAT HAPPENS IN TERMS OF CULTURE AT THESE COMPANIES? JESSICA: INTERNALLY, INTERESTINGLY, THIS LAST QUARTER WE PUBLISHED
A STATE OF CULTURE REPORT AND WERE ASKING EMPLOYEES WHAT THEY LOVE AND HATE ABOUT THEIR CULTURE. FOR THE FIRST TIME IN THE HISTORY OF THE REPORT, WE SAW POLITICAL POLARIZATION RISE TO THE TOP OF THE LIST AS TO WHAT PEOPLE LOVE AND HATE ABOUT THEIR CULTURE. PEOPLE LOVE DIVERSITY, EQUITY, AND INCLUSION. WE SELL WOKE IDEOLOGY RISE TO THE TOP ABOUT WHAT PEOPLE HATE ABOUT THEIR CULTURE WHICH MEANS THIS POLITICAL CONFLICT HAPPENING INTERNALLY AMONGST WORKERS IS CREATING A PROBLEM FOR MANAGERS AND CREATING TOXIC WORKPLACES. YOU WILL CONTINUE TO SEE THAT. IT WILL AMPLIFY IN 2024. ED:
IT HAS BEEN HARD TO DRAW CONCLUSIONS FROM THE JOBS DATA, THE JOBLESS DATA. NEXT YEAR WE HAVE AN ELECTION. EVERYONE IS HOPING FROM A CONSUMER POINT OF VIEW THAT INTEREST RATES COME DOWN. WHAT DOES THAT SET US UP FOR IN TECHNOLOGY JOBS NEXT YEAR? JESSICA: WELL, IT IS INTERESTING. WE STARTED THIS YEAR WITH ONE POINT EIGHT JOB OPENINGS FOR EVERY JOB SEEKER AND WE ARE NOW AT 1.4. THE JOBS DATA, EMPLOYMENT REPORTS COME OUT AND ECONOMISTS AND LEADERS SAY WE ARE ON TRACK. WHY DOESN’T THE FRONT-LINE WORKER EXPERIENCE IT THAT WAY? THERE IS THE TALE
OF TWO ECONOMIES. THE REAL ECONOMY ACCORDING TO THE CHARTS AND THEN THE PERCEIVED ECONOMY YOUNG PEOPLE HAVE TODAY. THEY’RE LOOKING AT THE PRICE OF GAS AND GROCERIES AND ARE FRUSTRATED. THE ISSUE ISN’T NECESSARILY IS THEIR JOB OR THE ISSUE IS, EVEN IF I HAVE A JOB CAN I AFFORD TO LIVE? THAT FRUSTRATION IS INCREASING UNIONIZATION EFFORTS, FOR EXAMPLE. YOU ARE SEEING MORE UNION ACTIVITY THEN YOU HAVE BEFORE. AS A CEO, I WOULD BE WORRIED ABOUT THE COLLECTIVE ACTION THAT MY EMPLOYEES MIGHT TAKE. THE WAY THAT I HANDLE THAT IS GET AHEAD OF IT. THE CEOS
LISTENING TO THEIR WORKFORCES THAT ARE MAKING SPACE FOR PEOPLE TO FEEL HEARD, MAKING SURE THAT PROBLEMS THAT ARE AT THE BOTTOM OF THE ORGANIZATION BUBBLE UP QUICKLY, SO THE CEOS WHO SOLVE THOSE PROBLEMS ARE LESS WORRIED GOING INTO THE NEXT YEAR. CAROLINE: WE HAVE HAD SOME CEOS IN TEXTING WE DON’T WANT TO HEAR POLITICAL DIVISIONS. KEEP THAT AT HOME. IS THAT THE WAY IT HAS TO GO IN 2024? JESSICA: I AGREE. I DON’T THINK IT’S APPROPRIATE FOR CEOS OR BUSINESS LEADERS, MIDDLE MANAGERS TO OFFER THEIR OPINIONS ABOUT POLITICAL ISSUES IN THE WORKPLACE. THAT ISN’T THE
PLACE FOR THAT. WHEN YOU CREATE AN ENVIRONMENT WHERE WE ARE DEBATING POLITICAL ISSUES, YOU ARE DISTRACTED FROM THE WORK AT HAND. IT IS UNSAFE. IT CREATES A LACK OF PSYCHOLOGICAL SAFETY. IT IS UNSAFE OR BUSINESS RESULTS. SOCIAL ACTIVISM IS THE GREATEST THREAT TO AMERICAN BUSINESS IN 2020 FOUR. COMPANIES ARE GREAT AT DEALING WITH REGULATION. WHATEVER HAPPENS WITH THE ELECTION PEOPLE WILL ADJUST. THEY ARE NOT GREAT AT UNDER STANDING SOCIETAL NORMS. PEOPLE SEE CEOS WORRIED ABOUT, WHAT SHOULD I SAY, SHOULD I SAY ANYTHING OR NOT SAY ANYTHING? IS NOT SAYING SOMETHING A PROBLEM? THAT WILL BE
THE MAIN FOCUS FOR CEOS NEXT YEAR. CAROLINE: GOOD TO HAVE YOU BACK. THANK YOU. IT IS GOING TO BE A PRETTY VOLATILE YEAR FOR SURE. LET’S TURN TO THOSE RUNNING THE BUSINESSES, THE LEADERS AND CEOS, PARTICULARLY OF CERTAIN STARTUPS, IN PARTICULAR A NASDAQ ON WOMEN ENTREPRENEURS ON WHERE THEY’RE STARTING TO SEE SHIFTS IN THE VIEWPOINT. NICOLA CORZINE, YOU HAVE BEEN RUNNING RESEARCH TRYING TO GET INTO THE PSYCHE OF THESE BUSINESS LEADERS AND ULTIMATELY WHAT IS HELPING AND HINDERING. WHAT IS IT AT THE MOMENT? NICOLA: A LOT OF THE CHALLENGES ARE NOT SURPRISINGLY AROUND ACCESS TO
CAPITAL, BUT WE FOUND UNIQUE PERSPECTIVES THAT EMERGED IN THE LIVED EXPERIENCE OF WOMEN ENTREPRENEURS IN AMERICA. THINGS THAT AREN’T ALWAYS WELL TALKED ABOUT, SUCH AS THE IMPORTANCE OF PAYING ONESELF. WE HAVE A LARGE AMOUNT OF DISPARITIES WITH WOMEN ENTREPRENEURS, INCLUDING RATING HIGHER THAN AVERAGE IN THE U.S. AROUND FOOD INSECURITY AND THE WORDY OF MAKING CASH FLOW BREAKEVEN. NOW IT’S TAKING ABOUT EIGHT YEARS FROM THAN ENTREPRENEURS. REALIZING THAT IF THEY PAY THEMSELVES, IT IS THE FASTEST INDICATOR OF GETTING CASH FLOW TO BREAKEVEN. WE DON’T TALK ABOUT THE IMPORTANCE OF PAYING ONESELF, SO THIS EMERGING RESEARCH IS
IDENTIFYING SOME OF THE MYTHOLOGIES AND CHALLENGES THAT WE NEED TO GET AWAY FROM AND ADDRESS AS A CORE KERNEL OF WHAT WILL BRING VIBRANCY AND OPPORTUNITY TO THE NEW MAJORITY OF BUSINESS OWNERS IN THIS COUNTRY. ED: YOU ARE FOR ALL INTENTS AND PURPOSES A NOT-FOR-PROFIT THAT WANTS TO HELP ENTREPRENEURS, FOUNDERS GET GOING. CARRYING ON FROM THE LAST CONVERSATION, ONE STORY WAS THE THOUSANDS OF PEOPLE WHO LOST THEIR JOBS AT BIG TECHNOLOGY COMPANY SUDDENLY HAVING TIME ON THEIR HANDS AND BEING ABLE TO START NEW COMPANIES. IS THAT REFLECTED IN WHAT YOU SEE DAY-TO-DAY? NICOLA: IT IS
INTERESTING. SOME THINGS THAT WE DIDN’T EXPECT TO SEE WAS THE IDEA THAT IT TAKES A LITTLE BIT OF AGE TO FIND OPPORTUNITY AS AN ENTREPRENEUR. BEING LITERALLY OLDER. THERE IS A REVERSE CORRELATION THAT IF BUSINESS OWNERS ARE BETWEEN 40-49, THEY HAVE THE HIGHEST CHANCES OF SUCCESS, WHICH IS INTERESTING WHEN WE THINK ABOUT THE TYPICAL ENVIRONMENT OF THINKING THAT I HAVE TO BE 18 AND STRAIGHT OUT OF COLLEGE. WITH NO PROBLEMS OR CHALLENGES TO THINK OF, NO WORRIES. IT IS THE OPPOSITE. THE MOST SUCCESSFUL BUSINESS OWNERS ARE THE ONES WHO HAVE 10 TO 20 YEARS OF
WORK EXPERIENCE BEHIND THEM. THAT IS EXCITING WHEN WE IMAGINE WHAT IS POSSIBLE BY LOOKING AT A NEW APPRECIATION OF INTELLECTUAL CURRENCY THAT IS BEING MISSED IN THIS COUNTRY RIGHT NOW. CAROLINE: YOU ALSO SAY THAT THOSE WHO GET TO SUCCESS BREAKEVEN QUICKER PAY THEMSELVES, VALUED THEMSELVES. NICOLA: THAT’S RIGHT. THAT IS NOT OFTEN TALKED ABOUT. YOU SAY GO ALL IN. DON’T PAY YOURSELF. WAIT FOR THE PAYDAY THAT WILL EVENTUALLY COME AT SOME POINT IN THE EVER POSSIBLE FUTURE. THE CHALLENGE OF WHAT WE FIND IS THAT WE LOSE SO MUCH MARKET VALUE IN THAT AND IT IMPEDES THE
ABILITY FOR BUSINESS OWNERS, ESPECIALLY WOMEN BUSINESS OWNERS, TO BE SUCCESSFUL. THIS IS THE CULMINATION OF TWO YEARS OF WORK FUNDED BY THE WELLS FARGO FOUNDATION. IF IT WASN’T FOR THESE EIGHT HUNDRED 60 WOMEN WHO TOOK US BEHIND THE SCENES AND HELPED US SEE THINGS DIFFERENT AROUND WHAT DRIVE SUCCESS IN COMMUNITY ENTREPRENEURS AND THE RISE OF HIGH-TECH ENTREPRENEURS, WE WOULDN’T HAVE BEEN ABLE TO DISCOVER THIS. IT IS ONE REASON WE HAVE BEEN INSPIRED TO BE ABLE TO SHARE THIS RESEARCH ON THE NATIONAL STAGE, INCLUDING RECENTLY IN THE ANNUAL SEC REPORT ON RECOMMENDATIONS TO CONGRESS. ED: IT
IS GREAT TO HAVE YOU HERE ON THE PROGRAM. THANK YOU. COMING UP, CERBERUS AND BLUE ORIGIN COMPETE TO BUY A RIVAL TO SPACEX. WE WILL BREAK DOWN THE DETAILS, NEXT. THIS IS BLOOMBERG. ED: CERBERUS AND BLUE ORIGIN COMPETE TO BUY SPACEX ROCKET RIVAL YOU L.A. — ULA. HERE’S WHAT THE CEO HAD TO SAY WHAT I ASKED ABOUT THE IDEA OF BEING BOUGHT. >> I WOULD NEVER BE ALLOWED TO TALK ABOUT AN M&A ACTIVITY AS THE COMPANY’S CEO. I’VE ASKED THIS QUESTION TWICE A YEAR. I HAVE NOT BEEN ABLE TO TALK ABOUT IT THEN AND I
CAN’T TALK ABOUT IT NOW. EVEN IF THERE WERE SUCH A THING. I WILL SHARE WITH YOU THAT I AM NOT A BOARD MEMBER ON THE ULA BOARD OF DIRECTORS, NOT AN OWNER, JUST AN EMPLOYEE. ED: HE DID SAY THAT IF I WERE DEVICE BASED BUSINESS, I WOULD LOOK AT ULA, WHICH IS A BIT OF A WINK-WINK. CAROLINE: “I AM JUST AN EMPLOYEE.” I WONDER WHAT WOULD HOLD THEM BACK FROM SPLURGING? ED: GOOD QUESTION. THE GOVERNMENT CONTRACTS. THEY SEE THE MONEY GOING TO SPACEX. THEY WANT TO PIECE OF IT. CAROLINE: THAT DOESN’T FOR THIS EDITION OF
“BLOOMBERG TECHNOLOGY.” ED: THANKS TO EVERYONE WHO LISTENS TO THE POD. APPLE, I HEART, AND WE PUBLISH
