Beyond Meat Reports Describe Dirty Conditions

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube and now also on Bloomberg Quick Take. So we've been keeping a watch on shares of Beyond Meat because we've seen some selling pressure again today in fact at their lows down as much as nine percent or just shy of that still down about five percent as we speak, and the Stuck. If I take a look at what it's doing, it is down, Tim so far Ino, we

got Dina Shanker with us. She's consumer reporter for Bloomberg News. She covers Beyond Meat and other foe meat companies for Bloomberg News. She wanted to get her on the program because she had a deep dive that came out yesterday morning into uh A, dirty conditions at a key plant. It's a facility in Pennsylvania, and it illustrates the alt meat makers ongoing difficulties. Dina Shanker joins us now via

zoom from New York City. Dina, according to these reports, what was found at that plant in Pennsylvania, Hi, thank you guys so much for having me on UM. Basically, what we saw from photos and internal documents was a plant that was just not operating safely or um following basic h health and safety measures. UM. We saw a lot of mold, both on ingredient containers and on the walls. I mean, these pictures, Dina, are pretty shocking that are

included in the piece. Yeah, I mean they are. They are because I don't think that any of us want to see a food plant that looks like this. UM. You know, there are things in these pictures that many

of us might not even notice as bad practice. But UM, for example, you have a picture that shows, um, a trolley car turned over into a large funnel um type of shape of machine, and we don't we can look at that, we can say that that doesn't look right to me, we can't necessarily say why or exactly what's wrong with it. But um, the experts actually not only pointed out that which they said, um is dangerous for

the people involved. They said it's contaminated or there's room for contamination, because you never want something with wheels on the floor to be UM that close to your food production services. But if you look at that picture, yeah, right, um, But if you look at that picture, you'll also see, UM to the left, there's a bucket on a machine. And that was actually a point. We don't even mention

this in the story, but the experts also noticed that bucket. Um, it's cut off in the photo, and they said that bucket shouldn't be on a machine. And there's a hammer on a machine. They said, those things shouldn't be on those machines that they're supposed to be messy. And we got just for everybody's watching on YouTube quick take you

can actually see what Dina is talking about. Do you know, I gotta say mold right like with it my basement, like it starts to freak it out, you freak out, and you just take care of it because it can be dangerous. But mold growth takes a while, right, So it's not like, oops, we just missed it. It It just happened. This stuff takes a while to develop, that's right. And we see the mold on ingredients containers, but we also see it on the wall. Um, I'm one photo on

a wall and it's uh, that's exactly right. It doesn't mean that this one day, at this one moment in time, somebody happened to capture a bad situation. It means that that situation has been like that for a little while in order for that to happen. Do you know where did these photos come from? From a former employee who worked in the plant and was really concerned about the conditions in it and what it beyond me tell you.

In response to inquiries related to these photos and what it showed at allegedly happening at the plant, UM, they said that the Pennsylvania Department of Agriculture UM found no instant says of nonconformance with regulations during their inspection. They said that they go above and beyond industry and regulatory standards of their food safety protocol. They mentioned audits which

gives them very high ratings. They did not comment specifically on the documents or the conditions we described to them from the photos. One thing that emerged to me in terms of reading your piece was sort of this pattern of I don't I don't want to ascribe intent to this, but I was pretty surprised to see that basic paperwork and fees hadn't been paid to the state, like a thirty dollar fee I recall, Yeah, yeah, the thirty five registration fee. That's right. What does that illustrate to you

that they're they're not following basic good practices? But to me, I wonder who's in charge and where are they? And um, why is this such a pervasive problem in this plant? I mean, I have a lot more photos that we didn't include, so it goes way beyond um. And you know four four aograph and you point out for anybody who's listening at this point. Internal reports also show that some contaminated products made it through to consumers. So ultimately did a lot get out to consumers? What do we know?

And I am curious when it comes to beyond meat facilities, this Pennsylvania one, how important is it in terms of overall production? So, um, I'll in order in terms of what reached consumers, what we know is that from the documents that we're sharing UM that UH some would in two UH separate A and W burgers at two different restaurants was found by consumers UM and UH that a metal link was found in a bag of Duncan sausage patties. UM. And there's also there was recently a recall from Costco

in Canada because of wood found in the products. UM. That's what we have documents of from from reporting this story. UM. In terms of the role of this plant plays in the company, it's actually a very important one because the company doesn't have a lot of its own real estate in the US. They have UM two sister sites in Columbia, Missouri and this plant, and the plan had been UM for this plant to be upgraded and expanded. UM. The company had been planning on doubling the size of this

plant UM as recently as this summer. There were expectations that that would happen. So this was certainly an important I mean, this is an important location for this company. Most of its manufacturing in the US is done by co manufacturers. They make their their raw material UM sort of like their secret sauce kind of ingredients at their Columbia Facilities, Dennis Shankar Consumer Report at Bloomberg News. Check out more just head to Bloomberg dot com. Thank you, Dina.

This is Bloomberg. You're listening to Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. I gotta tell you the conversations we are having behind the scenes right now when it comes to all things crypto, and I feel like crypto is this bucket where we throw everything in and not all crypto elements are the same, but it's just trying to stay on top of it

and makes sense of it. We should have some of those conversations behind the scenes have we should have them on air. So let's do that. Let's bring in Katie Gryfel, Blomberg New Senior Markets reporter, co host of Crypto I r L on Bloomberg Quicktake and Bloomberg TV. She is here in studio and we know one of the big stories today was what the bankruptcy here and getting underway for f t X first day motions. And what's unusual is that it took this long to have this hearing

usually happens so much quicker. I mean, when did f t X file for bankruptcy. It feels like a literal year ago, two weeks ago, so an unusual amount of time there. I mean, there was a lot sort through. It seems like one of the key takeaways was the record keeping process, which we already knew it was pretty lax. I mean John j Right, the third uh was the new CEO at f t X, of course, was involved in the liquidation of Enron. He I mean, was pretty

blunt that it was pretty much non existent. But that was a consistent theme today too, that there's really not a lot of records to go by, and when you're trying to sort out more than a million creditors, that's going to be a very long process. Uh, And we do, I mean, someone knows who the top fifty creditors are. We don't know who they are because the names were redacted. And that's something that was discussed uh a lot today as well. The ft X is set to me back

in court, but not until January. So what happens between now and then, Katie, Well, there is supposed to be a second hearing on the issue of the fact that the names were redacted on December six teh Tim and I were talking about this yesterday with Stephen Church. Hopefully you weren't listening, Carol because you were off, but it's really you were still really unusual that the names would be redacted in this case. At least two groups of of the creditors sent lawyers to this hearing to support

the request to keep their identity secret for now. One of those groups was representing members who were among the top fifty biggest. So the judge overruled objections from US trust the US Trustee who is requesting that we you know, know who these names are for now, so they're going to remain secret. I mean this to me then speaks to the contagion impact, right, like, yeah, this is what we're trying to figure out how far this goes? Certainly

within the crypto universe. It doesn't feel like it's hit certainly the rest of the asset class that is kind of our world on a general, a general basis. But I mean, that's what do we know about how much further this goes? Well, that's one of the reasons why people want to know who are the top creditors here?

I mean, who had the most exposure we know some of you know who might be on the list by their own admission, for example, Gemini, Galaxy, a few other names have come out and talked about their own exposure to f t X. But when you're trying to map where to look for the contagion, you would want to see this list. What about the names that are out there that feel like we're going to talk to Kathy wood about this, and she's been buying coin Base, she's

been buying grace Scale. I think there are questions about, you know, are these untouched or not. It's a great question. Coin based coin bas is an interesting one because coin Base, I mean, it's a u S publicly listed company. It falls under the purview of the SEC. From everything that we can see right now, it was untouched by this FTX blow up. But at the same time, I mean, the stock has just been obliterated, which is probably why Cathy is looking into it. She likes to buy the discounts.

But if you think about the future of the crypto industry, it feels like there's been a lot of love lost for centralized exchanges such as coin Base. You've seen a lot of movement into decentralized exchanges back into decentralized finance, into these cold wallets. So if that's the future for crypto, this sort of like deglobalization of the industry, I don't

know how coin base fits in there, right. I want to go back to the exposure question, Katie, because why are we hearing now that companies are struggling as a result of the contagion from f t X, when a mere two weeks ago they were kind of talking about, Oh, we'll be fine. I think it had to work its way through the daisy chain, like they were so sorry

to interrupted. Does that mean that they weren't directly connected to f t X, but a fall in digital asset prices has led them to have some sort of issue. I mean, I'm sure that that's the case. Obviously the lines have gone down as a result, not as much as you might have expected if you're talking about the present bitcoin um, but that is one of the forms that contagion can take. Maybe it's not a direct impact. Maybe you weren't a counterparty to f t X, but

you're probably counterparty to someone who was a counterparty. And something that I've been thinking a lot about the crypto industry in the last few days, is that so many functions are concentrated in these one companies. It's not unusual for a crypto company to be in exchange, a broker, a custodian. The list goes on. Those are all separate functions and trad five. So go to Digital Currency Group, Barry silver It's like, you know, so they right UM,

gray Scale Bitcoin to trust is. I think they're the largest shareholder in that UM. I think they own about ten percent of gray Scale. And then you think about they also own the cryptobroker Genesis right, which was affiliated with Alameda, And I guess, like, what do we know about Silburton his world and the tentacles and where they go? We I would love to know more about. I'm not putting my fingers and anything's wrong, but I just feel like it's once again that equation akin to what we

saw with that. And we know that Genesis, which again falls under his empire, is searching for fresh funding right now. Ber News had a fantastic scoop yesterday that they need fresh funding or bankruptcies in the offing. Barry Silbert also owns gray Scale. Like you said, the DCG Digital Currency Group is the largest shareholder in the Bitcoin Trust. So even though gray scale from all that we know, is fine here, their largest shareholder might come under some pressure

of Genesis, which is also in the empire false bankruptcy. Okay, so what could be the next hues to drop in thirty seconds? I would watch Genesis. That's what everyone's looking for now. I mean, it's hard to overstate Barry Silbert's reach. Yeah, it is interesting these these singular individuals, right who we look to kind of as a north star. And again I'm not saying anybody, I mean, at least Barry Silbert.

We don't know anything that has gone wrong, but it's just interesting these singular individuals and how wide and vast their reach was in different verticals within the crypto world. Exactly. So Okay, creedy, Katie, thank you. Sorry, it's just you know that kind of I've been called worse, Katie grypheld Bloomberg New Senior Markets report of co host of Crypto I R. L and our go to when it comes to the crypto universe, joining us in studio. This is Bloomberg.

This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes, Tim Stenovic on Bloomberg Radio. There's a lot in the spotlight today, Crypto of course, Twitter and Ellen. That's a given. And then there is always, I feel like, in the background as of late, the private equity where which is no doubt about it in the sights of Washington and an array of regulators. Leon Island writes all about it. She's anti trust reporter for Bloomberg Near. She

joins us right now from our studio in Washington. Check out her story. It's on the Bloomberg terminal and at Bloomberg dot com. Slash A business Week. Joe Weber is the editor of Bloomberg Business Week. He's with us right now in the Bloomberg Interactive Brokers studio. Jolia wrote this

story with Todd Shields as well. And I gotta tell you, Um, I thought, you know, with carried interest being safe after almost dying a few months ago thanks to a couple of senators on the Democratic side, Um, what else is in the crosshairs of of Oh, maybe everything about it? Um, everything about yeah, yeah exactly so, So that's right. I think carried interest has been the thing that people who have long associated with the private equity industry. UM and it has come up many times, and it kind of

gets kicked around and then kick kicked down. And what's interesting now is about the Biden administration and regulators throughout agencies that are starting to kind of like pinch these places that private equity doesn't like to get pinched, and that has It's not like a direct thing. Biden isn't quoted saying that he's coming for the industry, but it's sort if you read between the lines, there's clearly something

happening here. So so Leah tell us more. Yeah, So there are quite a few regulators here in Washington who sort of set their sights on private equity. The SEC has proposed a new rules about disclosure UM and the antitrust regulators, that's the Justice Department and the Federal Trade Commission have both made some noise about how they have

concerns here. The Justice Department opened the surprise probe a month or so ago into what are called the interlocking Directorate's that's where UM a company or a person sits on the board of two competitors. And after the analysis probe, tom A Brava directors stepped down from two different public companies. They've also sent out, you know, notes to a couple other major private equity folks like Apollo and Blackstone, raising

some concerns about some of their holdings. And then the sort of centerpiece of our story was about this deal between Standard General, which is a hedge fund, and tag Now, which is the broadcast stations that were spun out of gannett Um. But the sort of interesting piece about the steal is that it's backed by Apollo, and so that aspect has sort of put it under the microscope with both telecom regulators and the Justice Department, who need to

clear the deal before I can go through. So Leah, talk a little bit about the idea of transparency here, because this is an industry that you know inherently as private, right, Well, I was gonna say, they don't call it private equity exactly. So I'm wondering what you're hearing from the industry because you quote some folks who represent the industry about what they think about this, and look, there's politics here too,

and you think of prominent donors as well. Yet they're not that happy about this, I'll put it that way. You know, they think that they're doing good, they're investing in lots of companies. Um, none of these, as Joe said, none of these are sort of direct attacks. You're not hearing Joe Biden say anything about private equity. But these are sort of his people within the administration giving them a little bit of a poke at some of the things that they've done for a long period of time.

I mean, sitting on the boards of various companies is something that has gone on for for quite a while. But um, the Justice Department noted, you know, this law has existed since nineteen fourteen. Just because you guys have done it for the past couple of decades doesn't necessarily mean it's legal. Leo, what's the what's the truth about private equity? Or is it a little bit of everything? Meaning that they sometimes come in provide the funding when

others don't want to touch something. Sometimes it's distressed assets or what have you. The other flip side is, you know, a lot of cost cutting, a quick way of like within a what a two or three year a little bit of a little bit of debt, you know, and spit it out and make some money. So what's the truth when it comes to private equity? I mean, that's

a little bit of a complicated question. I'll just say that the ones that um the regulators are concerned about, they say, you know, there's not one size fits all here. There there are some some good things that private equity can do, but the ones that really raise their concerns or sort of what we might call a strip and flip, you know, where you come in, you load it down with dad, and then you sell it off and it's

not going to do as well. The other ones that they're really concerned with are are roll ups, right, So you might buy one company and then you start adding on more and more and more companies, and some of these are small, so it might not have come to the attention of regulators that they're sort of amassing this dominant player in the market. Okay, so what are some of the latest volleys because and talk cut through the agencies that are kind of nipping here and which ones

are you guys watching in DC? Yeah, so I primarily look focus a lot on the Justice Department and the Federal Trade Commission. The Justice Department is the one that's doing this probe into interlocking directorate's as they're called, and also it's looking at the Standard General TEGNA merger the FTC is a consumer prottection in anti trust UM regulator eight. UM has raised a little bit of concerns about private

equity and the healthcare space. You know, there have been some articles in the press about how maybe when private equity invests in healthcare that the health outcomes aren't as good. UM. This is looking particularly at things like nursing homes. UM the FTC actually had a settlement earlier this year with um J a b UM over it rolling up a

bunch of emergency veterinary clinics. They were concerned that they had UM sort of bought three different emergency bet clinics rolled them up into one, and maybe that was increasing prices.

When you know, your dog accidentally swallows your shoe or something, so uh, you know, these are the sort of things you're speaking from experience, Jill Alia, before we let you go, I'm curious how this is rippling into fundraising, And it's probably difficult to make a connection at this point because this stuff kind of takes years to work through a system.

But when you talk to your sources about going out and raising money from LPs, what are gps telling you about whether or not it's more difficult because of potential regulatory scrutiny. I mean, that's definitely something that you have to pay attention to now, you know, this is this is the sort of thing that has to be thought about when you're doing a deal, whether the the review

might be extended. In the standard General Tegna case, they had hoped that this deal would get review within nine months, and they had added this provision called ticking fees. So the longer the review takes, the more money they're actually going to have to pay to Techno shareholders. So they're not that happy about the fact that regulators are lengthening this deal since it means that they're going to have

to pay more. I'm really curious what's going to be the next turn of the screw that that is going to make private equity you know, call their call their local lobbyists. Well, I mean, the Justice Department is continuing to investigate the Interlocking Directorate's issue and also, you know, just whether having private equity owners is changing the incentives

of UM some companies. Um I we're sort of expecting maybe a big private equity deal block maybe in the next year UM where they'll sort of make this point either at the d J or the FTC. Alright, certainly. Um, a relevant story and something that we've been talking about a lot here. I feel like on business Week on

a regular basis. Um, Leah, thank you so much. Leon Island, she is anti trust her porter at Bloomberg News and are not anyone studio in Washington, d C. Check out this story in the current issue of Bloomberg Business Week. It can also find it on the Bloomberg and at Bloomberg dot com slash business Week are thanks to Jill Webber, editor of Bloomberg Business Week. Here in studio, roam a journal. Yeah but you let me drive? No, no, no no, I want a drive. It's a good question. Drive. This is

the drive to the Globe music Well Dawn radio. All right, just about ten minutes left in today's trading session. We're seeing somebody once again into the close. I feel like a broken record because I feel like over the last week or so, we've seen that a few times. We're now pretty much at our best levels of this date. Interestingly enough, on the S and p F I found it over the last five days, Carol, we're up only two tenths of one percent. Yeah, so right, so you

know it's been a little more perspective. Yeah, let's get into it with Asha Meta, founder and chief investment officer at Global Delta Capital, also the author of Power of Capital, An adventure capitalist Journey to be Sustainable Future, joining us via zoom this afternoon. Asha, how are you hi. I'm delighted to be with you. It's good to have you with us this afternoon. I just want to start with the markets and then get a little bit into your book,

because this is some really interesting stuff. UM, how would you describe where we are right now in terms of rate hikes, a tightening cycle, and when we're gonna be on the other side of these that's there. This is a tough question to begin with, UM, and I think we just heard in some of the former commentary about the rate cycle continuing, perhaps at a lower pace. Um. What it speaks to is in inflation that hasn't been experienced in a generation here in the developed markets. Thanks

for the nice intro. UM. I manage a strategy that focuses on emerging markets. So when I look at where we are with the markets more broadly, at the moment, I'm seeing investors looking around for growth and thinking about how are we going to capture growth like we've seen over the last decade and the years to come, with inflation being where it is, with the rates rising as they are and continuing ahead, UM investors who are looking for growth are starting to think beyond UM the single country,

single sector concentrated approach that's been successful over the last decade. And again I'm as an emerging markets investor, I'm starting to feel UM quite optimistic about the opportunity ahead for markets outside of the US. After you also think about you know, emerging markets and are the intersection of emerging markets in fintech and I just think about you know, UH, and you think about innovation disruption, something we're gonna talk a lot about with Cathy Wood UH in just about

ten fifteen minutes time. But what's interesting too, and I think with the backdrop of f t X and Sam bankment freed, like, how are you thinking about that and the impact UM that they meant that might have as as kind of an investing class going forward. I think it's one of the most critical themes and things for introducing my book Power of Capital. It's an adventure capitalist journey in which I introduced three mega themes that I

see reshaping the growth globe. One of them is what we just talked about, the new global paradigm, the rise of the emerging markets and this new sort of growth class. Another one is around sustainable investing. But a critical theme is the one you just mentioned technology. The reality is that the vast majority of the world's population today carries the supercomputer in their pockets and in the emerging markets

in particular, I see necessity is the mother of invention. UM, an asset class that has had less access to liquidity today has a very strong young demographic, which we all know is very quick to pick up technology. Some of the most exciting and scalable technologies across the globe are coming from Africa, where mobile money was born, in China, where clean technology is is hitting scale um and India, where some of the strongest technology universities in the world reside.

So I couldn't agree more. Technology is as a critical mega theme, and there's lots of opportunity, not just in the sector, but in the context of vertical integration. It transforms every sector from finance to consumer to retail. Well, help concentrate it a little bitter focus it a little bit for our audience, and I know you can't necessarily give picks, but can you get more specific with what you're bullish on and why? Yeah? So, so I just alluded to some of it and let me I'll spend

a couple more moments on it. Mobile money thin tech, which he just brought up. I think is one of those critical themes that's reshaping the opportunity across developed markets. We're all experiencing the rise of mobile money, the ability to paying this from crypto. I do separate it from crypto, but um you know, I do look at digital currencies as another important um uh innovation that again, it has the opportunity to disrupt the opportunities ahead in terms of investing.

You know, I think of digital money in terms of new sectors, the ability to invest in small caps that are you know, creating new forms of currency, but even in large cap financials within emerging markets in particular, you know, but with digital money, they're able to access a much larger demographic and again that creates opportunity, opportunity for revenue expansion across all as spects of the cap spectrum, an opportunity for earnings expansion because the reality is technology not

not particularly capital intensive. Actually, I do want to just you know, did you have any exposure to the collapse of f t X in particular or any of the fallout? Thankfully, cryptos an area that that I have limited exposure. I invested, like I said, an emerging market and emerging markets specifically and equities within that. Okay, good, Good to understand that. Okay, So can you talk about different regions? I mean, I

know you mentioned India. UM. I want to specifically focus on China though, because we've been talking a lot in the last few days about the reopening in China versus or I should say lack thereof, is the nation continues to at least talk about tens of thousands of cases that it's seen, uh, and report the first deaths over the weekend that we've seen in months in certain cities. UM. Why are what are what is your interpretation of what's

happening in China? Is an investable right now? Uh? China is a large market probably UM, not surprising to your sophisticated audience, UM, but often a surprising to investors to recognize that China has the largest equity market in the world by liquidity. UM. Well known that China is the geopolitical powerhouse UM and economically UM, really one of the superpowers today. Yes. Absolutely. With COVID the China growth story

became a little bit more blemished. UM, but we're starting to see the opportunity for China even with just a few comments that came from Presidency earlier this month, UM, the Chinese market is up more than twenty percent year to date, with a lot of volatility embedded within that.

To your point on rising COVID numbers, I UM, perhaps, like you, am very bullish that when China does reopen, that it has the opportunity not only to allow the Chinese markets to bounce back even stronger, but have downstream effects where the rest of Asia is likely to benefit from a China reopening theme and UM and the globe broadly again, with inflation being where it is, to have China supply chain back on that can have a massive deflationary effect that the whole globe is hungry for. Right.

But I expect a bumpy ride as we've seen in Remember I was gonna say many would argue that it will continue to be a bumpy ride, as it feels like sometimes policies coming out of China are one thing one day and another uh the following day. Asha, Thank you so much, Asha Meta, founder, chief investment officer of Global Delta Capital, her book Power of Capital and Adventure Capitalist Journey to a Sustainable Future. Thanks for listening to

Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us live on YouTube now, also on Bloomberg Quick Take