This is Bloomberg Business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus global business finance and tech news as it happened. It's Bloomberg Business Week with Carol Messier and Bloomberg Quick Takes. Tim Stinevin on Bloomberg Radio. Hi, Welcome to the weekend edition of Bloomberg Business Week. It's week fifty six. Still working from home for many in our world. Tim I, as you know, was home this week because of COVID concerns.
All clear though, and looking forward to being back in the office. I think it's fair to say, Carrol, we've all been there. That's that's the reality in this day age, right If somebody has a fever like happened with my son a few weeks ago, you know, that's a that's a concern, and you want to stay home from work, you want to get everyone tested. And that's just the world we're living in, all right. So we're gonna talk
and we're gonna have the latest on COVID this week. Also, we're gonna have an in depth profile of Bill Wong, who's Archigos Capital Management family office was hit with one of the biggest margin calls ever. It's this week's cover story. We just can't stop talking about it. We're also going to hear about how the cruise industry is rebounding from the pandemic. Will do that with Arnold Donald, the president
CEO of Carnival. That was a fantastic interview. Carol, Plus, the Mayor of Miami is looking to entice Mr. Elon Musk and some other techis to Florida. He sinking, Come on, enjoy the sun. We begin to with the check on the virus and vaccine rollout. President Biden announcing this week he wants all American adults to be eligible for a coronavirus vaccine by April ninete. That's two weeks earlier than his previous goal. Still cases and hospitalizations rising in some
parts of the country. New variants of the virus are spreading and they're moving quickly. Cases are going back up, hospitalizations are no longer declining. While deaths are still down way down from January, they're going up in some places. I go to voice on COVID. Dr William has Altine his chairman and president of Access Health International, and has found in more than a dozen biotech companies, including Human Genome Sciences, And he's also out with a new book
that's very topical. It's called Variance, The Shape Shifting Challenge of COVID nineteen lots to talk about. We began by asking about the vaccine rollout here in the United States. Some places are doing extremely well. Other police places are doing badly. Some places the variants are surging, in other places they're almost not the tectable. Uh. And it's complicated with the vaccines because some places where the vaccine that the disease is surging, for example in Michigan, have a
pretty good vaccine record. So it's a very complicated picture. And I think there's, uh, there's a lot of hope, but there's some cause for concerns. So why do you think that's happening in places like Michigan right now that are actually doing relatively well when it comes to the rollout of the vaccine, but still seeing surges. I think that it's still pretty cold up there, not like it is, and people are going staying inside and they're not following
the same careful behavior they did before. One thing we now know is that restaurants and bars are really dangerous because you're with a lot of people and you don't have your mask on. If you're drinking, you can't drink through your mask, you can't eat through your mask. And so it's not so much being outside and crowds, it's being inside. And I think that's what could be driving
in now. That isn't the only thing that drives it, because we're all surprised last summer when we saw this enormous bump in the summer which came from people missing. But then when it gets too hot, people stay inside to stay cool. So it's really our gregarious nature trying to get together, loving to be together, sharing food, sharing conversation, which is a big problem for this disease. We know
a lot more about transmission than we did before. It really gets transmitted by aerosol, small particles, uh that hang in the air sometimes for quite a while, and these new variants, some of them are much more infectious. So um, a lot more particles are in the air and each one of those particles is more likely to cause containing. So those are all factors. But the vaccines in the positive side, and uh, it's, as I say, quite a mixed picture right now. Listen, we love talking to you.
You know, you founded Human Genome Sciences, you were founder of Harvard Medical Schools HIV and AIDS research departments. You understand this world better than most, and so do you foresee, doctor hasseltine, that we get to a point where it's just like the flu, and we take a vaccine and we go on our merry way, or is this something different? In one sense, it's going to be I think like the flu, where every year or every year and a half and take another shot, account for variants that are
coming from somewhere, either our country or elsewhere. But in another sense, it's not like the flu, because from the get go it's been pretty dangerous. Uh. One and two hundred people have died. Some of these variants do a couple of things that are disturbing. They kill maybe twice as many people as they did before, to kill younger people than they did before. Uh, and that's pretty worrisome. Uh. They're also, as I pointed out, more transmissible and invade
our vaccines. So I think we may reach a steady state, but I hope that the steady state lower than it is a flu that in a good year kills twenty thousand of us. A bad year kills sixty thou of us. It could be a lot worse, so we need to do better. There is hope though, because there are drugs coming along now that if you think you've been exposed, you'll be able I think in the future, maybe within a year or shorter, to take a pill and prevent
yourself from getting infected. People should know that there's now a pill like that for flu, that if you've been exposed to the flu, there's a pill called a Flusa that you can take and dramatically reduce your chance. So if you're in school or your kid comes home with the flu, the real fluid uh that you can reduce your chance of getting it. And I hope that within the relatively in your future will have drugs like that
for COVID. To doctor haselten, we continue to get news about the durability of this vaccine and also how it does in the face of variance. So far as have you seen anything that raises any red flags about the mutations of the virus being able to get past these vaccines that are available for emergency use authorization. Now, if the initial response is very strong, it will last longer
and protect against more variants. Over time, it will decrease both in its protection against the original variant and increase decrease a little bit faster against the other variants. Now, not all variants are created equally. Some are more resistant in musicalization or protection than or others. That's right. It's all about upping that antibody protection to make sure that we are protected from the virus. That, of course, Dr
William Hazeltine, Chairman and President of Access Health International. You're listening to Bloomberg Business Week coming up, containment of the virus key to the cruise industry setting sale in the US. We hear from the President CEO of Carnival Corporation, Arnold Donald. This is Bloomberg. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio.
So this week, Carnival, the largest cruise line operator, reported that bookings are accelerating, reflecting pent up demand for cruising tim even as the industry remains well essentially un hold. Yeah, that's right. The CDC also came out this week and said that U S cruises could resume by Midsummer with restrictions. That news coming after Carnival had threatened to relocate U S ships to other markets outside of the United States. So Carol, it was perfect timing for your conversation with
President and CEO Arnold Donald. This was for a business week talks. Tell me about the CDC now possibly offering to or allowing ships to be out and running by midsummer. What's changed with the CDC and what are the restrictions that are going to have to happen in order for that to actually come to fruition. Well, as you might recall, Carol, the CDC, I think last October issued a conditional sale
order and they came out in phases. The first phase was bringing ships back in the US waters, primarily with minimal crew on board. We've finished that phase of it in terms of Heaven and ourselves thirty ships that are currently in green status. They issued UM on April two, the next phase, and frankly, what has been issued UM doesn't give us a specific time and to be able to return UM and also was really not workable in
the current form. But again it just came out and we have an opportunity to discuss with the CDC any administration um to make certain that we do have something that's workable and hopefully that would allow us to be
able to sale in July. And we're hoping it will be something that's more in line with the advancements of vaccines that's occurred in the rapid advancement of the vaccines that deministration has been so successful with, as well as the advancement and treatments and the investments of rapid testing, none of which existed when the original conditional sale order
which written. So we're hopeful that we'll be able to meet with the administration and CDC and and come up with something as practical and will allow people to return to their choice of vacation travel and get a whole lot of Americans back to work. As you know, Carol, but half million people are impacted in the US in terms of jobs associated with the cruise industry outside of
the cruise companies themselves. Hey, one thing I gotta ask you, Arnold, is how much of Carnival threatening to relocate their ships to other markets outside the United States. Do you think was the reason for the CDC change, Because it was just a few days ago that they came out, you know, and we're still kind of holding firm what happened. What were the conversations that maybe you, you and other members of the cruise line industry had with the CDC. There
was no threat or anything. It's just a practical reality that if we're not able to sailed from the US and some months soon we would have to sail from elsewhere. And so some of the ships what homeport and a number of companies have already announced home boarding, ships that normally would have been sailing out of the U S homeporting from different places in the Caribbean. But it's not a threat or anything. It's just a natural outcome of not being able to sail from the U S. I'm
not sure anything has changed, and perhaps it has. I haven't heard directly from the CDC or the administration anything has changed. I think that they genuinely believe the information they put out might allow some limited sailing as early as July uh and so we'll have to discuss that with them. Our timeline son't quite match up with that, but maybe we don't understand everything. So the CDC has a job to do. They're trying to do their job.
I think as long as we work together with the CDC and the administration, we can all get crews you know, back soon, and we can get it back and safe with the interests of public health, and we can have all those half a million workers no longer suffer from not being able to earn a wage and and and do their jobs in the ports and the various travel agents and all the other things that are connected to two crews well, or does it feel like that there's
a more constructive conversation with the CDC right now? And I asked that because I do also wonder is there kind of a last straw for you that if the CDC in a couple of months isn't clear about what it will take to get ships uh US home boarded ships, you know, up and running, is there a point where you're going to say, okay, I'm done and we're going
to move ships abroad. We have nine brands carrel, so about fifty nine of our nineties ships are not under the conditional sail or that they don't you know, sail in the US anyway, And so there we are already active and sailing, and we've announced sailings and um in the UK, we've announce sailings in Greece, um I Eida our German brands already sailing from the Canary Islands, all on a limited basis at this point, but it is
movement in the right direction. And UM we're optimistic that we'll be able to do the same here and continue to dialogue in the CDs. I think we're the big issues here is UM the relative mentality around risk. So today you could border plane, fly to a country, get on a cruise ship, and sale fly back from that country and come back to the United States. You have to do certain testing excerta, but you can do that. And today, even if vaccinated, you can't get on a
cruise ship in the US. And that's whether you've vaccinated or not in terms of what you could do from the US going somewhere else to get on a cruise ship. So, and if you look at other travel and entertainment sectors you talked about spring breakdown in Miami, UM, or you look at arenas where people are starting to be able
to attend sporting events, restaurants, hotels, resourts, air travel. UM. You know, there's a level of risk management and mitigation, and so we would like to just be treated similarly to the rest of the travel and tourism sector. Um. And we also obviously have enhanced protocols already in place versus many of the sectors. Well, does it not make extraining, medical center on board, etcetera. Forgive me for interrupting, but does it not make sense to you, Arnold, um that
on for planes. You know, people get on a plane and they're sitting right next to each other. Um. There seems to be kind of different requirements for people in different parts of the tourism industry. And yet you folks are still waiting, you know, to be able to get up and running. Does it seem is this disparate treatment fair in your view? I think everyone is trying to do what they think is best for public health, and I think, um, together we can work and find a
way forward. I'm It's true you get on a plane. Some people say, well, you only a plane for a few hours, but you are sitting right next to someone. Before you got on the plane, you're an airport terminal. Before you're on an airport terminal, you're in some kind of transportation. Before that, you came from somewhere. When you land, you go to another airport, terminal, and then you get in an automobile or bus or whatever, you get onto transport,
and then you go places. You might go to a restaurant, you might stay in a hotel, you may go to a sart and and all of that activity, and the cruises a city, s c. And so to compare us just to an airplane ride is inappropriate, and to compare us um just to a hotel stay is inappropriate. And so I think the reality is look at the evidence. There's over four hundred thousand people that have sailed UM to date in Europe for a fewer than fifty cases
of COVID, all handles seamlessly without disruption. Tim we are watching what's going on in Europe, especially as passengers get back on those big cruise ships. Yeah, as we do try to make our way out of this pandemic. That's something that we keep doing, right, looking to other countries, out of areas of the world to see how things have worked out as sort of evidence is to potentially how they'll work out here right exactly how we find
our way back. That's Arnold Donald, the Presidency of Carnival catch the entire extended interview in an upcoming podcast along with a Business Week talks in the magazine you're listening to Bloomberg Business Week Still to come a conversation with PayPal co founder and a firm CEO, Max Levchin on how stimulus payments are in acting consumer spending. I wonder if they're spending on cruises maybe, or stocks are stocks exactly?
This is Bloomberg broadcasting from the financial capital of the world, Bloomberg eleven Frio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one O six one to San Francisco, Bloomberg nine sixty to the country Sirius XM Chado one nine team, and around the globe the Bloomberg Business app and Bloomberg Radio dot Com. This is Bloomberg Business Week when it comes to understanding the startup world and how online and technology are reinventing so much of what we
do and how we do it. Tim one voice we like to check in with is a co founder of PayPal and who was also chairman of Yelp for eleven years from its founding days, as well as founder and CEO of Slide that one was sold to Google. We're talking about Max Levchin who today is founder and CEO of a firm. It's a company that offers installment plans to online shoppers and a great window into how consumers
may be spending some of those stimulus dollars. From my point of view, the most important thing I care about is the health of the consumer. On the financial side of things, and we've seen, and you know, much thanks to being actually by Federal Reserve and government in various places, there's just a tremendous amount of where would consider to be good consumer behavior. There's a lot of savings and this is to me that means people are saving up to really go out and have a wonderful vacation that
they've held back on. And you know, we're seeing conversations with our partners places like Verba and Pacasa, you know, et cetera, UM on the sort of overall health from
the death main conversation side of things. Americans have paid off almost eight three billion dollars in R debts during the pandemic, so you know, they put some of those similist checks to again, from my point of view, the right um, the right thing to do U. And then just the overall consumer confidence is really high and jumped to one year high, which is maybe maybe from a
low point of a year ago. We weren't really taking these log downs seriously, and at this point I think people have they've suffered, and they're really looking forward to real Well, let me ask you something. Is your company, you know, offers installment plans right to online shoppers um and lets people kind of pay over time. Are you seeing less of that because people are using more of whether it's stimulus dollars or just you know, savings in general to pay down their debt. Can you make any
kind of conclusions along those lines. You know, we have seen exceptional growth in the last year, and so I would not characterize it as seeing less. I do think that people are using their similar dollars. Sensibly, we have a saving feature that we offered to our customers, and we've seen influx of saving increases as the government sent checks to consumers, and so I think that there's a
sort of visible correlation there. Uh. I think it's really interesting about the effect of the pandemic and a long term state of e commerce and shopping in general, is we've trained a whole generation of people that we're just not going to go online folks like my mom Cruise in her seventies, who enjoys her offline shopping. You know, she's now very well first in the idea of box coming to her door. And so we brought in a bunch of commerce shoppers and I think they're here to stay.
And I think what's really going to be required of us in the bye oclator industry and broadly SECRUD providers and payments. We have to meet this new consumer behavior with by online and pick up and store or return in store exchange and started all the mixed omni channel modalities that are suddenly going to be much more prominent,
much more important. Yeah, I have to say too. In retail, I mean I look for places where there's lots of ease I can if I buy online, can I easily return it either through their taking care of it or they're taking care of shipping, or I can drop it off at one of their storefronts. And you know, we've talked about omni channel for a long time, but I think now I totally get it of what it really needs to be. In order for it to be incredibly productive. You have to be met where you want to be met,
especially as we're still for coming back to it's safe. Yes, maybe I have my hafix scene or how safe am I? I don't really want to go hang around in big showroom. But if I buy online and I need to get rid of it, it has to be very quick. I don't want to repackage it and to get to the post office, I need to bring it back to the door. So yeah, so I think that's that's that's a big
important change. I have to say. I think I know three or four people in my orbit who you know, had tried to schedule a wedding several times um over the last year and I had to keep you postponing it, or people who got married but said, listen, we're going to do a party as soon as things open up. So a lot of that's going on. Tell me about your company. Here, you are nine years in three months
roughly since you I p oed. You know, how is your company change and evolved along with what consumers need or what the market needs. So it's actually a very wording moment. It just literally happened. It was on Piday a March is our birthday. And you know, on one hand, everything has changed. You nine years ago idea of by affiliator just wasn't the thing. People didn't really believe that. They thought cared cards are just fine, and I had this sort of very strongly worded point of view that
the credits is broken. We need to provide for the more flexible, our transparent alternatives because do not want to be confused by their interest graded. They want to know exactly when and how they will get out of pain. You know, their their their their, their payments, and so we made this mission to create financial products that improve
lives and that a state exactly the same. And it's really awesome to just be able to look back and get we've been doing the same exact thing while evolving and changing everything for nine years straight, and it feels like we're probably five percentage, maybe repercentage, but we were trying to accomplish. So it's it's fun of the things where but it's the longest project I've ever done in my entire life. And I started companies since college and I have no interest in slowing down or got for
both pausing. So it's really fun. That's paper co founder and a firm CEO, Max Levchin, so tim as consumers get ready to spend some spacks. A few already putting money to work. We're going to hear from the chairman of Rotor Acquisition on its deal this week. Yeah, that was a really fun conversation. That's next on Bloomberg Business Week. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovich from Bloomberg Radio.
Someone we'd like to turn to on everything from trade and politics to Wall Street dealmaking and more is Stephen Selig. He's managing partner Bridge Park Advisors, also the former Undersecretary of Commerce for International Trade at the U. S Department of Commerce. That was during the Obama administration. Well, this time around, we wanted to talk to him all about a story recorded by Bloomberg News. It's about Sarcos Robotics planning to go public through a reverse merger with the
blank Check company Rotor Acquisition. Stephan is also the chairman of Rotor and told us all about Rotor and why Sarcos. Rotor Acquisition is a company that we formed at the beginning of the year. I have two partners, Brian Finn, who's the former president of credit suite in the US, who I've known since nine four and John Howard, who's a storied private equity investor, was the CEO and founder
of the merchant banking business at bear Stearns. And we raised two hundred and seventy six million dollars to do a deal, um where for a company that was going to be positively impacted by innovation and technology to transform
what historically had been an old economy business. And we identified Sarcos Robotics, which is a leader in highly dexterous mobile industrial robotics systems that enables the workforce of the future with solutions that enhance productivity and reduce operational injuries and equalize employment opportunities for jobs around the world that
did not otherwise lend themselves automation. So we are extraordinarily excited about this opportunity, um uh, and to present it to our share old I mean, I'm looking at a picture of the Sarcos Robotics Guardian Exo Exo skeleton and it looks like an exo skeleton, like something out of a superhero movie Aliens. Yeah, it does. I mean, this is something that is designed to to help people lift
heavy objects. Right, Yes, UM. What's important to him is it's not designed to replace humans like a number of the robots you see and in automotive factories and in other applications, but rather to augment humans. And as a result of that, UM the technology has been UM extraordinarily
well received by commercial and military customers alike. For some of the reasons, I suggested, what is the process of identifying a company like Sarcos Robotics when you have this criteria that you use for identifying the type of company that you want to acquire respect Well, you know, UM. We came together the three of us UM with a hundred years of Wall Street experience and UM broad and
deep relationships and UM. One of those relationships UM with two of my partners was with Sarkos and frankly, we think that's what differentiates some of the SPAC sponsors from others. As this capital markets tool has continued to evolve, UM and frankly UM, what we think differentiates us UM is not only our ability to UM negotiate attractive acquisitions UM, but to identify proprietary opportunities based on that network. Well, and I guess you know the question is because and
we'll talk a little bit more broadly about SPACs. UM Stephen, but did you guys think about a lot of other companies or look at a lot of other companies or I'm just curious about the process. Yeah. Well, UM, Sarcos had engaged to financial advisors to run a pro sets, which roughly coincide would when our spack was raised. So we were kind of thrown into the suit, so to speak. UM early UM uh in UM in our time frame for identifying a target. So UM, we had the opportunity
to look at UM a number of opportunities. UM. But once the Sarco opportunity became actionable because of their own deliberations and process that they're board decided on, we frankly jumped on this is I'm just looking at pictures of what's available on the market for this. UM. Just talk briefly about the go to market strategy with with how you're thinking about getting this to companies. It seems like
right now the cost is really high. You're going to lease it or the company I should say, Sarcos Robotics will lease it food dollars a year. Uh, and then eventually the cost is going is expected to get lower. Yeah, I mean the cost to manufacturer will go down to mat eckily as we start to get the scale. The cost that you're referring to ten an hour high only because we're in the kind of alpha and data UM
production stages. So we're doing that ourselves as opposed to the global contract manufacturers that we will utilize UM once we get the scale. But um UH, your intuition is actually the opposite of what we believe to be the case, which is this will make um UH production and manufacturing and UM decreased costs for our for our customers because it will allow one worker to do what to three or four workers can do without this UM without this technology.
So just think about it. UM. A normal worker guidelines are you shouldn't be listening lifting stuff that's more than thirty pounds, and when you have to lift something that's more than more than thirty pounds, that means you need to three or four workers. Where here UM you can use the exoskeleton can lift up to two hundred pounds and frankly feel like you're lifting just five pounds UM. And as a result of that, UM, the cost benefits to um UH, the cost benefits to our potential customers
are significant. Let alone the benefits around worker safety, UM. The amount of productivity that is lost in the global economy because of workplace injuries are just extraordinary. I do also wonder to UM stuff and if it allows older workers to, you know, maybe take a job that they wouldn't normally be able to because they're able to tap into this kind of equipment. So that's exactly right, Carol.
And it's not older workers taking these jobs as much as workers being able to stay on their jobs and not actually age out because of the wear and tear that their bodies will take in some of these more demanding jobs, let alone having younger people who are going to be attracted to these jobs because frankly, they're less dangerous and more interesting and more fun UM, rather than just sitting in front of a screen. Hey, just one
more question on sarcos Um, Stefan. I do wonder how much of the business going forward will be reliant on government contracts. It's a great question, Um, Carol. We have very strong relationships with the U. S. Military. However, all of our projections that we have shared with investors are one percent dependent on UH commercial relationships UM and not dependent on government contracts because frankly, government contracts are are far less certain, um uh and subject to much more variability.
And so we really built a business plan around commercial applications, although we think there's going to be tons of military and other government uses for the products. Hey, Stephen, I want to talk trade with you because of course you were former under Secretary of Commerce for International Trade or are former undersecret e Commerce for International Trade at the US Department of Commerce during the Obama administration. We are still in a trade war with China right now. I
think a lot of people forget that. Um, how do we get past this and into the what is the sort of next relationship or phase of the relationship with China? Look like? You know, I'm not sure Kim, we do get past it. Um. I remember telling Carol, Um, you know a few months ago that you know, it's almost kind of like we're in a challenged marriage with China and we're kind of forced to live together because of
the kids. And I think, frankly that continues to be the analogy and our relations you know, I think are going to continue to remain fraught. Um. The tone may change or will change under the Biden administration and clearly will be less belligerent. I think clearly, as a tactical matter, we're likely to coordinate much more of our friends and allies. But I don't think the fundamental underpinning of these tensions is going to go away anytime soon. So let me
ask you. I love that, I do remember that. I think it made us chuckle when you said it. But this whole idea of being forced to live live together because of the kids, who's going to have the at our house? China or the United States? I asked that because of the infrastructure spend that President Biden is now
trying to do. Stephane, we had a great conversation with our Andy Brown of Bloomberg New Economy that the whole idea of you can't fight, you know, the way we used to fight with our with maybe our foes, that modern weapon weaponry now is really about um improving, you know, your economy. That's how you fight kind of in the in the strongest way, and doing that is by building up your infrastructure. So I wonder your thoughts on that. So I guess Caroline made there was two points to
that interesting question. The first is which side do you want to take and frankly, I don't want to um uh sound polly Anish, but you know you have to bet on the US. We have the strongest economy, the most innovative economy. We have rule of law, We have the broadest and deepest capital markets, We are energy self sufficient, we have um an extraordinary workforce. We have the best set and dairy education, university education system in the world. And you know, those are all things that are the
envy of the world. As I went around, not just as under under secretary, but as a banker for many years. People want to do business with American companies that want to do business in America, and that's not going to change. Um uh, that's not going to change anytime soon. Great perspective from Stephan selg Tim because listen, this is a guy who's been at the table when he was working for the Obama administration, understood the dynamics the trade, the
commerce between the United States and China, yeh. And he knows what it takes to get something done in Washington or when something won't get done exactly. Stephan Seelig, he's managing partner at Bridge Park Advisors, And that wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio from Carol Masser and I'm Tim Stanovak. Much more ahead in the next hour, including a profile of Bill Wong, who's Archigo's Capital Management family office was
hit with one of the biggest margin calls ever. Yeah, big one. Well. Also hear from the Mayor of Miami he is looking to create Silicon val the Miami version, Plus the CEO of Jackson Family Wines describes the pandemic's impact on the wine industry. Yeah, you all know I love get a little wine into our So all of that to come in the next hour of Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business Week inside from the reporters and editors who bring you America's most trusted
business magazine. Plus global business, finance and tech news as it happened. S Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Hi, I'm Carol Masser and I'm Tim Stovik. Plenty ahead in our second hour of the weekend edition of Bloomberg Business Week, including how the Mayor of Miami is trying to lord
Elon Musk to the Magic City. Plus, after a year of the pandemic, we check in with the CEO of Jackson Family Wines on the impact and on what feels like the job offer of a lifetime. I kind of want to apply for this. Hey, you should do it and leave you no way, all right? First up the cover story this week, which already feels like the biggest Wall Street story of the year. It's about the greatest trader you've never heard of, who then went on to
lose twenty billion dollars. Yeah, it's a profile of Bill Wong, who's Archigo's Capital Management family office was hit with one of the biggest margin calls ever. We spoke with Business Week editor Joe Weber and finance reporter Shrinadarajan. The incredible aspect of this story is, forget the second leg of his career, forget what happened with the blow up of
this investment firm. Just the fact that he was able to parlay more than two million of initial funds in his family office Chagos and translated to translated to over twenty billion in just seven or eight years. That is a remarkable story By itself. That is near hundred times returns. That is not usual, and that is why we call him the greatest trader you've never heard of. But then what follows is even more astonishing. You you've had a suation where in a matter of this, all that wealth
goes up and smoke. Because these were big wages he's made in companies he believed in, with increasing amount of borrowed money from banks, and when those bets went against him, the banks moved to make sure that they didn't lose their skin, and the process is capital went up in I think one of the biggest surprises that came out of all of this is his commitment to God and the role of that in his life. So we talked to us about that and some of the things you
found out. That's just the other aspect of it that makes it such a remarkable tale to tell. When you think of a successful hedge fund trader, someone who runs a big from you can put all sorts of stereotypes on them and almost everyone will fit one of the buckets. Very Wong cannot be confined to any one of those. He's aren't your standard hedge fund flash lifestyle person. He's not one that is playing a big role in on like setting the national political agenda. This is someone who
came from really humble means. His father was a pastor in Korea. They moved to Las Vegas. Father died within a few months of being posted to Vegas church, but his widowed mother took caramel after that put him through college and NBA. But she went on to become a missionary in Mexico. His brother went on to become a
missionary in Tijuana, Mexico. And Bill, who really saw himself as a missionary with means, He was on Wall Street, he had the money, but he believed that all of that was to be put to use to spread the world of the gospel. And you know, some people would say, wait, is that just a cover to uh, you know, we
don't quite understand how is that possible. But in in in the last two weeks, a number of people who have spoken to who have known him well, who worked with him, who worked with him even now, they insist this this is who he is, that's his life. And as much as all of us are animated by what has happened, the equally astonishing thing for me has been everyone who knows them tells us, you know, despite everything that's going on, he has not changed one bit. He's
the same bill home today as he was yesterday. And I just find even that aspect to be quiet muscle. Okay, we um as fascinating as the god aspect and the religion aspect and everything is. Like I ultimately told you, it's the thing that people are going to care about. Here is the money. Uh? And how do you lose twenty billion dollars in two days? Exactly? Well, let's let's start with saying by saying that it's not easy to do that. You could try where however, most people will
not be able to pull it off. But when you when you peel back the portfolio and you and you said, again, we still don't have the complete picture. We're piecing this together from multiple conversations we've had with bankers and other people in the industry and people who knew and know how our kegos operated to understand what might have happened.
But just a simple way to look at it is, if he had twenty dollars, he would go borrow another eighty dollars from a bank, which in this case many banks across Wall Street and elsewhere were eager to give him that kind of leverage. You suddenly a hundred dollars of capital to bet on a share like bya Coom while the shares are going up Viacom share that goes
up from say hundred dollars to hundred and fifties. Suddenly your own personal wealth if you just look at the math behind it goes from twenty dollars to seventy dollars because everything else is born money. But that's, you know, more than tripling of your assets, even though the underlying stock is up only. But that's what happened. He was
he was making White Patris. Capital was growing, he was plowing it back to the same bed because that was his level of conviction in the stocks that he picked out, his belief that those were valuable investments, and he said, stick with it. Come what may then move the other way. That's the risk of leverage. That's Bloomberg's finance reporter Shri
not A Ragin and Business Week editor Joel Webber. You're listening to Bloomberg Business Week from a trader leveraging too much to door dash drivers, leveraging their ability to say no to increase their pay it's called the hashtag decline now movement. That's next. This is Bloomberg. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. Tim Stinoby from Bloomberg Radio. So, Tim, I don't know if you've noticed what we have become a world of algorithms.
I've noticed. I've noticed too, And in the world of delivery drivers, those algorithms now are being used to increase pay. And you talked about this on Quick Take. Yeah, we did so. Over at door Dash, there's a forty thou driver movement to use the company software against it. So the online forum is known as hashtag decline now. It was co created by Dave Levy. We caught up with Dave on Quick Take. Listen to what he had to say.
We started this movement with six to eight drivers in our local zone on conference call, bouncing offers around to each other, okay, watching them go up, and then grabbing them when feasible, effectively turning low ball offers at the higher offers. We we basically give door dash two choices, okay, either add base pay to the low offers or canceled them, because frankly, we're concerned about the driver, and we honestly don't care if the offer is not feasible to begin with.
We're out there on the street trying to feed families and pay bills here. So that was Dave Levy. He's the co founder of the four um that's called hashtag decline now for door dash drivers. Joshua Breusteen is a technology writer at Bloomberg business Week. Joins me on the phone from here in New York joints Carol and me right now to talk all about this story. It's in the latest edition of Bloomberg business Week. Door Dash drivers game the algorithm to increase pay Joshua, how are these
drivers able to do this? Essentially beat door dash at its own game. Yeah, it's an interesting model. Door Dash is algorithm. Like most of the delivery or gig economy, algorithms are based on the idea that the individual actions of people will eventually find the right price for a particular service. So if a bunch of drivers are turning down um delivery at a certain price, the algorithm will naturally adjust by offering other drivers a little bit more.
And so if you have a coordinated effort to say we won't take anything that pays us only three dollars, then in theory, the algorithm will just stop offering those and start pushing the price up naturally. Does it work?
So it's hard to tell if it works in the aggregate. Um. The the the guys who founded the Decline Now group that is trying to do this, Uh, they operate in a relatively small market in the Lehigh Valley in Pennsylvania, so you can actually get it's easier to have a workers, like a large proportion of the workers coordinate in a market like that. It might be harder in a place like New York, where you just have so many people making individual decisions. Um. So maybe smaller markets would be
a better play for this strategy. So what's so interesting about this is is that it works until it doesn't work. Right, It works until somebody else claims that for a lower price. And if somebody does that, then then obviously they can make that work financially, right the driver actually sees that as as a worthwhile delivery, right right, Well, you know, can someone make it work financially is really you know,
their own decision. Like someone might be willing to take a low a lower price ride for whatever reason, UM, and you know the um. That's why this group has a challenge in trying to keep everyone from taking these low rides UM, which creates an interesting dynamic within the group. You have people complaining of a bullying of you know, not listening to the reasons that someone might want to take a lower a lower fare um and it creates
some tension amongst the drivers. One other thing to keep in mind is that DoorDash, the Doortosh algorithm, is not like a force of nature. It's it's a piece of software that's controlled by the company itself. So presumably if the drivers were really moving the needle in a way that DoorDash didn't like, it could recode the way that drives that rides are are assigned. And we might not know that. The drivers might not know that because doorg as just doesn't have to show you exactly how it works.
So does this mean does the story mean that that door Dash there's there's enough demand for door dash to to raise the rates that it's paying drivers, or is the fact that they are getting people to deliver around the country based on where the fees start, they don't
actually need to do that. Yeah, I think that what we've seen up until this point is that there are enough people willing to take UM jobs for a low enough rate of pay that many drivers feel like they can't make a living because that is what door dash can get away with paying. And we should say with what DoorDash can get away with paying, what Uber can get away and paying what all these companies can get
away with paying. And you'd really have to have a like a really coordinated effort to get everyone refusing, to really force the company needs to change what they're doing. I feel like there's a bigger issue here too. And I think we we talk about this a lot. We know regulators are looking at it. Just this whole idea of the gig economy and what people are paid. I mean,
can they really make a living um? And And because like earlier on Uber drivers, I remember having conversations they were making a lot of money, you know, and it's all changed is more people have gotten involved. But I feel like that's a bigger overarching part of this story. Yeah.
I think that one UM thing that's sort of floating in the background in this story is that door dash can decide what it pays UM and there's an increasing push for maybe some wage floors that aren't imposed by trying to game an algorithm, but by putting laws in place, by putting rules in place to govern this new UM,
this new corner of the economy. UM, because the companies don't seem to be paying what a lot of people think would be a reasonable wage on their own and also what you know is kind of compare to the minimum way it's is oftentimes significantly below that. Where do you where do you? Tips and and gratuities come into this conversation, especially with regard to door Dash. Yeah, it's interesting. UM. Door dash has had controversy over tips in the past. UM it has had to admit that it was not
giving the drivers their tips in an appropriate way. And one thing the company has done in this particular instance is to not always tell the driver how much they
are going to be tipped. Usually when you when you place an order, you actually tip in advance UM on a lot of these platforms, So you know, door dash might offer you three dollars, the person who's who you're delivering too is offering two dollars, but DoorDash will just say we'll give you three dollars, and this person will give you a tip, but you don't know how much it is, so it tries to um it's trying to complicate the idea of saying, you know, this is the
minimum model take because you don't actually know how much you'll make on any should have cried. Something we're going to continue to talk about and hear about, of course, is how gig workers are treated in this economy. In this case, these door dash workers are taking matters into their own hands. Yeah, it's an important issue, and I agree this conversation will continue. That's Bloomberg News technology writer
Joshua Breustein who edited that story. And be sure to check out Tim's interview with one of the co founders of hashtag decline. Now, that's Dave Levy. He caught up with Tim on Quick Take. Yeah, check it out at Bloomberg dot com slash qut Still to come. On Bloomberg Business Week, it's wine time. We're going to hear from the CEO of Jackson Family Wines about their path forward and the ultimate job offer. Free wine involved, Sign me up.
This is Bloomberg broadcasting from the financial capital of the world, Bloomberg eleven Frio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one oh six one to San Francisco, Bloomberg nine sixty to the country, Sirius XM Chado one nine team, and around the globe, the Bloomberg Business app and Bloomberg Radio dot Com. This is Bloomberg Business Week the California wine industry. Tim, you know a lot about this. It's faced fires, drought, then the pandemic in the last
couple of years. It hasn't been easy. And Rick Tigner, he's president CE of Jackson Family Wines. He stopped by to tell us how it's all going and to talk about a job offered that maybe too good to refuse. Yeah, you might have heard about this one because it absolutely went viral. So, Carol, you started the conversation with a question that we've been asking most of our guests. What has the last year been like? Obviously, when the pandemic hit last March, you know, no one knew what that
was gonna be. And I think everyone thought it was gonna you know, in relatively quick, but it had its challenges and uh, you know, we we've been resilient as a company. We've survived own in areas that we probably wouldn't have grown in, like the digital part of our space. People had the channel shift right. And then then this opportunity came up to create a promotion around this really good op campaign campaign which we did about ten years
ago and it had good results back then. But we thought, what it couldn't be a better time right now with unemployment as to be what it is. You know, there are people out there that need to kind of pivot in their current careers or get a new career. So we thought it was a really good time to relaunch a really good job campaign. Well, you know, it's funny. When I was doing some research and reading in for this, I was like, wait a minute, this looks like they
have done this before. Tell us about your really good job contest, because uh, we were reading about it and talking in the newsroom and we're like, I kind of want to sign up for this. Well, you know what, it's a it's a four month long, you know, nationwide search for a person who's actually looking to have their ultimate dream job in the Wine Country. And what I
would say is, you know, the sky's the limit. You know, the last time we did it, we were kind of looking for a social media kind of influencer type of person, and we had some really good results. Now we're we're looking for is really a person who you know, wants to really either get into the wine space, which is a lot of different jobs. Uh, Like I said, the sky is the limit. So some people give you an example. Let's say you're in the restaurant business and your restaurants
closed last year. Right, you could come out to California and the really good job campaign and be on our culinary team, right and walk out of here as as one of our chefs or one of our our in our culinary program. Maybe you're in sales, you mean, maybe you want to be in hospitality, you could get that job.
Every day is going to have a new opportunity. But obviously you're gonna start off learning about how to make wine with our winemaker, which will be fun, and we'll be able to walk to vineyards and understand really how grapes are grown, right because ultimately that's where the that's where the there's us. They're there when it comes to making wine. And then you know, we'll follow that person's passion.
So we're very excited about the applicants and and really for me when I think I said this is somebody to the day. To me, it's like a pedal and the pebble in the pond, the pebble out there, and the ripples have been amazing. The response has been incredible. We've gotten more applicants that we would have out already and we're just getting started. So we're super super excited. Well, and it's interesting and and um, I love this whole idea that like you're kind of open to you know
what the job might be. But it also comes with a ten tho dollar per month's salary. If I if I have this right, rent free living for a year and all the wine you want to it is like a wind wind wind gott of the icon on the cake, the free wine. But but but imagine you're out there and you're either underemployed. But let's say you make you know, eighty thousand or ninety thousand or forty thousand opportunity to make ten thousand dollars a month, right, what's a big
expense when you make money rent or mortgage? Right, So now you can live rent free in a really nice place in Hillsburg, California. And then on top of that you can drink what would be in a in a moderation by the way, to give the person like thirty cases of wine bottles. So so super excited about the whole program. I'm glad to see you're excited too. Well.
I think it's just clever here. And I think you know, we talked so much Rick about especially in this past year, and we've talked a lot about inequities and diversity and inclusion, the need for it. You know, we've seen all the research. We've all talked about it over and over about the importance of having a diverse workforce. But and and part of doing that and creating an inclusive workforce is widening
out your labor pools. And I feel like this is kind of a way of doing it, like bringing somebody who you might not normally go after. It's amazing. You know, as a company, we have a d n I cast force as an example. But but but imagine as we add somebody to our to our to our team. Is
this a team. More's important to me is that what I'm hoping is they bring information to us, They teach us people have different backgrounds and different histories and have different education levels, I'm excited about the people who we bring on board. They'll be able to teach us about how to become a better company. And uh, I'm all about open door policy. As a CEO. We have all kinds of ideas about open door weeks for the CEOs
and the rest of our executive staff. But you are right at a time when all of these initiatives are out there. You know what a better time to create this campaign? So it is. You know, it's not marketing genius because we did it before and probably just stole somebody's idea back then too. Trying wines on a Thursday afternoon, Carol, not that bad of a way to end the workday. That's when I feel pretty lucky about my job. I'm
just gonna put that up there. Well, you can't do it every day, but that one was a special one. That was Rick Tigner, president and CEO of Jackson Family Wines, still to Gamma Bloomberg Business Week, the mayor of Miami also looking to attract workers. We're going to tell you about his quest to lure Techy's from Silicon Valley to Florida. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio.
If you think of tech hubs, you often think of Silicon Valley on the West Coast, Silicon Alley in New York City cities like Raleigh, North Carolina, Cambridge, Massachusetts. The mayor of one southeast city, though, is looking to add his to this list well. He in his city of Miami, the subject of a story in Bloomberg Business Week magazine. This week, Carol caught up with the Mayor of Miami, Francis Suarez, and started by asking about the tweet that
got the ball rolling. You have been looking forward when it comes to your city of Miami, looking to make it a high tech city. Tell us about the viral moment back in December when a Silicon Valley penture capitalist tweeted about moving to Miami. From Silicon Valley, who asked, okay, guys, hear me out, what if we moved Silicon Valley to Miami? You responded, I did. I said, how can I help? And frankly, it was It's been a ten year passion project for me. I'm a fairly young man. I was
a fairly young elected official. When I was elected, I was thirty two. I was forty when I was elected mayor. So I understand, and I understood, and I've understood for ten years that the future of our economy as a as as a country, as a as a as a world is tech base that is inescapable. From my perspective, that is nonpartisan. From my perspective, that's just a reality.
And the quicker that city embrace that reality and start fashioning their economies around that reality, the better off and the more equitable cities that we're going to have in America. And so that has been our goal, our mission. The how can it help sweet was sort of a lightning in the bottle moment where we propelled ourselves from someone sort of on the outer range of the conversation to literally the city that's most talked about right now in
the world on tech. Whether whether anyone thinks that we're gonna overtake Click on Value tomorrow or not, no one can disceive the fact that everybody right now is talking about Miami tech. It is the hottest thing, and it's been hot since that December four two, which is I think an accomplishment in and of itself, because you know, we live in a twenty four hour news cycle where news changes quickly and people move on to the next story.
And you know, to to keep and maintaining attention to the city for over four months of the country from the four months in the world, really is is a significant achievement, right. But talk is one thing, action is another. So tell me about you know you've had conversations or you've been tweeting with Elon musk Um. What's the plan? What's the specific response is what's the specific actions that maybe are coming from either venture capitalists or investors to
help create your mission. Look at the deliverables. Just in the last four months, we have UH through our DDA program created eight hundred and fifty jobs just in the last four months. That's UH with an average pay of over a hundred thousand dollars. That's over eighty five million dollars of economic activity just from one program in one
section of the city. We had a soft bank that created a hundred million dollar Miami initiatives for companies that are gonna be built here in Miami or people that are moving to Miami. We have the author of that tweet Delian, who helps run the Founders Fan, which is probably the most prominent VC firm in San Francisco, opening office in Miami. So you have Founders fun led by Delian, led by Peter Thiel, led by Uh, led by Keith Boix, who were sort of out of that PayPal um created
paperall you could say it, I won't say. I won't use that word. Instead, it side so derogatory right now. And but yes, you know the PayPal group of people that started PayPal, you know, and then and then having you know, conversations with Elon Musk about how do we look towards the new future of transportation and transportation technology. I mean, if you just look at those deliverables alone, we've seen that we've radically changed Miami in four months.
Have you talked with the Elon Musk directly or has it been all through tweets? You have no, No. I talked to him directly, UM, with a phone call. We spoke by phone for about thirty minutes. UM. He was excited about the prospect of Miami being his second quote unquote second customer for the boring company. I went out to Las Vegas and how the Born Companies boring tunnels
person in person UM and was just blown away. I took technical experts from the city from the county, and they were blown away by the technology and by the ability to do it at a fraction of the costs. Well, but how do you do it because us? I mean there's things that you've tried to do. Listen, we all were talking about at the news room when you UM put out a resolution to potentially pay some of your municipal workers in bitcoin, exact taxes in the cryptocurrency, maybe
invest city funds in it. The Miami City Commission, though, only read to look further into the matter at some unknown future date. It feels like it's going to be an uphill battle, will it. And are you still working to make Miami a crypto hub? Oh? Absolutely, And no I don't think it's an unpoll battle at all. I think it was a fourd or one vote. I mean, in politics, you rarely ever get an unanimous vote. Uh. You know, one of the commissioners wanted to sort of
dilute the resolution a little bit. And look, you know they're they're both commissioners that are over seven years old. I understand that for them it's something that maybe they don't understand quite as much as someone who's in their forties or thirties or twenties. So yeah, there's definitely an education process. There's definitely a collaboration process. When you're dealing with a council, um, you know, and a mayor council relationship.
That's always uh, you know, whether it's crypto or whether it's right uage cans. I mean, it's always something that's complicated and tenuous and you have to work on it continually, and you have to gain people's trust issue by issue. So I think afford to one vote was a resounding vote to go forward. Uh. And now we have to go into the next phase, which is to procure a company that will do it. Um. In terms of the
last piece, which is for us to invest. Look, we would have invested when I when I suggested, we would have been up you know, thirteen thousand dollars. Uh, you know, which is about But but the key is there may be some state laws that are required to be past that allow us to hold crypto. But the state government right now, based on some legislation that I've advanced, has imitated wy Owings crypto laws, and that is saving through the legislature and hopefully will pass and be signed into
a lot of this legislative session. And we're looking at things like charter banks um that will allow people to deposit crypto into banks. So there's a lot of innovation coming on the crypto space in Miami. We also want to be a mind hub for from the world, but like something with the Boring you know company with with Elon Musk, to do that, it's not easy, Like you have a high water table. I mean, are these things
realistic in terms of something like the Boring Company. You know, people, it's amazing how people advance obstacles without even doing the most basic research. One of the things that I said very very clearly in my tweets when I came back from Las Vegas, and you may be shocked to hear this, the Las Vegas tunnels on board underneath the water table.
In other words, their board under the water. So, you know, people would just take a time in a minute to read my social media posts because I answer point by point the concerns that people have, like water table, which is a natural one that people say, Oh, you know, Miami, the water table. Look, guess what Las Vegas also has a water table, and guess what, the tunnels are built underneath the water table, so they're built underwater, so like
they would be LAMI, there's absolutely no different. I love that you talk about you know, read my tweets because listen, this is you know, you've talked with the Elon Musk. Social media and becoming popular socially um on platforms can really provide some momentum for whatever mission. Lon Musk has certainly prove it proven that out. So tell me about politically, how does this plan get more momentum if you get another term as mayor, you face re election at the
end of the year. Is a run for governor for Florida part of your bigger plan in order to you know, carry out your your hopes of creating, you know, putting making Miami a high tech city. Well, listen, for me, I hate to sound overly political answer, but I sort of take it one step at a time. And so for me, my my senior focus is you know, presenting a concrete vision for the future so that I am
re elected. I was blessed to be elected by six when I was elected in two thousand seventeen, so I'm hoping that I can maintain or grow on that confidence that I have from my residence. After that, if I'm elected in November, I become and I assume the role of president of the US Conference of Mayor. So I'm president of all the mayors nationally beginning January one, and I was selected by my peer mayors across the country.
So that's a huge honor for me, and it's going to allow this Miami move this moment that we've converted into a movement, to hopefully become attemplate for how successful cities should be run and the technology that should be investing in, in the kind of ecosystem and economy that all cities should be really fighting for and striving for.
So that's my hope. Whatever happens from that point forward, Um, you know, it's in God's hands, and I'll be very glad and very happy, uh to potentially consider other offices in the future, depending on the circumstances, because just quickly being governor could maybe help in a big way, right
of course. I mean, you know, when you're when you're when you're if any governor of a state has a huge role in things that I consider to be critical like education, for example, I think you know what we want to do in Miami's we want equality of opportunity. We want to make sure that every child in our city has an opportunity to be successful. We call that Miami for Everyone. And so, if you're a governor of a state, one of the biggest things that you propose
in terms of your budget is education spending. And I think one of the things that Florida should do is strive to be the highest per computer of spending state on education in the United States. And that's something that we should come as a goal because as we educate our children, were giving them the best chance to be prosperous in a modern day economy. That's Francis Suarez, the
mayor of Miami. Check out the story on him in the magazine this week by Bloomberg's Miami bureau chief Jonathan Levin. Find it on newsstands, online and on the Bloomberg and that writes up the weekend edition of Bloomberg Business Week from Bloomberg Radio. Thanks so much for joining us. I'm Carol Masser and I'm Tim Stanovk. Be sure to tune into our Bloomberg Business Week Daily show Monday through Friday, starting at two pm Wall Street Time on Bloomberg Radio.
You can also watch our daily broadcast on YouTube. Just search Bloomberg Global News. Check out to our Bloomberg Business Week podcast, where you can hear the entire conversations of our guests featured in today's weekend show. Find that at Bloomberg dot com, Apple, or wherever you get your podcasts, and you can also see me on Bloomberg Quick Take. It's available at Bloomberg dot com, slash Qt, and streaming
platforms like Roku, Apple TV, Samsung TV, and more. Bloomberg Business Week It's available on news stands now, at Bloomberg dot com and on the bloom Terminal. Have a great weekend everyone. This is Bloomberg MHM.