Bloomberg Businessweek Weekend - August 27th, 2021

there have the whole world paying attention. Meantime, some progress in the pandemic with the Fiser vaccine getting full FDA approval, Madernas believed to be on the way, and J and J vaccine booster scene triggering an antibody surge. Still the return to office plans, Carol, they remain in flux. In fact, our international cover story is all about September not bringing the normalcy that we'd hope for. I love the international cover.

It shows a calendar for September with all the dates crossed out because the way that plants have changed around the world, with people returning to the office going back to work, so many were expecting to go back this fall that keeps getting pushed perhaps some October, some January, and some unknown right earlier this year, we thought September was going to be much more normal, and we're not seeing that at all. Also, Kathy Would she is back with us. You spoke to her for a great and

long interview, Carol. Why she was all set to pull out of Chinese stocks until she wasn't exactly it was just a month or so where she really changed her tune on that sector. Tons of great stories in this week's issue as well, of course, the Domestic Covers story, which is a deep dive into targets history of ties with law enforcement and its effect on Black Americans. We'll hear from the reporter on that story a little bit later on. Also in the magazine this week, there's an

interesting story about women in trucking. And what's really wonderful is this was written by one of our summer interns this week, Shara Aviona. And what's fascinating is and probably not surprising, is just about six percent six point seven percent to be exact, of long haul drivers were women, according to the American Trucking Association. It's a number tim that's barely budged in almost two decades, but there's a

group really looking, several groups of people looking to change that. Hey, for good reason, because it turns out that female drivers are actually better on the road. However, the road isn't always better for them. Driving requires long, regular hours, lonely conditions,

and the risk of severe crashes. The field carell it usually offers few benefits that are attractive to primary caregivers, like paid print to leave or even flexible hours that that fit with the school day, and it's why we see so much turnover in the industry, regardless of gender. A little bit later in the show, We've got a great issue of Pursuits this week. It's all about fall fashion and I'm just gonna say a lot of sparkling things. It's hard to plan for exactly how things will be

a few months from now, especially during the pandemic. But as our Pursuits editor Chris rouser And told us back when these fall lines debuted, when they were being thought about, when the Runway shows happened, people were thinking, wait a second, in the fall, we are going to be getting out again, and you know we're gonna want to be seen all of that to come. We do begin though with Afghanistan and how the two decade war there is turning a U. S mill, a terry startup into a unicorn. It's a

story in the new issue of Bloomberg business Week. It's also online at business week dot com and on the Bloomberg Terminal. It's written by Bloomberg business Week Technology editor Joshua Breustein. The company is called Shield dot ai UM and it was started by a former Navy seal who served in Afghanistan and elsewhere overseas and was trying to solve a problem that was pretty specific to those deployments,

which was entering buildings and contested areas. UM. He built a type of drone, a small drone that they would send into buildings in advance that would map the space and send video to troops outside, flying autonomously in buildings UM and that would allow them to enter if you know, if there were no enemy combatants inside. UM. So Shield has,

as you said, has become a unicorn. It's just raised about two million dollars and bought several other technology companies in an attempt to move beyond that specific location and start doing things more relevant to the type of wars America might fight in the future specifically against UM enemies like UM I should say, rivals like China and Russia. So what are those because I have to say to be fair and is it sounds so simple, right, and

it makes it and it sounds so logical, right. Yeah, let's go drone drones into kind of basically map out the space and check out the security. So where else

can they take this? Yeah? I think the idea here UM for shield is that they could take the UM autonomous software they've been developing for this one application and apply it to other things, maybe trying to have UM communication between semi autonomous fighter jets they're patrolling a coast UM or UM or you know, networks, networks of vehicles

both small and large. It's sort of open ended at this point, I think UM, and they're really just trying to look at, you know, where the U. S. Military is trying to take our to facial intelligence, which is one of the big questions UM, you know, for the Penticon itself. Yeah, I was gonna say, how comfortable are

they with this? It's interesting. I think one of the one of the aspects of having these small drones that are surveys that we're serving in a relatively low stakes environment, just you know, sending video from one side of a wolf to another. Is that they slowly started to build up some trust within the military for using these things

in UM in bigger, more complicated, and frankly more dangerous situations. UM. But I think that you know, there isn't full trust in these sort of systems is in the military, just like you know, anyone who's looking at relying on artificial intelligence is still questioning like is this stuff really going to work all the time when it matters well? And Joshua, I wonder how much of their success right now is military contracts? Is it all of it? Yeah? Right now,

Shield only does military contracting UM. Interestingly, they's to me that they were interested in potential commercial applications. I think those are mostly around mapping and also maybe working UM on domestic law enforcement, which is an interesting and somewhat controversial spin on pretty much on a lot of military hardware and end systems that you know, maybe police Starmer's states would want to use UM some of them, some

of the surveillance type capabilities that they're building. Obviously, that's probably going to be a big fight in some of the cities where they would be trying to do that. That was Bloomberg Business Week Technology editor Joshua Bruce sting so many different sides to the Afghanistan story coming up. She's been followed so closely for the last few years. When it comes to her investment strategy, we're talking about Kathy. Would you want to know where she's putting her money

right now? Cathy would joins us. Next, you're listening to Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Spinovik from Bloomberg Radio. So we tracked what she's buying and selling on a daily basis. You can always find it on the Bloomberg terminal, and her portfolio now includes a nearly eleven percent stake in a blank check company backed

by former Hollywood executive Harry Sloan. Kathy Wood is known for her investment strategy that focuses on companies that are disrupting and innovating existing industries. She spoke to Carol on a wide range of topics, including getting back into Chinese companies that trade in the US. Just one month Carol after getting out. We had been pulling out of China.

We started last November actually, after after the debacle around the ant group I p O and really the banishment it seems of jack Ma, and we saw increasing increasing signs that the government was going to get tough on on companies we didn't know exact and and companies which were more than unicorns. They had exploded onto the scene and they had become so powerful, as had their leaders, that they almost seemed to be threatening, uh the government, at least that seemed to be our take on the

government's response. So we were a bit cautious pulled away, and in fact our flagship fund Um had moved out of most Chinese stocks. I think we were out probably late April, late May somewhere around there. It might have been a little bit later. Gradually, you never know of the time. I think the online education UM really nationalization there uh was UM was a real valuation killer for

the market. So I think that the market is going to be under pressure from evaluation point of view from a lot for a long time now, because that that sort of thing was so unexpected, uh, even even from the those of us who saw the government tightening its

grip on on the country. Uh So, But what we have done we did after this last blood bath in the stocks we did, uh try and sort through, Okay, which companies are are doing things the government likes and what we're seeing those that are catering to tier three tier four cities, logistics groceries. So you've seen us by j D dot Com. J D Logistics is a big part of j D dot Com. I think they owned

seventy of it. Uh So that's probably been our biggest purchase, as well as some pin Doo do for the same reason. But if you were to look at what we were doing in those portfolios, we were really swapping them out of other names that we think are are going to be continue to be in harm's way or st early under government pressure, like the Ali Baba's for example, which

you've been selling. Correct. Yes, So, in terms of the recent crackdowns cathy that we've seen, does it longer term generally making more pessimistic or optimistic about investing in Chinese stocks? What's the call here? You're a longer term investor, so what's the longer term play here? Well, if you think about what China is doing they're doing many of the same things our own government and other governments around the

world are doing. Uh. You know, they're most governments are concerned about data privacy, uh, national security, and even even concerned uh in some ways about the impact of social media on students and so forth. So, but we just haven't. We don't have the kind of central, centrally controlled government that can, you know, wipe those those activities and risks off the face of the earth as much as possible.

That's just not who we are. We do know that China wants to wants to be number one in the world and economically certainly, and one of the ways they want to do it is with innovation, with technology. They want to bring more of it back into their country. UH, certainly the manufacturing side, UH, semiconductors being one of the most important areas in which they're investing. They haven't gotten

it right. I've watched them invest in semiconductors since the early nineties, UH, where they brought in a lot of Taiwan semiconductor talent, and they just haven't been able to crack the code. So more pessimistic about China long term or more optimistic. I'm more optimistic. I'm going to turn it around a little bit. I'm not pessimistic about China longer run because I think, um, you know, they're very

entrepreneurial society. Sure, the government is um putting more rules and regulations in, but I don't think the government wants to stop growth and progress at all. Of What I will say though, is I'm a little more optimistic about the United States and other economies. So it's more of a relative sort of thing. The more insular China becomes actually the less competitive in many ways. It will be because artificial intelligence. Sure, you can have all kinds of

data about your own population China or Chinese government. Uh, but in order to compete in the world, you're you're going to need information everywhere. And I think governments around the world are a little suspicious, suspicious of what is happening now in China. What do you think the investment environment will look like in China in five years from now compared to what we're seeing today? And are the because you know, investors, everyone follows what you're doing, So

are you positioning for the five years from now? Sure we have a five year investment time horizon. I think we're consolidating into the few names. And these are not in our flagship fund, these are in other of our more specialized sounds. So we're consolidating our positions. So we've taken it down, continued to take it down, but consolidating more towards with higher positions in names like I described, they're uh, you know, really focused on tier three, tier

four groceries, logistics, uh, manufacturing in China. So we'll we'll stick with those while we wait and see, you know how the government wants to play this. If you think about it, UM, one of the reasons this may be going on now is uh, China saw what the Trump administration was like uh, and the Biden administration has been just as tough in some ways, but perhaps not as tough as a more conservative or hawkish and administration would

have been around Hong Kong. And so we've got the mid term elections in November next year, so this is their window to do what they want to do, because I do believe they're not They're feeling like, um, this

is a little bit of a window. And if the more hawkish administration gets in later, then um, you know they will have want to have done whatever it is up next, while more of my conversation with our invest founder c I O CEO Kathy would as we shift our focus from Beijing to the cutting edge of tech investments. Right here in the United States, you're listening to Bloomberg

Business Week. This is Bloomberg broadcasting from the financial capital of the World, Bloomberg eleven Rio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one O six one, does San Francisco, Bloomberg nine six, to the country Syria, Sex m Chamber one ninety and around the globe the Bloomberg Business and Bloomberg Radio dot Com. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim

Stinovian on Bloomberg Radio. So in the last block you heard Kathy would have ARC Invests breakdown her revised investing strategy for Chinese stocks, but she has plenty to say about American technology as well. That's certainly an area time we know she invests heavily in. In part two of your conversation with Ark invest founder CEO and ce IO, we delve into some of the investment management firm's top domestic picks in the Dawn of Artificial Intelligence really are

a little bit about Tesla as what's gonna say. I love what she said about lap on stage. Also remember those robotaxis. Kathy would has big thoughts for how big of a business that can be. So one other name I've got to bring up with you. I'd be remiss not to you, And I've talked about it a lot. Elon Musk and Tesla, and I think we're all still trying to get our head a little bit around what happened on AI day and this human humanoid robot that he talked about to take over boring work. How do

you factor in? I mean, Elon is somebody who throws out some really creative ideas NonStop. How does that or what did What did you take away from that presentation? Yes? What I what I took away, especially in reading uh many many of the articles about it, is that, um, there are not many people who are deeply, deeply involved with artificial intelligence, and that is who that day was for.

They were trying to attract AI talent to tackle the most difficult and probably most transformational opportunity, certainly in terms of transportation, all kinds of transportation, not just cars and trucks, but ultimately drones and things um uh using artific facial intelligence. So I think the press took away see this was a nothing. I was kind of entertainment with this robot.

But there they go, changing the subject again. If anyone who was who has been steeped in an AI and and wants to take up the challenge that they're offering, uh got um got uh tremendous perspective on how far ahead Tesla is relative to almost anyone else. I would say Google is is is up there, but in in many ways in autonomous transportation, uha is is um in the lead. So I don't think it was the AI

day was not for investors. It was going to go over their heads most of it, um and And yet for those who tuned in, he offered a little bit of entertainment. I suppose almost our intelligence and us we're blown away. And in fact, if you looked on our website you'll see are we We put out a newsletter every Monday morning and we summarized some of the more important takeaways we had uh from that day. So it

sounds like no doubt about you're staying with Tesla. You're still in on the company, in on the strategy, without a doubt, without a doubt every passing day, especially the more we learn about their AI expertise and um, how they're really driving this space, so to speak, much faster than I think anyone else is. Right now, we believe they have the pole position too, and we've increased our

our estimate here. In the next ten years, we think, uh, the autonomous taxi network opportunity in the US will be eleven to ten trillion dollars from nothing today. Think about that eleven to our economy. Now, it's not just this economy. That eleven to twelve is a global opportunity. But just to give you a sense of the size of that opportunity, our economy is twenty one twenty two trillion dollars. This

opportunity alone is twelve trillion. In ten years, the market will start to recognize it, and we think we will in the marketplace in the middle of this decade five the market caps will probably be scaling towards the three to five trillion dollar range for nothing. So even with you know the chip shortage is impacting the auto industry, tests you know, you still remain steadfast on Tesla despite those chip shortages that are impacting the overall industry. You know,

it's very interesting. On the last quarterly Callum uh test Elon himself said, you know, the chip shortage might be lessening here. I know we're hearing uh she am and others, but I have thrown out another thought out there. You know, auto sales have dropped from eighteen and a half million units, this is just the US at an annual rate in April to fourteen point seven five. I do not believe

that is only because of a chip shortage. I think it is the beginning of a massive transformation towards electric That was our convest founder CEO and ce IO Kathy would. If you missed any of that conversation, feel free to check it out at Bloomberg dot com and also on our podcast feed. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio. Well, it's been a while since

we checked in with her last. I think it was last fall last October when the lights were still dark on Broadway in an unprecedented shutdown of New York Theater because of COVID nineteen. Well, Broadway is back, reopenings, restarts, news shows. Here with an update. Delighted to have back with us, Charlotte st. Martin, she's president of the Broadway League. On the phone in New York City, Charlotte, it is so good to have you back. How are you well,

I'm great. We're We've already had our first official opening and we have two shows opening next week. So we're back and we're getting ready to be back in a big way. So tell us though, because you have been so wonderful and giving us several interviews during the pandemic, especially in the dark days of the shutdown initially, Uh, and just kind of waiting for things to improve, and

it's taken obviously a long time. What has this year been like, Well, certainly it's been a lot of up and downs because, uh, we were doing so well with the variants that are out there, and then all of a sudden we got challenged with the delta variant. But at the end of the day, we've waited the right amount of time to make sure that we had all the safety protocols and that we were prepared to open

so that we didn't have to open and close. Certainly everybody is ready for theater, and uh, many people were hurt during this period, but the light at the end of the tunnel is looking very bright at the moment. All right, you said, waited the right amount of time. Tell me about the conversations you've had to have with various parts of your industry, parts of the theater industry to figure out and health officials, I'm guessing maybe unions

to figure out what would be the right time. Right and well, First of all, Broadway operates with seventeen union contracts that are held with fourteen different unions, and each one has different types of interaction, whether it's hair and wigs or makeup or costumes or stage hands. So each one of those unions we had to work with them and develop the protocols that made them comfortable. So, yes,

we've done all of that. And as I'm sure I said to you, uh last October, we could not afford with the cost structure that Broadway lives under to open and then close and reopen and then close, so we waited until enough people were vaccinated and we had all of these protocols put in place that we felt we could deliver uh safety for the cast, crew and audience. You know. That's what's been interesting also about the last

year and a half. I feel like for certain industries, your industry, the theater industry, certainly for the restaurant industry, the layers have been peeled back. I think we thought, oh, wait, you know, some of these successful shows or these successful restaurants. You know, they'll be okay, they've made a lot of money, but it's financially um everything needs to be kind of going gangbusters for it to kind of keep going in

the future. Correctly, we've really gotten an ability to to look into the business, the financial structure of let's say, the theater industry, and and it's everything. You know, people have to be in the theaters. They need to be full for it to be working. Well, that's correct. I mean, when you think about it, they they're the best theatrical employees in the world, but they're also the most expensive. And the rule of some has been we need the

shows to be uh sevent full as an average. Some shows need nine and some can get to break even and continue operating. It depends on the size of the show. The size of the cast, the costs of the various contracts, so uh, it's it's a very uh they're very tight margins for Broadway unless you're a gang Busters hit and

those don't come along very often. You know that you not only uh invest twelve to fifteen million dollars minimum for a new musical and two to five million dollars for a new play, but then you have the running costs every week. I mean a typical uh cost for the for a week of a big musical is at least a million dollars, So you've got to sell board tickets then a million dollars just to break even. So it's an exciting industry, but it also requires real investment

and real revenue to keep it alive. Bunch of shows coming back, we've already seen a couple of rollouts. When it comes to Broadway in theater, how do you do it safely? What's the mandate when it comes to vaccines? We have mandated that all of our audience uh mess show proof of vaccination and we're masks during the shows until we make a different decision. So we feel like we've got the audience taken care of, certainly for the cast and crew, their man, mandatory vaccinations for all employees,

testing requirements weekly, and pre employment. Each of the shows has hired their own COVID safety management manager to make sure that all of the protocols are being uh being lived up to. And then there's so many additional things like the heating, ventilation and air conditioning standards, the cleaning and disinfection practices. UH specific protocols based on job because they would be different for an orchestra. Our person works in the orchestra versus a costume manager. So uh there.

We've spent eighteen months developing uh these safety protocols with our unions, and we've worked closely together because we all have the same goal, which is to have everyone's safe that's in our care. And with the exciting UH September that we have where so many shows are sold out or close to sold out, we have to make sure Yeah, that's what well and that's well. Two questions I have for you are in terms of protocols, because we've talked

about this with a lot of CEOs of companies. Are people who run school educational systems, you know, who have been replacing their ventilation systems. Is there a lot of that going on or is it just maintenance and you know, increased maintenance when it comes to the existing systems, well, it totally depends upon the theater. I mean, we have forty one theaters and some of them are relatively new,

and some are over a hundred years old. And yet you know there's one theater that's over three years old that has totally replaced their system. So they all have new filter upgrades and constant assessment. And you know, we're living up to the standards that have been established by the CDC and we'll continue to do that. So tell us what's coming in the fall, and tell me a little bit more. You just mentioned about ticket sales and what that you know, gives you an indication of how

many people will be coming back to Broadway. Well, we have between September two and December thirty one, we have thirty four shows returning or opening. Um, some of those were obviously playing when we shut down on March twelfth, and some are new, like Passover that just opened a couple of weeks ago. And uh, we have many more new shows opening. And as with everything else in the world, the Internet has made it easier for people to buy their tickets, so they don't buy as feign advance as

they used to. But right now September October looking very strong. Um, and we're very positive about the outlook at this point. Yeah, it's pretty amazing if you go to things like Broadway dot Com and you just get you know, run down of the listing. As you said, some of the old favorites, whether it's Hamilton's Wicked, you know, the Lion King, or there's some new things coming out. Um, I am curious

to just got about a minute left here. When it comes to this past year and a half, so much of real life often impacts what we see in terms of content, whether it's streaming content, network content, whether it's podcasts, and certainly in theater. How has the last year and a half maybe impacted some of the shows that we

might see ultimately on Broadway. Well, at this point we're glad that some shows had the opportunity to stream previously recorded sessions, like Hamilton's, but as this point we're not looking at streaming as a new way of doing business for Broadway. That doesn't mean it won't be in the future, but right now there's really nothing that replaces live theater and that's what our that's what our theatergoers tell us.

And forgive me what have it? You know what I really what I really meant is the pandemic and the situation. Of course, the injustice with George Floyd. How did that impact maybe content that we'll see up on stage. And we've just got about twenty five seconds. Well, we have ten shows that have announced and that are opening this fall and early next year that are written by black

and bipoc playwrights. So that's a major step forward. I mean, Broadways always had diversity in casting, or at least it's had it for a long time. But I think a lot of this was about, you know, adding more of the behind the scenes, the creatives for people of color, and our thanks to Charlotte Say Martin, president of the Broadway League. That wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. I'm

Carol Masser and I'm Tim Stanovac. Coming up in our next hour, our domestic cover story on why Targets history of close ties with police is leaving black Americans wary of the retailer. That story on Target, it's an incredible story We'll also talk about the future of work with Lincoln CEO Dan Shapiro. Also a real estate tech platform, Tim that's easing the path to home ownership, and our Pursuit team's fault Fashioned guide. You do not want to

miss it. Get ready for smoking shoes most smoking or is it smoking slippers? I don't know what you what You don't have to smoke to wear? Apparently not. That's coming up. 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 Sloomberg Business Week with Carol Messer

and Bloomberg Quick Takes Tim Stenovik on Bloomberg Radio. Hi, I'm Carol Masser and plenty ahead in our second hour of the weekend edition of Bloomberg Business Week, including the latest in labor with the CEO of LinkedIn, and also how a two billion dollar startup helps make dreams of home ownership come true. Plus our Bloomberg Pursuits team is

out with its Fall fashion issue. And you know, I'm always taken notes when I look at fashion, when I look at pursuits, even if that's stuff, you know, like a twoty tho dollar watch, Carol, well quite outside of my price range, by a home by a watch, Those are sometimes the choices I guess first up this hour, though, let's get to this week's domestic cover story. It's all about Target and how the retailer's close ties with law

enforcement have affected its image among black Americans. Peter Waldman and Lauren Eder with our Projects and Investigations team. They co wrote the piece, and Peter helped us understand targets history of funding surveillance in inner cities, and how it's trying to convince people of color that the company has

changed UM. Laura and I undertook a piece about essentially what Target has been doing over twenty years or so, where they have kind of aimed their own internal UM surveillance mechanisms on the neighborhoods around some of their stores and been very cozy with police, funding surveillance systems, cameras, integrated data systems where people can report things and and a lot of it is just speculation, but it always has ideas and and and license plates and all kinds

of information about people in streets and other places, and they may not have committed any crime. UM. As you mentioned, they are doing a one eight now. In the last year, UM, Target has been extremely decisive about embracing the racial justice movement, and they've committed some two billion dollars to supporting black entrepreneurs and talking to a lot of community groups about how they manage their stories, particularly in the inner cities.

But we show in this week's cover story in Bloomberg Business Week, UM that they really spent I don't know, the first fifteen years of this century quite closely allied with police departments all over the country and spending a lot of money helping them with this whole surveillance situation, Peter, Was it the murder of George Floyd in May of that was the inflection point for for Target? And we should know this is a company based in Minneapolis. The city is core to the company's DNA and just the

fact that the murder happened so close to Target. After the murder, just days afterwards, the CEO and chairman of Target, Brian Cornell, issued a statement saying his team literally wept at the lack of progress on racial justice issues, and certainly the response and uprising in Minneapolis was the catalyst

for that response from Cornell UM. I will say though that TARGET began retreating from its most active programs, UM spending money and in developing partnerships with police departments around

the country back UM oh around two thousand fourteen. Two thousand fifteen, also as you will call UM a noted moment in the Black Lives Matter movement with UM the killings and places like Ferguson UH and in response to all of that, TARGET seemed to really change tax and UM has spent more of its UM law enforcement money and energy and philanthropy on things like UM Shop with a Cop programs which have police take underprivileged kids shopping

at targets around Christmas time, and other more community oriented events. So I would say that one eight began several years ago, but there is no doubt that the pace has picked up dramatically over the last year. You include a lot of individuals, or some specific individuals, I should say in

your story tell us about William Mende sure UM. William was one of many many naming UM young people, mostly of color, on the streets of Minneapolis, as you mentioned, targets hometown where they did their most intensive programming around law enforcement in what we call UM or I should say, support of what we call broken windows policing, which is that doctor and that says you have to arrest UM people for any kind of petty and fraction, whether it's

riding bikes on sidewalks or loitering, littering, uh, urinating, you name it. If they cite these young generally young people or others on the streets, then they won't uh, they'll get the pick, they'll get the idea, and won't commit more serious crimes. UM. So Target was as were many companies, and I should say police departments very involved in in

supporting that. After going back into the two thousand four through let's say two thousand fIF team time frame, and William was you might say someone caught up in that. He UM was arrested many many times inside the so called Target safe zone, which is this area of about forty blocks in downtown Minneapolis where they literally went on this extremely aggressive I should say the police went on the sixtremely aggressive arrest campaign. Um Uh, we're using surveillance

cameras to spot kids. We quote a UM defense attorney, the Public Defender of Minneapolis at the time, saying that they were sure that the police were all watching UM monitors to just find some reason, find some suspicion on people in the street, UH, to come out and search them and arrest them for minor offenses. UM. This all goes back to, as I said, the UM money the targets spent on setting up safe zone in downtown Minneapolis.

That's Bloomberg News Projects and Investigations reporter Peter Walden. It's a deep story, a lot of information, so feel free to also check it out at Bloomberg dot com and also on the Bloomberg terminal. You're listening to Bloomberg Business Week. Coming up the women behind a property tech startup that just hit a two billion dollar valuation and is working to make renters into homeowners. Divvy Home CEO Adina he

Fitz is coming up next. This is Bloomberg. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Spenovin from Bloomberg Radio. So you may have come across a recent story on the Bloomberg and at Bloomberg dot com. It's about the property tech startup that buys homes on behalf of renters and then helps them to become owners. Well, did hit a two billion dollar valuation thanks to a recent round of equity financing that was

led by Tiger Global Management and also Caffeinated Capital. We're talking about Divvy Homes and Carol, you caught up with the company's CEO, Adina he Fits. So we were founded about four years ago, but we've been purchasing homes for customers and helping the acxis home ownership for about three years at and how's it going so far? Give us give us some ideas of a typical scenario and how it works out. Sure, so it's it's been really interesting.

What we have found is that especially during the COVID period, access to mortgage has actually only gotten more challenging, and so we saw a rapid rising demand during the COVID time period and say, um have thousands of customers who are using us to purchase homes across sixteen different markets. What's really interesting is u how well people are actually being able to buy back to home. So we're seeing a buy back rade of roughly which is four times

uh sorry, ten times the the average. The most rent to own companies have the most rent own companies are are sort of low single digits UM, and we're almost ten x that amount in terms of buyback rade. What's even more interesting is that our customers have on average about eighty two hundred dollars of savings in their home UM. And so when you think about the average American most doesn't have UM almost anything in savings. I think the average amount of savings for rent or is roughly about

eight hundred dollars. So we're right now helping your customers save a lot, which feels really good. When you say customers have an average of eight in savings on their home, what is exactly do you mean by that? Is that equity? Is that? What that is? Yes, exactly, UM. So we we don't technically from a legal perspective, it's not technically

called UM. It's not technically equity. However, UM. What we do is we we basically keep a virtual equity account for them, So they contribute savings into an account, we save there for them, and we give them credit for for their percent ownership in the house. So let's say buy a house, Carol ad Let's say a hundred thousand dollars UM. They put in ten thousand dollars at the beginning of the program that home appreciates to add twenty

thousand dollars. They owned ten percent of at home, So the ten thousand dollars they originally put in, but they actually their ownership is ten percent, and so the value of that equity is close to twelve tho dollars And they made a two thousand dollar gate on their equity and they get the full benefit of that. So you said about the buy back grade of people who UM rent to buy, the buy back grade is and you said, that's ten times some of the other rent to own companies.

Of the sixty percent who don't ultimately do it. What happens. So it's actually interesting if we're seeing a lot of people who um, you know, saved up to ten percent, but turns up they need just a slightly larger down payment, as we're seeing a decent percentage of people who actually just stay in the house and continue to build up equities so they build up a larger round payment. Settings. UM,

there are some people who also just turn over. UM. You know, we really encourage access to homeownership, but we want some one to be able to actually want to live in the home. So if your neighbor, you know, you don't get alot with your neighbor, you don't like the school district, and you want to move, we don't make it to that you're stuck in this house. You cash out your equity and you can move on to another location that might work better for you. Do you

think you know? Ultimately and get to a point where most renters become a homeowner in this process, that is what our our goal is. Like our goal we're starting out at four. Our goal is only to increase that over time, and we've done that through a couple of very specific things. So first, UM, we offer a free credit counseling for all of our customers. That's a really

important part of our program. UM. Second, we have mortgage partnerships UM, so we're able to refer customers over the mortgage providers today that helps them actually work through the home buying process. In the future, what we want to do is be able to eventually help issues the mortgage to the customers ourselves, and that's something that we're slowly building towards because this buy back portion um and increasing the percentage is quite important to us over time. So

you mentioned you know, Adina. The goal is to get you know, more UH renters in every renter if possible. Who part taking your program to become a owner in this process? Tell me a little bit about, you know how the traditional financial system when when we talk about it a fair amount here at Bloomberg, they really don't. They really kind of ignore a big part of the population. How do you deal with things that they might say is important like bad credit ratings or not a credit

credit history, or low income? How do you deal with that? Sure? Yeah, So the mortgage market was created, has been around for a while, but was really put into um existence by the GSCs back in and during that time they set underwriter requirements so FICO requirements where your income had to be debt to income ratios and down payment requirements. Rightfully, so those requirements have not changed over the last hundred years.

And the reason why is the couple of times since that they've tried to change them slightly, it's led to two major issues like the global financial crisis. Right um and and so I actually really believe that the mortgage market is efficient and should continue to operate as it is operating. And the reason why if there is someone who is unable to make their mortgage payments and there has to be a foreclosure that happens. For closures are extremely expensive and just take a really really long time,

mostly because they're just so heavily regulated. Did he can take on people who are in a wider credit spectrum than than a traditional mortgage, So we go as well as a five fifty kom although our sweet spot is right around called six seven hundred YCHO. We only require one to two percent of the home value as a down payment UM. So are our customers generally have on average call it two to six thousand dollars saved up UM,

we require a minimum of two thousand dollars UM. And because our our our product is fundamentally a rental product, if the tenant is unable to make a payment, we're able to be a little bit more flexible, try to work through a payment plan and ultimately, in the worst case scenario, if we do have to go through an eviction. UM evictions are less costly and take a lot less time, which means that we can take more risk and opening up the aperture for who we offer this product too

than a mortgage can take. Hey, and doing this what has been a surprise to the upside. What has been a surprise to the downside. Oh wow, that's an interesting question. Uh, surprise that the upside has just been Um. You know, everyone talks about starting a mission based company, and for me, that has really just gotten better over time. I love waking up every day. I love helping people actually act

as homeownership. I really believe that it is a major way to to grow well for the low middle income Americans. So I think it's actually quite important. Um to the downside, I would say, Um, you know, building a company is just a bumpy ride. UM, and things like you know, right now, we're having a mass shortage of inventory. UM. Interest rates are kind of very low right now, but kind of jumping all over the place, and we're not

sure where they're going to go. You know, you have to be prepared for some of these macro things that impact your business but maybe are hard to predict at the onset. I never thought I was gonna be managing a company through a global pandemic. I've learned more in the last year and a half than I have probably my prior prior, you know, thirty four years um. And so I think that that has made it a really interesting learning experience, but but definitely um a little bit

of a crazier ride than I had expected. That was Divvy Home CEO Adina half Fits Till come on Bloomberg Business Week, How we work in the future. Tim, you caught up a great interview with LinkedIn CEO Dan Hippira. What's so cool about LinkedIn is they have all the data. They see what people are posting, they see what people are clicking on, what people are applying to and Dan shared some of that with us. This is Bloombarging broadcasting

from the financial happital of the world. Bloomberg Eleve in Rio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one oh six one does San Francisco, Bloomberg nine to the country, Sirius XM Chamber and around the globe, the Bloomberg Business and Bloomberg Radio dot Com. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes.

Tim Stenovan on Bloomberg Radio. So, Tim, if there's one thing we've learned over the last year and a half or so, it's that office life has been forever changed and companies are really having to go to unprecedented lengths to attract retain talent. There is a talent war going on right now, and that's really one of the reasons that we wanted to talk about the future of work with Dan Shapiro, the chief operating officer at LinkedIn. He joined me and my Bloomberg Quick Take co host Katie

Greifeld to talk all about the latest from LinkedIn. The company saw twenty seven increase in revenue last year, and also what types of jobs people are looking for in

company they're posting activity on that platform right now. Well, Lincoln is a platform for helping companies and professionals build relationships, and I think if there's anything we've learned over the last year is that we need as society and as a business community to be able to build relationships as the world increasingly moved digital, whether that's how companies build relationships with their customers, or employers build relationships with talent,

whether that's their just employees or future employees, and all of that transition is leading to more and more power of the Lincoln platform to help companies solve problems. And so Jan I'm curious to hear if you think that people change the way that they use LinkedIn during the pandemic, because just speaking personally, I can think of so many friends who really thought critically about their life and career and what kind of career they want to have, and

they use linked In for it. I mean, have you seen more people looking for jobs on the platform or just starting conversations. We're absolutely in a time where professionals everywhere are thinking about what they want from their career, how they want to work, where they want to work, and it is leading to something that we're seeing called the great reshuffle. We're both companies and professionals are reassessing a number of ways in which they've been working for

a very long time. And so in a time like this, you're seeing more exploration. You're seeing greater curiosity about different kinds of jobs. And one thing in particular that we're seeing is both companies and professionals considering remote work options. If you actually go back in time before the pandemic, only about one and a half percent of jobs in

the US on LinkedIn how to remote option. Now fast forwards today that numbers over eleven percent and over a quarter of all applications on their platform are going to remote jobs. And that's pretarticularly the case in some of the most highly skilled roles, like in techer and media.

Is there much more interest around a company that offers a hybrid or a remote position rather than one that says, hey, this is in office, like are you seeing a quantifiable increase in the number and quality of candidates going for that job? There's no question, uh, for seven of professionals in the US want to work in a role where they can be remote or hybrid at least half the time.

And we're seeing in particularly in skill sets that are in high demands, that are employers are adjusting their policies to be attractive to those kinds of professionals. So the number of jobs that have a remote option has gone up materially. Roughly one fourth of all jobs in the US in tech and in I T services are now remote enabled, and we think that that's going to continue because those are the skills that are in high demand, and that's what many professionals now have come to expect

from their employer. What are the lessons that you can take away and give to two managers who are listening right now about the data in the data that you see at LinkedIn about the best ways to attract and retain talent at a time when even even though the labor market is not tight, it is tight right well, I think we are seeing the labor market get tighter

over the last quarter and into the coming quarters. You're seeing that the resurgence in certain parts of the economy is leading to very aggressive hiring in certain perspectors, and that is actually ahead of people's general willingness to change jobs. Right now, many people have been and some continue to be what they call shelter and job where because the environment is uncertain, they tend to stick to what they

are doing. But almost that every research study you see speaks to the fact that many people are considering a change. So the question is, how do you make sure that if you have a member of your team that is thinking about change, how do they make sure that they're exploring changes within your organization or within your team as opposed to outside. And they're going to get to questions like how do I want to work, where do I

want to work? Do I work at accompany it aligns with my values or what's important to me um And we continue to find that the employers that are getting the most attraction from county to particularly those and highly skilled jobs, are the ones that are answering those questions and realizing that their employer is aligned with what they want to accomplish in their careers. That's Dan Shaveria, the chief operating officer at LinkedIn, along with Bloomberg News cross

Ast reporter Katie Gratfeld. See's your host over at Bloomberg Quick Take. Yeah, quick Take stock new in Eastern time Monday through Friday. Bloomberg dot Com slash qut. Nice little promo there, all right. You're listening to Bloomberg Business Week. Coming up, Bloomberg Pursuits. It's out with its fall fashion issue, and are Chris Rouser tells us how to embrace our desire to be seen, have fun and feel strong. I'm just going to tell you glitter. It's all about glitter.

That's shiny stuff. We could use a little glitter at this day and age. Right, I think so this he's Bloomberg. You're listening to Bloomberg Business Way with Carol Masser and Bloomberg Quick Takes. Tim Stinovich from Bloomberg Radio. Every you watch is like a new piece of box. It does in different stories to tell the time. Wines as a whole really speak to that quintessential need is the most powerful car made in the US period. You get the

beautiful interior or the iconic design. It's very cheek and posh. Even if you bet for it. It's something that gets alright. So let's go a look at this week's pursuit section of Bloomberg Business Week magazine. It is all about fall fashion, not just about comfy clothes anymore, that's for sure. So here with what you'll find in this section is Pursuits editor Chris Rouser. Chris, I feel like it's safe to say I'm looking at you wearing shorts and a tennis

shirt holding him out. Well, listen, when we were all working at home, I was living in yoga pants and jeans, but pursuits this week. I don't tell what you were working here. I was working here. But it isn't really interesting time to be debuting fall fashion, especially as you highlight in pursuits fall fashion that hlight sort of glitz and glamour. Yeah, so we were. I was watching the fall runway shows, um, which happened in spring, you know,

and back in spring. In February March, like we were like, summer and fall are going to be time to party and do your had this runway show in Shanghai with their fall winters closed, and it was all disco themed and it was like, in a it was awesome. It was like just what I wanted to see, you know, uh, sequins, gold le may gowns just like party Party Studio fifty four.

And then as the season went on, I just saw gold and glitter and glamor on every runway and designers were like, people are gonna want a party, They're going to be seen. There's nothing more like visible than glitter and shine. So metallics were everywhere, the color gold, um payettes, which are these big sequence and it was really just

a lot of fun. And now we're in the fall and maybe it's not going to be a big party anymore, but people, um, you can still incorporate the shine in small ways with accessories, but in at leisure, which of course has ruled for the past couple of years, they're even incorporating some shine, little bits of shine and glit and glitter into their looks because they know people don't want to be in gray and black forever. No, I'm going to just warn you all. I have a sequined

like biker jacket. I know it's really not for daywearing. When you bring that, I am going to be wearing it to the office. I'm so tired of like trap. I'll wear shores. You wear that, alright. What about when it comes to accessories, Chris, Yeah, so that you know, that's a great way to actually bring shine into your wardrobe.

And the designers that are doing the full length glam on the runway are also doing like purses and watches and accessories that have a little bit of that shine to it, and that's a great way to like you're walking out, maybe you're going to the office running errand scrab something shiny that'll make you feel put a little pop in your step. Alright. Something I want to talk about two is watches, which is your thing in a

big way. And you guys know it is right you love writing about it, um and you And there's a story that specifically talks about It's really great deep dive into Louis Vuitton and its impact on fine watch space. So fashion companies traditionally are not good at watches. They use they make Courts watches which are battery powered. Um, they're kind, they're very inexpensive. They you know they they's not the logo on it. You buy it at Macy's.

UM and you know I love no, I love and like Macy's number one pan um and I love those watches. But a small number of fashion companies have decided to really invest in their watchmaking and make their own watches and their mechanical watches. So they're very complicated. Um ermez does it? Do your Chanel and Louis Baton. So this year we took a look at Louis Batan, which started making watches in two thousand and two. Um, in two

thousand eight, they built their own manufacture in Switzerland. Then they bought this crazy manufacturer later on which makes all these special complications. So now Louis Vuitton is making watches that are like two hundred and fifty thousand dollars that look like nothing you've ever seen. Yeah, we're not talking tens of thousands of dollars here, We're talking hundreds of thousands's eyes and yeah, on radio, they're just popping, well, not wearing any watch right now. And I know that

Chris is wearing an Apple watch. I saw that. Yeah, but what is you know, you you write in Pursuits your team rights in pursuits that Louis Batan is relatively young when it comes to making watches. Yeah, I mean the in the scheme of things, because we talked about companies that are generations old. So you know, a company like Vastron Constantine, which is also Swiss, has been making watches as for more than two hundred years, and a lot of the main innovations in watchmaking are a hundred

and fifty years old. So like this technology that keeps watches going, that makes them cool still to this day is quite old. So to get into it in two thousand two, that's young. That's really new. And they've made a big effort to um, you know, to bring in the Swiss watchmaking industry and use experts and higher experts that can really make top, top quality stuff, and it looks very unusual. They they're very big into the LV logo UM, which is not Swiss, Like putting a big

logo on something is very Unswissed. But Louis Vatan is like, that's our thing and that's what people want from us. And people buy it, and they've got the Geneva Seal, which I didn't realize as a thing, but it's a thing, big thing. Yeah. The Geneva Seal is like a seal of approval um, which says that things have been made to a certain percent in Switzerland and to a very

very high standard. Very few watchmakers actually can get this seal of approval, and it's everything's finished perfectly, down to stuff that no normal person would see. Only a watchmaker would see it if they opened up and looked at the watch. None of us are normal. I'm just gonna say, fair enough, guilty, Hey, guilty as charge. Can we talk a little bit about fancy footwork and this part of the pursuit section because I see some pretty cool booties

and smoking shoes. Are we talking about smoking shoes, Chris? Yes, oh, yes, smoking shoes are still Even if you don't smoke, you can still wear smoking shoes. So I don't know about you guys, but when you guys have been coming to the office longer than I have. But when I had to started coming back to the office, I went open my closet on the bottom row where my shoes, I picked them up and I had to dust I had

I know exactly what you're talking about. I actually dust them off with like a rag, Yeah exactly, and and so and you know, of course I bet you hated half of them, and as I did. And so we were, you know, we thought, well, let's look at some shoes and and maybe if you if you have to go back to the office or just even to parties or social encounters be around people, you have to wear camera sneakers all the time. So how about have buy some

fun stuff. So we picked out some some Belgian shoes which are always really fun, uh, some little booty uh like heights like um cowboy boots. We have some really great Valentino kitten heels that are red that have some molded flowers on them. So there's a lot of really fun things in the section to check out there. You know what's fun too is um the use of plastics. I have to say, going in and out of stores now, which is something I can kind of do right now,

still wearing masks. But there's a lot of plastic in fashion shoes and heels using PVC. Yeah, and there's this great pair um from Amina Muadi, these Holly sling n heels which are made um from semi transparent PVCs, so they look they honestly look like Cinderella slippers, but modern I will be wearing something like that maybe in the fall. Um. They're also the fashion reality shows. I love, have loved watch them, whether it's Project Runway, Making The Cut, there's

some more. There's a new one though, called The Hype, and you guys review it. Yes. Um, So there's a show called The Hype and it is about streetwear, which is a complicated subject because streetwear is the thing, like all the big fashion houses want to buy streetwear brands. Everyone wants to partner with supreme. Um. You know, when Gap acquired Kanye's company, it went the stock shares went way up. But it's it's it's complicated because a lot

of it is has become corporate. And this this show, which is like Project for Streetwear, it's got designers who are making stuff by hand or they're incorporating stuff that already exists out in the in the world. So it's kind of like an up cycle hype kind of thing. And our and our net we net out on the show that it's not worth the hype. The Hype is not worth the hype. Why not because it's it's not

a super well made reality show at the Parniament. So it is most fun when like there's a train wreck and people are, you know, making big mistakes, are getting in fights, which is sort of not really actually what you what we like sort of a fashion reality show to sort of to be like that's what we don't

want the focus to be. But also it doesn't deal at all with what's going on in the world, so like sustainability, black lives matter, like a lot of stuff that people pandemic right, pandemic that people are talking about on the street. It just isn't in this street where show. So it just feels really detached from everything and kind of fluffy, a bit tone deaf. Um, Okay, we're going to wrap up that with one more thing that's in pursuits.

And what's interesting is when you take a look at Gucci, what we're finding is Gucci is going green or greener, so all the companies are really trying to go green. Um. And we took a look at Gucci's beauty collection, which is growing under Alessandra McHale, who's a creative director. It's getting a little more romantic look and it's getting more sustainable.

So in nail pola, a lot of beauty companies are trying to go what would they say is five free, seven free, twelve free, and those numbers are amounts of toxins, so like they're free of the twelve specific toxins that that are all commonly used in nail polish. And a lot of the brands that you'll see are maybe five free, seven shee free. But these Gucci, this new Gucci collection

is twelve free, which is really top tier. I don't know about your wife, Like I look at nail polished and I have increasingly I am looking for clean makeup, clean nail nail polish because I think there's too many chemicals. We do the same thing, she does the same thing. Remember I wear makeup because which is fine. But you know, I do walk into a room and I knew immediately if my wife has been putting nail polish on or taking the polish off. And I'm wondering if this changes that.

I think part of it is the naipolish remover though as that smell, that smell that you really think of as the remover. But you know this is also very good quality. Um our. Asia our writer who I've known forever. She is a mom, and she was washing hands, changing diapers and stuff for two weeks and the nail polished data on really solid for at leastwo weeks. So she

was like, this is this is legit. What a great section looking forward to fall fashion and all of you putting some sequence or something in a little shine in your stuff. I need to get my smoking shoes. Chris has Warren actually a Terry smoking jacket, which was rather Yeah, that's true, brought it in. Yeah, we tried. I have to show you the pictures, all right. Chris Rowser, editor of Pursuits, Thank you so much. Thanks Chris. I could see you Tim definitely in those Belgian loafers. And I'm

just gonna put it out there all right. Well, you know what they say to do your holiday shopping now because of supply chain. And she's Carol. So if you think that, you know, I need that addition to my wardrobe, uh, I won't say no to Okay, I'm going online right now. And that wraps up the weekend edition to Bloomberg Business Week from Bloomberg Radio. Thanks so much for joining us I'm Carol Masser and on tim Stane. Be sure to tune into our Bloomberg Business Week Daily show. It's Monday

through Friday. It starts at two pm Wall Street Time on Bloomberg Radio. You can also watch our daily broadcast. It's on YouTube, just search Bloomberg Global News. Also check out our Bloomberg Business Week podcast. You convided at Bloomberg dot com, Apple or wherever you get your podcast and Bloomberg Business Week is available on newsstands right now at Bloomberg dot com and always on the Bloomberg terminal. You

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