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Hi, everyone, Welcome to the Bloomberg Business Wee Weekend podcast. This past week, and Video became the first company to hit four trillion dollars in market cap, cementing AI's rally and its status as a kingpin in the global financial market.
Okay, so that's sort of a micro economic look totally, even though in Video is such a big company, we could call it sort of like a macro event.
True.
On the macro side, though, there was a lot because President Donald Trump fired off letters to over a dozen trading partners threatening new and higher tear rates they will face if they don't make a trade deal by the new deadline of August first.
To be fair, there was stuff happening with trade and tariffs as we were recording our broadcast and podcasts, so highly recommend you head to the Bloomberg or Bloomberg dot com for the latest and greatest when it comes to
trade and tariffs. All right, on trade and tariffs, though, we talked to the CEO of Treks, it's public company that's the largest manufacturer of wood alternative decking products, and the company's CEO joined us to talk about the impact of President Trump's extended trade deadline.
Meantime, the world's richest man tells one bullish Tesla analyst to shut up. That analyst opens up to us in just a moment.
All right.
We also get into some other stuff that's going on. Amazon's robotic milestone that could one day replace humans and warehouses, or maybe it's a case they're working side by side. We get into that, and then I got to say, in our second hour, we get to America's hot garbage problem, a bit of a disturbing store.
Also the CEO of Brooklyn Sports and Entertainment, which owns the Brooklyn Nets and New York Liberty. All that to come. We begin with the analyst. You this week got a short but clear message from Elon Musk. The analyst, Dan Ives, Global head of Technology research at Webbush securities.
Look, I mean, I knew Elon was not gonna be happy, but the reality is, you know, the board they basically need to now step it up. And I think it's something where you know, I hear from sheeralders around the world right on Tesla and as one of the biggest supporters of Elon and Tesla, it was time to rip the band aid off. You got to now put a
new structure. And actually one of them you know that we talked about in terms of the three things that we suggested, is that justly something Musk wants terms of twenty five percent voting rights and what I view is will ultimately be an XAI merger potentially, but second third, the political gambles and this side show it can't continue.
You know, analysts were totally seemed totally fine with Elon Musk and correct me if I'm wrong. They seemed totally fine with him when he was getting along well with President Trump and it seemed like the president's policies would favor his companies. Is that fair to.
Say it's that's one hundred percent. I mean, I view it is like and we talked about it. The best ever happened to Musk at that time was Trump getting into the White House. And obviously, you know you could argue Trump doesn't get into the White House if it's not from Musk.
But like a lot of things, it took on a life of its own.
Doge BFFs spending now time with Tesla, mar Lag or DC Doge the brand issues That ultimately is why then Musk had to take a step back and basically leave the Trump administration. But in your wildest nightmare, no one expected, hey, let's triple down start a third political party where now Trump actually becomes a foe, Republican part becomes fue and that just becomes more of an overhang for Tesla.
So the board as it exists now, is this the board that you think can bring about the necessary changes and set the ground rules as you are calling for Tesla? And Jack Hartung who has been CFO of Starbucks, not Starbucks of Chipotle, excuse me, Kimball, Reeve Musk is on it, Jim Murdoch of course, Elon Robin Denholm, an Australian business
executive from her accountant, chair of the Tesla board. So I'm just trying to think, is this the board that you think can execute the changes that need to be done.
Well, they don't have a choice.
No, this is I mean they don't have a choice because.
They don't have a choice where the sometimes boards look, if you go back to history of Tesla, what Elon does?
What he do?
You know, you can never argue a bet against them, And that's been that's been the m right, that's been the DNA. The problem is is that essential the clock strikes midnight when now it comes to these political ventures and endeavors as well as the time spent at Tesla the board, you're not going to have a major change or makeup in a board that would take many years. The board now, as a public company, needs to a
new pay package. We talked about twenty five percent voting shares, but then established the guardrails because it's a public company and shareholders are demanding and the stock reflects changes that need to be made.
You know, the board certainly is part of it. But I think bigger picture question that I have is an existential one about Tesla Dan and that's with regard to Chinese competition, and we've seen sales get hammered over the last year, and that really the narrative has been around Musks and his association with politics, whether we're talking about that in the US or about that in Europe. But
what about the China factor? Does Tesla have what it takes to compete around the world with Chinese EV's, they have.
What it takes with Musk in other words, like Musk is the biggest asset for Tesla, but they don't.
Have the products. But they don't have products that compete at those price points and with that test.
Yeah, So on that point, Look, it's so much spends time in China, like competition, Bid neo xpaying everything. We've seen clearly it's become much more of a competitive market. I just I continue to view is that Tesla is still a gold standard globally when it comes to EV's. I think when it comes to China, Look the big game right now that they're a win. It's not this sid about deliveries, it's about can they win the autonomous
and robotics future. That book that is the way you get to two trillion, The way you get to trillion dollar incremental evaluation because of autonomous is that way.
You know, it's interesting that you say that because one of our producers Sebastian Escobar said, Hey, Weimos are coming to my town where I live in, which is just across from Loower Manhattan, And I'm like, wait what? And Weimo seem to be expanding pretty aggressively, and so it does seem like folks are going after what could be ultimately the future right of Tesla. I really autonomous works. I mean that's where the growth comes right going forward for Tesla in your.
View, sure, but to that point, I look, weymos are two undred thousand dollars cars, like you're essentially in five six cities. Yeah, when you do about the scale and Scoop Tessa were talking about twenty twenty five cities over the next year. When it comes to robo attack, I mean, that's the whole opportunity, Like when you think about twenty percent of what I view is like ride sharing over the next four or five years is going to be autonomous,
no driver. So that's the opportunity that Tessa is going after. But then it goes back to politically, you can't have Trump, Duffy, whoever else you want to talk about for administration now as a friend, but as a foe when you go into the most important chapter of growth and success. What I view on the horizon for Tesla has has.
Elon reached out to have you reached out to him?
I mean, I won't comment there.
I would just say that, like, the message has definitely been received by Elon, It's been received by the board, and that was my goal, right, Like my goal is is that sometimes it's like tough love, right, Like the point is like it comes down to like if you don't reprimand or whatever, if you like, you know, it's like there's good times in bad times, but this is a time and the stock reflects it that the board, the adults.
In the room, what everyone want to talk about. They need to weigh the guard rails.
Out from Musk, especially around the political ambition.
That that is the key.
Dan, How does it feel to have Elon Musk tell you to in all seriousness? What did it feel like to have him tell you to shut up? On his platform? He's got I don't even know how many followers he has. It has to be over one hundred million, hundreds of Millik's like two hundred and twenty million followers. How did that feel? I mean, I imagine too as his sort of army came after you as well.
Yeah, I don't you know you we knew each other. Well, It's like I don't worry about that. I mean, to me, I just actually view it more as like he has his right to an opinion. I disagree. I'm a huge supporter him and Tessa, but I'm more focused on, like it creating dialogue, Like he'll say shut up Dan, and I have one hundred memes sent to me about different shut up Dan stuff and actually got in the street yesterday yelled from New York City across the streets like
shut up Dance. So that's that's that's that's cool. But to me, it's about creating the dialogue because now it's like, Okay, what what is the community?
What is ship?
I'm here from sheeralders all day. Right, that's the important thing. What it means for the Tesla story. That's the whole goal.
I wonder has the board reached out to you and said, hey, thanks Stan for that?
Yeah?
No, I mean, I just the good thing is like I feel like I definitely feel like this message has been received by the you know, I think everyone's seeing it. And at least now now it comes down to like, Okay, are there actions like does what does the board do with the next pay package? Remember is the other fifty six billion dollar pay package is still in the legal sort of wimbow because of Delaware Foxy still hasn't been
you know, ultimately sent. That's been the way. So this is a key period of time for the board.
From Musk.
Another message that was received for the world of Elon Musk was from the CEO of X, Linda Yakarino, stepping down a CEO after two years post on X decided to step down as CEO. I'll be cheering you all as you continue to change the world. What's your view on that? What's how do we read it?
I think I have a very positive view of her, right, besides the fact that she's a Penn Stater.
We are, but.
All right, let you know, but my view is she turned around acts. She navigated massive political storm, right. I think very few people could have done the advertising.
I think a lot of it has rebound. There's still obviously queer headwinds, but I think.
Like this is like, look, it's it's huge shoes to fill, Like it is a big hole. Herd weaving because she is a unique background because of advertising because of her personality. I think she got along very well with Musk. So it is it is a huge you know what I view, it's a negative. But now it comes down like who fills that role?
Yeah?
Interesting stuff. Listen, We're so glad we could catch up with you here. Yeah, we really, we really appreciate it.
I'm so glad to be here and talking. This is a you know, get the popcorn out. A lot of soap operas ahead pack.
If you want to not be yelled on the street, Dan, you're gonna have to tone down the wardrobe a little bit and go incognito and not wear the signature. Dan ives closed. I don't know if you need to go incognito, but you know I love it. We love it. Dan Id's global head of Technology research at web Bush Securities. Joining us from New York.
You're listening to the Bloomberg Business Weekdaily Podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
Well, if you've built a deck in the last few years, you probably know about Treks. The company makes composite decking for mostly recycled materials, including reclaimed wood and polyethylene film. Trex is publicly traded. It's got a market cap of about six point one billion dollars. The stock's down around seventeen percent so far this year. Like many companies in housing and home improvement, it has been a challenging first half of the year. Brian Thanks is with us. He's
president and CEO of Tracks. He joins US in the Bloomberg Interactive Brokers studio. Brian, welcome, How are you?
Thanks? Great to be here?
Well, welcome.
Welcome. Trek sales in more than forty countries, so that's kind of where I want to start. How is the environment in the US for your customers, for your potential customers versus other parts of the world that you sell in the US?
Environment is still relatively strong. Most of our consumers are going to be family income of one hundred twenty thousand dollars plus, and we've all talked for a long time about the bifurcation of the premium customer versus the entry level customer. Because most of our customers are that one hundred plus. We've continued to do well in the marketplace this year. We gie to five to seven percent growth. We reiterated that guy just a couple of weeks ago.
Our contractors generally have six to eight week type backlogs at this point, and overall we're pleased with what we're seeing in the market.
Where are most of the sales coming from. Is it people homeowners who who are putting in a deck for the first time, or are they remodeling or are they just completely kind of I guess yeah, remodeling their backyard.
All the above, But more often than not, it's going to be a consumer that's already experienced a wood deck. It's failed between twelve to fifteen years, maybe eighteen years. On the long end of it. The quality of pressure treated lumber is not what it used to be, so that decision and the payback period of putting in a treks deck versus a wood deck is very different today. But we also put on a lot of new decks on new homes as well as homes that are just
looking for existing square footage. More difficult to move up to that larger home. Now, how do I add more space to entertain with your friend's family, and it put a deck on the back of the house.
But isn't a deck built with treks framed by pressure treated wood under it anyway?
That's correct?
So is that is that an issue? Ever, where the wood that provides the framing the structure that doesn't last as long as the.
That structure is going to be protected by the trek, so it doesn't get nearly the same beating from a weather perspective or for chemicals, UV rays, things like that, so that structure tends to last quite a bit longer, whereas the decking itself is what's subject to the majority of the environmental conditions.
So what exactly is it made of? On the website it says that it is made of mostly recycled materials, reclaimed wood, polyethylene film.
What's the secret sauce at ninety five percent recycled and reclaimed material. So the recycled piece of it is going to be the polyethylene films that we buy from all over the country and up into Canada. It's about one thousand pounds bail of film. We'll bring that in, we'll reprocess it, and then we also purchase wood furniture flooring manufacturers from some other sources as well to mix that together with the plastic, we extrude it into a deck board.
We apply our proprietary shell on the board to give it its fade, stain and scratch characteristics. That's pretty much the way it's done. Buying recycled materials does give us a healthy cost advantage. We can be buying plastic anywhere between five cents and up thirty cents for cleaner plastic. We still have to process it, so there's some additional cost added, whereas virgin materials are going to be sixty to seventy cents per pound.
You mentioned buying some product at least from Canada, the polyethylene film. The tariff situation, we've spent the whole day talking about clarity or lack thereof that we are getting that CEOs and business owners are getting right now from Washington. How have tariffs affected you.
Well, there's a lack of clarity, that's for sure. For CEOs, we are primarily a US manufacturing company. We've got three manufacturing sites, one in Virginia, one in Nevada, and then we're building a green field site in Little Rock, Arkansas
that we're excited about. Today. We are recycling plastic in Little Rock, and then we're moving that to our other two plants to use there As we continue to build out that facility, less than five percent of our cost of goods sold is going to be impacted by tariffs, And in looking at the those tariffs, we look at how can we potentially source out of other countries, negotiating
with those vendors, and then eventually taking pricing. We've taken a very conservative view of pricing of let's try to let tariffs settle out of where their endpoint is going to be, rather than immediately reacting the day the announcements were made.
So we're tim asked about the tariffs, I'm going to ask about the big beautiful bill. We're going to hit you with the two main current events of the news cycle right now. Have you heard anything from the consumer about how this bill is going to impact their spending behavior?
It is too early. I think everybody is just beginning to digest everything that's actually in that bill, and so I've not really had any feedback from it as of yet. We haven't had a chance to pull our contractors or work further with our consumers as well as all of those dealers as well as retail channel locations.
I know you're ninety five percent repair remodel based. So the housing market weakness that we've seen when it comes to new housing isn't necessarily Can we can we do a do a through line from housing data to you or is this all about, Hey, somebody's been in a house, they want to put in a new deck, they're going
to they're going to use tracks. Is there any is there any anything that comes you know, when you're talking about new housing demand and like people buying new homes that that accompanies demand and tracks.
The only impact with the new home buying side of things is it does generate existing home sales. We've all seen existing home sales have been lower the past couple of years. That has driven repair and remodel spending negative numbers. The past couple of years, we've been able to well out growth that mid single digit growth for US small
single digit negative growth in repair and remodels. So we've been able to well out perform at but it would be great to see the existing home sale side of things really pick up and drive that remodeling engine.
Do you work at all with the large developers of property or the large homebuilders like the Lenar's or the KB Homes, for example, to use your materials.
We do. We've had agreement with the majority of the large home builders that are in the marketplace, so it is an important part of our business. But generally we're about ninety five ninety to ninety five percent repair, remodel the remainder.
Of that on new home You guys have a pretty large part of the market share, but that's not for lack of competition. James Hardy just closed on its acquisition of Aazec, which is your largest competitor. How are you thinking about keeping that market share now that there's been a pretty big deal in the space.
It's a highly concentrated market. As you mentioned, we're about fifty percent. Azak TimberTech roughly thirty percent of the marketplace, and they've always been a good competitor, and I think it makes both of us better having good competitors that are out there. We're not going to be seating market share.
Back to tariffs in terms of how the product is purchased outside of the US retaliatory tarraf from other countries. Has that been an issue yet for you?
It has not been an issue, and that goes back to the fact that we're ninety five percent US source US manium.
But if you're US source and US manufactured, let's say you want to export the US product.
Right, I see on the flip side, Yeah, the flip.
Side of that would be another country saying, wait a second, we don't want you to buy this product from the US because we're entering this period of global trade that is more insular, where we're seeing sort of like the world is not flat anymore. You know, it's been a kind of a weird twenty five years. Is that is that on your radar at all?
Our international sales are a small part of the overall company. Now we do ship to forty countries around the world. We've not heard any of that feedback as of yet. Because we get further in the year and the tariff structure settles out to where it's going to end up being, I expect there'll be some additional discussions around that and we'll hear more feedback from some of those countries.
How do you.
Guys kind of deal with the rising rising commodities prices? I remember writing an article a couple of years ago when lumber was just absolutely soaring, and I wrote about like wood alternative companies doing really well in the face of that, But I imagine that you do have to source some materials and if inflation does persist, is that an issue.
Sure, inflation absolutely hits our business during the pandemic. We raise prices like many other building product makers. We also have a strong internal improvement program where we look at all of the costs that we can control and understand how can we take cost out of the business so that we can fund some of those cost increases. Internally, we know every year the cost of labor is going to go up, certain commodity costs are going to go
up along the way. How much of that can we fund by our own internal engineering R and D efforts and our own efficiency efforts. But sometimes we do have to take pricing to be able to cover those additional costs.
One of the big selling points of Track is just how long it lasts. This idea of not having to replace a deck for twenty five years, for example. That also means that when somebody purchases the product from you, they're probably not going to buy anything else from you. How do you build a part of the business that's like not necessarily services, but more ancillary products that are add ons or how do you get that existing customer who knows about trucks to spend more money with you?
Right, that's an important point. Our warranties are anywhere from twenty five up to fifty years. This product will last a long time, but the market size is such a there's fifty to sixty million decks in North America. Half of those decks are at or beyond their serviceable life. Today, composites account for about twenty five percent of the volume of decking that's sold. So there is a large opportunity out there to go convert more of that wood business into Trek's composite business.
Is new business still wood business? Like are people still building wood decks?
People are still building wood decks yet?
Well, why are they doing that when this like, when they're in that moment of truth where they're choosing their material, Why are they still going with wood?
A lot of it is because that's what they know, that's what they've done in the past. So the challenge for us is making sure that we're in front of that consumer while they're making that decision, showing them that we have products. In the case of the decking product are enhanced basics is roughly two times the price of lumber. So for an extra eight hundred dollars, you can have a Trek surface on your deck and prices go up
from there. For an extra five hundred dollars. On top of that, move up to our next line, our Treks Enhance Naturals product line. So it's really important that our marketing engine gets in front of those consumers before they're making that final decision social media.
I've seen some of your social media content.
Ah, Trek's TikTok?
Is that what it is?
It's other people on social media stick.
About their deck.
Oh interesting, I haven't seen that. Hey, Brian, thanks for stopping by. It's been a couple of years. Do appreciate you taking the time. Brian Fairbanks, President and CEO of Tracks, joining us here in the Bloomberg Interactive Broker's studio.
This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern on Applecarplay and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
Amazon held its annual Prime Day this past weekend for the first time ever. It happened over a course of four days, Amazon betting the extension would give shoppers more time to navigate the millions of deals despite terror related price worries, a.
Bunch of robots lending a helping hand to get orders out to customers. In fact, Amazon marked a milestone earlier this month when an announced it's now using over one million robots in its warehouses. That's actually about the same number of human employees at the facilities. The news comes at a time when more tech companies are making job cuts and issuing automation warnings.
Ty Brady is the chief technologist for robotics at Amazon. He joined Matt Miller and me all the way from Tokyo, Japan. It was in the middle of the night when he spoke with us, but it was weird that one millionth robot was deployed in a Japanese fulfillment warehouse.
It's an incredible achievement. I'm so proud of our team to be able to deploy more than one million robots to our global fleet. Our one millionth robot. I'm here in Tokyo. We actually deliver it to a fulfillment center in Chiba here in Japan, a great region for us for sure, And the way that we see it is it's really a force multiplier for both safety for our employees and also for the efficiencies getting those goods right to our customer's door on time, at a low cost, just in time for prime day.
So when we talk about robots, I don't think of the roomba. I think of C three PO and that doesn't seem to be where we are quite yet, certainly not in America, right we don't have a bunch of humanoid androids running around. How far away is that?
Matt, You're speaking my love language, because when I think of robots, I actually think of R two D two, not C three PO. Because I do want to remind you who is in the back of the X Wing Fighter when Luke Skywalker had to go into into the desk Star. That was R two D two.
And why I love R.
Two do and actually R two D two was the inspiration for my entire career. It's because R two D two helps a Jedi be more Jedi. And that's kind of the way that we view our robotics. Inside of Amazon. We see our robotics as an extension and amplification of what a person can do. Just like any great robots, it should be a tool centered around a person, right, So we put people at the center of the robotics universe. That's what we've done with a million robots that we've
deployed out there, whether it's in mobility or manipulation. We are giving our frontline employees the right tool set in order to do their jobs more efficiently, and we're also created more safety for them.
Hi, where's it all going?
And I asked that if we're giving you know, increasingly, you've got these robots, you've got AI and all of this is assisting workers, Like, where is it all headed?
Yeah, it's well, I really do believe that we're pioneering the field of collaborative robotics. So as we continue to gain efficiencies, as we continue to create safety for our employees, we become more productive. That has clearly worked inside of Amazon and frankly for e commerce, where we see that if you can build your robots in the right way that amplifies human potential and as a system that works with people. It's not people versus machines, but it's machines
and people working together nor to the job. We have really revolutionized that field. So what we have seen historically is the more robots that we have added, and this is now over a ten years plus since Amazon really got serious about robotics, We've created hundreds of thousands of new jobs, and we've also even created new job types.
So where I see it going is that the onus is on us roboticists to build our machines in a way that is intuitive and natural for people to use, to build them with specific intent in the functions in order to help people do their jobs better. And my goal is to eliminate the menial, the mundane, and the repetitive. I aim to eliminate every single one of those tasks and allow people to think at a higher level and use the tool set in order to get the job done.
What kind of robots are helping you deal with? Like Prime Day, for instance, it's coming up. I think July eighth is when it kicks off massive shopping day for people around the world, but also for people in Amazon warehouses. I mean, do they have like an exoskeleton like tom Cruise, an Edge of Tomorrow or is it actually you know, a humanoid that's running around picking up orders and putting them in boxes to ship out.
Yeah, we think of function first before form, right, So and when you say humanoid, that's really form base. But the functions that we really index on in robotics is the ability to move items from one side of the warehouse to another, or manipulate items, or store or sort or identify and pack those items. That's really what we do. So if you were to walk into one of our fulfillment centers, you would see these little drive units moving
goods at will. Thousands and thousands of these drive units moving our pods to a person in order to pick out those items. You would see robotic arms picking up heavy packages. These are the repetitive jobs that I speak of. Before picking up heavy packages and moving those into sortation systems. You would see sortation drives moving to the right and correct spot in order to bring it to the truck.
You would see a cute little robot that we call Proteus, and that's the safety certified around people that can move these large containers of goods to the right truck at the right time. So it's really the symphony of people and machines that working together, which is really incredible to see. And it's a very practical in a very practical manner, and that's something that I'm very proud of because this
application is really what's driving the fundamentals of robotics. It allows us to be adaptive and more modular or creating the safer environment for our employees and also frankly, gaining a lot of efficiencies.
Hey, Ty, it does look like we're just showing some pictures out there for those who are watching us right now, and it does look like robots are increasingly becoming more quote unquote human like in terms of standing up and having kind of appendages.
That's the form he doesn't want to talk about.
I know, I know you don't, but I want to go to something Times of London out Andy Jassey. Of course, you're chief executive sending a memo to staff in June saying he expected it's corporate workforce with shrink as it rolls out AI, and this was the quote, we will need fewer people doing some of the jobs that are being done today and more people doing other types of jobs. In the next few years. We expect that this will reduce our total corporate workforce as we get efficiency gains
from using AI extensively across the company. That's AI. But I do think about AI and robotics really increasingly merging replacing workers. How close are you guys to using more robots than humans in your warehouses?
Yeah, it's a it's a great quote, first of all, and I do want to point out the difference between there's AI systems and there's physical AI systems.
Right.
So you can think of an AI system as the digital chess that's in your computer and you can play chess there, but physical AI is that you would want a system with a real chess board in front of you. We're actually picking up the pieces and moving those pieces, right, So this physical association, and what we have seen is when we build the right tool set for our employees, what we do is we really increase productivity for our employees. And what that does is that allows us to invest
more in two key areas. We invest in better collabative robotics, right, a better tool set for employees to use, and we all also invest in our people.
Right.
We have.
Ups more than seven hundred thousand of our employees. It's really important to be mindful of upskilling it's important to realize that jobs will change over time. There's no doubt about that. And our aim is to give our employees, in particular our frontline employees, the best tool set possible for them to do their jobs.
So I love that upskilling figure, And it sounds like you guys are prioritizing certainly making sure your employees they can kind of move up or move on to where you guys have demand and where you need workers. But I do want to go back to is there a point where you do have more robots than humans in your warehouses?
And are you clothes?
Yeah, it's just be careful about the correlation because imagine your let's just say that you're a carpenter, right. What I aim to do is give that carpenter the best tool set possible. I don't really count the number of tools that they would have, but instead I would actually index on the effectiveness of those tools. Are we allowing that carpenter to do their art and create or build the house in a shorter amount of time with even higher quality and create it as safer environment? So I
mean we could index on the numbers. We're proud of the numbers that we have for sure, because it represents some really pioneering work by the many women and women and men scientists and engineers that have designed them. But remember we also manufacture these, so we have manufacturing jobs. Remember we support these in the field, we deploy these live in the field, and then of course we have
our frontline operators that we're very, very thankful for. So it's a full ecosystem that when it's really a force multiplier when you do robotics right, when you do robotics that extends a person's capability to do their job, amplifies the human potential, then you really have changed the game.
And that's what that's why today's one million. It's a one million force multiplier for our employees for the benefit of our employees and also for the benefits of our customers because we know that they love to have the world's largest selection of goods. Robotics helps with that. We can actually as compared to our manual buildings, we can storm more than forty percent more goods in the same footprint.
We know that it fuels a lower cost that we can pass along to our customer because of the efficiency gains inside of our entire fulfillment chain. And we know what fuels the fast delivery times that we know our customers love because we have the ability to pull any order really quickly and bring that the right, good, right to the customers. So robotics is helping spin that flywheel.
Carol has never gotten over Eric Brynjolfson's book Race Against the Machine, and so that's what she's asking about. You went to MIT, right, and so you know that, you know, Brinjoe.
Here's the thing. I think it's great robotics, especially some of those tedious jobs, repetitive jobs, physical jobs. And then if you're upscaling to you know, people who are working now on creating the robots. Like, I think it's a pretty cool thing.
I think, you know, it's supposed to be dystopian, but I the idea in Wally that we will eventually just float around in debt chairs on a cruise ship, drinking icys while the robots do our work for us and get paid dividends. What do you think about that kind of future? And I especially wonder about cryptocurrencies being used because machines will have to work with machines and transact. And this was the idea that we were kind of
sold on at the birth of bitcoin. But is there any is there anything that's not science fiction to that idea?
Well, I can tell you what we're doing is definitely not science fiction. It's actually very practical and applied, and it's it's giving a great success to our employees and it's also benefiting our customers very directly.
That was Ty Brady, chief technologist for robotics over at Amazon. Matt Miller also there. He'll be back in our next.
Hour, and I got to say, we want to have tie back really soon. Tim, You will love this guy. He's so into robotics but really understanding the science, the technology and kind of where we're going with all of this.
But he's fully human. He's not part robout it.
All as long as I know, as far as I know, all right. That wraps up our first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. Ahead in our next hour, US landfills are heating to dangerous levels. It's viewing trash, juice and toxic emissions, and it's making people sick.
We'll explaining plus building a new sports and entertainment empire with the parent of the Brooklyn Nets in New York Liberty.
This is Bloomberg Business Week. I'm Carol Masser and.
I'm Tim Stenovik.
You are listening to the Bloomberg Business Weekdaily Podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
Plenty Ahead in our second hour of the weekend edition of Bloomberg Business Week, including how all those global tariffs, some in place, some to come maybe are affecting one small business in the luxury space.
Plus as sports team valuations rise, the corporate empires running them are thriving. On that, we check in with the CEO of Brooklyn Sports and Entertainment. It's the parent company of the Brooklyn Nets and New York Liberty.
First up this hour, addressing America's hot garbage problem. It was recently one of the most red stories on the Bloomberg and a Bloomberg Big Take. It explores one of the lesser known environmental fiascos in the United States. We are talking about toxic landfills.
Bloomberg BusinessWeek writers Laura Bliss and Rachel Doddell reported and analyzed just how overheating waste below the surface of US landfills is harming the environment and surrounding communities which are left with little recourse. Laura joined Carol and Matt Miller, and she began by discussing one of the US's largest repositories of municipal waste, the Chiquita Canyon Landfill in Los Angeles.
The landfall that you mentioned in La County is a great example, and pockets of buried waste in this landfill have been rising to temperatures over two hundred degrees for the past three years. That's about forty percent higher than the EPA safety standard.
California regulators suspect.
That what's causing this is too much much oxygen getting into this landfill, which is a problem known to start fires. This goes against federal regulations. The landfill operator says that's not the case, says nothing is on fire. And as I found out, these landfills that have been overheating are a phenomenon that we've seen across the US over the last twenty years, and there's real debate, there's real controversy, you know, within the industry, in between regulators about what's causing them.
And what to do about it.
Laura, First of all, I read your story the first thing I read on the Bloomberg and I could not put it down. And you know, I'm the type of reader who typically gets goes to the first four paragraphs. I'm from the Matt Winkler school of Bloomberg and then I'm done. So fantastic job writing this. Uh. One question I did have is isn't it pretty easy to determine whether something is on fire or not? I mean, it seems like you could gauge that pretty quickly.
You would, You would think so, you would think so.
And a challenge with these incidents is that, you know, the the temperature climbs. You know, this is happening several feet below the surface of the landfill, and so you don't necessarily see smoke. You don't necessarily smell, you know, what you might think of as a burning smell. You know, these events can can manifest in a lot of different ways. And it's because actually that you don't necessarily see those you know, classic fire symptoms that the industry is saying, well,
this is this is not a fire. We think it's something else that's that's going on here. But as the story shows, and thank you so much for reading it. I mean, you know, regardless of what we call it, you know, residents are getting sick, and there's a lot of challenges in really dressing the problem and kind of getting to the root cause.
What's exactly what's crazy is like people are getting caught up is it a fire? Is it not a fire? And there's all these terminal terminology, subsurface oxidation, smoldering events.
But it's an important.
Distinction because you write the distinction is in trivial federal regulations explicitly forbid operators from running landfills in a way that starts fires. Why is that so important, especially when you so clearly write that people who are living nearby, they and their families are getting pretty sick.
Absolutely, I mean it's it's been, you know, a well known issue in the industry for years. You know that these fires can create really dangerous and toxic situations.
And you know, among the you know.
Few regulations that are out there at the federal level for landfills, you know, don't start a fire is absolutely one of them. And you know, one of the concerning things that I found is that one of the key rules that environmental engineers and safety advocates say, you know, was really there to prevent fire was actually rolled back, and so you know, as far as like what is
there to do about it? That is something that a number of scientists highlighted for me that we we need the return of some of these rules, for example, to stop too much oxygen from getting in because as we all know, right that can that can start fires when you when you mix that with hot enough temperatures.
And the point is it starts fires, but it also gives off really dangerous gases, right, and and talk to us about what's happening to people who live nearby.
Yeah, I mean, so just to take the Chiquita Canyon landfall as an example, I mean, we see elevated levels of benzene, you know, a known carcinogen, carbon monoxide, other toxic gases that are known you know, to cause the kind of respiratory, neurological, cardiovascular symptoms that people are reporting,
you know, hand tremors, headaches, nosebleeds that won't end. You know, people are having you know, cancer also, And one wondering, you know, is what's going on with the landfill having to do with my diagnosis.
So what can these people do about it? I mean, as I was reading your story, I had a feeling of like frustration in my chest because it's so hard to prove causation.
Right.
People are getting sick who don't live near the landfill also, and these corporations have seemingly endless pools of money for litigation. I think of dark Waters. I think of Aaron Brockovich. You know, what can the houses who is the couple that you that you write about in your lead, what can they do about it?
Yeah, I mean it's a great question.
There are like I think over a dozen, you know, mass torts moving through the legal system right now of residents trying to take legal action to represent themselves. Los Angeles County has also sued you know this at the state regulatory level. There have been a lot of enforcement actions, and I think, what a lot of these efforts are all kind of pushing for our funds, you know, from the operator, to fund the relocation of residents right to
get out of this danger zone. And so I think that is what a lot of people are pushing for at this point. But you know there's also I write about in the story Polar Chiavo who's an assembly member in California has a has a bill that's she's you know, I think, is awaiting a hearing in the state Senate that would basically just attach more you know, penalties right to landfills in the future that you know, exhibit these symptoms that are cause these kinds of problems for people.
What do the companies say, Well, just to reiterate, right, they say that this is not a fire. This is what they call an elevated temperature landfill, which is a term that you know, the industry is applied to at least ten, you know, large landfills across the US over
the last twenty years that have exhibited similar symptoms. And you know, they pointed to you know, millions of dollars that they've spent in mitigating the problem, adding gas wells to trap the odors, putting a cover on top, you know, contributing some money to residents to you know, buy air filters and things like that.
Why don't they just go in there with cranes and dump trucks and move it away. I mean, there is a temperature regulation, right, They're not allowed to be above a certain temperature, and you can just stick a thermometer in there and see that this does exceed that regulation.
It's true, It's absolutely true.
I think the challenge is, you know, what do you do when these kind of hot temperatures become this kind of runaway problem?
And again the question of causation, what to call it?
Like this this all matters, right, because that drives it the question of what do you do about it? And California regulators say you need to dig a fire break, which is actually not unlike what you're saying, right, you need to sort of create almost a trench, right to stop this reaction from progressing. The operator says that that would make things much worse. They say that the solution is to pulling heat out using these wells. So there's just there's a lot of disagreement there, well.
You know, and I feel like it gets into a bigger problem in the United States, and that has to do with waste, right, like what do we do with it?
You know?
If you can't you know, I think there's pushback against creating new waste facilities, right or waste or dumps based on one in exactly exactly. So then what you have to do is deal with the existing ones and just pile more and more stuff into it. I mean, as you noted in our in your story, is that for a long time people burn garbage. We thought that was the way to do it, and then we realized, okay, that's not the way. I mean, and doing kind of also some you know, giving us a little bit of
a history lesson in terms of dealing with garbage. I mean, this is again becoming another big problem, not only maybe potentially for the health of US citizens, but also for the climate.
Yeah, I mean absolutely, I think this, this whole situation is a great and really alarming, you know picture of the problems that can arise, like when we just keep kind of piling our trash higher and deeper, right, And I mean I will also add that, you know, safety advocates will say, you know, we don't we're going to generate trash, right, we know that we're gonna that trash
is going to generate methane emissions. And that's kind of part of the story too, because trapping these emissions, you use these wells that can actually lead to more oxygen intrusion, which is known to start these fires.
And so you know, advocates will say, like we just need better monitoring.
Right, we need you know, better technology to monitor emission levels, you know, real time temperature monitoring for example, so that you know, operators and regulators can take action more quickly instead of you know, letting problems kind of spiral.
Well, and as Carol and I were talking about this yesterday, one of the great things to do would be to stop generating as much waste. Right. I was over the weekend camping looking for a spoon, and I went to a store and they had a box of two hundred plastic ones if I wanted it. But that's part of the problem.
Yeah, like making things that you actually want, you go to attack.
The problem at the root, right, Laura, I'm sure you've thought about.
This a lot.
Absolutely. I mean it's funny.
I part of the way I celebrated publishing this story yesterday was taking the base of my dead electric toothbrush to a battery recycling facility, which, even in the city of San Francisco, was not that easy to find. But
that's another problem. That's another you know issue of this too. Right, We're not just generating more waste, we also have a lot more flammable waste, you know, vapes e cigarettes like these kinds of things, and so you know, figuring out the right safest place to put it is important too.
Yeah, and you bring on the recycling experts to it, they'll say, you know, you think so much stuff is being recycling, but it recycled. But it's not necessarily ape case.
Doesn't everybody now have a drawer full of dead vape batteries? Not in my hand?
No, Laura, incredible story.
That's right.
We were talking about kind of the waste yesterday and when he saw it this morning, he's like, oh my god, this is what we've been talking about. It's a great deep dive and we so appreciate you giving us some time with it. Laura Bliss, Bloomberg Business Week editor and writer. Check it out. You can find it on the Bloomberg and at bloomberg dot com slash BusinessWeek.
This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern on Applecarplay and the Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
Well The WNBA, known as the WTA fans announced plans to expand eighteen teams by twenty thirty, adding Philadelphia, Detroit, and Cleveland to the previously announced Portland and Toronto teams, which begin play next year. The expansion builds on several seasons of dramatic growth and comes at a time sports teams have been getting acquired for record breaking and I popping amounts. So let's talk about sports and enter aman and hospitality. We've got Sam Zusman with us. He's CEO
of Brooklyn Sports and Entertainment. It is the parent company of the NBA's Brooklyn Nets, the WNBA's New York Liberty, and their home arena at the Barkley Center. We're also joined by Randall Williams. He's a familiar voice and face to all of you. He's Bloomberg News Global Business of Sports reporter. Both of them join us here in the
Bloomberg Studio. Sam, I want to start with you. I think you know the brand Brooklyn is something that you are leaning into big time here with the Brooklyn Nets, also of course with the New York Liberty with the Barkley Center. But I think people outside of New York might be surprised to find that the Barkley Center basketball is a big part of it, but it's not the
biggest part of it by any means. Sort of break down the share of what comes from basketball versus what comes from everything else that the Barkley Center does.
Yeah, so thank you for that, Tim. So, Barkley Center is a real entertainment mecca. We are open roughly one hundred and ninety nights a year. We do somewhere around seventy five to eighty concerts a year. Brooklyn Nets games around in the forties, Liberty games in the twenties. We are the third highest grossing arena in the world. And it's not just about the content, it's also about how
we do it. Our goal at Brooklyn Sports and Entertainment is to create bold and unique experiences the Brooklyn Way meaning Brooklyn DNA. Right, if you sort of think about what Brooklyn stands for globally, not just nationally, for creativity,
for relentless hustle, for authenticity, for diversity. We represent about one hundred and fifty different cultures, and so we want to make sure that when you come to an experience at Barkley Center, whether it's a concert or a game, you have a unique DNA Brooklyn DNA based experience that might be different from the experience you would have with the same game played at a different arena or the
same concert played at a different arena. And we manifest that with food, with service, with ancillary entertainment, with how the venue is and the fan experience. The audience experience is sort of first, then we manifest that.
So, Sam, one of the things you mentioned was culture, and the reason I bring that up is because obviously New York City has a lot of it, but Madison Square Garden in particular has been open for since nineteen sixty eight. The Barclay Center opened I believe in twenty eleven or twenty twelve. You built culture in fifteen years to become the third excuse me, third highest grossing stadium arena in the world. What went into that?
So the work and division of a lot of people that came before me. But I would say it's focus first and foremost. But secondarily and maybe first is a lot of long term thinking. So we are I consider us and the ownership group to be long term builders. Everything that we do is with the long term goal.
We're focused on building generational fandom. We're focused on building the experience, the service that we provide, the training that we put in, the selection of vendors, the selection of entertainment, the selection of concerts. If you look at Barkley Center, it is only to your point, opened in twenty twelve. It is only thirteen years old, and we've already embarked on a set of arena renovations with over one hundred
and fifty million dollars over four years. And we've opened several new clubs that you told me the Crown.
Club is my favorite. The Crown Club is my favorite. Yeah, and look, Crime Club literally.
Is first and unique in its experience, a chef restaurant with unparalleled wine list, where people come in and they're havn't the time of their life, you know before.
For some people who don't even go to the game, they just go to the Crown Club and sit down there the entire time. I think, he's your guy, not me, he's your guy. There a follow up to the renovations. We're seeing this age of sports teams who have to renovate these stadiums, and the cost of that continues to go up. You guys obviously got out ahead of that.
Why is that.
Important to say, hey, we're going to put money into this even though the stadium is less than fifteen years old. You know, there's a world where the Scy family could have waited twenty years down the line and be like, okay, now's the time. But you're out ahead of this.
Why is that? It is because we're long term thinkers, and it is because we're audience and fan focused. Right.
So, just to give you an.
Example, we have taken two levels of suites and we've turned them over into bullfacing clubs. Where the reason we did that was not the utilization. The reason we did that is that we notice that the consumption pattern and the preference of the audience has shifted. People like less to run from their seats to buy something and run back and miss the game and so on.
There are there are.
Folks who come in. Look when you look at overall, how you experience a concert or a game, it's an experience. It's it's it's it's entertainment. And so if you can offer somebody the opportunity to come into a club with several hundred people, to be able to eat, drink, take that food to your seat, watch the show or watch the game, go back and forth, be with your friends, entertain your clients. It's a very different experience than buying
a ticket and sitting in a seat. And so what we've observed is this is the trend, this is what people want. We've done primary research, we spoke to people, and so we want to give that experience to people. And we have not invested. We're not doing this because things are getting gold, because we want to give things a facelift. We're doing this because we want to satisfy the patterns of what we hear people are wanting. And we believe in the notion of keeping everything fresh, of
being being leaders and thought and entertainment. And we're putting our we're putting our money, you know, to work.
I want to talk about the growth of women's basketball and the WNBA. Randall had pointed out to Tim and I that the Liberty were ranked the second most valuable WNBA team four hundred and fifty million at least by Sportico. Is it possible to get to one billion? And what would that look like? Talk about like how we've gotten here and where we're going.
I think it's not just possible. I think it's highly likely.
You think there's a race to get there. Look, we're in sports.
There's always a race, right.
The Look, we don't, But I would say this.
The race is to win another championship, to be a dynasty, to give fans a great experience, to have the best players, to take care of our players, and so on. That's that's what the race is. Not to evaluation. You also don't dictate the valuation. The valuation comes because you do all these things right. But yes, I do think that it will happen. I think it is you know, famous last words. But it feels to me like it's straight down the fairway when I look at I joined the
company three years ago. I have seen the average crowd go from two thousands so much different times years ago, from two thousand to a sellout. I have seen, you know, I won't I won't labor all the all the key performance indicators, but attendance, ticket, ticket prices, season ticket holders, sponsorships, every single metric has gone up tens of percentages a year. And and when you are at the arena, it's palatable.
A Liberty game is loud, it is a party, It is a fun experience and everyone is invested, and there are some things that you could you could just see, you can you can feel.
We're speaking with Sam's usman CEO Brooklyn Sports and Entertainment. Also joining us Randall Williams, Bloomberg News Global Business of a sports reporter, Sam. How is the consumer doing right now based on ticket sales? Are you seeing any weakness, any lack of demand in different events due to concerns that the consumer has about parting with discretionary income. I mean, there's nothing essentially more discretionary than what we're talking about here.
Yeah, you know, it's interesting. We are we're in the experience economy, right, Like when you think of people buying products and services, they do that in order to save time in order to gain efficiency. For us, it's the opposite.
For us.
People are giving us their time and giving us the money their money in order to in order to gain an experience. And so it's it's it's quite interesting. It's it's in good times that people want to do it, and it's actually in tough times people want to do that as well. And so look, I don't exactly I can't exactly measure the macro, but I can tell you in the micro. If we look at attendance in concerts,
it is it is stronger than ever. If you look at attendance in Brooklyn Nets and New York Liberty Games, we are in the high ninety percentage. You know, when you look at discretionary purchases off merchandise or food and beverage and so on, if you look at ticket prices, if I only had those to go by, I would tell you that the economy is doing great.
See.
And one of the things that both you and Emily mentioned was the growth of the WNBA. And I'm going to ask you about these CBA negotiations, negotiations that are going on, and I don't know if you can answer that, but the players have said they want better salaries, better benefits, increase retirement, all of these things. We haven't heard much from the league. So from your vantage point, what do
you think is a fair deal from both sides? Because you know these CBA negotiations go on once every decade and.
We only have twenty seconds.
Yeah, well, I won't use that because I that is actually a topic that I that I should refrain from. It's an active negotiation, and so I think we should let the professionals, negotiator on the table a.
Good place to end at. Sam Zusman, CEO of Brooklyn Sports Entertainment, Randall Williams and Bloomberg News Global Business of Sports reporter. This is BusinessWeek.
You're listening to the Bloomberg Business Weekdaily podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
A recent most read story on the Bloomberg and at Bloomberg dot Com that caught our attention highlighted the struggles that some US small business owners are facing due to volatile trade policies. It was about Robert Keeley, the owner of Killey Electronics, who used his one point eighty three million American Express Reward points almost two million to pay an eleven thousand dollars tariff bill.
For some, it may feel like they're only lifeline left. Small business owners often lack the cash reserves, lobbying muscle, or supply chain flexibility to absorb steep terrifikes or pivot production.
One small US business owner with the global supply chain is Steven Silver. He's chairman and CEO of the independent family owned Steven Silver Fine Jewelry.
I think that the tariffs have put a lot of pressure on imports as Swiss watches, and yeah, that's an interesting situations that they're having to deal with. We're having to deal with as a company that's supporting twenty one independent Swiss watch brands. So navigating that's been pretty interesting. From the perspective of inventories that are hold held inside the United States, those inventories have gotten more valuable because
the tariffs don't affect those. The interesting sidebar with red arts to manufacturing, which is I think one of the major purposes of these tariffs is we bring as a trade. We bring in a lot of rough a lot of cut gemstones, but they haven't made into anything yet, so tariff on those products coming in we've never experienced before. So I think you may see an elevated price point jump, whether the consumers are forced to absorb that or not.
As a different story, but unless little modifications are made to these tariffs to support us manufacturing in this country with the loose goods that we bring in, you'll probably see some jewelry pricing increases. Who knows, I mean It really depends on how much the manufacturers are willing to absorb in the process of delivering the product to the public.
How much does it matter to you. I was in Lamon in France a couple of weeks ago, and I had the opportunity to sit down with Richard Meel, who makes, you know, great watches and very expensive watches. I mean, I don't know the exact prices, but we're talking about three hundred thousand dollars riskwatches. And you know, for his clients a ten percent bump doesn't matter very much if they even have to raise the price that much.
Yeah, I mean, Richard Meal is a company that we started with when we first went into the independent watch business about seven years ago. The way that these things will be acted or reacted to is about what the brand wants to absorb in the process of delivering product to its consumers.
And it's a very good point because they have I'm guessing they have massive margins.
Well they have margins, so to the degree that they want to eat into that, they will in order to support their business and their consumers.
So tell us about your world, and I'm just curious about what you are seeing I'm assuming you have, you know, tell us about your typical client if it's a gamut of you know, in terms of price points and what it is telling you about the consumer right now.
And you're dealing with also incredibly high end stuff, right cashmere sapphires, pink diamonds, Richard Meal watches, so.
Well, not Reshart Meal anymore, they went Mono brand and we were eliminated. But but other brands on the level of Reshard Meal or even finer, you know, some of the brands like Groogle, Foresa and other important brands.
Do you have one carrot diamond rings? You have you know, multiple carrots, So like there is a range.
So what are you seeing.
Well, the consumers, as we discussed earlier, as we move up into the to the different levels of consumer activity and we start getting into the ultra high end attitude shift, reasons to buy shift. A lot of our ultra high net worth consumers are buying is storage of wealth. So that points to you know, product like ultra rare pink diamonds,
blue diamonds, red diamonds. Some of the unique rare historical pieces that we've dealt with over the years, like the colon and blue diamond necklace, which we donated to our National Gem Collection in twenty ten that sits in the Smithsonian. You know, things like that, historical pieces that are real, really true collectibles and investments or act like investments.
But did you see I promised diamond? By the way, I mean, the colon in for me has even more significance because Rolls Royce actually named the SUV after this diamond.
You know, we were actually in discussions with them about when they were first coming out or with the concept of the colony. We sat down with them and we actually gave them a color chart of what the colon in blue diamond color was and to see if they wanted to match the color of the paint of the colon in. That would be insane, would We Unfortunately didn't do it with them, but it was an interesting discussion to have with with Rolls Royce at that time.
What a cool brush with history it is. I mean, in two different ways. Can I ask about the lab grown because to me this is okay. Obviously no one's replacing a culon or a pink promise with a lab grown diamond. But you point to you point out that for a large swath of people, diamonds are more than jewelry. They're a store of wealth.
I have some.
I have a very wealthy friend who gave his wife a giant diamond and she immediately got a fake made of it and put the real thing in a safety deposit box, because that's just how that set rolls, you know. But for the normal people among us, like for me, I just want to get as much size as I can to put on my wife's finger, right, I don't care.
I'm sure she appreciates, yes.
So, like, how do you see this debate between lab grown and you know what I would have called blood diamonds, But I don't think that's fair anymore.
Well, the impact on our trade is still an evolution. The last time something this massive happened to our trade probably goes back to the time of Micking Moto inventing the technology to culture appearl and it really impacted the natural pearl market. This is a little different in the
context of the ability to measure the market. It will define itself over time, I'm sure, but it looks like to me anyway that the trend is more of a mass market product that really impacts positively the average consumer. That spends twenty five hundred to maybe set five six seven thousand dollars to buy a piece of jewelry for
an anniversary or a special occasion. Instead of spending or financing that purchase at twenty thirty cents on the dollar, they can afford to just write a check and not get into debt in the process of buying that product. So I think for that market it's probably a great tool because the product looks like a natural stone. It's a synthetic diamond, absolute match to what nature produces, but it's not in a laboratory.
So but it will hold any value.
Zero value at all, because the measure of value in our world is what the secondary market wants to buy that product back into the trade for. So if there's no support there, which there is not, then it's sort of the same thing as buying a T shirt. Once you've used it, it's done. There is no value. The trade won't recognize it as a secondhand purchase with value. However, with the natural stone, it's a fully developed second mark secondary market. The state jewelry has bought and sold every
day in massive volumes along with metals. So in the alternative, again going back to the Mickey Moto experience, is there is a market for mickeymotocultured pearls or cultured pearls, but that's because they farm them. They actually it's a farming process that does have the risk associated with not producing the product. So is a farming product as the trade recognizes a value. But it is definitely a different marketplace
than the natural pearl market. It's massively different. Natural pearls and a big size can be worth millions of dollars as a pearl, and nothing even comes near to that with a single pearl in the culture cultured world.
I am curious, Steven, because we talked with some folks in the high end real estate and that when there was the turmoil in the marketplace and we saw stock sell off a lot, that people were pulling back from buying property. And these are even wealthy, Like we talked to high end real estate. Did you see any kind of slow down amid the market volatility?
Some Yeah, yeah, for sure there because we're also a wholesale business as well as well as a retail business, so we saw a lot of resistance slow down in our wholesale side, you know, with the ultra high end, they're they're very very smart consumers and where they see opportunity,
they'll take it. And buying something that they don't need but want is a different thing that understanding that their capital may be better suited for a dip in a market, they'll put money into that versus a luxury item like what we deal with in the long haul over a long period of time. These rare collectibles are very very strong though. They hold a very very strong position and resistance to volatility is part of that. Interesting charts that
we develop and look at in our own world. What is a pink diamond done in the last ten years?
What has it done in the last time?
Really interesting chart with very very little volatility. Depends on size, color, clarity, cone of color. But the vivid pink category and intense pink category has been a very very gradual increase over the last twenty years. That has spun off amazing returns for people that that buy them, and I believe, honestly we'll consistently do that in the future because they're so rare.
Have you seen the Missus Bezos diamond?
I didn't know.
It's I think like twenty thirty carrots.
It's pretty wild.
I want to ask about watches because you know, on Wall Street, I think there may be some lack of creativity. So the guy that makes you know his first ten million is going to go out and buy something from ap or Petech, Fhi Leap, but not necessarily Grooble Foresay or mbn F. What are the most important indie brands right now? For those that really know, and I'm not one of those people, what are the ones that are sought after so once?
So this is a really interesting question because the what I call the independent stables Rishard, Meil, ap Rolex. Those are your three dominant big boy brands that dominate the high end luxury watch Constantine, Paddocks of course, but Vacheon is probably number five or six. I'm not sure the top off the top of my head with the top ten are, but these that I've mentioned are certainly in the top four. Then you have this sector called independence,
but they're not usually big businesses doing big volume. But that's where the innovation is, and that's where you see the MBNF and this wonderful design and this really unique quality the grooble Foray. These companies don't make a lot of watches. They may make three hundred or four hundred max. But the innovation, the time and the effort the finishing on these watches is equal to or surpassing great cars that are incredibly rich cars, right, very very expensive cars.
So that kind of engineering is the samekind of engineering that goes into these independent watch brands. That's where the innovation is. It's also points to our client in Silicon Valley. This is a valley of innovation and has been for decades.
So the this is why we see like Mark Zuckerberg wearing the Google Forces only recently, right.
I mean, you guys are in Menlo Park and I'm just curious, you know, what would you tell us about kind of to look on Valley today in terms of based on the purchasing and what you're seeing.
Well, we started in nineteen eighty, so we've seen pretty much the entire evolution of the different technology companies that have evolved. They're certainly different today. They're much bigger, and they're much you know as they the.
AI guys like watches and as much as everybody else.
Absolutely. I mean, we've got twenty one watch brand sitting at the Villa, which is our new home you know, we built a thirty six thousand foot building just to service the clientele. That is our local clientele.
Who are the most famous. I mean, I'm sure you can't divulge the names of your clients, but you know how.
Many NDA's I've signed, So don't go.
No, I get that, but some of them are open about their hobby, right, So we know Mark Zuckerberg now has just a pretty decent stable of watches. Who are the most famous horological experts in you know, Silicon Valley or Hollywood And.
Just got about thirty forty second.
All right, Well, you know I can't say names, but I can tell you that the leaders of some of the big tech companies that you're reporting on every day of the week. So and also some of the most important venture capital guys or I've been clients of ours for forty fifty years. So so they love to buy watch, Matt.
You know that they do.
You just need to look at I love it.
I love it.
But Stephen, thank you so much, Thanks for coming by, Thank you for having me. Yeah, a pleasure, Steven silver chair the way, I.
Want to make a quick chat out to enchant or uncharted. Yeah, they were amazing Noah and and Michael and Michah. Yeah, done such an amazing job.
That was the event you did to the Hamptons.
Unbelievable and we hosted at dinner by the Way for them on the West Coast before they did.
We'll catch up soon.
I agree.
It was like a whole different slice of life and it was fun to bring it to our Bloomberg audience. Steven Silver, thank you so much.
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