Bloomberg Businessweek Weekend - October 28th, 2022

tech earnings this past week. And you know these are the companies Tim right, that have been disrupting and innovating for years. Speaking of innovation and disruption, coming up something

that might be the king of all disruptors or not. Crypto, The latest edition of Bloomberg Business Week magazine dedicated entirely to the Crypto story, your guide to what it does, what it means, and why it still matters that in a moment, and I gotta say, really, this whole first hour is all about our ever changing world and those shaking it up. With that in mind. Coming up another disrupt or, Chinese President j Ping tightening his grip and what it all means. Plus the Metaverse in practice with

the CEO of Super League Gaming. All of that to come, We begin with the Crypto story, for just the second time ever the entire magazine dedicated to a single topic from a single writer. Paul Forwards what his code was the first that was just a few years ago. This time it's Bloomberg Opinions. Matt Levine, you know him from his Money Stuff newsletter that hits your inbox around lunchtime each day. He gave us forty thousand words on digital assets.

He certainly did. Bloomberg business Week Markets and Finance editor Pat Regnier and the editor of Bloomberg business Week Magazine, Joel Weber give us a primer on the innovation that could forever change the way we transact and how we

view the world of finance. Crypto has been just honestly, it's been an amazing story for a decade, and then to see what's sort of transpired over the last um year, uh where it has just felt like a lot of error has come out of the balloon and it just sort of makes you wonder, like, what was this thing that we've lived through for this past decade and what help us make sense of that? And the number one thing that I think collectively that group was like, we

all want to read it. Is like anything Matt Levine wants to say about crypto, Um, we will, we will publish that, all right? So Pat coming in on here, uh and this because it's an incredible story. And I have to say I already said to do Like I started reading it and I'm like, oh, I kind of start to get it after so many conversations, so many different interviews, what Matt writes in terms of how he kicks it all off, it starts to make sense crypto

to me. How do you guys, though, work with Matt on this because it's a massive project and it's broken down into parts. But how do you approach something this What are the conversations you had back and forth with Matt about it? Well, I mean first with something like this, you just asked him what he wants to do. He's such an accomplished writer that often the wisdom of editing is in knowing when to get out of somebody's way. Um,

But then to ask questions and to be a good interlocutor. Um. I think there are different people on staff who think about crypto differently. I'm crypto skeptic and it was fun to bounce ideas off him, and I think the achievement of the piece is how demystifying it is. UM. If I try to describe it to people, I say, this is a tool for thinking about this thing that's kind of captured so much of our attention, and it could it could take you in a lot of different directions.

I think one thing that a lot of people feel about crypto is let's say, for example, you're a crypto skeptic. You'll say, I, I'm skeptical this, but I'm not sure I understand it well enough because it's sort of obfuscated in so many wayers of detail. He'll he'll break that down for you, and he'll show it to you and you'll be able to think about it with an open mind. It might change your mind, but it also might actually uh take you to thinking about it in new ways.

I think if you are a crypto fan, um he might surprise you in like what he focuses on and what he doesn't A lot of sort of the most important talking points of people who like crypto you won't see much in this story. And then he'll he's kind of drilling down into some of the UH financial market details of crypto and some of the surprising places that crypto went just in the past couple of years, and you may see new interesting opportunities in that or new

places that crypto can go. Hey, Joel, can you talk a little bit about the presentation of this piece. It's it's in the magazine, so it's in traditional magazine format, but it's completely i don't want to say, a completely different experience if you read it online. Can you just talk from an editorial perspective, how you sort of make something unique online but also you can digest it in

a traditional format. So the staff UM several members have been around long enough that they worked on that code issue that I mentioned by by Paul Fordan and so there were learnings from you know, sort of uh, how this is, you know what, and how ambitious we can be with this. And you know, the dirty little secret is that we built it really for web first, because we wanted this presentation to be something that was just organic and and in its kind of native form for

the Internet. And so we did that first and foremost, and then we basically have reverse engineered it from there into print and it's almost going to be a one to one UM uh, kind of transmission where we take everything that we've already done online and bringing into the magazine. And I think there will be some there's some little, you know, bells and whistles that obviously aren't going to

translate to print. But I think what we really tried to accomplish here was something that was timeless and felt like you know, if you if you really only read one Crypto story ever, and like, look like I think what's interesting about crypto and it's very different than code, was that code is this invisible thing and around you and is the architecture on which our modern worlds built. And then crypto is not like that. Like you have people who believe and then people who don't believe. So

it's this really divisive topic. But we we I think we've really tried to create something here where people on either side of that equation have something that they can can read and understand. Like like Pat said, there, I think we're really we We tried to go out here and reach the whitest possible audience. With that, Joe Weber and Pat Rigneer breaking down this week's issue cover to cover again one story, the Crypto Story. Your guide to what it does, what it means, and why it still matters.

By Matt Levine. It's so crucial to understand this coming up someone who's not so in love with crypto but very clear about what he wants to do about the future. It's been just about one week since m Pink solidified his singular spot at the top. What that means for the global pecking order when we come back. You're listening to Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim

Stenovik from Bloomberg Radio. You might recall a chilling scene last week. It came out of China last week, and I watched it many times, feeling the gravity of it, watching former General Secretary Hu Jintao ushered off stage at the Chinese Party Congress and watching President Jijan Ping of China cement an unprecedented third term as that country's top leader. Andy Brown leads the China Hub as a partner at

Brunswick Group. It's a critical issues advisory firm. He's also the former editorial director of Bloomberg New Economy and spent thirty five years in Asia. As both China editor and columnist for The Wall Street Journal. The Pulitzer Prize winning journalists joined us to sum up the result of She's years long game. So victory for Sea absolute triumph, gets his third um basically, if he wants it, rule of a life, packs the polit Burero standing committee with his

own people. People say he's the new Mao, not in the sense that he's about to unleash chaos on China. I mean he wants order, but in the sense of power, in the sense of prestige, in the sense of his place and history. In fact, he may actually have more leeway than Mao. Mao, after all, had to launch the cultural revolution to get control of the party. She has no rivals, no peers, and no success. He's alone at the top. Now, what the markets are reacting to is

the fact that this wasn't just a personal victory. It was a victory for his policies, the policies that have so alarmed investors, portfolio investors as well as global companies investing in China over the last several years. So how do how should investors after decades of thinking this is where companies wanted to be to tap into um their citizen base. What a billion plus people. How should investors think about the Chinese market going forward? You know, it's

so interesting. I took to I talked to business leaders now investing in China all the time. Just about everything they knew or thought they knew about China has turned outside down. They thought that the Chinese system was optimized for growth and development. In fact, it's now optimized for security. China is looking inward. They thought that Don Cha Ping's open door, open reform and opening policies would continue indefinitely. She's Don Schalping's open door has turned into Si jim

Ping's fortress China. They thought that policy making would be pragmatic and predictable. It's become ideological, almost random. They thought businesses thought that China would do everything it could to ensure a benign global environment that would facilitate China's economic rise. Wolf warriord to pharmacy, ballistic missiles over Taiwan. Uh An alignment with Putin's Russia ahead of the invasion of Ukraine has reversed all of that kind of thinking. It's a

very very different China. I do think about do we look back. I don't know any year from now, five years or now a few years, and this was the beginning of the division of the world, or maybe that was starting already, Like how do we think about this in a world where globalization was supposed to be it all that we've seen a tremendous pushback. We have to recognize that she Jimping is building a very different China.

He has a very different vision. It's a vision that prioritizes security over growth, and it comes from a fundamental place of insecurity. He believes that Chinese government believes, the Party believes that they're in the early stages of a decades long struggle for supremacy against you and I did

states that may actually lead to conflict. And so all of these policies that you see rolled out from you know, uh, the advance of the state, the assault on the private sector, UM, COVID zero, populist policies aimed at wealth redistribution, forcing billionaires to disgorge their money, UM, a more assertive foreign policy. UM. So much of this has to do with hardening the economy for the for the for for the struggle that

they feel is coming. So what does it mean for American companies that want to do business there, Apple, Nike, Disney, Tesla, just to name a few. I mean they want access to this growing consumer base and this what well, what could end up being a wealthier consumer base. Right, So so they have a dilemma. They're not they're not going to leave. I mean a few are leaving. Right. We saw linked in airbnbum a couple of a few companies that weren't doing much in China, had big reputational risks,

weren't weren't earning many much much much money. They've they've abandoned ship, they bailed. Most companies are staying uh and they're hedging. Uh. You know, every CEO is being leaned on now by by their boards. What is your plan? B what is your plans? Ce What do you do if it all goes wrong? What do you do if if the Chinese invade? Uh Taiwan. We saw this just

the other day in the congressional hearings. You had politicians grilling you know, uh, Jamie, Jamie Dimond, you know, uh, all of the the the you know, Brian, Brian Moyney, you know, Jane Phraser. It's like, okay, what what's your what's your plan? What would you do you know, well, of course we would salute the flag and do what we're told to do. Right. And then somebody said to Jane Phraser, no, no, no, what what if you weren't told what you had to do? Said, well, we would

probably still we would probably still pull out. Now this is this is a very different situation from Russia, right. I mean these companies that some of I'm getting of their global revenues out of China. So I do wonder about President g with everything that happened over the weekend, Andy, who's there to question him? We always talk about it's important for our leaders to be questioned. So who's there? And as a result, if there is no one, what

happens in terms of China and the Chinese economy? Carol, you don't need to be a sinologist to figure out where all this goes? Uh. You know, the longer he lingers in office, the more he's going to face this autocrats dilemma. Right. So as the autocrat ages he or she usually he becomes more isolated, more paranoid, doesn't know where the next threat is going to come from. And as a consequence of that, the tendency is to pack

themselves around with yes men with sickopants. Okay, and these are not the people who are going to challenge the great leading And as a result, course correction becomes quite a bit more difficult. Right, and for all its faults, for all its faults, democracy does have within it this capacity to shift course. We've seen it very but right, we can shift course, right, ask Liz Trust Okay, uh, you know that does not That is not going to

happen in in China. That was Andy Brown. He leads the China Hub as a partner at the Brunswick Group and of course a former colleague of ours here at Bloomberg. So glad we could check in with him. All right, still ahead on Bloomberg Business Week, the metaverse it is here? So is it really here? To him? I don't think it's here yet, I mean, asked Mark Zuckerberg, you know during earnings. Yeah, exactly. Well, I gotta say our next guest. He is the perfect use case for the nascent technology

in the wide world, the video games. We got super League Gaming CEO and hand up. Next. This is Bloomberg broadcasting from the financial capital of the world, Bloomberg eleven Frio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one O six one to San Francisco, Bloomberg nine sixty to the country Sirius XM Chado one nineteen and around the globe the Bloomberg Business app and Bloomberg Radio

dot com. This is Bloomberg Business Week, one of the big tech companies that with results this week meta Platforms, noting in its third quarter earning statement at the path to the metaverse, it is an expensive one and it will keep on losing money. And yet, you know, Tim, there's still businesses that are already showing demand for this technology. That includes gaming and hand is chairman and CEO of Super League Gaming. It's an e sports community and content platform.

It's a publicly held company, a microcap that has struggled this year, along with many others in the tech spased down roughly se here today still an sees immense opportunity ahead as these virtual platforms expand their reach. Bloomberg Radios Paul Sweeney and I began by asking her how she defines the metaverse the way that I simply try to talk to both investors and some of our larger brand partners about is the first kind of part of the metaverse is metaverse games or what we call open world

platform games. And in those games, instead of you going in and just playing a game that served up to you, you're actually given tools to create your own games and experiences, and there's no limit to what that game offied experience can be. It can be concerts, fashion shows, it can be all kinds of things. Metaverse game or open world platforms have been around for over a decade. It's it's

platforms like Minecraft and Roadblocks and now increasingly Fortnite. Um. You don't need a VR headset um, and you can participate in those experiences as a creator or as a viewer or player. Um. Right now today, hundreds of millions of kids are already there, and the super leagues built a pretty big footprint there. We reached seventy million unique under eighteen gamers a month in those worlds alone. So the first thing I say is big meta maybe five

years away, but the there. But metaverse games don't be don't be afraid of them. They're around. That's where kids play. They prefer those types of game modes where they can be the creator as well. Uh to to traditional video games. Now that said, I do think that bigger meta is going to continue to happen faster than we think. There are companies building out the engines so that you don't just have to use roadblocks and Minecraft to create these experiences.

Big brands, Iconic I P will be able to create their own worlds and interact with their fans and gamify things and modestization around those fans um and own that full user in that modestization stream. And that's not far away. That's happening and really now and over the next one to two years. So I think it's going to be gradual. I don't know if I'll ever be the person wearing a br headset for ten hours a day, right that

that big meta vision. But but what I can give comfort around is it does exist right now in these game platforms. You know, when we think about the metaverse, are big bigger meta? Is it just with a gaming component? Is everything with a gaming component? Or is it the way you see it? I know you're an e sports community and content platforms, so that's your world, but is

it something even more wider than that? Thank you for that question, because we do get called the sports a lot and yet we are so much bigger than that. Now when we talk about those seventy million monthly players, we're talking to all kinds of people who are seeking community inside these game based platforms. But super League isn't really just a gaming company. We gamify experiences and so

to your question, it's much bigger than that. Um. We helped Samsung earlier this year bring Charlie xc X into the metaverse for a concert. We ran the Red Carpet for the MTV v m A Awards inside a digital world where your digital avatar could participate in that experience. And this is a real time example right now. We've had the pleasure of helping Mattel take their steps into met these metaverse games. And now you can go into one of our game world's called life Topia, and you

can hang out in Barbie's dream House. We've created a three story digital version of Barbie's dream House. You can swim in the pool, lay on the chaise lounge, go hang out in Barbie's closet and try on clothes those aren't to all of us again, traditional video games. That's about community, it's a digital cul de sac. It's people

finding people they want to socialize with. And so super League has come a long way because we now have the kind of reach where we can speak to the Barbie girl, the Hot Wheels boy, that older demo that maybe a Samsung or MTV wants to reach. Because here's the reality. Everybody is a gamer these days and it's not just hardcore gaming like we we tended to think about it five ten years ago. All right, just real quickly, what's the business model here? Do I sell advertising against

this audience or charged them subscription business model? Yeah? The primary business model is that we work with brands and partners to take them into two metaverse worlds that we all already operate ourselves or are part of our extended network. We have several hundred game worlds, so when when a brand like Mattel comes to us, we can say, look, here are the types of game worlds that we really think matches your target audience. Here's the experience that we

think um is right. And then we have some pretty special proprietary ad technology, media tech and analytics. And what that means is is we may have built Barbie's dream house in one world, but we have three D Barbies characters walking around digital avatars and other worlds directing traffic to it. I think in the first two weeks of Barbie we had were thirty two million visitors to her

dream house. So we're talking about really outstanding numbers as far as engagement, but also deep engagement, you know, hanging out minutes at a time that was Super League Gaming CEO and Hamlett, me and Paul Sweeney. You're listening to Bloomberg Business Week. Up next, more from the c suite, this time on finding the financial professionals of the future, the Tapestry CFO. He's also CEO Scott Roe weighing in.

That's coming up next. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio Blier. This past week, a Bloomberg Live event was held at Bloomberg Global headquarters in New York City. It featured chief financial officers talking about cultivating the next generation of financial professionals. Carol spoke with

Katie Rooney. She's CFO at a Light Solutions. It's a professional services, data and tech company that provides benefits, payroll and HR services and Applications also taking part with Scott Roe, CFO and CEO of Tapestry, that of course is home to the coach Stuart Whitesman and Kate Spade Brands. We kicked off our chat with thoughts on today's tricky world and the challenging financial conditions facing companies everywhere. Scott, let me kick it off with you. I told you in

the green room. So I've been repeating something you said on our planning call, and that is short terms really hard to call right now for sure? Yeah, what a strange environment where in In In fact, we did an investor day recently and I made the comment it's almost easier to see the long term than it is the short term. And so what we're doing today, frankly, is we're talking more about decision models. Used to be able to put a you know, a plan out and say I think

I think we can we can create this plan. But right now it's so volatile. We're thinking about agility, How do we react quick and what are the decision models of the no regret actions that we should take rather than maybe traditional planning. Well, Kate, come on in, because like Tapestry, you are a global organization. You work with organizations around the globe, most of them Fortune one hundred. So what are you hearing from them? What are you

seeing about the global macro environment? Yeah, it's it's fascinating time. I think the good news is so we do about a light um as benefits and global payroll overall administration. So whether we're in a tough macro environment or great macro environment, people still need benefits and they still need to get paid. So that's the good news, which which is helpful. But at the same time, because of that position for us, we're spending a lot of time saying, so,

how can we go an extra step to help our clients? Right? We are in this unique position. Do we need to think differently about payment terms for them for the short term because it will afford us a relationship that will grow longer term. And so that that's there's a lot of pressure for a lot of companies. I think we're in a good place. So it's enabling us to think differently.

Can I ask you, because one of the big things I probably gonna talk about finance, talent and moment, but China, like you have exposure to China, and I have to say I can't tell you how many times like I was reading Chinese stories over the past weekend and trying to understand what China is going forward. Um people have said to meet China doesn't want to see its economy come apart and doesn't want to pull it to pull apart fully. But how do you factor something like that

in terms of you're thinking, yeah, it's tough. So the first thing we did is we talked. We looked at what's happened before. I mean, there's the COVID issues and then there's maybe the more secular, bigger issues that are out there. So we've looked at when you see COVID effects, which there are still some, what what can you expect?

And we used history as a guide on that. And then in general, we said, we're just gonna snap a line here, look at the trend in our business that we see, what's what's happening right now as we project that forward, and be very clear about what our expectations are, because you really can't, uh, you know, if you say I want to be conservative or aggressive, what does that mean? You know? What? How do you how do you do that? So we said we're not going to try to be

that cute. We're going to look at what is the trend, what is our consumer um doing today, and as we project that forward. That's that's the basis for our for our guidance and what we see going for Katie, feel the same in terms of some of the instability we've seen you, whether it's the UK or China, I do. I think we're seeing it more in Europe um today. But I mean it comes back a little bit back

to diversification, right. I mean it's so hard we can I can never predict China verse the UK, but I know globally I can take a balanced approach, right because some are gonna be up, some we're gonna be down at different points in time. Look at currency right now, I mean right, you can't you can't predict currency, but you can figure out a solid hedging strategy so that you're balanced across your portfolio. All right, So let's talk about when you think about talent in this environment and

what you think about um Scott front and center. For you, you said the character lens. You're thinking about talent. What does that mean? Well? For me, what that means is the first thing I always look at is are are you a team player, Are you out for the win of the broader group? Because people see authenticity or the opposite, right, And so I want to build a team. I want to I want to build a group of people who are working together and have each other's backs. And to me,

that's the that's the go, no go. How do you know that when somebody walks in, Well, you don't know, but you know you know you do? Uh, I always get an impression, right, But I think one of the things that I've learned over time is actually to get a more a broader group into that discussion, and a diverse group because we tend, right we were all we bring our biases in and we tend to hire people

like us. So one of the things I've forced myself to do and I've learned over time is make sure you're getting people from a broader range of experiences and people that are coming from a different place to help you judge is this going to be a good fit for our team. It makes a difference. It absolutely makes a difference. Katie. You two said to me, I can teach somebody P and L, but there's other things that

I can't. So tell me about what you're looking for when you're bringing somebody in or or pulling somebody along internally, what is it that you look for when you build at experiences? I think that's so critical today. Like even I almost tried to look at my talent if they were to become a CEO, not even CFO. Right, it's almost if you think about bringing that strategic perspective with

a financial perspective. Um I think it's really important. I talked to a CEO, I was helping her find a CFO, and she said, should I should I focus on industry or finance experience? I said, that's like an impossible question. Um right. It depends on where you are at that point in time for your organization. And you've got to complement yourself with those skill sets that that you know you might not be as good at. So can I

Can I build on that too? Because I think I think another thing that is important is learning agility and and and maybe it's uh guts. I don't know people who have jumped into different areas, different disciplines, because I think the CFO of today needs to be way more

than just a financial person. And I look for that global experience people that have been in different aspects of the business because they're going to be more empathetic and they're going to have a better broader perspective, you know, to be able to get to the c suite. There is something very interesting about I feel like the progression of CFOs and I think we felt it. I've said this a million times because I feel it. After the financial crisis, man, no, CFOs kept companies alive and figured

out how to do it. Same thing in the pandemic. We've seen different members of the c suite that are more and more important important, and I feel like the CFO and their team is really very crucial in terms of strategy and really keeping companies alive in many different ways. Yeah, I think I think that's so true. And how did the pandemic even like knew that in a different way. Well,

it's even broader than the pandemic. I mean, recruiter this summer, she had two hundred open positions for CFOs, right, And I said that, But think about like, so not only are the pandemic, but then you have this all this pent up demand and all these companies going public, so you need a different skill set. It wasn't even just kind and they're all done anyway. Sorry, sorry, okay, but we were sorry, okay, you're not tis real real profits

of the ones. No, but it's true. I mean there's I just think there's a different you know, a different skill set through those different progressions and in what we see. I know, I fully agree, and I mean, you know, in the early days of the pandemic, it was so uncertain and everybody looked at us right to say, basically,

are are you okay? And so I felt we we took a different role in in terms of just helping the organization understand first of all, we're okay, these are the actions were taken, this is why we think we're okay. And then slowly that went back to okay, we got six months of planning to do in six weeks because everything just changed, and it seems like we've been on

that that little treadmill since. Really so true when you think about talent, internal development versus external development, Katie, how do you think about him? You have to have a balance of both. I mean, yeah, I just you always have to have a balance of both. But I think it's it's funny. We were talking about getting people back to work, right, you have to meet people where they are today, but at some point we all still have to figure out how to develop more internally in a

remote environment. It's hard, but we used to complement that. If you can't do it all obviously on site, I think there's tons of external perspectives that help, you know, honestly bring new ideas to a company, but also bring new skill sets to our teams. Yeah, I guess from my we had in our pre call. We had a discussion about this. I think it's a hard one, but I would just own it and say I I have

a strong preference for internal talent. I think that's an important message to your organization and when people come in, that's where I'm going to look first. That said, you can't always do it right, and and especially in the E, I and D area, we often have a conflict right in in terms of internal promotion or or do we go to the outside and and those are always hard discussions and sometimes you go left, sometimes you go right.

But as a general rule, I think it's an important message for your organization and for your brand as an employer to give preference to internal right. I mean, if if what a signal that sense, if you're not promoting internally. That's really hard for your teams. That's a light solution.

CFO Kat Rooney along with Tapestry CFO and CEO Scott Rowe check out Bloomberg Live dot com for more information on our discussion and upcoming events, and you can hear actually the full conversation that we had, and that wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. I'm Carol Masser and Tim Stantovik. Coming up in our next hour, Sustainability from all angles,

including the promise and potential of hydrogen. We do that with the CEO of Plug Power and the one energy source that could end up trumping all others, and nuclear power in particular could form a firmer source of energy that we need to drive electricity and other other industries that we have they reliance so much. Jonathan Menard of the Princeton Plasma Physics Lab in a wide ranging discussion on the road to green energy and climate adaptation from our broadcast this past week at n j I T.

You're listening to Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business Week. Inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news as it happened. Bloomberg Business Week with Carol Messier and Bloomberg Quick Takes Tim Stinovic on

Bloomberg Radio plenty of head. In our second hour of the weekend edition of Bloomberg Business Week, We're going to lean in big time into the state of our global energy transition with the panel of experts who we spoke with at the New Jersey Institute of Technology, Plus the impact of climate change in the wine industry from Sidary Vineyards New Winemaker, and why the ultra wealthy are invest in life on the high seas. Our conversation with the

CEO of Fraser Yachts is coming up. As we mentioned though, energy and climate are recurring themes on our program. This past week, Tim and I caught up with one of the players in the renewable space, Andy Marsh's president and CEO of Plug Power, the maker of hydrogen fuel cells for industrial equipment and vehicles, earlier this month cut its full revenue guidance by five to We started off by

asking about the headwinds facing his company. What we actually told the market was we're not sure whether we're going to meet our targets, and we wanted to back off just so no one was surprised. I think a couple of things are important. One, we haven't lost any orders. A lot has to do with construction our customer sites,

as well as supply chain with us. Did you caution because the supply chain concerns are caution that I'm not quite sure about the economy and maybe those deals won't come through with supply pure supply chain, the deals are there, and look, it's working the supply chain every day. I when my drive down from Saratoga Springs this morning, I was on with supply chain issues and make sure we

were addressing them. So they're real. But you know, you just have to work at it every day and to explain what the supply chain challenges are and and specifically when it comes to your business, because we talked about supply chain challenges and we oftentimes, you know, think about companies trying to get goods from outside the US or maybe they're stuck in a rail yard somewhere. Yeah, what's

what's going on with you know, it's it's interesting. So simple item you would think fans are really easy to get, right. Uh So I was on the discussion on the way down about fans and that come from Germany and the issues actually integrate circuits, right, So when fans themselves, there's controllers. So is that I mean, is that translation? Is that a chip? That's a chip? So I have too much of an engineer too, but I guess I use the term chip like you know, kind of overarching. So what

about the abandoning plans for two plants? First? Want to you know, I talked to one of the analysts that are events said to me, Andy, know, this moving a month at a quarter not really a big deal in the big picture, right, you know, we're building this five

green hydrogen plant across the United States. Well, Andy, when you think about some of the people that you partner with, our your big clients, like when we talk about the move towards green, and we constantly have every day in Bloomberg, are our Green Vertical and our green reporting team, you know, talking about the climates getting warmer. We're seeing it this week, like you know, again in terms of you know, and

the impact of it. So do you feel like in terms of the move towards alternative fuels and what you guys are doing. When is the tipping point going to happen? Because the big oil giants they're doing well too, and we're still going to be tapping them for some time. You know, we have infrastructure in this country which the fossil fuel companies have developed which could be leverage for renewables, i e. Natural gas pipelines could easily use hydro gen

mixed in their pipelines. I mean you can't just you know, there's activities with carbon capture that has to go on that to help protect the environment. To think that all these assets are going to go away instantaneously overnight, I don't think it's very smart. Yes, you're emitting c O two, but actually you can end up with negative CEO two

depending upon how the farmers till the land. So there's ways that you know, when I say being smart is trying to look and say, Okay, with the tools we have, how can we not only eliminate emissions, but how can you turn in negative? Can you talk a little bit about the power that's consumed in order to create hydrogen fuel cells, so use it power, I mean to generate hydrogen um from electricity. It's probably a fifties sixty percent offishient process. If you think about that, boy, that sounds bad.

I also tell you if you use batteries to back up the grid, it's about a six process. When you look at self, what do those percentages mean? How much power you get out for how much power you put in and power out over power in equal sufficiency? It makes sense. It's really contextualize that for us. What's the most efficient power generation? Nuclear? Probably pretty efficient. We're talking

like eighties nineties. Yeah, you're probably talking. But you know, you have to also think about tim the application, right, So it's great if you know, let's say batteries, batteries are not the right solution for heavy duty vehicles. They wigh too much, they take up too much room stuff, right, So that means that you know, testless semi is not

necessarily the right application. I would not buy that product. Interesting, you probably could justify that product for like a hundred and fifty mile run, but then you got to think about how much power you need. So there was worked at the Port of Long Beach, which you know, when you thought about how to power a truck for one truck, it was more than the power that went into the

station where they hold fifty trucks. I'm actually finding we have a lot of customers who want us to put hydrogen fuel cell systems in place the power electric vehicles because they can't get the power. So you know when I say it's it's not all easy, it's not all black and white. You need people who are really smart thinking about what's the right solution for the right application.

What's top of mind for next year. Well, for I think from my perspective, we're going to do one point four billion dollars in revenue in twelve to fifteen months. We're going to be positive because of an operating income, positive because of all the plants we're bringing online. That's the key to my business, getting those plants built to support all our applications. That was Andy Marsh. She's president and CEO of Power, The company scheduled to report third

quarter earnings after the Bellmer eight. You're listening to Bloomberg Business Week coming up. Our focus on sustainability takes us out to the New Jersey Institute of Technology for a look at where our global waste is coming from and how we might safely power the Globe for generations to come. This is Bloomberg. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio. Carolin I paid a visit to the New Jersey Institute

of Technology in Newark. We conducted our entire broadcast from the campus and led a great discussion on green energy and climate adaptation. Our panel included Jonathan man Our, Deputy Director for Research and Chief Research Officer at Princeton Plasma Physics Lab, Dr Sam Mitra and j I t Distinguished Professor of Chemistry and Environmental Science, and Dina Prostos, founder

of Indigo River. It's an environmental consulting firm, and Dremnards starts off by weighing in on the progress being made as we move toward a global energy transition and where to turn as we try to gradually shift away from

fossil fuels. One of the challenges we see with some of the renewables, or with wind and solar for example, as they can be intermittent, they depend on, you know, the power coming from the sun to blow the wind and solar energy and nuclear power in particular could form a firmer source of energy that we need to drive electricity and other other industries that we have. They rely on so much, so that that's our real role at the Plasma Physics lab as advancing fusion energy and studying

the plasma physics. That's really the foundation of the energy. So you're using fusion energy as a synonym for nuclear, You're using the terms interchangeably, right it is. So it's funny. I don't know if you guys follow Josh Wolf on Twitter as a ventro capitalist at Lux and he argues that we need to rebrand nuclear power and I call it elemental power because nuclear has this terrible connotation. What do you make of that? I mean, has a brand

image part of them? It does? I mean think about right, you know, you've got Fukushima, You've got three mile Island here in the US, and then of course Chernobyl in the nineties. It's very much. I was actually trained as a nuclear engineer and got got the bug for fusion looking at some of the waste concerns, safety concerns for fission nuclear power. But nevertheless, the safety issues associated with vision energy are quite manageable and really is an important

source of energy. And electricity. For example, of our electricity in the United States comes from fission power and nuclear energy Frances seventy South Korea just under. So it's a very important part of the energy portfolio, and I think it's one of the few options we have for a few firm energy to really take up the baselin energy that we need in our economy and to power the world.

So I'm come on in on this conversation. You're teaching chemistry, you're teaching environmental science here at n J. I t how much I mean, let's let's piggyback on what we been talking about. I am shocked how much we've talked about nuclear energy here because it doesn't come up a lot. Everybody's solar its We like just closed Indian Point Nuclear Power plant here in the Tristate area. So there's a

perception problem too. I think, yeah, you know, I'm not really an expert in nuclear energy, you know, but talking about the big picture of sustainability, I think, um, you know, but is it part of that? Like do we need to think about it? Is? Oh, definitely, yeah, definitely, you know, I mean definitely, I mean, you know, if you factor in the safety issues and if we can really factor in the safety issues. Uh, and we can have safe

nuclear energy. Absolutely, yeah, definitely we'll expand to in terms of your teachings for the students who are here, maybe some of them in this room and in general, when you think about you know, sustainability, when you think about, um, the climate, climate adaptation, where do you go with your students and how do you tell them to think about you know, it's five years from now, ten years and now that we've got to make sure that we can

power the world. Um. You know. For me, sustain ability is like you know they are saying that, you know, think globally, act locally. So sustainability starts from your morning coffee cup, you know. I mean you take buy a Starbucks coffee. Do you think how many trees when goes into making you know, all those Starbucks coffees, for example, how much water pollution is coming from all those coffee cups?

You know, things like that. So then you dig down to every little thing and seeing you know, what is happening. So for example, let's say hand sanitizer, right, typical hand sanitizer is about isopropile alcohol three percent water. Now, the waste water from the hand sanitizer is seven percent dipes of propile alcohol. So what do we do with that seven percent isopropile alcohol. We mix it with solvents and

we burn it, so so there we produce carbon dioxide. Now, is there a way we can take that seven percent isopropile alcohol and concertated to se. So now it's back being a you know, hand sanitizer. And that's the kind of thinking we need at at grassroots level. This is what I think. You know, we're thinking about waste and you know, forgive again, I'm going back to I think about at the beginning of my career and going and thinking about yuck a mountain and you know, where do

we put the radioactive waste? And you know, visiting a nuclear power plant and seeing the pools where they cool the rods, and you know, and wearing a monitor and realizing that, you know, I could be at risk, Like it really scared me. I'm going to be quite honest, But how do we be smarter? What's the smart conversation around nuclear that we need to be having, and what do we think about when it comes to the waste,

what do we do with it? Yeah, I would say every source of energy has risk associated with a coal for example, has in the past released sulfur dioxide and acid rain. Things like that. Coal tailings can lead to environmental issues. Burning of fossil fuels clelly has impacts on on the environment. There's no free lunch in the energy picture.

And other countries have have taken on the challenge of storing this waste, and there are new reactor designs that are more efficient a burning up the fuel and producing less waste. But ultimately we think fusion energy could really replace vision energy. It's much more inherently safe, doesn't have the chance of uncontrolled reactions. The fuel is ubiquitous. You

can find it in sea water, in the ground. Lithium editorium are are readily available, and it's it's really could be a game changer, we think for for energy production. But it's very technically challenging, and that's why we've been working so long on that technology. Do you know we got about ninety seconds, then we're gonna do some news

and then we're gonna come back. But connect coastal resiliency to this because we think about the idea of waste, we think about climate change and think about the way that burning coal actually contributes to climate change and the coastal projects that you've had to do across Manhattan to

make sure that well Manhattan doesn't go under water. So I think the conversation about waste is an incredibly relevant one and it has to do beyond coastal measures, um but certainly how we live our life, and it's certainly where we're spending our money, whether or not it's going into our community or whether it's going to ron, whether it's it takes five connections shipping in excess energy and excess waste, or if we can begin to look at more closed loop systems and how we can reduce waste.

And the perfect example of that is nature, and nature does that, it has its systems that if we can imitate nature a bit more in coastal resiliency certainly, um, but in our daily life and in our practice, if we can figure out ways to eliminate waste and find purposes for every element of our interactions, that's a direction that's a foot in the right direction our Thanks to Indigo River founder Dina Prasto's Dr Jonathan Menard of the Princeton Plasma Physics Lab and n j I. T. Distinguished

Professor of Chemistry and Environmental Science, Dr some Mitra. We also want to acknowledge the entire team at nj I T for graciously hosting our entire business Week team. Check out the full discussion. You can do that on our podcast feed. Still to come on Bloomberg Business Week Sustainable Grapes, we'll hear from a West Coast winemaker on mitigating the

effects of climate change in the wine business. We're looking into farming methods called regenerative agriculture, basically long term trials to eventually make vineyards carbon sinks, so fewer disking passes, basically taking a tractor through and plowing the soil, erosion, things of that nature. So we want to have less inputs in the vineyard and actually eventually have them beat

carbon sinks. This is Bloomberg Broadcasting from the financial capital of the World, Bloomberg e Love in Frio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one oh six one does San Francisco, Bloomberg nine sixty to the country Sirius XM Chado one nine and around the globe. The Bloomberg Business app and Bloomberg Radio dot com. This is Bloomberg Business Week. Alright, finishing up our last half hour with two of the finer things in life. I

guess you could say fine wine and yachting. First up, wine, which we like to imbbe from time to time. All Right, Our next company we're focusing on was named for the Babylonian got us of wine, Saduri. It's a family owned winery and it began back in the early nine nineties with the love of Pinot noir. Okay, I'm really sorry I missed this one, because wine on a Friday is always fun. Matt Revelette is the winemaker for Sidury Wines.

He pade a visit to our Bloomberg studios to discuss the evolution of the business over the last couple of years with Carol and our own Bloomberg Radio colleague Paul Sweeney. Of course, COVID presented a unique set of challenges to us. All but but things have been good. Things are steady, um, you know. Of course, there's some restaurant accounts, retail accounts and switching back and forth with who's open who's closed.

But things have been really good and we've had we've had some nice harvest on the heels of that well. And like good No, I spent a lot of time in northern California, and I know the wildfire issue affects everybody. It's almost no one is immune. And I know you're part of the world and that region of the state has really been impacted. Given some kind of some your experiences, it does. It's it's challenging, and you know it's it's

difficult because there's also human elements. I mean, we don't want to expose people to danger smoked from wildfires things of that nature. And of course it's very difficult to make wine when you're under evacuation orders from the winery. Um, there are challenges. Climate change is definitely a real thing. We're seeing it more every year. But it makes us more and more grateful for when we don't have those challenges and wildfires. And two is absolutely fantastic. It was

a good year. What if there's one thing that climate change has caused you to change in terms of either strategy or how you um developed cultivate wine, what is it? Sure?

So um we're looking into farming methods called regenerative agriculture, basically hearing more and more of the long term trials to eventually make vineyards carbon sinks UM so fewer disking passes um perc Again disking, what is that basically um taking a tractor through and plowing the soil, so eventually you might lose lots of top soil erosion, things of that nature. So we want to have less inputs in

the vineyard actually eventually have them be carbon sinks. All right, So is that something that the industry embraces or is it something that maybe you have some old fashioned winemakers and now I'm doing the way we've done it forever. There's there's some of both, but it takes you know, a few brave folks to really lead the way on that. And you know, we're happy to be, you know, part of leading the charge on that. So we're very very happy. But when you think about your customer base, who is

it that you guys are going after? There's so much wine and wineries. Absolutely, so we like to think that we can make um peanoo wirres an affordable price to where you don't have to be an expert and you do have a nice price point of course. Yeah, so standard retail price, you know, thirty to forty dollars on most of our products, and we do offer a slew of Vineyard Designate series wines which we retail for seventy dollars, a lot smaller production on those, and a lot more

geeky wines. I guess you could say matte. There we go so with solutely. So the first one we have at one of our that's that's one of my favorite sounds, of course, thank you, thank you, thank you. Um So, the first one I brought is a vineyard desinite Pean noir from Gary's Vineyard and the St. Lucia Highlands, so Monterey County, very cold, very windy, place to grow peer noir. Um. Gary's is a farming team of two friends, both named Gary,

that have been farming in the St. Lucia Highlands. I'm serious childhood best friends as well, So great stories, So lucky to be um Sourcing grapes from this vineyard tends to be a pretty robust Peter noir. The fruit holds its acid really well in our studio all of a sudden, Yeah, so if you're like a full bodied kind of rich

ripe style, this is right up your alley. Who is it's It looks beautiful I mean, beaut explained to me that designate business like versus your grapes versus somebody else's grapes. Is that sure? It's basically just a closer look of doing one vineyard only. What does this one vineyard doe and bottle? So we do vineyard designated wines, but we also do larger what we call Appalachian blends, uh, that encompass several vineyards. So this is just kind of a

micro look at what one vineyard can do in one vintage. Well, and I was freaking like on the website, you guys talk about minimal intervention in the wine making process. Talk to us about what that means and maybe how that distinguishes you from some other Absolutely, so Peano noir is what we call a wine growers grape. Um. It doesn't really liked high touch in the winery. If you get the farming right, if you get a good vintage, if you pick on the right date, it's pretty minimal intervention.

So a couple of punch downs to keep the cap wet, then you go to barrel and that's pretty much it. So it doesn't like having a lot of fingerprints on it. And the vineyards really shine with minimal intervention in the winery. We kind of make them all the same and keep our hands off. That was the Dairy Wines wine maker Matt Revolette. He was in studio with Carol and Paul Sweeney. Carol, I was sorry to miss that one. Next time, next time it will be next time, I promise. All right,

you're listening to Bloomberg Business Week. Coming up, we're gonna wrap up things with a taste of luxury. The average sales today in the industry is about eighty to ninety feet of an average price of seven million. But obviously we also have bigger sales over you know, one hundred meter and and and a few hundred million dollars, big boats with big price tags, and there's a waiting list. The CEO of Fraser Yachts joins us. On the other side,

this is Bloomberg. You're listening to Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. Tim Steinovic from Bloomberg Radio. Well, I find a bit of luxury to wrap up our broadcast this week. The Fort Lauderdale International Boat Show underway this weekend and some impressive and rather large vessels will be on display courtesy at the full service yacht brokerage

Fraser Yachts. With inside on the industry geared toward the ultra high net worth customer, we turned to Raphael Solo, the CEO of Fraser Yachts. He says, the business remains robust despite a recent slowdown. Look, we've been going through some tremendous years the last couple of years. I have to say the twenty two is a little bit slower. We are so fasting the drop of in the cell of second end boats. But you know this is probably

due to many factors. One probably the lack of inventory so many boats were sold last year, and yes, but more also probably some of our potential buyers who are wanted to see what's coming next. But you know, as you rightly said that you think industry has never been doing so well, so we're very fortunate, Rafael, did you say down thirty two, that's right for the cells Segonden

without in one and two. Sorrey however, were still ahead of sixty nine percent on the average of the last thirteen years, so this is a very very strong industry still going for for your team, Rafael, there's yachting and their yachts, and we're says are super. Yes, is anything you use for pleasure? Is that true? We are talking

about the yards over thirty feet here, you know. So the numbers have just gave you refer to the industry of what we would call the super yachts effectively, Uh, and I can ensue yes, this is a lot of a lot of pleasure on body. Yet, so tell us who is your like, what's the typical yacht at cells that the majority of your sales give us an idea of what they are, how long they are, how much they go for, and who's typically buying. Well, you know

this is this is a very large subject. We we sell y adds between thirty feet up two or three hundred plus feet, you know, So it really depends on on what you are your customers are looking for. But the average CELLS today in your thing industry is about eighty to ninety feet of an average price of seven million. But obviously we also have bigger sells over you know, one hundred meter and and and a few hundred million dollars, So it really depends. It's a wide range of products

which we have available in now industry. Now when it comes to the customers there again, you know, the American market leads a charge to that at say for more and fifty percent of our own serves at phrase yard. We are leading with American best customers, and they've always been very, very strong in the market. I have to say, we haven't have an additional public ten percent in twenty two from the American market, so we are close to

fifty five six in twenty two. And you will not only see this with the sales market, but also with the shater market. The US market is very strong and they surely like their yachts. Who is buying these yachts right now, because my understanding is you're seeing a lot of Americans by them. Yes, absolutely, and one one trend or so something which is new, if I may say, over the last couple of years, we've seen younger, younger

customers coming to the market. I mean our company on its own we have at fourty percent newcommers coming to you think forty is a big number, and all these all these people have made our average age of customers going from fifty five to sixty five to fully five to fifty five. So I mean, all these numbers are extremely encouraging for you think number one, new customers, younger

customers and a lot of American buyers. So these would say, you know, as we say in my in my country in French, you know, all lights are greed for the industry. What are you seeing from Chinese consumers right now? And how is that different from what you've seen over the last few years, you know, do your thing. Industry has been trying to break through China and we're talking again large yats, and you know, it never never been successful for many reasons before you know, even the economics and

and and the luxury goods, et cetera. One of the most reason, it's the most important reason, is the fact that this is not really in their DNA to be at sea on the yacht, you know, the Chinese in general, in the Chinese and then all they don't necessarily like the sun. We don't necessarily like the sea. And for them to be on the yacht for seven, six, eight days, it can get very boring very fast. So this is a market which has not been very very successful for

the industry overall. You have some few exceptions, obviously, you know, like you know, lots of bios can come from Hong Kong, but mainland China you have a very very few customers today. I would I think that maybe the future generation a lot of a lot of Chinese are putting the children in you know, occidental school as well say, and some of them are maybe more accustomed to the uttin you think a bits and what it can provide you with.

So we may see a development in the Communists, but I would not bet too much money on that market so far. And as you see also because of the regime, is not necessarily very well seen to to have a yacht and have being since spending your money in such a type of good. So the market itself in China, we've seen some few openings mainly for in vidual based

in Hong Kong, not many from mainland China. And this is not a very strong market as we speak today, um in terms of Hong Kong, though maybe not a massive market for you guys, but hasn't changed too as rule there has changed dramatically over the last year, it does not affected yet few buyos whom we have in

Hong Kong. They still are buying boats and there's a culture of your thing in obviously by its proximity to the sea and its magistrate's albor So and the fact that they want the British regime in the past, so they have a kind of a U Team kershaw, if I may say. So, this market remains. But again for our own market over the eight feet boats, it's it's not a big, big, big game change to day at least. What about when it comes to Russians. I mean, we

know that Russian oligarchs were big buyers of yachts. We've been tracking for the last six plus months about what actually happens to those yachts and different parts of the world. What are you seeing from that market? Well, you know that what we've seen about obviously the oligars they've met the airlines because most of them at the largest boasts in the world. If you if you now put things into perspective, you know, the the Russian market for the what we call the mega at the biggest yachts in

the world is about seventeen. However, if you look at the U Team market overall, the Russian market is done to seven eight. So of course it has been a bit of an impact on our own industry. But from what we said earlier and the influx of new customers, mainly from America. We've been able to compensate a little bit the loss of the of the Russian market by

the able of these new customers. The biggest impact is indeed with the larger yachts, where you are obviously a man impact the bigger shipyards which were building the two hundred three feet um. Now when it comes to the existing yards, but as you know, some have been frozen, if you have been seized, and we really don't know what's gonna happen to these yeard's going forward. That is interesting. Um okay, so what are kind of some of the

interesting big trends when it comes to yarding? And I think about one helicopter path or being greener, being greener and sorry but I'm just laughing, yeah, bio diesel to put in that, Yeah right, well, you know, I mean there's also a trend which we see developing and that is really I think it true after COVID where people see the pussures of a yacht as being like, you know,

a second or third home. So you see a little changer as well, you know, because of the technology and people realize and it also not so difficult to work remotely. So some of our customers, you know, they are not trying to go away for six months on their yet and walk from there yet, So we have we have seen that shift as well, which I think played a big role into the your booms which we've experienced the

last couple of us. Now, going back to your question about green, you know, I'm not I'm not a liar, and I think it would take us for your think to be super green. Obviously, that's so much she can do with a yacht. However, our industry is really at the forefront of trying to find new technology and new west to make you think greener than it is today. So the shipyard as are spending a lot of money

together with the owners. You know, we have our owners building new boats who are actually very very keen to make a difference. So they are coming up with with new ideas and plans and new technology. So today you have you have said, oh, yats which are so called hybrid, so like their name states, you know, they are both which can remain without without proportion for about eight to

nine hours, and that makes a huge difference. You know, eight to nine hours without burning fuel is already eight and nine hours, and not only it allows you to have agree in the yacht, but also it allows you to really enjoy you in your different manner, no more nos normal vibration. So I have to say, you know, there's so much we can do, but we can see that the industry and its wall is making a huge effort and spend a lot of monetrying to make you

think more greener normal is today? Hey, Raphael, our producer Paul Brandon, that chilled on our planning car that there is a six year waitlist at shipyards for yacht. Is that that's really the case? Is that you know today go ahead, Yes, today you can go up to almost almost five years, that's right? Is that typical or is

that historically high? No, it's historically. I why we're in that delays for the very simple reason that the last two years, especially twenty one have been just incredible, meaning that we have had so many others. So all the ship yards are just full. They are no more space to build new boats. So whenever you want to come in some certain shipyards, you've gotta have to wait, yes, full to five years to get your boat delivered. And

that's the reason why. Also the second end market has been so strong because a lot of people don't want to wait five six years. You know, they have that CAPI M factor after COVID, so they decided, okay, you're gonna take me full to five years to build a new boat. I'm gonna buy a second end boat for now. And this is what we've seen. That that that boom

in the seng Woland market. Now you have some yards which have been smart enough to build on speculation, as we said, so you can find a few a few boats which will be available in twenty three summer and in twenty four. But in some other yards, if you want to build a new boat, yes you have to wait for years. It's a very long time to get a new yacht. That was Raphael Solo is the CEO of Fraser Yachts. Are thanks to him for joining us, and of course the Bloomberg Radio is Paul Sweeney for

helping us out once again this past week. That wraps up the weekend and ino Bloomberg Business Week from Bloomberg Radio, thank you so much for joining us. I'm Carol Masser and I'm Tim Stanovik. Be sure to tune into Bloomberg Business Week Monday, through Friday. It starts at two pm Wall Street Time on Bloomberg Radio. You can also watch our daily broadcast on YouTube. Just search Bloomberg Global News

and check out our Bloomberg Business Week podcast. You can find that at Bloomberg dot com, Apple, or wherever you get your podcasts. Bloomberg Business Week is available on newstands, now, at Bloomberg dot com and on the Bloomberg Terminal. You can also see us on Bloomberg Quick Take. You can do that by going to Bloomberg dot com, slash qt or checking out the streaming platforms that we all know like Roku, Apple TV, Samsung TV, and more. Have a

great weekend, everyone, stay say. This is Bloomberg