Grill Makers Are the Hottest Things in IPOs

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg glovel News. Let's get to a little bit more of those COVID headlines. We talked about COVID nineteen cases in the UK, rising the most in the world, as virus restrictions ended in England, New York City no plans for new indoor mask mandates. We know what's going on in l A, Southeast Asia, continuing to reel from

a fresh wave of the virus. Well. Earlier today on Bloomberg TV and Radio, Dr Anthony Fauci caught up with our own David Weston to talk about the rising cases and as pleaded people check it out, but among the vaccinated people, that's a significant risk. And that's the reason why we are practically pleading with people to please, if you're not vaccinated yet, seriously consider getting vaccinated because this

is a nasty virus, particularly if you're unvaccinated. All right, of course, Dr Anthony Fauci there earlier, M Blomberg RADI hum Blomberg TV. Let's see what our next guest has to say about all of this. Dr Justin Zogi is with us. He's chief medical officer at LA based here. They provide telehealth services and doctor house calls to over seventy five million Americans. He's on the phone in l A. Dor Zoggy, Good to have you here. How are you and tell me what you're seeing when it comes to

COVID cases, specifically out there on the West Coast. Hi, Carol, thank you so much for having me on your show. Sure, um, you know you're right. I'm based in Los Angeles, and in Los Angeles there's been a significant rise in COVID cases over in the past two weeks and it is quite concerning it. As a result, as you know, Los Angeles has reinstated the mask mandate um, and you know

there are breakthrough cases happening. Obviously, vaccination is the most important thing for people to do UM and even among those who are vaccinated, there are some breakthrough cases. So we are seeing some patients who have been vaccinated and are getting the vaccine. That being said, those who are vaccinated have a much lower likelihood of ending up in the hospital or of dying, and so we do strongly

urge all of our patients to get vaccinated. Of those people who are not vaccinated and get this COVID nineteen as a result of the delta variant, how bad is it? It can be quite severe. It's in fact it's the most contagious and we think the most severe strain of the COVID nineteen virus um. It's thought that this is actually two fiftent more contagious than the original strain, right, which explains why it's spreading like wildfire and why people

who have even been vaccinated are getting it. How the distinction is that if you have been vaccinated and you get it, uh, there's a you'll be much less likely to have severe consequences, meaning much lower likelihood of dying from the vaccine, much lower likelihood of ending up in the hospital, and also less severe symptoms. Just generally you may have some you know, cold cold like symptoms, cough, uh, fever, and in some pieces it can be more severe, but

generally you're vaccinated. That's the best line of defense we have the country overall, and I feel like the world overall continues to in a large way. Of course, it's not a straight path forward. Continue to reopen, but it's tricky. Do the lifting of restruction restrictions excuse me, and the continued reopening make you nervous? You know, I think it's it's a Balasi act, right. Keeping things closed has significant

consequences um on everyone. Right, We've we've heard of the impact of the lockdown on school children, for example, and the impact that has on their development, with the CDC coming out and saying that we need to reopen schools because of the impact of the lockdown on children. Similarly, you know, we were just hearing on the headlines about the impact on the stock market and travel, um and

people's mental health. You know, I'm seeing a lot of patients with depression anxiety from the lockdown, and so there is a significant cost associated with the lockdown and with these restrictions um at the same time, for a long time, it has been our best defense against COVID nineteen. The silver lining here is that with vaccination, you know, that will free us up to open up even more right and will allow us to avoid these these restrictions and

will help us to return to more normalcy. It's it's it's really a balancing act. But if I can give one one, uh, you know, one message to to our list centers here is if you have not yet been vaccinated to please do do consider getting vaccinated, because this is this is our way of freeing ourselves from the shackle of COVID nineteen and going back to more normal. Thoughts on people wearing masks even if they're vaccinated, you know, I think that uh you know, I'm as difficult as

it is in Los Angeles with wearing indoor masks. I do think it's the right call, right because we have been seeing significant rise in cases, and you know, where as a complete shutdown has significant impacts as really challenging to do, simply telling people to wear a mask when they're indoors is less restricting than you know, not leaving

the home at all. We're limiting contact completely. And I do think that you know, given given that we were seeing breakthrough cases and people who are vaccinated, I think it makes sense to have people wear face masks indoors, right And I think this this will just help protect both the vaccinated and unvaccinated people in our in our communities. Um and just the way to mitigate the glowth of the virus until more people are vaccinated. Great to check

in with you. Thank you so much, Dr Justin Zoggi. He's chief medical officer at Heel on the Phone in l A. Check out their website, their business where they are doing telehealth and doctor house calls, growing six since May due to the COVID nineteen demand. Of course, he is chief medical officer at Hell. As we mentioned, they are l A based. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. All right, let's get to it an online story at

Bloomberg dot com. On at Bloomberg business Week dot com, I should say, and who knew, from the iconic Weber to the BBQ guys, groolmakers are the hottest thing when it comes to post pandemic I p S. Let's get into what's going on. Joining us is Bloomberg News Deals reporter Crystal Ce and Bloomberg Business weekender Joel Webber, both in our Interactive Brokers studio. Are you grilling a lot? You know you would think that, um, I would grill every day since my last name is Webber and it's

spelled the same way. So let's just get that out of the out of the way. To start with, I'm not related. If I were related, you know, I wouldn't be sitting here right now. I would be you know, getting ready for an I p O at a grill. But you know, the story is really interesting, I think because it speaks to I mean, do you remember, like not that long ago girl where we were talking about like the dearth of companies that were in the public

markets are going public, going public? And then all of a sudden, you know, we just had a huge change to that, and companies like Webber and and now Trigger, who you would think would have remained private for as long as they wanted, are testing the public markets. Yeah, exactly, So Crystal, come on in on this and your story here in terms of what we're seeing, because it is a really hot part of no pun intended pun intended hot,

part of the I p O market. Yeah, actually there are two I p O s like you mentioned Trigger and Whoever. There's also a s Bag deal and after we publish a story, we actually found it as a fourth company in the girl space going publics called Solo Stove. So, like, I think people are just like wondering, like why there's so many girl companies. And the biggest question though, is as everybody start going out again, like all these companies going to be as hot as they were during the pandemic.

And that's the question that we really try to answer him. And so first of all, why why do we think that, um, these companies who have been private and clearly you know, had a good run in the private market for so long, why do we think they're going in public all of a sudden at the same time. Yeah, So the interesting thing about this is that they're not using the proceas to growth the company. Like you said, they've been around for the longest time. They actually very established, you have,

they're very profitable. A lot of the existing investors actually using this as a good opportunity to cash out. So as equity markets at all time high. What's better way to do it other than do an I P O and do I here top peak. It sounds right, it's hop sure that I mean, I guess the question is on the other side of the pandemic. We are a grilling family. My husband's at there in December January grilling often on our porch. But I mean, does the grill

craze continue your endemic? We asked that question the banker I spoke to from City Group. He was saying that he grows actually when he was working from home. So this is the potential hybrid working model. You know, if you're home and you you have a lunch break, you can just go out for a fifteen minute break girl, stay a girl like a burger, and come back in. So that potential longevityo of this hybrid working model could benefit them. But also he's saying that people are picking

it up as a hobby. It's not just that a one time purchase. You're also buying the accessories you also like, topping up on your existing grill. So even though that one time big ticket item was bought this year, their potential purchases coming up. My my joke on this story when we were first kind of kicking it around, was like to me, you know whoever, especially it's like this is a hundred year old piece of technology that really

has not changed at all. It's like you put fire in a metal thing and and get what you get. And what's interesting though is as I sort of like started reading around the story, there is actually some tech going on that's pretty great to um and what are what? Why are grilling heads so excited about where the two companies have gone. It's become like a i LT device Almost a lot of these grills, especially the higher end

model that could cause like thousands of dollars. They are tech enabled that you can connect it to your WiFi. There's an app and you can control the temperature so you don't really have to like stand around and wait for your meat to smoke for fourteen now is you can just go to bed and next the next morning it's there. So that really just you know, transform the company into a bit of a tech company, and obviously

the tech valuation is very favorable. Well that, I mean the other thing is right there are it's there's the grills were a grill in a smoker house. I mean, I've woken up in the morning or in the middle of the night and you know there's brisket that's been cooking for hours. I mean, that's another part of this story, right, I think the other part of the stories that I need an updated invite to come over to your house

for a while. It's really good. Yeah, but that's true, like people often have more than one of these devices like you have. You have different needs and people getting more and more into these cooking hobbies, and you have all these cooking shows that are building big bugs, and they often advertise on these YouTube cooking shows or like magazines that are food related. So yeah, it's it's a big business. So I still can't believe I didn't think Webber.

I'm really upset. I'm shocked. The other thing that it bears mentioning here is like they're sure there's the company aspect of that, but the Mannings actually figure into this one. Talk to us about um what Elien and Peyton have pulled off. Yeah, they are actually existing back of baby que Guys, which is a retailer for barbecue griels, and

they're going public there s back with reported UM. I mean, spac it's another hot topic of the year and the past two years, and a lot of the spag deos tend to be unprofitable companies or people companies that are looking into very very far ahead in the future, like the space traveling electric vehicles, So it's not often then you get actually a profitable company that has an established

track record. So this could really get people excited. It's just not just because of the growing element, but that it seems like a legitimate company. So can I throw in pools into this? Why not? Because that's part of it. I do not have a city backyard. It's really small, um, so pools are part of it, right that they have also taken off, It's part of this story. It's the entire home improvement trend that we saw the past year. At least three pool companies have gone public in the

past year. All have seen shares rose more than faulty percent during this period. So everything that's that involves your immediate surrounding your home is getting an upgrade and all of these companies that benefit. And it makes me just think, like, especially off of today's headlines and everybody getting cold feed, it's like, you know, this is exactly what that trades about. Which is like, how can you find, uh, some companies that are are benefiting from you know, longevity of people

staying at home? Right right? This like peak growth idea or peak pan you know, pandemic place. Having said that, robin Hood is also something just to do a quick before you leave robin Hood going public, how do we read that? Is that a sign of a peak in the market or something else? They are also a pandemic beneficiary. They actually acquired a lot of volume, a lot of users during this you know work from home period where people had not much to do except for setting home

in trading stocks. And what we know is that they are going to list on July twenty nine and attend a work show. Are done virtually, and they will have a huge component in the I p O allocated to retail investors, which are their own users. It will be allocated through their platform, which is something that has only been done like one or twice. So it will be interesting how it turns out. All right, ChIL, given a choice between a grill smoker, a pool and a piece

of robin Hood, what would you take les about? I'll take I mean being a webber, even though I'm not related to the Weber. There is nothing I can you know, just embrace the namesake, I think, and go with the grill or it for the weekend show. I'll have to work it in untill Webber Editor Bloomberg Business Week. Here in our interactor Broker's studio along with Crystal See Deals

reporter at Bloomberg News. You're listening to Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. All right, let's get to it. Because the U s UK and their allies formally attributed the Microsoft Exchange hack to actors affiliated with the Chinese government and accused the Chinese government of a broad array of malicious cyber activities, escalating last week's tensions between the White House

and China. That's one of our big macro stories today that we're gonna get into. Plus how China's crackdown on ride hailing giant de d raises a lot of questions about the future of an investment in Chinese startups. It's two big themes that we've been talking about ongoing with our own Andy Brown. He is Bloomberg New Economy editorial director, and he joins US on this Monday on the phone

in New York City. Um, Andy, let me just start with um, first of all, the headline here about the US, the UK and their allies, you know, formally pointing the finger at the Chinese government for that Microsoft Exchange hack. Um. I don't know, how do you assess the damage of something like that or how do the two sides navigate through something like that. Yeah, well, this, this is this really is huge. Um, this has been going on for years.

I think that's you know, you have to recognize that this this, uh, these accusations of Chinese cyber attacks have been poisoning US China relations for more than a decade UM. And this is one really sort of recalls an episode

that I reported on extensively. It was about it was about a decade ago UM when Chinese military hack has got into Google servers and came very close to stealing Google source code, and that triggered a whole chain of events which ultimately led to Google exiting China or taking its um it's search engine out of China. This one, I think it is significant that Microsoft is at the

heart of it. Another iconic US tech company, but also one that has invested over the years massively in China in spite of not getting much revenue out of China at all. I mean, Microsoft has been so dedicated to China's economic and technical development. It has its largest R and d UM unit in the world, facility in the

world outside of the United States in China. So you know, later on top of that, what we've been seeing in terms of the Chinese government's crackdown on big Chinese tech companies, concerns about information we see it as you write about

again about D d UM, what does it mean longer term? Andy, when it comes to foreign investment in Chinese companies or in China large you know better than all of us, UH and anybody's been reporting on business news for a long time, is that, you know, global multinational companies all they wanted to do is have some kind of presence in China, and we're really kind of willing to do anything to have some kind of footprint on the ground. Does that change going forward because of all of this

that's going on. Look, I think I think you have to see this in the context of a steady deterioration UH in U S China relations. I mean, it just seems like we're getting revelations almost daily. Um. You know, it's so just in the last couple of days, the Biden administration has warned US companies against doing business in

Hong Kong. Janney Yellen, the Treasury secretary. US Treasury Secretary, has announced that she's not going to restart the Security and Economic Dialogue, which has been the prime platform for US China negotiation on their bilateral relationship since the George W.

Bush administration. Janet Yellen also, in an interview with The New York Times, UM has called into question whether or not the US is um going to you know, is going to keep to this the trade agreement that was the crowning achievement of UM, you know, the the last Trump administration. UM. So it's it's it really is all

sort of falling apart. And then you know, you look at you look at this episode UM with d D and the announcement basically by the Chinese side that they're they're not gonna they're not going to allow you a Chinese companies to list in the US. And now you start getting capital market decoupling on top of all of the rest of it. So, Andy, there are worries, right and then there are the financial markets and investors who say, Yep,

I'm worried, but I still see opportunity. You actually caught up with one that I think is a really key voice in trying to figure out what does this mean? What are the investment implications? Um, when it comes to what's going on in China. So I think two things. First of all, UM, investors still largely see opportunity in China that they tech invests in particular, see China as being, you know that the fastest growing source of consumer demand

in the world, and so they're going to be there. Um. That's the first takeaway, regardless of everything that's going on. But what they are seeing is a lot of disruption

in the near term. The reason that China was actually encouraging its tech companies to list outside of China is because the regulators within the financial regulators within China understood that Chinese markets simply weren't ready for that volume of I p o s. And what's going to happen now, according to the investors that I've been talking to, is that they're going to list now in in China, which and by the way, it takes a lot longer list in China than it does in the United States, and

this is potentially going to deter UH investment in startups and damage China's entire innovation ecosystem. So there will be some implications it definitely Yeah, real real, real, short term, real short term disruption UH in you know the the people forget actually you know that that the initial wave of Chinese tech companies were funded and nurtured by foreign investors,

most of them US investors. And even though that balance is now shifted where most of the money is coming from China, foreign investors still have a critical role to play UH in the development of Chinese technology, and this calls into question whether or not they're going to be able to free the invest Well, I highly recommend everybody check out Andy's latest column because it does have his interview he did with Gary Riischel, who he and his

firm have invested in college endowment funds at a number of Chinese uniforms. So there's this incredible back and forth between Andy and Gary. Andy Brown, thank you, editorial director of Bloomberg New Economy brow the journal. Now but you let me drive Oh no, no, no, no, please, I'll do the right lest I want to drive just drives the question. Yeah, drive to the globe. Thanks, we'll drying us dawn radius. All right, just about ten and a

half minutes left until today's closing bell. Charlie, of course, breaking down, uh, those major equity averages. We are down across the board, just off our loads of the session. But there is a question out there, you know, is economic growth has it peaked? So let's get to it with our market close guest, time for the drive to the close. You back. Puri is chief investment officer of America's of A Deutsche Bank Wealth back with us on the phone from New York City. De Back, Good to

have you here with us. So what do you see as the reason for equity is predominantly being lower today? Thank you, cal Good afternoon. I think today's move is actually, you know, part of it can be explained by the COVID variant delta creating some reasons in the world to create, you know, short term lockdowns. I think there is a concern that this reopening is multi speed, multi regions, so

not everywhere you're seeing this reopening trade working. And also the CDC director just yesterday saying that the pandemic is still very much alive in the States for those who are unvaccinated, and which is quite a substantial number of individuals. So I think, you know, to expect that we're out of the pandemic just yet might be a little bit

too premature. I think the pandemic is going to have long shadows on policy on markets, and what today we are seeing is I think predominantly related to the concern that the reopenings reopening story might take a while to really get to get going. So having said that, are

we are you redoing your market models? Well, we do our strategic models at the start of the year, which is a long term view of the markets, and and they're given that vational levels that we have been for the last you know, a few months, we did the revised LOBO our equity market returns for the next ten years. Having said that, you know, the short term tactical models, you know, we are looking at beyond a lot of these peaks, be it peak and uh, you know, economic growth.

I think rather than just rolling over, I think we have plateaued and you're gonna see start to see moderation in the economic growth numbers. Saying could be set for you know, EPs growth number that we're going to see in the second quarter. I think chances are in the second half of beer you're gonna start seeing moderation and

peak earnings growth. So peak economic growth, peak earnings growth most likely behind us when you're looking at the policy similar spoth from fiscal and monetary side, and I think there's good the you know, case to be made that even the big fiscal and Montrey impulses maybe also behind us. So I think when you take all of these things together, Carol, uh, you know, a good rationale can be made. The markets we just still you know, above double digits here today.

Let's not forget that might be you know, taking some pause here, right and it's not like we're falling out of bed and forgive me and our Dave Wilson, I thought, gave us some really smart perspective on Bloomberg Radio and Bloomberg TV earlier today and talked about the conviction to the downside, or perhaps lack thereof. I mean, big tech, there are gains there. Small cap, which I've really taken a beating over the last few weeks, a few months,

we've definitely seen a pull back there. They're not off as much as the bigger broader market averages gold isn't you know, we're not saying gold up a lot. So when you put that together, to me, it feels rather orderly in terms of the pullback, and maybe to be

expected considering the run up that we've had. Absolutely, I mean, I think we need to keep in mind that once a year and the markets do correct, right that they you do see a ten plus percent pullback, and three or four times during the course of the year you're going to see a five plus percent retracement, and and

we haven't had one in quite some time. What we have seen, however, is what I would call rolling corrections, where rather than a broad based market correction, you've seen certain sectors of the market go through, you know, a pullback or a correction. You know, it started with uh, you know, last year it was the value cyclical place they're corrected, and earlier this year it was the tech starts and some of the other you know, high flying links,

be it on spack, innovation, e S. G um. So a lot of those things I think are still a concern and hence being selective really makes a lot of sense. And and here I would advise that you know, you could have your base rationale in terms of if you're really sensitive to heighten the inflation risk in your portfolio, maybe then you want to be have a little bit

more biased towards the defensive. If your biggest you know, positive by this towards the reopening, then maybe it's a good time to start laying into some of these value names that have been clobored most recently given this reopening hiccup, because I do feel that, you know, it's not all end for the for the leisure, entertainment, airlines and truth industry stocks. These are going to come back once you start seeing more clarity in terms of the where we

are with the delta variant. So markets may be reacting like they're supposed to write this progression. This whole idea, I think it's really smart, this idea of rolling correction. Right the markets are looking at what's happening and reacting, and markets you know, hopefully you know, are an indicator of kind of what's to come uh and and kind of foreshadowing. And so we're seeing the evolution as we move through this recovery, which everyone has been reminding us,

including all the FETE officials, but market watchers, CEOs. It's not a health officials. It's not a straight path forward. It isn't And I think the only concern that I have there is really what the bond market is saying, which has been the case right for for quite some time.

You know, when you look at a tenure number, you know, yields at one point one eight, I mean, that's really telling me maybe the bond market is going beyond the recovery and really looking at what the terminal rate when the next time that starts to hike, which is still years away. As for the most recent said you know, dot clot, maybe the terminal rate that we're going to get to for this economy is not going to be even close to what we had in the last bikele,

which was two and a half per cent. So I think that to me a little bit of an area of concern um that bond holders you are really struggling. The financial repression is up and running, you know, full steam ahead. And also well let me just ask you, though, do you think the bond market story narrative and the equity market narrative, especially on a day like today, are in sync? They make sense? Are they at odds with

one another. Is the equity market still too optimistic compared to what you're seeing in the bond market, or is the bond market too pessimistic. I would say it's the ladder. I think the bond market is a bit more pessimistic than what even the real you know, economic data, sentiment indicators, you know, you look at soft and hard data from

this army what they're suggesting. But that could also be a function of the bond market, especially when you're looking at ten years, you know, number it's a little bit further out right when you look at stock market, especially the earnings there for the next for this quarter, in the next quarter. So I think there's a little bit of a difference in terms of the time frame we're talking about. But the bond market has been concerned with

regards to you know, the Fed dot plots side. It seems to me that the bond market is just not ready for any talk of tapering either. And maybe that's going to be the real test, you know, in the next few months, when the Fed dog starts to you know, telegraph, wh at what stage it's gonna start implementing this tapering program. But I do feel that the bond Mark is definitely much more pessimistic view of the reopening story, and maybe

the debt overhangs. Yeah, certainly it certainly feels that way. Deepak. Thank you so much. Dpak Purry, chief Investment Officer of America's Atory to Bank Wealth, with us on the phone in New York City. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at tpm Eastern on Bloomberg Radio or watch us on YouTube. Search to Bloomberg Global News