This is Bloomberg Business Week. I'm Carrol Masser and I'm Bloomberg Quick Takes Tim Stanovk. We're here every day bringing you the latest news from the world of business and finance, plus technology, politics, economics, all partnising the power of Business Week reporters and editors, not to mention our journalists and analyst in more than one and twenty countries. You can download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com.
You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube. Search Bloomberg Global News to all Highland Park, Virginia Tech, Sandy Hook Elementary and Elementary School in Valdi, Texas. I mean, we could go on and on. The rate of gun deaths has increased thirty three from or excuse me, in the United States that we're talking about nine years. This is according to every stat every Town for Gun Safety.
With more on gun violence awareness and prevention, we bring in Cassandra Kofossi. She's Associate professor in the Department of Health Policy and Management, Deputy director of the Center for Gun vi Ulent Solutions at the Johns Hopkins Bloomberg School of Public Health, of course, supported by Michael R. Bloomberg founder and Bloomberg LP and Bloomberg Philanthropies. Mike also a co founded supporter of every Town for Gun Safety. And
Cassandra joining us on the phone in Annapolis, Maryland. Cassandra, good to have you with us. How are you? I'm good? Thanks thanks for having me. When Carol was going through the names that we associate with acts of terror and gun violence in this country, it got me thinking that after there is an incident like Highland Park, like Vivaldi, we talk about gun safety for you know, a few days, but then it seems to shift to the back burner. How do we keep the conversation going without you know,
these big profile events being in the news. Yeah, it's a really excellent question, and I think the first thing to keep in mind we have been seeing these really horrendous high profile shootings, UM, but we also have exceptionally high rates of every day gun violent suicide, an intimate partner violence. We need level violence, and we need to be thinking about those factors, um, those types of violence.
In addition to these mass shootings and so the things that we've really been seeing change in the last few years, largely driven by the youth voices. Youth advocates have been more attention on drawing parallels, so not just focusing on a mass shooting as an isolated event, but understanding how there are features or characteristics of a mass shooting that are similar to other kinds of violence and looking there
for solutions. I want to talk a little bit about access to firearms, because this is something that comes up each and every day with instances like this State's very in terms of gun restrictions and what people are able to buy. How do you prevent a gun from uh, you know, a different state going to a state like Illinois, for example. It's such a challenging feature of our country. Our borders are fourth for a reason, right, people and
products move across them. But what that means is states with strong gunlass like California, Illinois, Maryland, New York, they're at the mercy of U states with weaker gun law.
And here is an opportunity to take our regional approach to look at where sounds that are recovered in crime or used to harm others, look at where they're coming from, and sharing that data across jurisdictions across partners to understand are their targets of opportunity in terms of bad apple gun dealers are their individuals who are buying a lot of guns and bringing them across state lines. I think one of the most important factors to keep in mind
when we're thinking about addressing gun violence. No one thing is going to help us address this problem. We need to be thinking about it from a multifaceted approach and thinking about policies and thinking about gun dealers and access and supply, but also we need to be thinking about why people want access to firearms, what is driving this demand, addressing some of the fear trauma, all of these things that are associated not just with COVID, but longstanding UH
systematic racism and other issues that we've had in this country. Cassandrew, where does social media fit into all of this? That's such a great question. Um. Social media can be a tool to help spread messages public safety, public health messages, for example, but it can also be used as a
tool to stoke sphere or to spread misinformation. One of the things that we try very hard to do it hence our name for center from Gundivalent Solutions is to really lift up the things that we know work to try to counteract the feeling of despair or inevitability anytime high profile mass shooting occurs, so we try to counter some of those pieces that it can be, unfortunately a tool to help spread misinformation and here that can drive
gun purchasing. Do you think we get to a point just in the last minute that we have with you, Cassandra, where we start to see public funding going to research against gun research when it comes to gun violence. We all know about the dicy Amendment and what that did. We have seen over the last several years more federal funding coming from the Centers for Disease Control Prevention as well as an h dedicated to specifically funding gun violence prevention.
And I think that's really going to help us to do a couple of things, to grow the field so that we have more researchers trained to understand and study this problem, and it's also going to help us answer some basic questions. We are way behind where we should be in our understanding of gun violence prevention and policy because of the restrictions on federal funding. But as that's loosening up, as we have more funding coming into the field. We're going to see that change, all right. We're gonna
leave it on that now. Hey, Cassandra, thank you so much for your time today. Cassandra Krafoss, She's Deputy director of the Center for Gun Violent Solutions at the Johns Hopkins Bloomberg School of Public Health. As we mentioned earlier, supported by Michael R. Bloomberg, founder, BLOOMBERGIL and Bloomberg Philanthropies. Mike also a co founder and supporter of every Town
for Gun Safety. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Let's get to the domestic cover story Bloomberg Business Week. This issue, new issue out on newstands of Bloomberg and Bloomberg dot Com Slash business Week. All about the AMC Entertainment CEO Adam Arrant him and I've talked with him, who has cultivated an army of followers, who sent the stock storing in a retail trading frenzy last year. Who
could forget that? Yeah, the story by Felix Gillette and Eliza Ronald's hand and Felix Gilette his media entertainment and telecom editor for Bloomberg Business Week. He joins us this afternoon on the phone from New Jersey. Also with us is Joel Weber, the editor of Bloomberg Business Week. He joins us this afternoon on the access line from Massachusetts. So people have been following out of air and Jold.
They perhaps know him from his time at Veil Resorts or with the cruise lines at the airline industry early in his career. Now he's been at AMC for a few years. What is he up to? Oh, that is a great question. Um. Well, in the time that um, we were sort of initially talking about this idea for the story. Uh, you know, we're in the middle of the pandemic. People were like, hey, movie, movie theaters, that's
not gonna work out. And then lo and behold, AMC became this meme stock and you know, I don't think many people recognized that um Adam Aaron was the CEO of the company, and it sort of was like, you couldn't have imagined a more theatrical CEO to be in charge of a publicly traded company happened to be the world's biggest theater chain, and he kind of met the moment in this amazing way where AMC became a meme stock and he was very flamboyant, very amazing on social media,
and it really kind of made him endearing to all these UM retail traders UM, and that set up this little, nice little tension between the retail traders and the institutional ones, which were all kind of familiar with now. But in the middle of all that, we realized that who who is this guy? We did we had no idea, We had no idea what his backstory is. And he ends this amazing backstory because he came up through like loyalty programs. So so Felix um Analyza did this amazing job reporting
this story. I feel like it's like just a perfect Business Week cover story. UM Felix, you know you guys, you guys dug into his back story so much like, how did he Why was he the right person for for this company at this moment? Well, I think to an incredible degree, his entire career was really building up to this. UM. I mean the whole thing hinges on.
I mean, meme stocks to come and go, so you have to like keep these four million retail investors somehow engage and you have to keep them, you know, involved, you have to keep them on your side, you have to keep them loyal basically, right. And the thing about Adams fascinated that he spent his entire career basically engineering these loyalty reward programs. And if you go back to the nineteen nine his first job is at Panama. He
did World Pass, the airline's first loyalty rewards program. Back then, the whole thing was like, Okay, if we want to talk to our customers, we're either going to have to die a really expensive ad on one of the three broadcast TV networks or in the national magazine is going to cost a lot. And suddenly there was this new way. Computers are getting more expensi less expensive, more powerful. We can keep track of our customers. We can talk to
them directly. You know you kind of like take that. Adams, you know, did their first program. Then he went to Western Airlines to the loyalty program for them, then Hyatt Hotel vl uh, you know, Norwegian Cruise Line, the seventies six ers, everywhere he's gone, he's kept working on these programs. Suddenly you get to the present day and using social media, suddenly you know, he can talk directly to his customers.
The fact that's amazing to me is that he managed to somehow extend this whole tradition to investors, like if you, you know, invest in US, you have AMC stock, you buy stock, you hold on the stock, We're going to give your rewards. You know, we're going to give you
a free tub of popcorn. Which sounds insane, right, it just sounds completely made up, But actually that's kind of what he's done, and to remarkable degree, through some combination of his own charisma on Twitter and his own ability to kind of, you know, give this sense of exclusivity to this large group of retail investors. That's a part of something special he's managed so far to hold onto them.
What I love about this piece, among the many parts about it, is that you include some of the memes the art department just fantastic and being able to include days and if you're watching us on YouTube you can see some of these means of course, they call in the silver backs. They're lot of sort of guerrilla themed memes that have proliferated on social media. Felix, let's talk about gold mining, because your piece has some incredible color
as to how this deal went down. Yeah, because we all kind of heard it when they announced it and they said, you know, AMC's you know, just acquiring of this gold mine in the body. Everyone was like, what, like, what are you talking about? Literally is no, it's a metaphor, right, there's a crypto mining operation. Like, no, it's actually a gold and silver mine out there in the Black Rock desert. So for months we were like just we're dying to know,
like how did this whole thing go down? And one of the fun parts of the article, of the fun parts of reporting that was kind of doing the TikTok of like these guys, you know, showing how this deal came together. Um, Jason Mudrick, Mudrick Capital really brought it to AMC Um you know, Adam talking about why he wanted in on it. Then jumping on an airplane, you know, flying you know, picking and everybody up going out to this tiny little airport and win a Muka nevada um.
And then you know, driving out to this gold mine at dawn. I mean, the whole thing is just incredible, Um,
the way it went down and hilarious on many different levels. Um. And then just like the thought of like what it's like they get the kind of like pile into this trailer at this gold mine in the middle of nowhere it's the only place has WiFi for like hundreds of miles, and then have to like jump on the phone and sell this to all the AMC board members like this is why you know it makes sense for a you know, the world's largest movie theater chain in two thousand twenty
two to be invested in the gold mine. Felix I said, godman, you really made me scratch my head. I remember when that crossed the Bloomberg reading your story. What made me scratch my head? Is Nicole Kidman, the first lady of AMC. Like, like every aspect of the story, you just kind of like, what, yeah, well, I mean that's part of you know, part of the branding. Um. I think, you know, there's only so many ways you
can brand the movie theater chain. And I think typically people choose what movie they're going to go to based on the product and the proximity it is to their house, right, they don't care usually if they're going to go to like an AMC or Regal whatever, and especially with the multiplexes, but there are theater chains out there have done incredible job of branding themselves. I always point to Alamo, which
Alamo Drafthouse. I think they do a great job. And one of the ways they've done a great job of brandon selves is those pre movie attractions they show you. It's always like very instinctive and cool feeling. And you know, I think this is kind of like the AMC version of that, which is like, we have an opportunity before the movies come on, um to do something that makes it feel like special somehow. In this case, you know, they went out in the cool kidman did these promotions,
talked about oh you know there's a coming back. It's American institution, as we want to know, in like a Another aspect of this story is like how when she got paid Jill quick thoughts as we wrap up here, you know, just as we wrap it, you know, it's the meme stock moment. It's like, you know, we have these ebbs and flows to it. I'm just gonna be really curious to watch how AMC fairs. Uh, you know, we're obviously watching bed Bath and Beyond Dowid's Thing. Am
wanted another one to watch, no doubt about it. AMC by the way down eight percent today, Joel Weber, Felix Gillette, thank you so much. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, the most read story on the Bloomberg is what about the individual who put an end to the crazy six day run of meme stock bed Bath and Beyond, a run that added something like a D to the share price?
The individual activist geralda Ryan Cohen, who apparently Tim now kind of wants to say bye bye to Bed Bath and Beyond. Let's get all the details. B B not be confused with Best Guys ticker, which is quite a bit. Give you a. Balg is Equity America's team leader for Bloomberg Near. She joins us via zoom from our bureau in Toronto, Canada. Did you help us understand what's going
on here with Bed Bath and Beyond? So Ryan Cohen, people know him from Chewy fame with his now activist and activist investor fund Our Ventures bought a steak in Bed Bath and Beyond back in March. So he is he fully filing to get out of it because he may sell up to this many shares, right, I mean, it sure looks like it at this point. You know, he has put in a filing saying that he would like to sell all of his shares and some call
options as well on bed Bath and beyond. I mean, there's rumors going around that he's already sold his stake. There are other people who think that he might sell it in batches. You know. Right now we're just sort of waiting to see what he has to say about this whole thing at this point. But you know, you guys are right, it's just been such a wild ride
for this dock at this point. What I love about this is it reminds me we talk so much about retail traders, right this is their game and they're playing with all of these meme stocks. It says to me, though, this is a reminder though, that are there are some big time investors in this name as well, and other
Memes stocks potentially. And that's exactly it. You know, they have this whole notion of Yolo you only live once that they're getting into the stock, and they for some reason, I cannot understand this why they love Ryan Cohen so much? And you know when they get into it. They are pumping up their own investment and their own shares, right,
They're getting excited about it, and they're doing this. And now when you get like proper news that's coming out on the stock and a potential super large shareholder trying to get out of this company, that's where they're really taking a hit at this point. And I'm not sure a lot of them actually fully understand what's at stake at this point. Yeah, who is Ryan Cohen? Just to give our audience if they're not familiar with him, like, who is this guy? So he is an activist in
the world of finance at this point. You know, his claim to fame, or at least what we tend to think of as his claim to fame, is when he got into Chewy Um the pet company, and he made you know, massive restructuring with the company and since then it's done really well. And I think that's what retail traders really got into in this case. When he got into game Stop, they were really hoping for a similar
turnaround that they saw with Chewy. They did the same thing with Bed Bath and Beyond, and frankly, I just have not seen that with Ryan Cohen and both of these companies at this point. With game Stop he brought in a bunch of new executives, mainly from Amazon. And with bid Bath and Beyond, you know, he outstead the CEO and brought in a new CEO and he also got three independent directors at the company. But fundamentals wise,
both these companies are still struggling at this point. We have not seen a corporate growth turn turnaround for game Stop and bed Bath and Beyond. Most recent earnings results were still pretty dismal. Um for investors out there, is this meme stock rally different than the memestock rally we saw in the winter? You yeah, it is. It's definitely
on a smaller scale at this point. I mean when we saw it with game Stop and even a m C, you know, more than a year ago, you were seeing a hundred percent move, a hundred and fifty percent rallies on any given day and swift reversals as well. Trading volumes were a lot bigger than we're seeing right now with Bed Bath and Beyond. Um, and it really spread out to a lot more stocks than what we're seeing
right now with these companies. So it's different and yet the same in the sense that you are seeing big moves, they're just not as massive as what we saw um a year and a half ago or even almost two years ago. I gotta say caveat to m tour, you know, buyer bware like I feel like when you look at bed, bath and beyond. I mean you've got fort of the float shorted. I mean investors have to understand that there could be a big swing either way. Correct and just
got about thirty seconds. Absolutely, and that's really it. You know there will be big swings. You have to be careful. Analysts are saying, pay attention to the fundamentals more sold than anything else that's going on on the retail side of things. Look at the sale side of thing in terms of analyst you've got one by four hold and twelve cells on this name. Just say that doesn't match with what we've seen in the performance of the stuff. I'm gonna do some shopping there ahead of my daughter
going back to college. So you got off coupons. You gotta love those coupons. Yeah, they send them to you electronically too. Those things are great. Oh yeah, of course I'm bro journal. Yeah, but you let me drive. Oh no, no, no, no, who's going home? Right? Please, I'll do the dravel. I want to drive. It's a good question drive. This is
the Drive to the Clothes on Bluebird Radio. All Right, we have about ten and a half minutes left in today's trading session and we've been bouncing around in today's trade. Right now, just turning off our highs of the day. We're in the green age. You heard from Charlie Pellett on all those major averages. But just up a tad, Tim, Well, we're very pleased with to have with us this afternoon. Alan Zafronia little wacky to Alan, but that's okay. I mean, Alan,
don't forget that Alan zafron Um. One time when he was on air with us there was an earthquake and right, oh my good, good memory. M Alan. It's good to have you with us. How are you. I'm doing great and it looks like the markets are shake it too, but straight up recently right yeah, like I even you know, you even got some big laughs from the control room there on that one. I like that. Um. Alan Scotting partner and co Cy at i e Q Capital joins us on the phone from Foster City, California. So it's
puzzling to me. Alan. We have FED officials coming out and you know, saying over and over again, day in and day out, we gotta raise rates to combat inflation. We're nowhere close to being done with that, you know, in similar phrasing. But yet the market marches higher. What gives well, what gives tims A s that the technicals are once again ahead of the fundamentals. We see the time and again. So if you believe the stock market with this incredible technical uh flush upward we're having, the
Fed's gonna get it right. We're gonna thread the needle. We're going to avoid a recession, is what the stock market is signaling, or at a minimum, the recession will be so shallow that you won't actually see it. Earnings recession companies will can you grow earnings like eight percent a year and we'll mitigate all these concerns. We'll get through this scare and we'll be back to a more normalized world. That's what the stock market is telling you.
Do you buy it? I buy that the likelihood of the Feds thread and threading the needle is much greater than it was a month ago. And the reason I buy that is you're finally getting inflation readings that are heading down. You're getting consumer surveys indicating that their belief inflation is heading down. Is also the case, you're getting confirmation from independent sources conveying that the set seems to be attacking this problem. Well, also get it from the
standpoint that it's been an interesting time. It turns out and in this earnings estimates, overall earnings expectations heading into the end year have only been cut by about two percent. Heading into this earning season, the market was pricing in about fifteen percent cuts and earnings expectations, and so what's going on is earnings or visions are far less bad
than what everyone believes. Of course, you get target target, or you get selected companies and sectors that are disproportionately hit and revised downward, but an aggregate, you're still at a point where you're getting a significant number of companies beating. In fact, turns out companies have actually beat estimates and not average, by about four percent this quarter um. And so that's what's going on. Earnings aren't as bad as
people fear. Inflation is starting to come down. You have a remarkably over sold short term and technical condition, and if you do read chartists and technical analysts are out there, they'll tell you that the set up right now is for a continuation of this rally. As one example of Bank of America does surveys, the fund managers survey. Right, Yeah, it's still still reading a zero, which is historically been
incredibly bullish. So too many investors caught too barish and too quick a time frame and technical indicators or that this market is likely in the short run to move higher. We've talked a lot about the retracement right from peak to trough retracement you know of that, and how that that is a positive indicator from more upside to continue
alan and yet that's a pretty significant retracement. So it does make me wonder, you know, when do we when do we think that maybe things are getting a bit ahead of itself, especially when you have somebody like Neil kosh Kari, who was one of the more devish members of the FED, saying okay, we need to high grates. Yeah, he came out today and still seems pretty unclear. And Ballard came out today and said, you know, maybe we
should still be raising by basis points in September. There is a bullish argument to that, and that bullish argument is, as much as we don't like grate hikes, let's take the medicine now rather than take it later. If we do larger rate hikes up front, there will be fewer total basis points up in rate hikes we need to go. And maybe that's the best thing to take the tough medicine. You mentioned, Carol uh something about fifty percent retracements. We
went back and looked here. If we have this right, if you go back to World War Two, there have been nineteen different occasions where you had the market the sp specifically fell more than percent or more basically down. If the market breaks back up above that fifty retracement test, it signaled the end of the bull market all but one time, meaning there was some durability to the rally. End of the bull market. I'm sorry to send the end of the bear market and into the beginning of
a new bull market. So the bull markets, the indications are that one you once you recover more than fifty from that bottom, it's probably gonna sustain alright. So any any anything barish out there that you're seeing right now, well, sir, this there's plenty of the barish about. We still think in particular, China's economy is slowing. Europe is actually in a recession at this point. Their gas prices are way higher than what when you are experiencing here in the US.
That means you're going to have less ability to export goods and services abroad. You have a slowing economy, you still have tremendous geopolitical and certainty both from respect to China as well as with what's going on in Eastern
Europe currently. And we still are in an environment we're earnings growth rates, albeit they're not getting cut as much as feared, there's still being cut a bit, and so the prospective rate of growth of earnings next year is lower than what you would typically see it this point in the calendar year. So we're looking at growth, but slower growth than what you would normally expect looking one year forward. So fundamentally still challenges. Um Alan just got
a few seconds left here. What really struck me Earlier in the week when we talked with our Juna Martin Adams, head of our equities team here at Bloomberg Intelligence, but reminded us that she kind of thought. You know, technically we're in a recession, but maybe we're already through it, but that you know, economists are talking about a deeper recession again in isn't that going to be potentially problematic? And do we as investors need to be kind of
thinking about that? And just got about thirty seconds. Yeah, that's saying we're in the eye of the storm and we're halfway through and another on the other side. Yeah, yeah, yeah, Well, unfortunately you and I can't answer that because it's going to come down to how many times the set has to raise the set funds, right, because the effect of that rate high takes a full year to really work
through the economy. So we just don't know yet. It's going to be dependent on for factors that the argument stay diversified, you know, don't put all your eggs in one basket, right, which means that potentially when are depending on when the FED ends, we could still be working through the impact of that well into late next year. I'm always smart. Ellen Zafron, thank you so much, founding partner co CEO at I e Q Capital on the phone from Foster City, California. 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 two pm Eastern on Bloomberg Radio or watch us on YouTube search Bloomberg Global News