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Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside my co host Matt Miller.
Every business day we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market movin news.
Find the Bloomberg Markets podcast called Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot com slash podcast. All right, let's get out to Vegas to the Craps Table, Bellagio, the high Rollers Craft Table, which is where I tend to sit. Ed Ludlow's out there ostensibly at the CES Converence the Consumer Electronics Show. Wheres I like to call it the auto show with some gadgets around it. Edward,
what's the buzz out there in Vegas this year? Is it pretty much AI driven across the board?
Yeah.
I put a newsletter or a column out this morning saying it's AI everywhere, and not necessarily in the ways you'd expect, just almost like you just said, there is a heavy automotive presence here, and we can get into that. But I think there are two kind of key things you're seeing. This kind of abstract conversation around AI and
particularly generative AI, translate into real world things. So, for example, I spent the afternoon yesterday with Walmart, and if you are an iOS user, you have an iPhone, you bring up your Walmart app. You no longer have to search for hot dog buns or beer specifically by brand. What you can do is go into their generative AI tool and say I am hosting a Super Bowl weekend party, what should I buy? And it will list a complete shopping cart for you, ready to go. Then you have
the option to click it. So that's kind of a real world manifestation of AI. I know what, who needs that? Actually?
It works really well for the demo, like the Englishman the English DA hosting the Super Bowl party.
Guys, as you know, I am a fair Weather forty nine have no interest, but it's an interesting experiment to do. The Other side of it as well, is that there are dozens of pieces of consumer devices or hardware where the selling point is AI and that looks different in different ways.
Making it easier for us a shop and spend money. And so Paul had mentioned about how there's more car companies there. Car is a big thing. We spoke yesterday about this Goodyear tire that was released. If you could tell us a little bit more about this, because I hadn't even realized that that EVS really we're and tearing those tires a lot faster.
Yeah.
Something that happened just before the pandemic is that the kind of classic car shows think about the Detroit Auto Show or the munich Auto Show had kind of lost their shine, and you saw companies choose Ces to be the place that they unveiled their EVS four years later. That's not necessarily true. Honda did unveil its next generation EVS here, and Honda's important right. Many Americans driver Honda but when I spoke to the CEO about the plan, he basically told me we don't really have a plan.
We just know that sometime in twenty twenty six, this ev concept we've shown you just now may or may not appear on US roads, which didn't fill me of confidence. And then away from that, it's all about automotive tech, think about advanced driver assistance, driving safety, the experience in the cockpit. Mercedes were on the show with me yesterday and they've brought a virtual assistant into the Mercedes cockpit where you literally say to Missilla, I'm driving home. Hey, Mercedes,
I need to shop. Go to Walmart, put some stuff in my basket. By the way, there are other retailers and big boxes available other than the Walmart.
That was just one example, right, So, Ed, I mean, it's just I know, I can see from the background you're in the exhibit hall here, what's the traffic been like there? And kind of what's the makeup of the crowd, because when I went, I was surprised at how global the attendance really is it this week of people from everywhere come to Vegas.
Yeah, the data gives us a good read on post pandemic, business travel, and some insight into the economy. Right there are one hundred and thirty thousand, one to three zero attendees expected for this year's CEES. That's up from about one hundred and fifteen thousand last year, but it's still significantly below pre pandemic levels in terms of footfall and attendance.
The international angle is interesting. One third of all attendees this year have come from overseas, and you know, just anecdotally, when you fly into to the airport, when you're waiting for a taxi, when you are in the casinos, there is a real sense that actually there is strong attendance this year, strong spend, and that that business travel component is back. And when I speak to sources, the reason why, it's very clear it's speed dating. And I mean that seriously.
If you are the CEO of a big company, or you are trying to meet with the CEO of a company, everyone's in one place for just two days. Get it done.
That's a great point. And what's the sense of you know, one of the things I think a lot of people are trying to get a hold of, particularly investors, is you know, this AI is such a new growth driver for technology. How much of it is incremental spending? Do you think, I mean, do you hear companies saying we're amping up our tech spending because of AI or is it kind of replacing other tech spending? You get any sense from the companies out.
There, Yeah, it's definitely a case of prioritizing rather than increasing overall spend. You know, we've seen this particularly on cloud spend right where a number of companies will say, okay, we have to be involved in AI, so we're adjusting the proportion that we're spending on a compute power versus data storage for example. There is really interesting ways that it manifests itself. Bear with me on this one. I spoke to Lorreal CEO Nicola Himus and they have a
new device, the devices in beauty stores. It registers a reading of your skin. And that sounds abstract and silly, but the reason that AI is important that they've invested in it. They're saying that if you're a human in one in a store that's buying a loreal products and you go up to the counter and speak to another human, there is a nine percent chance that that sales rep converts the sale. If you use this AI powered machine. Lorel thinks that this chance of a sale increases to
seventy three percent. Wow, because the AI can give you such a convincing read on your face and suggests products directly relevant to you. So there is evidence that there's kind of very focus spend on how AI can convert sales opportunities and boost margins.
You know, I have to agree with that because if I went to a computer and it told me, I've had a lot of people in the you know, a beauty story that have told me the wrong shade.
For my face, and I'm out of there looking like an orange.
And and if the.
Computer told me, I think I might believe it a little bit better. Ed wanted to quickly TikTok. A lot of companies teaming up with them. Now we're hearing Google is doing it to stream those videos from your phone to TVs.
Yeah, so broadly, Google's whole Cees thing was the ability to take content from the cell phone stream it to the TV. They're taking on Apple's airplane in that respect. But the TikTok tie up, God, that's a tongue twister is an interesting one because this time a year ago, we were lamenting the fate of TikTok in this country, that it was going to face seriously regulatory and government scrutiny.
Now in the space of a week, it has a deal with Peloton, and it has a deal with Google to amplify the distribution of their content and also TikTok's content, And it just shows there's a bit of traction going here. And remember, you know, there are a lot of users of TikTok in this country who don't necessarily already have any interest in that regulatory scrutiny that we reported so much on last year.
Hey, thanks so much for joining us. Great color as always, from the floor of the Consumer Electronics Show out in Las Vegas, and Ed was just reporting, Boy, everybody is out there, not just tech companies, but pretty much every CEO is out there because technology impacts their companies one way or the other, and they need to be out there. Ed Ludlow, he's the host of Bloomberg Technology, is reporting live from the event space, the Event Haul out there in Las Vegas.
You're listening to the team Ken's are live program Bloomberg Markets weekdays at ten am Eastern.
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All right, let's talk about Boeing here. This is really interesting. I mean, I love this company because I just to me, it's always seemed like a real symbol of American engineering ingenuity leadership. You think about the amazing fist they have out there in Seattle, when you're driving on the highway from the SeaTac Airport into Seattle, you just kind of pass it by. It's just mile after mile after mile of their facilities there and jets all over the place.
Just amazing. But boy, they've had some real challenges over the last really three four five years, and the latest being with this seven three seven max jet with a side blowing out. George Ferguson, he's the senior Airspace Airline
analyst for Bloomberg Intelligence. He follows this company very very closely. George, what are we hearing from the company today about where they are in terms of I guess kind of getting these birds back in the air here and maybe you know kind of what they're thinking is about what happened.
So I think we're still waiting to hear from the regulator from the FAA an agreement on the inspection plan to get the airplanes back back into the air. It's a fast moving story, so I don't know that I may have missed something in the last couple of minutes, but I still don't think we've agreed on an inspection plan yet.
And yesterday, what I.
Think we heard was it was at all hands meeting, you know, we're CEO, Calhun told the employees that, you know, they had to sort of own up to their mistakes, I guess was what he kind of said. So sounded a little bit controit there, but I think that's the latest for us. The biggest issue is, well, this spread past the seven thirty seven Max nine. If it goes and you know, we end up having to park the Max eight fleet, that would be a major issue. Right now,
we don't see that happening. It looks like it's not going to interrupt deliveries I think for twenty twenty four in the form it is right now, And that's what we're watching very closely too, right because if that impacts the potential for deliveries, well, if this started to knock those down and that changes cash flow, you know, income all those all those great audieens that we focus on in.
The markets, now, George, yesterday we heard from CEO Dave Calhoun. He was basically kind of fighting back tears. He was kind of owning up to the company's shortcomings. What was the reaction to that, What did people think about his reaction? And also we haven't heard from the supplier much as well.
Yeah, I mean the I guess from the supplier.
This player put.
Out a press release. I think it was Monday morning. Well, you know, Spirit air Systems, the supplier.
We're not sure that it necessarily happened. It's Spirit Air Systems.
They do make the fuselage to we do believe they put the plug in there, but Boeing may take the plug out to load the airplane. So but they seem to be much slower in doing much of anything and letting Boeing take the lead. I think that's probably fair. It's Boeing's airplane, and I think it was interesting to see. Yeah, yeah,
it's a whole issue. But I think you know, at the end of the day, everybody's trying still trying to figure out where the problem is, how far it reaches, and you know, what the what the financial what the travel impact. So there wasn't a lot new in that, just that it seemed like maybe he was indicating that it was going to be Boeing's fault or Boeing supplier's fault at the end.
So at the end of the day, George, this is I mean Boeing's did the name that that's on the plane here? I mean, what's the feeling within the aerospace circles that you travel in, Georgie? I mean, and no, you go to all the air shows, you talk to all these buyers, the folks that lease these planes. Does Bowling have a real fundamental engineering slash manufacturing problem? Do you think?
I think that sense is in the aerospace circles that there is a fundamental problem, you know. In this case, I would say it's not so much engineering, right, engineering was really around the mcast system. In this case, it's a fundamental manufacturing problem. But I mean, those are the two most important things they do every day, right They engineer aircraft and then they build them and send them
out into the fleet. But definitely we've had a number of problems in the manufacturing process, either at suppliers like Spirit, you know, or even up at Boeing we had these we had bolts loose on the back of rudders of aircraft that came out in the news over the over the holidays. It really feels like the stability isn't there in the in the build process, and it's something that going really needs to get you know it. Really it's it's arms around quickly. I mean, I thought they would
have felt this way midyear last year. Right everyone talking supply chain, you'd think they've been digging into spirit air systems, digging into all their suppliers to make sure there's stability there. It's a very, very challenging process. There are lots of suppliers, there are lots of parts that get put together to
make an airplane. But I think this just just re emphasizes the fact that they really have to dig into their supply chain and their suppliers and make sure they have stability in this manufacturing process if they need this, if they want this recovery to continue in the in the companies.
Delivers so joy.
We've been hearing about this every day, we're hearing some more information about it. What is all this bode for Boeing's earnings? I mean, how are they doing before and how do you expect them to be?
Yeah, so you know, we were not ready to take down the number of deliveries we think they can make in twenty twenty four based on what we've seen so far. Again, I think if we saw the grounding stretch to the max eight that would be very, very concerning. Then I think we'd start to think about, you know, what the real potential was to get all those deliveries out the door.
But right now it.
Does seem to be contained to this fleet of two hundred and fifteen airplanes.
We've heard a couple of.
Instances where there are other loose bolts, but we haven't heard it's absolutely widespread. And the inspection that they need to do the last we heard on it was a four to eight hour inspection. That's not horrible, something that ought to be able to be done in a couple of months to get the rest of the fleet again. If it stretches from that, everyone will have to take out their pencils again and think about what delivers will be and that's going to knock down cash flows and
that's going to knock down profitability and Boeing. If we've got to knock it down.
George, what is our concern here among investors and just observers that the federal government, Congress from a regulatory perspective, might take a look at Boeing and put it Boeing in its sites here.
I mean Boeings. Sorry, Congress has done at once already. They are they are the national aerospace champion. And if something is amiss at Boeing, I think it does not bode well for America. So I wouldn't be surprised to see Congress digging and they take a little bit of time.
There's even I think even some concern.
You know, the FAA has had its challenges, it's been short staffed, it's had turnover issues, and they've you know, they've been maybe a little more intense on some of these issues that I guess that's a good thing when it comes It's definitely a good thing when it comes to safety.
You know.
Right now they seem to be I imagine the right way to put this is they'll take this as far as they think they need to do to preserve their reputation, which got mighty to mcass, which maybe you know, which may be even further given that.
History and George yesterday, the chief safety officer. He was right alongside the CEO talk about a pressure position. I mean his position was created after those two fatal crashes about five years ago. So what do you think, what's his thought process? What's going through his mind?
Now?
You know, I think the supply chain is it's like an octopus, and that's got to be the hardest job inside inside going right, or inside any company, especially Boeing. And I'm sure he's not getting a lot of sleep at night thinking about all the different things that can go wrong. It's it's like lack of mole, right, And my sense is that's what they've been doing. They've been
finding problems fixing them. And as they do at the look they look to the right and there's another one rising up that they've got a man, it would be nice if they got some stability inside these workforces, you know that. I think the turnovers getting better. The longer you keep that better turnover, the longer folks are on the line getting trained doing the job. You know, numbers
of repetitions, the better it's going to get. But right now, it just looks it looks pretty pretty rough, right, That's a really hard job.
All right, George, thanks so much for joining us. We always appreciate getting your insight here on all things aerospace airlines. At George Ferguson, he covers the aerospace and airlines industry for Bloomberg Intelligence decades of experience.
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So we're trying to show plan sees out in Vegas. One hundred and thirty thousand tech geeks get together out in Vegas and look at all the new gadgets and stuff like that. I've actually done it many, many times. It's a lot of fun out there. Boy, there's crowded. You got to wait long lines to get taxi.
Do you go for the tech or for Vegas?
I'm both, Let's be honest. You know, I go to the crafts table Blagie and they know exactly where to find me if you're looking for me. We got some smart people out there. Mark Davis, Mark Douglas, I'm sorry, the CEO of Mountain. We've talked to him a lot about the digital advertising space. He's joins us here along with Mark Penn, a president at Stagwell and a former chief strategy officer at Microsoft. Gentlemen, thanks so much for
joining us from Vegas. Looks like a pretty staid place where you guys are, not typically where you would find me if we were doing a live remote. Guys, I know you guys kind of have a partnership that you recently announced. Talked to us about that.
Well, I can start. So what we're focused on is essentially performance marketing for some of the world's largest brands. We've talked about performance marketing a lot, but what do you see happening is with the demise of Nielsen brands Essentially, you know, want real metrics, they want real targeting.
They don't.
They're not happy with just spending hundreds of millions of dollars and having no real data and no real control over it. So both of us, Mark Penn, his company is kind of the premier performance marketing holding company for agencies, and obviously you guys know mount ebented performance TV. So we're teaming up with an offering geared to directly at the world's largest brands to now enter the world of performance marketing.
Hey, Mark, talk to us about Stagwell what you guys do there and how you guys can serve advertisers and the networks and you know, really kind of help out with measurement there.
Sure you know Stagwell announced dec listed companies. We're uh, we manage about five billion dollars of media for our clients and so this this partnership is very important to extend you know, our performance oriented media into connected TV, where Mountain has a real specialty. And also we have a series of digital platform products and research communications and media which Mountain can take to its primarily small business market.
So we think this is a win win partnership for digital marketers and for both of us in terms of the billions of dollars of media that we manage at Stague Well, I mean.
That certainly seems like a solution here to a growing problem, because the growing problem is we now consume our media on so many different platforms and it's almost impossible, I would think, to measure that accurately and you mentioned it talk. It's been a huge challenge for Nielsen. So what do the brands actually need and what can you guys deliver because I got to make sure I'm reaching my audience here.
Well, brands need results, right, and so the real question is how much you invest and how much you kind of get back in return. Is it a two to one, three to one, four to one, or or you're just building your brand right? And so what we have been has been more performance oriented, and the primary measurement of that is going to be sales. We do have attribution tools, We do have location data, so we generally know if you've gone to the store or not gone to the store.
But by and large, Performance Media has a set of KPIs which are really rigorous. That means that of the two thousand ads that people see a day, we'll be able to track how yours do now.
Mark and mark.
You're making it easiest for us here the same name.
You guys are out in the middle of it.
Sees talked about about some of the things that you're seeing there. What are some of the hot items that catch your eye?
They well, I've been on the show floor. I mean I honestly the hot topic is AI. But you know, AI is just becoming pervasive. It's like electricity one hundred years ago. Everything will be electrically powered. Everything will be AI powered. So you know, you go to the big boots. Some of these booths are like the size of large homes. And you see, I know LG had transparent televisions. You kind of see the future when you come to see us. You don't see the product they're launching today. You see
what they're going to launch five years from now. And there's a lot. I mean, the transparent televisions I think are really capturing everyone's attention. Just see through the TV and watch and watch television. That's the one that What are you gonna do with that one? I know I'm not sure, so I have to buy it at.
Some Uh you know, I think I think this year, Uh, I'm going to the floor more intensively this afternoon. But but really this year is a year or too early. Next year I think it's going to be amazing because next year people will have had the time to great AI with hardware, and that's where I think you're gonna see incredible advance. I think here's people talking AI showing some AI, but they haven't really had time to build
the consumer products that really incorporated it. Next year, I believe we'll be spectacular.
Yeah, agree with that, and I'll bring my transparent TV to witness.
So Hey, Mark doug Leat's talk to us about just kind of when you're looking at at the metas of the world, the facebooks, the Googles, the Amazons, give us a state of the advertising market out there in terms of linear versus digital, because we hear the linear television is just brutal and it just seems like it's in a secular, secular decline.
Yeah, I mean, I think that's true. One of the the number of people watching TV is not changing, and so it's the business models of these media companies are having to evolve. But the user, the viewers are there, the dollars are there. They're having the change how they acquire media. That actually, by the way, kind of fits right in on what Mark p and I. Penn and I are talking about in terms of the brands realize this and they're like, Okay, well I'm not going to
rely on linear data anymore. I want something holistic. I think NBC made a really interesting announcement They announced this year their goal was sixty percent of all ads that they serve NBC on peacocks, CNBC, you know, like NBC Sports. They expect those to be now targeted in a digital way, in the way that like like Stagwell and Mountain are
focusing on. And that's a huge announcement. I mean that's like they're basically saying, like they expect twenty billion dollars in their ad spend to now be digitally targeted across linear TV and streaming TV. That's an announcement they made this week.
What is the competitive response from ac Nielsen company, the traditional measurement company, the currency for that one hundred billion dollar TV business.
Yeah, people are people continue to seek the holy grail of complete measurement, which continues to be somewhat evasive in nature. But but again more of it is performance oriented. You look at the partnership that we have. The partnership is really designed to capture the expanding market in connected TV. That really what's happening is linear TV is becoming connected TV. Yeah, those people who said they would never ever do ads like Netflix, they're doing ads like Amazon. They're doing ads.
So ads are back all that time which people were spending without ads, is coming back to advertise time, and that's good for us, good for companies like Stagwell.
Yeah, I think this mark this year is the start of the TV pee. A lot of people don't realize the TV industry grows at one percent rate while streaming has grown obviously much fast. I think this is ticking of the year where the whole industry starts growing again.
And we're gonna have a big political season. Remember there's going to be twelve billion dollars on top of regular advertising here.
And does that still go to primarily local broadcast?
It is now.
More distributed across all platforms, but I would still say it's more. You know, it used to be about eighty percent local broadcast. I think that'll come down more like fifty sixty percent, with the forty percent going to as local as you can get your digital Yeah.
All right, guys, all right, thanks so much for joining us, both of you, guys, Mark Douglas, president and CEO of Mountain and Mark Penn, president of Stagwell, they're out there at the CEES, the Consumer Electronics Show out in Las Vegas, as is seemingly everybody else in almost every any industry that has any kind of technology aspirations one way or the other.
You're listening to the tape cans are live program Bloomberg Markets weekdays at ten am Eastern on bloom Radio, tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
I'm looking at bitcoin forty five, four hundred, pretty much unchanged on the day. I think today's the day where the SEC is going to give us a thumbs up, our thumbs down on this spot. Bitcoin ETF, which people have been in, particularly the crypto space, are really really waiting for it, because that would be a real seal of credibility here in the US trading at least. Our
next guest is all over this stuff, Greg Taylor. He's the CIO of Purpose Investments, whose Purpose Investments, Well, Purpose Investments launched Purpose Bitcoin ETF, the first direct custody bitcoin ETF in the world, in twenty twenty one, and they've been managing it ever since. So he knows what's happening here. Hey, Greg, I kind of we all got a head fake yesterday.
First of all, thanks for joining us, Greg. We all got a head fake yesterday with the you know X whatever it is putting out a tweet that maybe they did get the approval then apparently was not. What do you expect to happen today with the SEC?
Yeah, I think the excitement yesterday was kind of on brand for crypto surprising age one too much. But I think this is a space and at the end of the day, it does feel like the SEC has run out of reasons not to do this ETF. So it does feel like today was today We're going to get the approval. It seems like a long time coming. I Canada approve the ETF almost three years ago, and I think we've had a pretty good track record all the
way through. So it feels like today is today. We'll get the announcement that the SEC has made the approval, and I think that's a good stamp of credibility for the entire space.
Now, Greg, take us through this approval process. I mean there's a lot of moving parts for that. Can you walk us through it?
Well?
I think the big thing I can speak to is the way the Canadian regulators did and they were really trying to make sure that we had a good, safe ecosystem, and really when we approved, when we've initially launched it or applied for a CRYPTOETF back in that twenty sixteen the OSC, the Ontario Securities Commission, declined that at that time point in time because they thought the space was
really not up and ready for it to happen. A lot has happened since then, and I think the exchanges have gotten better, the whole ecosystem has gotten stronger, and when we got our green light to go in February twenty twenty one, it was all about working with the regulators to show that this is something that you can invest in, that it's going to be a lot safer for the average investor to get access to this through
in ETF versus just buying through a crypto exchange. And I think that proved out in twenty twenty two when we saw a number of exchanges fail and a lot of people lost money and had the bad experience in the whole crypto ecosystem, but those who had exposure through a regulated ETF on a good regulated exchange were able to just deal with the price volatility instead of the whole financial system claps.
So Greg, you guys, again you're the ones with the experience in this, with your purpose Bitcoin ETF. Talk to us about your ETF kind of how has it evolved in terms of assets and just kind of how it trades and give us some sense of how that's been.
Yeah, so we've been pretty happy with the whole trading assets through it. It's again we're getting close to three years. We pretty much traded at NAV the entire time. We pretty much traded also with a one penny bit ass spread, so keeping very much institutional style investments, and I think that's why it's gotten a lot of credibility and a lot of attention from both the retail and institutions through Canada and rust of the world that are using our product.
Is a good way to get access to this. We've been trading on average around fifteen to twenty million dollars a day, but we've also had big days where we've had inflows and outflows around one hundred million. And I think the big credibility to the system that we've designed and done this is that we've not lost a single coin through this, and we've also not really impacted the
market or impacted the way our nav is traded. So I think it's all about making sure that your process are up and running, and I think it's also dealing
really with credible counterparties. That's the most important thing we've been focusing on is dealing with strong custodians, strong trading partners, and not really going forward to something that's easy, because this is a volatile sector and I think you really want to make sure that people are going to get access to it and not have to worry about any of the underlying volatility.
Yeah, I want you to expand on that a bit, Greg, So we talked about the crypto landscape in itself. I mean, it seemed like it had a pretty good run in twenty twenty three. Where do you see it going heading into twenty twenty four.
Well, well, that's the big question. And I think one of the things that people are really looking for is this bought this US etf to come because really it's tough to value bitcoin. I think everyone's trying to come up with models and trying to come up with a way to look at this versus physical gold or something else. But at the end of the day, it comes down to supply and demand and demand. We know it is really fixed, so it's going to be looking at stories.
Supply is really fixed, so when you look at demand, having bringing in new investors in a US ETF is really opening this up to a whole new market. And I think when you get that more demand coming back into this and people are looking for alternative currencies and people are losing interest in US dollars some other VAT currencies, having a sleeve of their assets in something like crypto could bring in more investors. So I think that could be positive for the entire ecosystem and in particular and
for bitcoin. The next big thing throughout the year is the HAVING which is going to come out probably in Q two of this year, which is really going to be something that takes down the incentive for bitcoin minors again, so that will gain the limits supplies. So we could be setting up for twenty twenty four that if we do have a risk on environment, you've got more people looking for access to crypto and also less supply out there,
so could be setting up for a bulowsh here. But as we know, this is a volatile, aastic class and anything can happen.
Greg what do you expect to happen when we get the big heavyweight brands like you know, Vanguard and black Rock and Kathy Woods Ark, I'm going to get the big big names coming in this ETF space. How do you think it's going to play out over the coming weeks and months.
Well, at the end of the day, it is going to open it up to a whole new sleep investors. Our products has going to have been running for almost two years, but really at the end of the day, over almost three years. But at the end of the day, really want to get more US retail investors involved in this and that's something that I think this will only help. So that should bring in more buyers to the space, and that again should add more credibility to the space.
I think the SEC finally getting around and more comfortable the ecosystem again will be a stamp of approval for the whole space. So this is a positive development and I think should at the end of the day lead to further advancements. Maybe the next thing we'll see is an ethereum ETF coming down the road, and I think that would be good for the space as well.
Anyway, so does an approval from the sec. Does that basically mean that it's a yes for everyone else? I mean, what does that mean if they say yes to let's say one application.
Well, I've hard time seeing how they'd approve one and not the others because everyone is basically using the same format, which is again very similar to where we have with similar custodians, with the Gemini and coin Base, and similar trading partners and as similar structures. So I think at the end of the day they will approve all of them versus just one offs and then it's going to be as we're seeing a competition see who's going to
be the one to get into the market share. We were fortunate to be the first in Canada and that was a good advantage to go, but you really at the end of the day then have to deliver. There's one thing being first to market, but if you have investors a bad experience, then that's something where you can lose a lot of credibility and really be a mark
on the whole ecosystem. So I think what we were hoping for is that this is going to be a good experience, that there aren't going to be any problems in the first day of trading and that would be at the end of the day positive for the space.
At Greg Taylor, thanks so much for joining us. Really appreciate it. Greg Taylor, He's the CIO of Purpose Investments for the good folks up in Canada. They that came out with the world's first direct custody Bitcoin ETF. They did that in twenty twenty one, so Canadians ahead of the US market.
Here you're listening to the tape can't our live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and.
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Right now, let's get back out to Vegas. The high rollers table at the Bellagio. Uh Wu jin Ho. He covers all the technology stuff for Bloomberg Intelligence. Wooge. First question, what hotel you staying at?
I'm at the Alara which one health and Alarau.
Trouble all right? All right, Uh, I'm a Bolagio guy myself at anyway, good stuff, woo talk to us about this deal that we see with HPE and this other I mean, does this make sense for that the sector, because I know there's a lot of uncertainty out there just about you know, kind of what this deal means for the companies here.
Sure. So for for HPE, they've been looking to diversify their core computing business for quite some time now. One of the things that they've done several years back and made the room of acquisition flow start. But that's one of the more probable businesses for HPE. In making this acquisition with Juniper, they've actually doubled down on networking. The networking business is as large as their compute business, and the hope over the long term is to drive better margin expansion going forward.
What do you think about the price here is? And I guess the bigger issue is is this a good use of cash, good use of capital?
You know, that's a really good question, and I think that's one of the reasons why you know, investors were not too happy reflected by the share price, right. I think there was an expectation of some money coming due from the H three C divestia share roughly about three billion coming back into better capital returns. Now, now that being said, you know, the question is is that you know with that fourteen billion dollars used for Juniper, will that drive multi full expansion. Let me give you a
case in point. If you think about traditional Dell, HP and HPE, they trade roughly around eight to nine times forward arnings. The networking guys on average trade or for about fifteen times forward arnings fifteen sixteen times if it goes back, If if we start reverting to the mean to the two multiples, you could probably get about a thirty percent valuation bump if this deal works out for HPE's favor.
Is that the sphere behind you that is very well?
That is the sphere that is very well. I pick this hotel? Yeah, why I pick this hotel?
Very good?
I mean I gotta get out there because it looks really awesome out there. So anyway, all right, Wou Jinho, Thanks Sank for taking some time out there. I'll let you get back to the conference floor there.
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