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 moving news. Find the Bloomberg Markets podcast called Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot com slash podcast. Let's bring in Wall Street reporter Shanale bastok Now, who has taken a five
day mini sabbatical to read Jamie Diamonds annual letter. Hanally, I'm just wondering, after you got through the sixties six page home, did it give us any hints as to what to expect from the earnings report coming on Wednesday. Listen the fact that he thinks that things are going to be good, Til says a lot, right, because you have volatility now down a little bit, which you know, on the face of it is fine, it's nice, it's boring.
But banks make money when things get volatile. Banks don't make money when things get too rough for people to really engage in markets, right, Sonali, what's what our expectations here as would come in for these banks? Here this earnings because We're gonna have a lot of the big
ones on Wednesday. Yeah, I've got to say I've moved on from Jamie Diamond, Daniel Letter all the way to the Satoshi Nakamoto white paper again because on Wednesday we have both JP Morgan reporting and coin bases direct listing.
So you have Old Wall Street New Wall Street. You have a confluence of events that I think are very exciting actually, and coin base is going to be using the direct listing model, which you know, we've wondered for a long time how much that type of a model is going to eat into the traditional I p O s that make the banks owe so much money. As we know, the banks make less money and do we know how much less they do make on a direct
listing versus a traditional IPO. Well, here's what's interesting. They don't make less money per bank, they're just a lot less banks working on them. So where you can have a dozen or so underwriters on a direct listing, there's really only a few that work on sorry, and on I p O there's only a few that work on a direct listing. So Goldman and Morgan Stanley are they've really gotten ahead of this. They've been able to make
a business for this of themselves. Cited Al Securities, which is usually the market maker for these direct listings, they've made a big business for themselves. But on NASDAC, you don't need a market maker like sited Al Securities. NASDAC kind of does the process for you. UM. And so it's a big day for the exchange, and it's a big day for UM the you know, I like how Bloomberg Intelligence puts it. You can expect coin baseed to
eventually become a bank for crypto. It's also a big day for UM, the bitcoin community or the crypto community, because this is a much more democratic way of giving investors access to your shares. Right, if you do an I P O, you need to be a buyer in that. As a retail investor UM, you need to get syndicate. That means you have to have developed a long relationship with your broker. You have to be a big play.
You know. It almost seems unfair for you know, a mom and pop investor because there's no hope in heck that they can ever get any syndicate. They have to buy it after it starts trading, and typically after a pop. Right, Yeah, that's really the hope here that the direct listings can
make this much more democratic. Uh, let's see how it works out at the end of the day, right, Let's see how many people actually start to buy into coin base and then you know, Matt it also it's become more than really a hundred billion dollar company in private markets. Do they keep that evaluation as they become a retail play. You can make the argument both ways, right, if bitcoin continues at its current pace, if they add more products, if you get more retail interests, and you see coin
based going much higher, and it is good. But on other areas you can say maybe some of these companies have waited very late, um, and you know, do they face potential down rounds when they get into public marks. Will also be interesting to see if the price in bitcoin fades a little into this, because that's a hundred billion dollars that's essentially going to come out of crypto market cap, isn't it. Yeah, it's it's pretty incredible here.
The coin based play is really looking beyond bitcoin, right and looking at them getting into other assets like areas like custody. Right, making bitcoin more easily held and tradeable for large institutional firms, because firms like JP Morgan right have been so slow to get into this kind of new new era of finance. Yeah, that's kind of where I went to go. What are the the big banks saying about crypto because it feels like the late to the game. It feels like they don't or they have
not made a big commitment. How are how are investors thinking about this? Well, one thing that's pretty incredible, as we've in recent we've got news that Goldman and Morgan Stanley are taking steps to make it more available for their private wealth clients. There's a couple ramifications for that. One. Crypto was supposed to be this great equalizer, Yet at the banks it's being made available to the wealthiest clients first, So that is kind of against um the whole heart
of what crypto is supposed to stand for. The other thing about it is again it's years later, right, it's a crypto, it's bitcoin above fifty dollars is when they're starting to sell it. Does that big give a big boost to the price or are they getting in late? Only time will tell that story. You know, the folks that have gotten in much earlier through other means outside of the banks are probably much happier today. Um, but you do see the banks trying to embrace it. Just
got twenty two here. But you speak to the wealthiest investors on Wall Street, are you noticing an uptick in the number who are interested in bitcoin? Oh? Yeah, even traditional hedge fund managers. You know, watching Dan Loebe tweet about it over the weekend is is you know a fun change to watch. Yeah, that's interesting and I think the we are seeing that institutional uptake guys, and again even on the corporate side, with Tesla obviously putting it
on its balance sheet. Shnei Bassk text so much for joining us, giving that preview of earnings and preview of coin base on Wednesday, Shanellie Basket, Wall Street reporter for a Bloomberg News where was appreciate getting the update on all things Wall Street. Now let's get straight to Duncan Aldred. He joins us from General Motors, where he's a vice president Global Buick and UH and gmc duncan. Great to
have you on the program. I gotta say, ever since I was a kid, Arno Schwarzenegger started driving his mill speck h one hummer around l A I have wanted one and I still want one, preferably with a big six point seven Leader turbo diesel. But you're bringing back the Hummer in a much more eco friendly way. What kind of um demand are you seeing? Yeah, good morning, Great to be with you. Well, we're seeing it. Huge dayman.
We revealed the pickup truck version of the GMC Hummer EV in October, and we've just revealed the suv version of it. About a week or so ago. We started taking reservations. It's first to say that the the reservation count is huge. We did a limited edition first edition which sold out in a matter of minutes, both for the truck originally and then more recently for the suv. And this is very different to that that vehicle that you just mentioned there as you say, this is a
true zero emission all electric vehicle. But believe me, the performance and capability that this generates really does put that original Hummer into the shade. Zero to sixty in three seconds, to the truck up a little bit longer for the suv, the ability to go in the most difficult off road terrains. This is a super truck. And we coined the phrase on this because this really is the world's first super truck, whether it be in pickup truck or suv. Guys, all right,
what are these super trucks gonna set me back? So they started eight dollars um and they go all the way up to a hundred thousand dollars. But before that you get in an amazing amount of capability. I mentioned there the zero to sixty type figures, but you've also got four wheel steering. So these are big vehicles, but they've got a turning circle thanks to all four wheels turning that is the same as a small car like
a Chevrolet Sonic for example. That four wheel steer function also allows you to go into what we call crab walk, which means the vehicle can drive in a diagonal fashion, which you might think, why do I need that, But certainly when you get into extra him off road environments
to help navigate around, it's an amazing feature. But to be honest, it just makes you smile when you do it because you see the horrid the horizon going in the wrong direction when you're driving, So that's an amazing feature. We have what's called an infinity roof, so the six panels which all come off the store in the front of the vehicle where an engine would be in a traditional vehicle. You can store the infinity panel roof and the rear drop glass actually falls down, so you basically
make this vehicle are convertible. We think it's probably the first all electric convertible in the world, and of course you're getting that amazing open air experience with a near silence from the propulsion system because it's electric. Um. It's also got super Cruise, the latest generation of super cruise, and this is what a lot of people refer to
as autonomous driving. We call it a driver as this feature, but it allows you to drive along the highway, take your hands off the wheel completely, and it will even do overtaking maneuvers as well. So this is a vehicle that's truly revolutionary, truly a super truck. And whilst the upper price bounds, we think it's incredible value of money. It will be amazing. I mean, I'm looking forward to the SUV version which comes out. I think what late
three and I think it's gorgeous. I gotta ask, though, Duncan Um, what's your answer to the current uh, the current crop of gas powered super trucks you've got the doddre M t r X, so I think blew everybody away, and Ford plans to answer could they kind of flubbed it And now they're gonna answer next year with the Raptor are But these are you know, more than six leaders v a supercharged or turbo charged with seven hundred horsepower.
Does GM have an answer to that? Yeah, we do, And again you know we were still we're still selling traditional based vehicles as well, and I love them. But if his performance that you're looking for, then quite honestly nothing and come close to um to the hummary V whether it be in truck, pickup truck or SUV. Guys, we're talking about eleven and a half thousand pounds of talk. We're talking about a thousand horsepower on the truck and
about eight thirty on the SUV. And as I say there, you're talking about instant acceleration zero to sixty three seconds on the truck and about three and a half on the SUV. So this is this gives truly kind of unprecedented levels of performance. And he doesn't just do it in a in a way that he's a pure brute force. I mean, for example, when you choose to go for this great zero to sixty time. Obviously, in the safe conditions you engage what's called what's the freedom mode, and
what that does. It lowers the vehicle to its lowest level because the suspension goes up and down, the seat starts vibrating. You get almost like an amusement park theater within the vehicles. All the screens begin to display things and you count down them. Boom, you you express the the gas story, you press the accelerate, the pedals pedal, Yeah, no gas pedal. Now all right, that was good car talk, guys. I'm glad we have you. Guys got the chat your
little auto stuff. Duncan all Dread, vice president Global Buick and GMC talking about electric vehicles coming to the truck market. And I know one Matt Miller is a psyched, so that's good for him. This week, we're going to see a big, big I p O and it's in the crypto space coin based coming public this week via a direct listing at a staggering valuation, staggering to me at least of proximately one hundred billion dollars. Let's get the latest on this. We can do that with John Woo.
He's a president of Ava Labs based in Miami. So, first, John, thanks so much for joining us here. I love for you just to simply describe what coin base is and why it is so critical to the crypto world. Okay, Paul, nice to be here. So, a coin base is a crypto exchange. They are very important to the cryptal world because they are one of the few properly regulated exchanges allows FIAT onto the cryptal world, so they provide that service in a compliant way, and that's why it's so important.
You know, Before I go to bed every night, I always like to dream about, Uh, had I bought like three thousand bit coin when it was at seventy five dollars apiece, then I would have liked to sell it out around seventeen eighteen thousand at the peak and u and then and then buy back in when it dropped again and then sell it out again at like sixty tho. So I would be like a billionaire right now. Would I be able to do that on on coin based that would that be the best place for me to
do it? Yes, that you are allowed to do that, That's one of the places you can do it. But um, you know I can test the fact from having been on the bi side before. It's easier to just buy and hold the concept of trying to capture a move and being able to navigate the daily trading. These are dreams, John, This is my This is my dream every night. It's nothing that I could actually have done. I think it
would be ethically wrong for me. But um, is coin based then the best place to do big bitcoin trades securely for a US investor who wants an experience that's similar to what they do at the brokerage houses. The answer is yes, all right? So John, is this a way for investors if I wanted to buy into this coin based IK? What I be my major play here is Hey, this gives me exposure to the crypto world. Yes? Absolutely.
I think the one thing that you would have to consider it though, is how correlated is this to just gitcoin? I think of the assets custody by these guys is just bitcoin. So if you want to get exposure to anything below the top five coins, this is okay way, but it's not probably possibly the best way to do it. So uh where else should investors look? Then? Right now? And does this crypto boom still have room to run. So in terms of I answer backwards in terms of
the boom, I think you'll absolutely have room. Because the market cap in crypto has gone from about one trillion at the end of January to about two trillions. Part of that is just you know, the price of BPC going up, but if you look at what's beneed that and the faster growing parts of it, even at coin basis custody, it is etherium and some of the other alternatives. Bitcoin has proven to the world the first generation of crypto was good for a digital currency. Ethereum is now
showing people that hey, there could be utility. There's this whole defined network popping up. There's these n f t s that you and I have talked about in the past. So there's starting to begin use case and what I call second generation of crypto, which is the ethereum and some of the other alternatives. Is ethereum help me out here. Is ethereum a competitor to bitcoin or is it just
a use case at bitcoin? How do we think about it in the context of bitcoin, Because we are hearing more and more about ethereum as a stock price or as the price of the currency continues to rise. Sure, the easiest way to think of Ethereum is that it is showing the utility. It's kind of like iOS on Apple.
It is the platform that allows applications, whether in the traditional world Facebook or clubhouse or TikTok, to build on top of that iOS because it has a platform to allow developers to come in and be creative and create use cases on top of it Um. That's the best way to think about Ethereum. Whereas Bitcoin, the best use case actually frankly is still digital goal storage of value, and that is because the call it think of it
as the operating system. The mechanism on Bitcoin has certain advantages, but it doesn't have speed, it doesn't have transaction capability, doesn't have smart contracts on top of it. That's what ethereum has provided. Now there's a whole new group while called crypto free point. Oh, and that's the guys below the full and those guys are now making those transaction happen at a very very fast paced no latency and making it cheap. So you know, we've talked, we talked
about n fps in the past. There are people right now who go to Etherium. They purchase a n F key somewhere, but they had to pay thirty to forty in gas prices, which is effectively transaction costs. So that's going to be prohibitive of creating a proper digital economy. So you have a whole new generation now of call it platforms that are allowing better technology, better way of setting things up, allowing people to actually transact, allowing a
digital economy to really thrive. That medium exchange should not be prohibit to becoming a nice economy. So tell us quickly again what you're doing at Ava Labs, because you you know, come from a full Ivy League pedigree, NBA Harvard, you worked at Tiger Management. What what do you do and what is your platform capable of? Great so on, President of Ava Labs. Ava Labs is the team behind the protocol Avalanche. Avalanche is the next generation blockchain that
is compatible with Etherium. So exactly what I said before, where I think the first generation crypto Bitcoin was digital money, second generation was applications, utility and an ecosystem. Third generation are going to be Avalanche like platforms that allow people to transact and exchange things cheaply. It's almost like my Friendster, my Space, and now we're in the world of Facebook where we're gonna about to really take off. All right, well,
it's great to get your insight on all things crypto. John, thanks again for joining us. Hope to have you back again soon. John Woo, they're the president of Able Labs talking to us about the coin base. I p o this could Paul be a hundred billion dollar company. It certainly is value that way privately. And the question is, um,
how will investors who have bit up crypto assets so quickly? Uh, you know, um embrace coin coin coin base absolutely, and it's gonna beet direct listing mat so it's gonna be really interesting to see how this thing trades when it does come out. Yeah, I think the direct listing aspect of it is really cool, so you could get a lot more retail. This is Bloomberg. Now we're to bring in anag Rana. He is Bloomberg Intelligence senior industry analyst. And of course the chips time it is on today.
We'll get to that. But first off, this morning we saw Microsoft headlines cross they're gonna buy Nuance in a sixteen billion dollar deal that is their second largest in history and I read your b I piece and you have a really cool chart about the reach, the product penetration of Nuance. Ten tho organizations use it, but I thought it was amazing of hospitals in America use nuanced solutions.
What does this company do? So in the simplest way, if I'm a doctor and I come back after visiting a patients, I need to transcribe that soft to that particular you know, dictation of the of the chart. Um. The software allows me to transcribe it as as as you and I are talking. The software transcribes and conversation in the background, and that really has been their full tape for many years. And that's really where the crux
of the product is. And this is what we think Microsoft is going to scale it much bigger, all right, So I mean nineteen point seven billion dollars, that's a that's a big number to the Matt Miller's and Paul Squeeneys of the world. Um, but the Microsoft that's not so much here. So I guess they're thinking about the total addressable market. Let's just give us a sense of the strategy behind Microsoft. But what they think they can
do with this asset. So think about it. It Currently healthcare accounts for close to eighteen percent of uss GDP in terms of total expenses. It's an area which is probably the biggest problem area for any corporation that's out there, is a problem for all politicians. But and we have always said for years, I everybody said it for years that only technology can solve this problem of you know, waste stage. Now the pandemic is a catalyst for people to say, can we do a lot more work digitally?
And this is one of the the you could say, nuggets of where as we go more digital, you want to get more things that can transcribe using you know, voice, using AI. Yeah. I mean when you when you talk about what doctors use it for um, I'm thinking like my mechanic could use this from my bike. I got carb flow, I clutch slippage, you know, um, if you have an old bike, those things are a problem. But
you could use it in so many different ways. For example, finance, the financial industry could use it in um looking at a client's portfolio. Are they gonna stick with just health care here? I don't think so. In fact, one of the things being pointed out in our written research is conversation is increasingly becoming the most important way people interact
with any application. So you know, from the consumer point whether that's Alexa or City, but from you know, other areas as well, whether it's your HR software down the road, you know, whether it's any other productivity application that helps you become more um, you know productive. You will be using voice as the first way of command to you know, to interact with the person on the other side, and
that's this software. You know, the guts of this software is so important because you can use it to create customer service chart pots. For example, you've covered Microsoft for a long time. They typically, uh, don't acquire a lot of stuff. They're not very active in the M and A market. They did by LinkedIn and now this deal on a couple of others. Is that going to stay the same or do you expect them to try to step up and go stick growth rate with with some acquisitions.
So I think one of the biggest thing I would say is they would want to use the growth rates not by actually acquiring something for the take of revenue, but it's going to be technologies that have very large, you know, implications. So for example, this particular applications, as both of you mentioned, will have applications not just in the healthcare vertical, but almost everything that Microsoft does, So you know, it's it's it's a question of acquiring the
software and where the end markets is incredibly large. And I think that's really what we will be looking at, is whether they keep on investing in areas where, um, you know, the the end markets are not tiny but have a very large addressable market. So I just want to quickly get you to touch on the chip summit that's happening today. We've seen the problems spread across a number of industries. Just thirty seconds here and act what
what do you expect to be accomplished? See, I don't think that SUBMIT is going to accomplish anything concrete in a sense that that's a problem that just cannot be solved so quickly. But we are I'm happy that they are discussing this problem just because as an agent, we really need to get a lot more semiconductor work done in the US rather than you know, being a hostage to the the the a the ation mevendors. Realistically, un
will we bring chip manufacturing to the States. It's very difficult to say whether we physically bring it not, but we really need to have a way to make sure that, you know, similar to the way we are getting drugs or we're getting the vaccine and you know, without a problem from anywhere in the world, we need to make sure we get the most access to it before anybody else does. All right, don Rock, thank you so much
for joining us. We appreciate that Anor rack Ron has senior software and I T Services analyst for Bloomberg Intelligence, helping us break down the Microsoft deal again. Nineteen point seven billion dollars total consideration, big premium um, but as Annoragua was mentioning, UH, it increases Microsoft's UH positioning and enhances its positioning in healthcare as healthcare moves into the twenty first century. So sting follow up on that. Thanks
for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews of Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller V three on false Sweeney I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio.