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All right, let's get to Gena.
Martin Adams, So Boomberg Intelligence Chief equity strategist, Gina, how much complacency at this point is still left in the market.
Oh, I don't think there's too much complacency at all, Alex. It's pretty rare to see the VIC spike well north of sixty. Yes, we did on Monday morning and not have a full washout in sentiment.
And I think we did see that.
By the time we got to the point of Monday close, the vixlas above thirty. The fourteen day RSI momentum score for the S and P five hundred was just at thirty. That kind of oversoul momentum and extreme pop and vis has historically led to positive returns eighty percent of the time over the next three months, so we've generally sort of washed out.
A lot of the complacency.
I do think that to the degree that valuations are still a little bit too elevated. In tech that may be a space where complacency still exists. And you know, frankly, as much as we nitpick at these company earnings, the earnings have been very.
Very strong.
So there's not a lot in the earnings that you can say really sort of dismantled the confidence in the tech space. If there's any complacency, it might be there, but I'd say markets at large, you have gone a long way to pricing out any sort of elevated enthusiasm.
So I'm still trying to figure out what happened, Like, what happened Monday, Tuesday and today?
Was it technical?
You forget Friday?
Friday too? I wonder why I forgot Friday.
It's on the beach, So is it a technical thing? Japan carried thing that people are telling me about the Nieck trading crazy?
What was it?
I think it's predominantly about Japan, and you can almost one for one mark all the way back to the middle of July when the market started weakening as the yen turned significant to made a significant turn in direction, right, So it's very much about an unwinded the carry trade. And then last week when we did get final confirmation from the Bank of Japan that they were raising interest
rates for the first time in seventeen years. That created a lot of instability that was then exacerbated on Friday with some relatively weak economic data in the US. So it's that spread in interest rate differentials between the US and Japan that is really key to this market meltdown
that clearly widened substantially over the weekend. US bond markets starting to price for fed ease, where the Japanese market is now starting to expect a tightening in Japan created tremendous weakness in the currency marks, which then exacerbated declines in the equity markets.
I mean, I think that.
There there is a link between all of these markets that is very, very notable. When you have this carry trade in place for nearly two decades and it's starting to unwine, it creates some issues of force selling, some liquidity issues broadly that generally impact the equity markets, and
I think that's largely what's driven the instability. Thankfully, overnight we did get some news from the Bank of Japan that they have they've committed at the very least not to tighten during periods of general financial market distress going forward. But you know, frankly, we are in a different path for central bank policy than we have been in the points in the past, So we're going to have to be on guard for bouts of indigestion as we adjust to this new normal.
All right, Gene, I've been doing a stock market thing for thirty five years. I have no idea what's going on at there, Gina Martin Adams.
She's a pro.
That's not helpful.
I have no idea what's going on?
Gena Martin Adams, chief equity strategist for Bloomberg Intelligence.
Joining us.
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And Alex Steel Pulse. We need is Bloomberg Intelligence Radio.
We are broadcasting to you live from our rainy interactive broker studio right here in New York. Although I don't know if it's actually raining right now, but doesn't look pretty dark.
It looks dark. It looks a little grim, looks a little dark.
R Let's go to the bond market for a moment, because four years ago those twenty year bond auctions were a thing.
Of the past.
But Treasury Secretary at the time, Steve Manushan, reintroduced those twenty year bonds and monthly auctions. Their sale apparently, if you just do back in the envelope calculations tacked on roughly two billion dollars a year in interest expenses. And now Steve Manushan saying, you know what, guys, maybe we don't need them anymore, maybe they're too expensive. Well here joining us in studio. Yesha a Bloomberg Markets reporter. He
is the lead on this story for Bloomberg. It's reading quite how you guys should definitely check it out on the terminal or on Bloomberg dot com.
Yeah, what is he saying.
He's saying, as you just said, just to kill it. It's expensive paper for the government to keep selling every month. It's almost like one trillion over the past four years they sold and based our calculation based on the average yields of tens and thirty year bonds, the government overpaid roughly two billion a year and it adds up to forty billing over the life of the bonds. So and if the government keeps selling it, it's just really costs a lot of money for taxpayers.
Why why is it costing more money?
Yeah, because you are selling the most expensive bonds on the trairie Yo cuve. You would sell the bonds cheaply raise the money cheaply for the governments if you sell the ten years for example. And the two billion doesn't sound a lot of money, and just considering in the context of the government's spanning is almost seven trillion a year, So two billion is not a big deal in big scheme of things. But at the same time, it's not small money. Right, we look at the budget of the governments.
It's roughly equal to the annual cost for running the national parks. It's also equal to the subsidy for the veteran housing. So it's real money.
Why did he like it to begin with?
Then?
So the government and it's two twenty. The government's looking for new ways to diversive that by their funding and try to raise a lot of money because the it's pandemic. The government spanning is really ramping up and they try to find a new source of the funding, and they studied a lot of ways, including selling fifty year bounds or one hundred year bonds. The government have a committee they try to convince that MANUSI that it's not a good deal to sell really long bounds fifty one hundred
year bounds because it's even more expensive. Nobody's going to buy buy it. So the Mnusian took the idea and sell the twenty year bounds. Remember, in the past, as you mentioned earlier, the government sold the twenty year bounds in the nineteen eighties, but it only lasted four years because they run the same problem as we run now. There are no sufficient demand for the twenty year bonds, and at that time the government also have the limit of how much long term bonds they can sell with.
So at that time the US Treasury decided to just abandon the twenty year bounds in favor of keeping selling the thirty year bounds. Thirteen bonds has more demand at least it looks like now that because a lot of the pensions insurance company realize these long duration, long interest and sensitive security to match their balance sheet liability. So yeah, there we.
Are one of the things.
If it's more expensive sell in the twenties, why isn't the Treasury just not sell any than just auction off tens and thirties.
Yeah, So the Treasury in their debt management principle, they really want to make the debt issuance more predictable, more reliable. So once they start issuing new bonds, they want to see it stick for a while, so everyone have the same expectations. So you just can't turn it on and turn it off on a whim. So that's the argument
for keep doing it. And the the other argument is that if you're looking down in the next few years, the deficity is going to continue grow very quickly and they need every help from every part of the curve since you have already this new instry instrument, so they like to stick with it. And also that the argument is that if you don't sell the twenty year bonds, you have to sell more ten years, thirty years, then you're going to increase the cost for that part of the curve as well.
An argument are they issuing more front end or back end?
Yeah, so the so there's some academic study the most cost efficient way is sell in the middle of the curve, in the badley of the curve, like five years, ten years, anything beyond that. It's costs a lot of money. But they also want a more diversified of the case. So if you sell, like all of a sudden, sell lots of the ten year bonds in one auction, you could see that auction fair fairly poorly, And this is something they want to avoid. So that's the argument to just keep doing that.
Yeah, these deficits are they're becoming a thing here. I mean the annual de it's almost two trillion dollars.
That's per year.
Kids, that's double the level of just five years ago. What is What does your bond markets say about that?
Yeah, that's there's a lot of a debate on that. We saw that last summer, the law and the curve really kind of keep rising. Remember at the time, the federal was raising interest rates, so a lot of people were concerned that we are don't have a sufficient demand for these bonds. And I think I think this is still the concern in the market, the this talk of
bond vigilanty. It becomes a thing nowadays that the idea that that we are going to have a bier strikes all these auctions because think about it, some of the foreign investors, especially central bank in China, Japan, they are not going to they are not coming to the US treasure market anymore. And uh, the it's really the private sectors buying all these bonds and they're there price sensitive. They want to buy the price. They're not going to buy the price that's really low. They want to be
compensated for the risks. So there's a term in the BOMBA called the term premium. This is how much actual compensation you wanted for holding the long term bonds. And we see it backed up a little bit over the course of the year, but now there's recession consuming the market,
especially over the last couple of days. That term premium is capture at bay at the moment, but at some point there's some has to be some confrontation between the markets and all the supply coming to the market at some point.
Totally, all right, Yashan, thanks a lot, Yasha his Bloomberg Markets reporter. Definitely check out everything that he writes because that's where I learn all my stuff. Just thank you very much for all your hard work and you're writing.
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Let's get more to the equity moves Lift also moving in the market. Airbnb though just really struggling, Man deep saying, Bloomberg Intelligence in your tech industry. Analyst joins us on Airbnb. So is this Airbnb misjudging something or is this just the US consumer surprisingly slowing?
I think with Airbnb, the biggest concern has been the saturation in their core market. And you know, we are coming off of pandemic where the tailwind was behind them in terms of people traveling more. But now everyone realizes that their room night growth is tapering off. And the reason why it's tapering off is because they are highly penetrated in their core markets, whether it's in the US, Europe, and with any marketplace business, you got to grow supply.
If you're not growing supply, then it becomes a problem because then your demand is sort of limited by how much supply you can grow. So what they told us last night is they're going to spend more in terms of acquiring new supply outside their core markets in Latin America, in Asia pack and there will be ROI down the line, but for the next two to three quarters, they're gonna be growing mid single digit. And that's where I think.
When you're trading at eight nine time sales, the highest valuation, you get this kind of response.
It looks like we're surrounded here in our studio by these bi anals. We got man Deep, we got Jonathan Palmer on the healthcare. It's almost like there's not a management team in there keeping tabs on where all the animals.
Are for because they're all here. We make them come here.
On the beach at the moment, I mean most of the management team, all right, So Man Deep Airbnb. To me, it feels like we're just kind of getting.
Back to a new normal. I mean, if I like this story and I like the concept, I buy the stock on the weakness, what are some of the Are people concerned about the model.
Per se or they just saying, Hey, I just don't like the cops, I don't like the numbers of stores.
Yeah, it's more about the estimates getting revised lower. So if you were hoping you will see upward revisions. That's not happening with this stock. And the reason that's the case is when what they told us last night is even though they are talking about new products, you know, rooms and experiences, nothing is adding in terms of the incremental top line growth or the margins. In fact, the margins would take a hit because they talked about expenses
being on the higher side. So if you are looking for, you know, a next one to two year investment, there isn't a lot to look forward to in Theirbnb story. And plus, there is a cyclical element to this stock, given you know, the economy is slowing down, consumer spending is slowing down. They had the best tailwind in terms of Olympics, you know, summer travel. Still they guide it to mid single digit room night growth, So that wasn't music to investors.
Is the demand there still demand? That's the other side, right.
So if you look across the in terms of how the marketplace travel marketplaces have done, booking, Uber Lift, every company has suggested that they are seeing some softness. Now nobody is saying we are seeing recessionary trends. And when you know, people pare down in terms of their travel spend. Maybe they're not going to take you know, three vacations as opposed to they'll trade down and take two. And you know, same thing with type of uber rights, they're
not taking the most expensive. So there is that trading down that's happening right now. But nobody is calling for an outright recession yet.
Lift, is there any future for this company?
Can Lift get a lift?
Can Lift get a lot? Sorry at all?
I mean scale is your friend when it comes to marketplace is given how tough marketplace businesses are. And in Lift's case, they need to partner with somebody who's rolling out autonomous vehicles, whether it's Vemo or Tesla.
That's the hope.
They need a part or even a door dash.
That's the enough place to be. Now, what's management saying. Are they open to a partnership?
They are.
They said their fleet network is the best to roll out these autonomous and robotaxis. But clearly, you know, we know Tesla's ambitions or they want to do it on their own. They don't want to use any of the intermediary So time will tell if Lift will be partnering with them.
All right, that's amazing.
I just can't believe the different how those two companies have diverged since their IPOs.
One reflected in the valuation. I mean, look at lifts valuation.
It's a monster, just ten x in terms of market cap. Mandeep Cheing thinks so much. We appreciate technology channel somehow it covers all those marketplace things. I think it's all kind of a scam.
But I don't know. People love the Airbnb. My kids use them all the time. Oh yeah, so good, good for them.
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Let's go to the other thing that I love, and that's energy. How to store energy is huge, and it's huge because if you want to diversify what energy you're using, like wind and solar and even hydrogen, you need batteries, and you need really big batteries to be able to store it. Now, you can maybe do it for a couple hours, maybe a day or two, but doing that longer has proved really difficult and really expensive, and one company is trying to change that. The company is called
energy Vault now. It's backed back in twenty twenty one. Before it's backed, SoftBank was an investor. It's a Swiss startup basically that is trying to find different ways of storing energy. And the CEO joins us now, Rob Paconi, CEO of Energy Vault. He joins US from Switzerland. Rob, we appreciate the time. Can you just describe a little bit in dumb down language what it is that you guys do.
Sure.
So we broadly focus on energy storage, and we focus on it with varying technologies and software. So we do shorter duration energy storage using latimion. We do long duration energy storage meaning things to get sort of in a six, eight, twelve, even twenty four hours, so full day types of storage with a unique gravity solution where we lift in.
Lower blocks or will shift water from different heights. And we also do ultralong.
Duration meaning multi day storage using green hydrogen and microgrids.
Who are your customers, Rob, Our main customers are first and foremost utility, so we can sell directly to utilities, and we also sell to independent power producers so the ones that will, for example, build out solar wind and pair storage with that and have long term contracts with utilities.
And the third group are the large industrial users.
So our investors include people like Saudi Aramco HP, the largest mining group in the world, and groups that are looking to make their own clean energy transition or that have desires to make streen hydrogen for example, where you can make that using solar an electoralizer, but you need.
Long duration storage. So because our technology is focus.
Across a series of durations, we can actually meet a lot of those needs and hence serving those three market segments.
So let's go back to the gravity storage solution thing. So this is from an article here at bo boomer from a few years ago, but it describes it and I feel like accurately and pretty well. An electric crane hoists up blocks of concrete and stacks them into a tower when power is plentiful. When power is needed, it uses gravity to take the structure apart brick by brick, and the weight of the descending blocks converts kinetic energy into electricity. That sounds really hard and complicated.
You know what, gravity has been around for a while. I tell people it's not an idea, it's the law. So the whole physics of moving weights up and down, it's been around, but you're right to do that in a way that's economical to do that now with software where we can automate that entire process and dynamically look at the timing and dynamically accelerate and accelerate that lifting and lowering. And also we actually don't use concrete, so
we avoid it because it's not really sustainable. It's one of the contributors I think seven to eight percent to greenhouse gases. So we actually have a material science team and worked with SEMX to use dirt and even waste materials like coal ash, even concrete debris are the things that would go into landfills. We can utilize that to make these large blocks that are twenty five metric tons, So we try and avoid materials that are not sustainable to make those very same blocks.
So, how is I guess your business changing to try to meet the changing sources and uses of energy these days.
It's a great question and it is one of the challenges. It's definitely focused globally on countries wanting to achieve energy independence, and to do that, you need to be able.
To produce locally.
Hence our gravity solution that's more long duration, of course is ideal because you can produce most of that from local materials with the labor I mean it's construction, you're
building a building. When you get to the short duration, which is most of the market today, and if we know about lithium ion, so that's two to four hours, that's this time shifting people trying to manage you're relying on the rare earth metals, which I believe Paul what you're referring to, and that's where through mechanisms like the IRA that was put in place in the US, they're trying to get that localized.
And to deal with that, you have to.
Come up with mechanisms to try to bring some of that production local as much as you can in terms of getting content, and that's been a big focus area and of leveraging technologies like hydrogen. For example, green hydrogen can be made sustainably. We're using that to back up the city of Calistoga in northern California and near Napa to provide a sustainable backup solution for two to four
days that otherwise would have taken natural gas. So it's a combination of technologies you really have to use to solve this issue of reliance on either a few countries in the world or a few rare word metals.
So if I just look at your stock, it's ninety three cents. It's had a tough road since it's a spack, right, I mean, clearly there was a lot of enthusiasm in the beginning. You had a nice pop, and that's been really tough. In the last earnings estimate and the last earnings for second quarter, the headline is revenue missing estimates. How how do you manage this at this time? It's expensive to probably get all this done, even though the demand we know is still there.
Yeah, the demand is high, and the capital markets have been very challenging in particular if you go back to mid twenty twenty two, when the interest rate environment changed and really fundamentally, I think the risk appetite for new emerging growths like ours really soured and changed. And for us, we focused on execution and our you know, we had one hundred and forty eight million in our first year revenue twenty twenty two, our second year almost three hundred
and fifty millions. We more than doubled the size of the company, but at the end, investors are really focused on cash flow and minimizing risk. We've guided that that's going to happen next year. So in our first I guess would be our first third, our third full year of revenue, we're going to be cash flow positive and even at positive. And I think until that happens, a lot of investors are on the sidelines. And what we can do is what we're doing, which is executing for
customers and in different regions of the world. We announced new deals in Australia, we announced a large gravity project in Italy had a coal mine, and I think filling up that order book alex is going to be fundamental, so investors see it's not about if, it's just about when and as we feel that order book, then when that cast flow roadmap becomes very clear, which we're getting there to twenty twenty five, which is what we guided, I think then we'll see investors re entering the stock.
In the interim, how do you fund your growth?
Because I'm looking at the FA function, which gathers up all the anaals estimate it's still no free positive free cash flow in sight here, So how do you fund that growth?
Well, we're in a great cast position, so we're well north of one hundred million no debt. Unlike a lot of the companies that pursued this backgroute, they've done diluted convertible notes and really at high cost and also that hurt investors.
We've done none of them.
So we have no debt as a company, well over one hundred million in cash, and we've reduced our burn rate to about fifteen million at quarter, and in the meantime we're ramping up now that revenue we've guided five hundred to seven hundred million between this year and next year. We do have a second half ramp, so that's not unusual when we're relying on EPC projects and the timing of these projects starts. So that's from a cash perspective and being good stewards of the shareholder money and cash.
We've actually done a very good job of that and that's going to be playing out as we get into our growth period where we don't have a need to take on debt.
All right, Rob, we really appreciate it, Thank you so much. It's such an important space, and particularly with all the money flowing into it from private equity companies as well as governments. We appreciate that insight. Arabiconi, CEO of Energy Vault, joining us on energy storage, which we definitely definitely need.
I think the question also becomes, you.
Know, we just had sun Power file for bankruptcy yesterday as a solar company based in California, and there were it is syncratic issues, to be sure, but what happens when someone else or whoever takes the White House in November, if it's President Trump, what areas of this gets rolled back of the IRA? Maybe nothing, I mean money's already been spent, but maybe something. And I think that must be very difficult to kind of manage in this business right now right And if.
Your investor, do you want to stick around? And why you have that level of uncertainty? So yeah, we'll have to see. So certainly one of the industries that is paying close attention to the national elections.
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Alex Steel, Paul sweeneing. We're live here in our Bloomberg and Active broke the studio.
We're streaming live on YouTube as well, so you can see us YouTube dot Com search Bloomberg Podcast. All right, you know, commercial real estate, this is the way I frame it for everybody. Third Avenue, New York City, between Grand Central and our hqu here at fifty eighth Street. When those buildings trade there, what are they going to
trade at? I mean, what discount to the market. Bloomberg News did a great story on about a year ago, saying that's really a risky area and it's emblematic of some of the problems in urban real estate.
Lisa Nee joins us.
She's a managing partner and head of real estate at Eisner Amper. I don't pick a building there seven to fifty Third Avenue when that thing trades ten percent discount, twenty forty fifty percent discount?
Where is the market these days?
Yeah?
Hi, thank you for having me. So that's a really great question as to where the valuation sits and where people are willing to have the buyers and the sellers agree to that price. So seven fifty third Avenue.
Which is just to pick one ount of the blue.
It wasn't my old office space. We currently moved to where I was seven thirty three now, so it was our old space there. But looking at there and sort of looking a Class A office building is going to trade differently than a B and C and the curtain's going to trade differently. So last year, if you would have had me here at this time, things where people weren't willing to make those price adjustments. And now when you're looking at valuations, are they're looking to make some
of the adjustments. Now how much of a decrease is really the key there?
And looking at the.
Leases in place too, is it a long term lea short term? And so the valuation is the key of what everything is going to be driving at. Now we finally have some buyers and sellers who are willing to bridge that gap because the sellers are obviously waiting for the higher pricing. The buyers really want those deeper, deeper discounts that they're willing to do.
Do we have a market?
Could you say, you know what I understand is Class A in New York or Boston or San Francisco holding its value correct and doing well B and C. Some of the discounts we're hearing, I'm hearing fifty percent plus correct.
And it's also where how far are you along on that cycle? Where are you you with your debt on that? And so what are the banks pressuring you? I mean, the banks at this point have been doing the pretend and extent, which because they want to keep it on their balance sheet. Now they're looking at some of those v's and c's and looking to say, do we have
to get those off our balance sheets? And they're pressuring the owners of the borrowers of the buildings to really go and do some due diligence and making sure to see how long they can last with those buildings and seeing if they really need to start getting those off their balance sheets. And so the banks are putting some pressure regulatory reasons, I mean, the whole host of things for those buyers to start looking and making some adjustments for the sellers.
We also saw I think it was yesterday, I think Goldman Sachs took one of the big buildings in Time Square and sl Green is going to be the property developer.
But basically, the guys.
Who owned it defaulted on loans and then banks had taken control of it. Is that are we going to see that over and over now or is this going to be like a one off?
So those are great headlines. That's what people want to read, is those headline stories. You're not going to read the portfolios that we're able to work itself out through the news because no one cares. But those are happening. And so those behind the scenes stories are happening day after day.
How do they get worked out?
So the banks will work with the the borrowers and they'll put in some provisions in there for plans, they'll look at their rent roles. They're making sure that they can make those payments and trying to make modifications within those debts to make sure that the borrowers really can can make the properties work. The banks don't want to
see those headlines undistressed. I mean, the banks don't want to go out of business, so they really want to make sure that they're working and if they can make the cash flow work, they are going to work to modify those those debt instruments for the lenders or for the borrowers.
I should say, you know, I have yet to have or we have yet to have because we focus on commercial real estate. Maybe we think about office too much, and we think about New York City, San Francisco office too much because.
Commercial is so much broader. But I want the person to come in here.
Maybe it's a family business been in New York real estate for one hundred and fifty years and said we're done too many of our We had B and C buildings on Third Avenue and the banks are forces and we're only getting fit fifty cents in the dollar. My one hundred and fifty year family business is done well.
We never want that to happen, right, so we want to make sure well working it is not happening. Most of those are very lower they're low leverage, holding those buildings for a long time, and those are smart cash flowing assets, and so they've been working those assets for quite a long time. You're not going to see a flood of deals.
You're not.
You're going to see the here off bigger deals that you're going to be able to read about in the paper. But the floods that people were waiting for with all the capital to come in and rescue hasn't happened yet, and now have we hit the bottom? You know, I was away with a bunch of really really smart owners and operators last week and they couldn't agree if we've hit the bottom yet, And so it's just trying to figure that out.
So to that point, I guess it's twofold question, why haven't we seen this flood of defaults like we are all kind of waiting for? And if we imply it's more on like a rolling basis where there's going to be these one off buildings, et cetera, one off deals, how long can that last for forever?
Great?
Great question?
Wish I knew most of that, but again it's hard to deal with what the banks are willing to tolerate and how they can go in and do the modifications from a cash flow perspective. What people also are talking about is when you're looking to go in and purchase those deals and bring in the distress capital, the distress isn't there, so it's really not as dire, and so really getting the people to understand what the valuations of those properties are and wanting to infuse capital to make
those properties work. And so I think we're going to keep seeing the one off for a little bit until we really hit that equilibrium where the buyers and the sellers can and we're almost there can start making some real meaningful trades.
What are the good stories out there? And commercial real estate, there's.
A lot of good thank you, there's a lot of good stories. So industrial is doing really well. Data centers are hot, Hospitality come back, hotels great, people are traveling.
And doing that.
You know, maybe a little bit nervous about consumer spending people with that fear and what's going to happen with the report that just came out, But hospitality industry is doing remarkably while considering where we were, you know, a few years ago. So there are some great stories and there's some great opportunities. But in every asset class, there's always a great opportunity for a great property with a really good vision. Why not take a great opportunity for that.
So there are some exciting moments in commercial real estate.
So Paul has a six percent or over six percent of Morgan right, he had straight up six. So the big question is like, you know, when does he refine? And he's like in the fives, he'll consider it. I'm guessing it has to be in the lower fives tree to really consider it. What kind of FED cutting cycle do we need for things to make a lot more sense in your world.
So we're all anticipating, we talked about this before the session. We're all anticipating about fifty basis points in September for the FED to reduce. We saw in Alarming what people wanted an emergency, which is not going to happen again to do the refinance is much different than the buyer market. So that refinance, I'm not sure Paul's going to get where he wants to.
Go so quickly.
But what should happen is that hopefully for people who are looking to sell, with the lowering of the interest rates, it'll make it a little bit easier for the buyers to come in and purchase, so that purchase those assets. With respect to home building, now, remember there's a lot more inventory now, believe it or not, than there were a year ago. With there's been a surge recently of used homes, which are the homes that we've all lived in, and the home builders are having a little bit more
of an influx of inventory for new units. What's interesting though, is there was a study done for the median home purchase. The disparity disparity now between rental and that mortgage payment is still thirteen hundred dollars a month. Ten year average was three to four hundred a month, So we got to get that a little bit lower to be able to make a meaningful difference there.
So our banks lending, like, if I want to I'm in Poughkeepsie and I want to build an office park, or maybe it's maybe not an office park, probably like a just a warehouse or something, will my local bank lend to me at reasonable terms?
They're making the regulatory is making it harder. It's making harder for them to go on their balance sheets and do it. Creative financing is a little bit more so whether it's a debt fund, and even in the insurance companies aren't running to do those lens. Sellar financing has really had an uptick in those types of projects. Again, that's land and you're building a warehouse. If you're building, if you're renovating and existing, you might get seller financing.
But the debt funds and some familieve it or not, those families that we spoke about, they're looking to do some creative financing too for people in the real estate space. So it's going to be not if your debt might not look the way it had historically, but there is money out there for those investments.
All right, Lisa, really great stuff. Really appreciate that perspective. Please come back. Liason, the managing partner and head of real estate over at Eisner Amper. And finally enough we got Brookfield coming on with earnings today and just they were expecting deal activity to pick up now that central banks are going to be cutting interest rates and that they think that there'll be some large scale transactions happen
and they're able to exit some of their investments. But that's like a behemoth, and they're an asset manager, so that's a whole different kind of even ship.
I've seen them walk away from.
I mean some of the big names, like I would just think from a reputational perspective, I wouldn't.
Walk away from the building and take loss like a professional, like.
A like a like a thing.
Yeah, but it's something I.
Don't know, but I guess there are these big funds and they can do it.
I guess they do say that the real estate market it is improving. I guess the question is like how fast does it improve? And then where we kind of go from there.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with 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.
From alex See alongside Paul Sweeney. This is Bloomberg Intelligence Radio could bring you all the top news in business and finance and economics. There are lens of our Bloomberg Intelligence analysts. They cover two thousand companies and one hundred and thirty industries worldwide. We also love earnings, We love companies. We love to dig deep into some of the ones you may not have heard of and from. One of that is Nayax. It's ticker and y ax on the Nasdaq.
It is classified as an other financial services It's a vending payment solution company. The stock is up almost five percent of reported earnings. This morning, they reported a loss of about eight cents a share on revenue of As I go ahead and try and bring it up on my computer on revenue about seventy eight point one million dollars. The CFO joins us, Now SAGI te manor joins us.
Sagi tell us more about your company. What do you guys do?
Good morning.
So Nayax is the only global company in the unattended space. And what do I mean by d You usually think about going into a store and paying with a cashier. We're exactly the outside of the store in the automated self service.
So think about as the.
Vending machine, a massagere as you might see in the JFK airport, laundromat, EV charging stations and whatnot. We are, as I said, the only global company in that space, selling to more than one hundred and twenty countries. We have one point two million devices around the world with eighty five thousand customers, and we are very happy with the positioning that we have today in order to because this space is early stages, so very excited.
So SAGI, talk to us about your relationship with the EV business. How does your technology interface with the EV charging business?
So we're actually selling our product in forty four different verticals. I've mentioned the vending machine, Nostasche, kid ride, laundromat, parking as well as the EV charging stations, which it's a very interesting vertical and we are very excited about the opportunity there. So if you think about today, there's literally payment device on an electric vehicle charging station. So what's happened is the user needs to download and up in order.
To pay for the electricity.
And what we see right now in the in all markets is we see regulational changing. We saw that in California, we see that in Germany, in the UK and many most states like that where you they we have you have to have a device, a payment device on those machines.
So we see retro fit and we are we actually work with all of the electric vehicle charging manufacturers and we have the only solution today to have a car present solution as we call it, being able to pay with your credit card in a station everywhere you go.
How easy would it be there to have that disrupted?
Like if I just go to the gas station, I can use any credit card, I want payment system easy.
How quickly could that part of your business be disrupted?
Well, it's actually it's a great opportunity for us right because even today when you think about gas station some of it you have to go into the store in order to pay with a credit card. So that was one same is you think about it the same with electric vehicles? Well instead of downing an app, and by the way, sometimes you need sixteen different apps because there's sixteen different companies.
That allowing electric vehicle charging.
So now you're going to be able with the Nix device, with our yellow Nix device, to be able to pay with a credit card. So you have that opportunity users and people that have an electric vehicle, they have an anxiety if they need to drive, especially in the US where it's so big, if.
You don't have enough stations out there.
So now think about the ability to pay with your credit card is changing the entire business.
How do you differentiate your company versus others like Block or Toast that are out there there in the payment business.
It's a great question.
So if you think about Toast and Block and Square for that matter, they're inside the store.
So there we will be.
We call it the attended space where you have a cashier in front of you. We are actually in the automated self service, as I said, where you actually outside there's no one in front of you. So this is one. We also have the end to end solution. So you have the device, you have the payment, and you have the software. And so what we are providing every customer that we have, and as I said, we have eighty
five thousand customers. Most of them, by the way, are small businesses where they cannot allow themselves too much of a hassle. We are allowing them two things. Enablement of payment and to manage their business better. What does it mean, manage their employee, manage employees, manage their inventory, really look at the transaction value and be able to see how they can manage their business better.
I see, what are you hearing from your customers right now? We talk a lot about the state of the economy. We talk about people in companies investing or not investing. What are you hearing from your clients?
So I'll give you an example.
In Q two, one point two billion dollars transactions went through our devices. But when you look at out the number of transactions that happened, it's six hundred million. My point is, at the end of the day, in our business, it's a very small transaction value. The everlet transaction value for us it's two dollars and in that space. We don't see much of a change in the economy.
Like maybe retail is seeing. We actually continue to grow this quarter. We grew thirty nine percent a quarter of a quarter with forty.
Seven percent increase on our recurring revenue. Our area, which is again the unattended space, is really in its early stage and we don't really see any headwinds coming in.
We haven't seen that for the last four years.
All right, thank you saying so much for joining a segee monor chief financial officer for Nayaks the.
Company, the electronic payments company here.
You know, and you go to like the places in your self service, so you get a sandwich, you know, a drink and maybe at an airport, tap your card and ask for a tip.
Yeah, what's up at that zero?
But now it's harder to do that when it's somebody standing behind the count It is true.
And also like if they're making new stuff.
Yeah, but I'm that's a tough one.
The hope tipping when I'm old enough to be set in my ways and say I've never done that for fifty plus years, why would I start now?
I mean, it's it's a fair point.
I mean the young folks. They're being trained to tip for things that we were not.
But if you think of like Starbucks, like you guys work hard, drink orders are complicated.
Yes, should I give a dollar? It is a new thing.
It is a new thing.
But like somebody just ringing up my stuff at a store, I don't know about that one.
That's a tough one.
But then I feel torn, and then you feel guilt, and then like should you do that?
But you know, and then if you come from another part of the world where you don't tip, you're like, what what is that?
Yeah?
Yeah, And I used to be a waitress, so I know the tips and ceiling so it's like, I feel you. I want to do that for you.
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