Apple's Chips and the Tech Rally Fizzles Out

Just around the corner this Thursday, semiconductors outperform and Chinese stocks law back after Science of Government is winding down its tech crackdown on data protection, on online gaming and investments in foreign entities. We want to dig into that scoop because it did move markets, So please to say to talk about the replacements of chips and go really for its homegrown components and the implications on its supplies as well. Mark Gum and he was there with the

story it did move fake time. Next, just talk about what's new here? Is it the pace at which they're doing it? So we've known for some time that Apple would be moving away from qual Calm for its cellular modems. Right now, the cellular modem, the qual Calm chip is what allows the phone to connect to data network, so you can make phone calls, connect the internet, download apps, email, basically do whatever you need to do when you're away

from WiFi. So we've known that, we also now know to your point the timing of that that's going to be end of twenty four or early. It's going to start in one iPhone model. Take about three to four years for that transition to actually occur. Now, the main new piece of information is, in addition to working on its own cellular modem, Apple's working for the first time on its own WiFi chip. So that's the Broadcom component that allows the iPhone and it's other devices to connect

to WiFi. And this is actually a combined chip, so it also lets the phone connect to Bluetooth as well. So it's the component not only for cellular from Qualcom that they're working on, but the component that also allows you to connect to wireless and bluetoo. So they really want to own the entire wireless stack inside of its products. How that for is the relationship between the two companies.

What are executives saying about bracing of a future relationship. Yes, so the Apple Qualcom relationship has been, you know, dundling down for some time. Qualcom has publicly said the last few years that it expects for Apple to design them out of its products. Remember there was this major lawsuit

over patents and royalties. Apple settled that because it really needed a five G phone with the iPhone twelve and twenty, and there was no way to come to market with the five G device unless they used Qualcom, so they needed to come to I believe it was a six year licensing agreement and a four or five year supply agreement at that time for the Qualcom modems inside of

the iPhones. Now for Broadcom. Broadcom and Apple signed a fifteen billion dollar deal a couple of years ago that expires at the end of this year, right, And so that is also an indicator that there had been some trials and tribulations between the two companies. And now we know that it's pretty clear that Apple is also playing

design broadcome out. But you look at any major supplier of components inside of Apple's devices, you can bet that Apple wants to work on its own in house custom solution, Mark Kara and I had to completely rip up the script for the show today because you have broken one story after another. Your other scoop this Monday was that Phil Peter sterns sorry, who was the Services VP, is leaving the company, leaving Apple according to sources. Why is

that significant? This is hugely significant. So Peter Stern was a very quick riser at Apple. He's the brain, the driving force behind Apple subscription business. As part of its services business, he led the business side of Apple TV Plus, Apple Arcade, Apple News Plus, Apple Fitness Plus, as well as the marketing side of all of the the Apple services. He spearheaded bundles bundles for content within Apple TV plus the Channels service in the TVP but also the Apple

One bundles. So he was really the brains behind this push in services that has made it one of the most components of the company's overall business. Now he's leaving. What that's gonna do is going to raise the profile

of Oliver Schuster. He's the head of Apple Music. Now he's going to be taking on much of the responsibilities of Stern, and you can really probably Shoe and Schuster at this point as the eventual successor to Eddie q who, as we know, is the person behind all of Apple services and has been a top executive, a very senior lieutenant, a top three to five person at Apple under Steve Jobs and now under Tim cook Mark. I've just got back from Cslas Vegas, and you and I've written about

this together in the past. Apple is never there, not normally in recent years at least, but there was a big discussion around a r v R and I notice your newsletter power on over the weekend looking at three. This will be a big year for Apple in the realm of a r VR, win't it. So Apple's next big thing is a mixed reality headset. It's gonna cost about three thousand dollars. They've been working on this for

about seven years. They're going to introduce it sometime this spring March April time frame, talk more about it at their developer conference in June, and then released two consumers in the fall. So this is a big year for Apple in terms of a R and v R. And I'm sure you've had suppliers who are working with Apple and components without product discussing their plans at CS. The price point I mean where we expected three thousand. It's an earth shattering price point. It's going to be uh,

let me do the quick math here. It's going to be about eight to ten times more expensive than the competing product from Meta, but it's also probably going to be eight to ten times better than their competing products. So I think it's really up to what consumers want to do with that, all right, bloombergs Mark gam And breaks stories every hour of the day, does the math live for us on the show. Thank you. I mean, you know, a r VR has been top of mind

for you and I for a few days now. I was at CS where obviously you know that the latest consumer gadget that is the next generation that people are looking to. You've had your own bit of fun during the day on Monday, haven't you? In the realm of day r V I have, and I arrived on my city bike, So apologies for any like crow that you might be able to see in this current footage, because

I did have it on in my cycling outfit. But I got to play with the Quest Pro, which I'm not sure if you like you've laid hands on the Quest too from metas now I happen to have a quest to my home, but I hadn't played with a pro check out my leggames. I'm sorry, but I was looking at all these latest tribex are was my favorite. You just saw me standing up using that. Basically I

was a DJ this morning. And again it's all it's you're immersed within this idea of your being taught how to DJ, how to like build up the sounds, how to move them. Then I was doing here as I sat down, more of the focus on Horizon workspace. So this is really where perhaps Metal wants to get you excited how the future of work rooms, how the future of us interacting at work might differ. And I have

to say I was impressed. And I just think before anyone's critical of things like n f t S, things like Peloton, things like the metaverse and VR, you've got to play with these things before you can have any sort of viewpoint here. And I actually really like the fact that I could be sat with just a small computer and actually through the wonder of the R and a R I could have like surround screens. I could

be having this beautiful view while I worked. It's basically like, if you're going to stay in an airbnb and have a small office, you could go and do it to a really wonderful degree. I think for me, you know that when it comes down to the technology, it comes down to that price point, you know, three thou dollars for the Apple first generation of a r VR headset, and Mark mentioned it that the quest to at least

is is many factors cheaper than that. But as you said, I have experienced it, you know, down in in East Palo Alto, and that I actually felt, I did feel a bit disoriented. But for me, what was amazing was the workout. You know, I'm you know, I'm a Peloton user, I'm a Jim goer, but the lightsaber game for one of a better expression. Really interesting workout, sweating. We'll dig up that footage for another time. Great, great stuff. I mean, we want to get out there. That's the whole point.

So if you're watching this and you're working in the realms of a r v R, give us a call. Yeah, we want to play with these things. Coming up What to watch in tech this year? Of course, two FED officials sirring some cold water and traders this Monday, after signaling the interest rates could top five we'll discuss all of that and more with Emily Bower sock Hill of

Bowerstock Capital Partners. Next, this is Bloomberg. We started off this show by telling you pretty volatile day and training overall, particularly when you're looking and actually tech stocks managing to whether this sell off, whether some of the concerns about whether the Federal Reserve is still very intent on hiking rates above five and managed to be galvanized by the

reopening story from China. But what about the rest of three Let's dig into it with Emily bowerstock Hill seeo founding partner of Bowerstock Capital Partners, fifty million dollars in assets under management. Emily, great to have some time with you, and let's go broad to start this whole conversation off. When you look at the days tradeing and you try and perspective out what look like you Are you bullish?

Are you are you barish? When you get in terms of your sense, Well, I would classify myself as bearish, But you know, I think that's the consensus out there right now. So I don't think there's anything terribly uh, you know, revolutionary about saying that. I think, particularly in the tech sector, you know, we are at the end of you know, we've essentially had a bubble burst that

had been building for two or three years. And I started in this business back in the early two thousand's, and so I have a very vivid memory of, you know, what happened in those years after the you know, the first tech bubble burst. So I would be surprised. You know, I think that there's some really good names in the tech sector, but I would be very surprised to see, you know, a quick, happy rebound. You've got to be

very selected within the sector. And I mean everyone that you talk to sort of keeps referencing the interest rate environment. That is why we saw the claps and evaluation two. But is that the story for you? Now? Do we think enough of the prices, the overall valuations have thinned out enough that it's less about that, it's more about individual stories and individual stocks. As you say, yes, I think the interest rate increases for the most part have

been priced in. I think the problem here is that you look at a company like Amazon or Facebook or Shopify or Salesforce. You know, they really during the pandemic, they spent with abandoned and they they they increase their workforce.

They spent very heavily on technology, and now reality is hitting and capital is much more expensive, and this is why we're seeing the layoffs and we're seeing the slowdown and spend and so I while I think the worst is behind us, and there's certainly large parts of the tech sector Apple, for example, Microsoft that are probably fairly valued, I don't think we're going to see the kind of growth rates that we saw over the last ten years

over the next term. So I think it's you know, these are these are premium companies, right, I mean, I'm not suggesting that anyone goes sell their Apple or their Microsoft. In fact, it's probably a good a good time to gradually accumulate it. But don't expect the next five years to be like the last five. Emily, Caroline and I would love to get in some of the single names

and specific subsectors in a moment. But there's this idea that actually, in the coming weeks, when we get fourth quarter earnings, irrespective of the trajectory for rates or the terminal rate, we're kind of bracing for this earnings recession. Right, I was looking on the Bloomberg terminal. I think that the consensus is for earnings on the NAZTAC one D

to drop two percent or two point two percent. This year is an earnings recession, and earnings recession opposed to an economics procession the biggest rick risk to tech right now. I am expecting an earnings recession. I think the interest rates have increased so quickly. You know, the Fed raise seven times in two and it takes time for that to trickle through two earnings. And so I think we're

going to have some earning disappointments. And you know, I think we're gonna we're gonna see that certainly through this fourth quarter reporting season. So I you know, I share the consensus view. The only thing that's alarming to me is typically when there is this much of a consensus, it's wrong. So it does give me some pause. Right, let's get to some of your top picks for three. I know that you yourself hold some of these stocks,

indeed they're in your funds as well. But the names that jump out and me are not just the chip makers, but the chip equipment makers. We're showing on our screen. LAMB Research t SMC. Is there is there a broad rule of thumb you're applying here to those names. Yes, I think actually Lamb Research and Teradyne have very very similar competitive dynam m X think of them as being, you know, the equipment services of tech the white slumberge

is the oil services of the energy sector. And so they are going to be a little bit more resilient in this very cyclical business. They're a little bit less affected by decisions like the one that Apple just made. They're they've got very they've got high barriers to entry because the amount of capital that has to go and build to building some of this equipment is very substantial.

So I think and they all they're both very well managed companies with strong cash flow, with strong balance sheets that are that are very disciplined, and they've had to be in an industry like this, so it's their their companies to own collected dividend and you know, wait for some of this these semiico doctor issues to work their way through. You know, it was a terrible year last

year down over all for the sector. So there's definitely value there if you're selective, and a lot of geopolitical risk will wrapped up in that, whether it's China US as well. I mean we've talked sort of through therefore, areas that you're kind of being cautious but still holding onto the Microsoft's, the apples, then talking about the areas that you're looking to actually like buy into. But I mean, why should you just be getting out of avoiding at

all costs. This is a little bit risky, as say, but I think some of these I p o s we call them broken I p o s. I'm sure there are many people who use that term. But there were a lot of technology companies that I p oed in that I think have a long road to recovery. It doesn't mean that they're not good companies. And I would put in their palant here, a sauna, a firm, big commerce. You know, some of these companies that now are going to be stretched by how expect and so

the capital is. So I would probably avoid those companies. Now I would wait. I think there's going to be a better entry point down the road. It's interesting. Emily barwasot Hill, CEO and founding partner of Bostock Capital Partners. Thank you, you know, I'm just looking at my Bloombell Caroline Palanteer, you know, not the best here in two the v makers that were the worst performers literally on then as that one she's saying, still not the time, alright,

time now for your top tech calls. Starting with Jefferies placing Uber at a bias, the firm sees some upside from improving sentiment on the ride hailing company's profitability. Meanwhile, Jeffreys dropped Piers door Dash to an underperform rating and Lift at a hold. Next up, Oracle upgraded to overweight from neutral at Piper Sandler is It's cloud transformation takes hold.

Piper also notes that fiscal might be a water said year for the software company, with growth in operate operating profits and earnings to share accelerating to more than ten percent. And finally, Tesla auto stock investors had a pretty rough year in two is. The industry suffered through supply change, disruptions and inventory and balances, and Tesla not spared. Therefore, Bank of America cutting its price target for the ev maker from two seven five to add and thirty five

dollars and reiterating a neutral rating. Carrec interesting though Tesla managed to be rallying on the day. We want to dig into Tesla price cuts and not just on this price target. Let's talk about the price cut ramification on the actual car, particularly in China, because we know that, of course they have been cutting their prices over there, but showrooms therefore have been overwhelmed, not with potential buyer zed but protesters, people going and saying, look, you've taken

down the price. What about me? What about the amount that I've just paid for my recently purchased electric vehicle? And I think all of these cut prices, I mean, what was it fourteen percent we cut last week, the second time in four months. Not only are they way cheaper to go and buyer from China than they are in the US, but you would be pretty annoyed if

you just purchased one at a higher price point. Yes, second cut in China, since third cut since October or second recently, and you know, I think the executives have taken to Twitter to say these are the lowest they've ever been. And what's fascinating is the discount to US sale prices, So they're basically saying we missed the boat, Yeah, we want in. Doesn't work like that, I mean on a much smaller scale. I remember when I bought my full price Peloton many people are actually buying them, like

higher than full price. I mean, if we all went back to the depths of COVID and thought about the supply chain headaches, we were all spending above and beyond on many crystals. We didn't know that was going to happen. So we now look how much cheaper that they are. But I'm not running down to Palaton and saying I

want on my money back. But I can understand the frustration when they seem seemingly happen overnight, right and now Peloton follows up with more insensitives to kind of move that inventory of cheaper bikes and also trying to sell the more expensive hardware as well. I think on the e V side, what's interesting is there are many more players in China than there are here in US, and

there are other well there's just other names. B y D, for example, raise prices and had a record quarter of deliveries. So I mean, but what's the price point deferential for a b y D versus a text that are they much more luxurious price point at Tesla not not the huge premium that a Mercedes for example, But there's just more choice for the consumer right here in the US, the price range is much more well said. Welcome back to Blomo Technology. I'm Caroline Hide in New York alongside

in the flash mister ed Ludlow want a joy. Meanwhile, all we've gotta do is talk global. While we're both sat here in New York. We want to talk about the page potentially being turned in China for the text docks is it now? The hand sang Tech indext jumped after a top Central Bag official actually said that they clamped down on the internet sector. That's drawing to a close.

Ali Baba led the rally, which comes, of course after a major squeeze on Chinese tech markets more broadly for the past two years no less, and the drop seems to have stepped from regulatory scrutiny on data production, on online gaming, and a government pushed to untangled investments in certain firms. But meanwhile, let's just think of the poster child of Chinese entrepreneurship, one billionaire Jack Mar. He's actually giving up a controlling rights of ant group that's the

fintech part of his empire. Really, it's a sign that Mar is retreating yet further from his online empire following China's tech crackdowns, and he has mostly disappeared from public views since giving a speech that, of course rather criticized Chinese regulators. Just think that huge scuttling of the ANT listing still having repercussions. It still feels like such a catalyst for US listed tech shares this Monday. That and the fact that ants appointed individuals with their own voting rights,

basically taking it out of Jack Mar's hands. Meanwhile, Beijing is spending big money as the US aggressively pushes for more semiconductor manufacturing market share. That includes the passage of the Chips Act, which brought more investment to US made chips or future US made chips, as well as this embargo on China chip exports from the US. Bloomberg's in King covers all things chipped for US. You've made a mind.

Back in the San Francisco Bureau, we talked a lot about US policy to restrict China's access to chip making equipment and and and the latest generation of chip technology. My question to you is what has China's response been. What has China's policy been to advance their own semiconductor industry.

You know, it's a very good question. I mean The way to think about this is to think about what South Korea did, think about what Taiwan did, and it took them basically thirty years to get to the position wherein where some Song is the world's largest chipmaker t SMC is arguably the world's most advantage chipmaker. China has

been following that path. Unfortunately, the US are not supporting China in the way that they supported Taiwan and South Korea, and therefore China has got to this point where they've spent billions and really haven't got to the point where they can do things like withstand these restrictions that the Americans are putting upon them, and really, you know, there at a point now where they're having to re evaluate how they're going to pursue this going forward and perhaps

take an even longer approach to gain that independence that they're so desperately crave. This is one of the most read stories on the Bloomberg Terminal and Bloomberg dot com. Aggressive US chip strategy forces China into a corner. You know, in that corner, they're not just throwing money at this, although they are to it to a large extent that I guess it's a policy action right where they're saying to China's state and private enterprises, you guys have to

find us a technological solution here. What else are they doing? Yeah, I mean it's been a vacillating policy that you know, they've put billions to work and then they found that they didn't really get what they wanted. And then they've gone after some of those people who have actually been in charge of it and they said, look, we've wasted money,

We've done this. So it's really not clear what they can do at this point because some of those key points, some of those key choke points, really in the hands of the Americans. Unless they can get the machinery and the technology from the Americans, they're going to struggle. And it's going to be a really really long road to domesticate that and take it away from the point where that,

you know, they're subject to external factors. And I feel like it was the beginning of last week where some US chip companies got a bit of a bit higher because there was suddenly talk of China sort of giving up taking its foot off the accelerator when it comes to its own ship manufacturing. These rumors going to circulate in such a way. Yeah, I mean it's you know, we've we've got all kinds of rumors, all kinds of speculation going on, and including our own reporting which says,

what are the Europeans going to do? What are the Japanese going to do? Are they going to get him on board? Is this situation for China going to become even more extreme? Are we heading to more of a standoff? On the flip side of that, obviously, some of the U S companies don't like the fact that they're being locked out of their largest market and clearly lobbying against that.

So a lot of evan flow in terms of the conversations in places like Washington about how this is going to play out, whether we see easings or whether we see an increasing climbed down on China and the potential out you know, consequences will see in the marketplace. Just get us up to speed a little bit with just China's focus more broadly in technology and because we talk here of them clearly in defining wanting to double down and ensure that they can take on the U S

when it comes to chip manufacturing. But in the same breath we were just talking about one Jack mar who basically has been in exile ever since he spoke out against the Chinese regulators. And many of these billionaires have been forced to sell down their overall ownership and certainly reduce their overall billions too. How do you think China sits with its technology right now? Again, I think that

it's a fluid situation. I was speaking to a CEO who said he's concerned that, you know, the leadership in China is disillusioned with what electronics with semi conductors and the internet has done for their economy and hasn't helped them, and he's concerned that, you know, there's going to be a turning away from this, that they'll go back to heavy industry or or something else to try and you know,

carve out an economic niche for China. And the other side of it is that well, perhaps China's learning it's lesson that it needs to play better in the world economy and in order for these industries to flourish, and we'll see a new era of cooperation. Hard to say which way it's going to go at the moment, and certainly in you know, the decision makers that we're talking to seem to feel like, we're going to be pursuing on a harder line with China for the foreseeable future.

Bean like Caroline, and I'm sure you're head spinning from all the headlines that hit the Bloomberg this Monday from one Mark German and all his Apple reporting. I mean, the key headline to move markets was that app always going to move to use in house technology in place of broad Calm and also Qualcom chipsets and modems going forward. We've got marks take on the Apple side of this story. What is the chip maker take on this side of the story. Yeah, I mean the quick take for Qualcom

is they've been talking about this for a while. We've been reporting about this for a while, and they've acknowledged it and said, you know, it's kind of a matter of time. We'll enjoy this while it lasts. And guess what, it actually lasted a bit longer than we thought. So on that side, not so much of a shock. On the Broadcom side. As recently as December, Hottan, the CEO of Broadcom, was talking about how good their WiFi chips were, their combo chips were, and how you know, why would

you go anywhere else? So this is clearly more of a shock for them, and this is something that I'm sure analysts investors are going to focus on more heavily. In king Resident Brittain s f made of one at Ladlower Mine and also giving it the odd fashion tip. It feels like you guys with the night a nice sea through classes that no tie, so look thinking thank

you so much. I meanwhile, like Eddie, while you're here, let's let's talk about your favorite thing, our favorite thing, and of course let's think about EVS a little bit more. But when it comes to China, what's so interesting is not just some of the price drops that Testa has been doing, but also the talent moves right. And this was a big story at the end of last year. Yes, so we're talking about Tom jew who was kind of the mastermind but behind the construction and ramp up in

performance of the Shanghai plant. And as we reported about a month ago, he's been in the United States, both in the Bay Area in Fremont and in Austin basically installing his own people and trying to make those factories better because honestly, Shanghai tests production is kind of the standard that Tessa wants to hit sources tell me that

this guy is serious. He works super hard, and you know we've done a profile of him on the Bloomberg tumnel The question the market has is this a future Elon's successor, because there has been a lot of talk right not only about Elon musk handling over the reins over at Twitter, but many wandering about key man risk and about ensuring that you have a deep bench for his role of CEO A Tesla's Yeah. The confusing thing is that Ellen himself talks about wanting to be on

the engineering side, less about the pentil pushing side. Tom jew is also very much on the engineering side. So where we net out we don't know, but he's certainly a nim to watch in the future. It's a great read up and go have a look on dot Com on the terminal two. All right, coming up the top I p o s to watch with equities ends. Are there going to be any Well, he's got a list, we'll see. This is Bloomberg. Oh, we just tased the head to the I p o S initial public offerings.

Will there be any? Yeah, look right now and focus as a few in Asia, it's been a bit busier start the year there, But what can we expect in the US and abroad? Yeah, I mean we're looking for a sense of direction and energy in the I P O markets. I thought, let's look at two and some of what happened two seven billion dollars raised globally. Two.

That's a pretty significant drop around from one. And that's where context is king because what happened in one, well, we had not yet embarked on that aggressive rate policy, not just from the FED but central blanks banks around the globe, but also had the Spack wave right where a number of special purpose acquisition companies also listed there shares in hopes of acquiring target companies. That's sort of

spack enthusiasm dropped off in two. A part of what's happening there was energy in China and energy in Middle Eastern markets. But actually flip up the boards and let's talk about the US because you can't quite see it. But on the far right hand side that is kind of listing volumes for two in the US around twenty four billion, nothing compared to one, and again higher rates

having a real impact there. Volatility and markets also kind of the start of the conversation around recession globally clear having an impact the question, as you said, Asia or the US three, there is some green shoots and we can ask our next guest about this, but block trades there with me. Block trades are taking place to a certain extent. There's this idea that you see some secondary offerings as a precursor to some primary things down the road.

I pios down the road IPOs take a really long time, that you can make a secondary transaction happen a lot more quickly. So we're looking for some optimism. But that's what happened over the last two years. And whether those trends continue, don't ask me, I ask our next guest, because there's a marketplace for these secondary some transactions in the secondary market, and well it's ecurity ZN Well. Pleased

to talk about all of it with Phil Hazlet. He's a co founder on chief strategy officer that platform pre i PO investing. At the moment, any of those pre IPOs looking to our natural exit route, do you think many of them will in any way get to market this year. I think we're going to probably see some companies come to market. In the second half of two th three, we saw a pretty frozen I p O market, as you just previously alluded to, and that's starting to

thaw out a little bit. But all it really takes is maybe just one or two of these bell Weather pre I p O tech companies to finally test the market. And you've got one success, you probably open up the market for a bunch of others. I know you have some specific names you're watching. Three. I kind of want to ask you the reverse question first, which is worst performers on the Nos one twenty two where Rivian Blockbuster I p O. I covered it deeply in one right

six biggest I p O in U S history. And then you have Lucid second worst performer, or maybe the other way around. On then as that one hundred, they right raised a lot of money in the pipe from their trans spack transaction. Those were the two worst performers. What does that tell you about you know, some hesitancy to go public in twenty two. Maybe we looked at those two companies and said we don't want that to happen. That's right. I think those two companies are a good

example of what worked in two thousand two. Why don't I show you my revenue projections for two thousand, twenty six and two thousand seven and a zero interest rate environment. And now when the rubber meets the road, you start to see companies that are operating in a three four five percent interest rate environment. You see risk come down and the risk appetite come down, which means that allocators into I p o s are now saying profits first,

profit first, profit first. But you've built all of these companies with growth in mind. Right. Venture capital investors were feeding money to these companies in two thowy two at very high valuations, and the smart founders actually took that money perversely and are going to wait until they can

come to market at evaluation that they think makes more sense. Well, it's interesting that perhaps it has been forcibly ground to a halt, because there's still a lot of tech companies who are listed with very deep pockets, but they can't do M and A at the moment because of regulation. Now, one company like that was ARM Holdings, and you're saying, look, they might actually look to list, they still want to

go public. That's right, that's right. I think that's a simpler avenue for ARM to go through them to try to test out any type of M and A activity in the current anti trust environment. Blizzard is probably another example of, you know where it's been really hard to do large scale M and A and so you kind of think about what tools you had available as a

private company about a year and a half ago. Everything was at your disposal, spacks, large acquisitions, I p o s, and you've kind of got none of them right, and so as a result, you see very little activity, except as you mentioned, we're starting to see some more activity on the secondary markets, which we typically see as a leading indicator for companies getting ready to go public. Vin Fast is a name you've identified. I kind of I didn't find it surprising, because you know, there's a large

investor base that's still interested to find the next Tesla. Frankly, but again we went through that very long illustration of what happened to Lucid and Rivian. Do you not think that vin Fast is at risk of of the same reception that those two names got. It's a great question.

Has exposure to a slightly different geography, which I think an opportunity um but also I think there's a lot of learnings from the gosh, you know, fifty or seventy five e V and light our companies that have gone public on what you really have to show to investors, the reality of actual contracts, of actual deliverables, of actual supplied trains up and running, uh and falling short of those, I think you're going to have a really tepid ip

O response. And so I think there's a lot of learnings for companies that are coming out that basically said, thank goodness, we didn't do this a year ago. I want to ask you about the burden of proof. You know I continued covering Rivian Gone, the Bloomberg look at the course Le Earning story, and you know I've been writing them at the time. The I po, as you say, revenue is distant, is the burden of proof now higher where pre revenue companies in particular are kind of a

no go for investors? Or is that still an opportunity. I think you're absolutely right. You've got to be a company doing hundreds of millions of dollars of revenue if you want to be one of these companies that goes public in two thousand twenty three. The way I see it is that investors are not willing to pay for that risk of the unknown anymore. Um, you're kind of

seeing it and why things are going completely quiet. The positive side though, is that all of those unicorn companies of which there's a thousand plus, many of them are at the hundred or even billion dollar revenue level, and I think those are the companies you're going to see that are going to test the markets. And so really the kind of the water mark you would have seen for an I p O fifteen twenty years ago, maybe

thirty million in revenue for a million in revenue. Leading up to the dot com bubble, it was eyeballs, right, and now we've kind of recalibrated and said you have to show revenue growth and you have to show a path to profitability. Note but far earlier and maybe a very loyal fan base like a Reddit for example. But I'm interested for you said that in the secondary market, you have seen a little bit of pick up. Who is buying, who is selling? Who are the players that

are at the moment. Yeah, it's a great question. The buyers we've seen are pretty it's pretty interesting. And new phenomenon is adventure capital firms and growth equity firms, which typically invest just in primary capital races are finding that that market as well as completely shut. You know, Sequoia goes to a company and says, I saw you raise a ten billion last year. Look at the market house five five billion, and that founder tells them to kick

rocks right, Why would I do that? I already have a bunch of cash on hand. Uh. And so those venture capital firms are saying, well, if I want to invest these companies at market prices, I've got to look elsewhere. And a lot of times they find that they're eager sellers in the secondary market, which, to answer your question, are employees ex employees and maybe your early investor that had a lot of returns on paper and have some

very angry limited partners saying where's my cash? Right? And if you can realize that now there would be a good idea, just totally fascinating. Yeah. I'm not speeches, but what I would say is that, you know, there's a long list of names that we didn't even get to, and my find very quickly has got about ten seconds. But pent up demand? Is there a bit of angst in investors that they want a big I PO Yeah, I think investors want to see an I P O

and they want to see success. Right. If you didn't invest in lean hogs and crude oilto you didn't really make any money, right, And so I think people just want to be part of a winning strategy again. And so seeing some of these really healthy pre apio tech companies come to market, I think we'll really kind of open up the gates. Phil could talk to you for a very long time. Come back at cuity Zen co founder Phil Haslett, where some activity apparently is going on,

and I think that is an interesting one. I mean at the moment, I like that. Read that read it was on the list. Yeah, read it's coming back to its own Did you see what barth and beyond? Right? Yeah, there's still like Dallas. Is it's fair? You know, Phil is one name. He did a very good job going through a list of us. But there is so much skepticism out there. You know, everyone agrees. First half of this year in the technology sector at least very unlikely to see a big i PA or even a little IPA.

I'm sorry. Yeah, there's gonna be an awful lot of people talent who are wanting to buy a house, have children, make life steps, and they need to be able to have a liquidity event in some way, shape or form a whole lot of news in the world of soccer. Or look, there's two Brits here. It's called football in across the world. It's going viral today because Kata Sports

Investment Fund. It's looking at well, the Premier League no less for its next big investment, Manchester United, Liverpool FC, Totdham Hotspur's they're among the clubs being targeted by KATA. No deal apparently is imminent, but some clubs, including Liverpool

and MANU, they are open to a sale. Meanwhile, the Premier League already has two clubs with Middle Eastern owners, Man City by Aberdabi based City Football Group and Newcastle United recently acquired by the Consortium for Saudi Arabia's Wealth Fund. Now remember already going viral of late had been Nick Kata was hosting the most expensive World Cup ever, more than two hundred billion invested in infrastructure over the past decade. But what caught my iron on only on Twitter was

these deals and potential investments. Was one man that's pretty close to your heart. What Gareth Bale? What was it the third most Google thing today on Google Trends? Gareth Bale retiring age thirty three. I'm surprised, I'll be honest. You know, he had a disappointing World Cup by all accounts. He was the Whales, which is a nation of three million people. By the way, this tolobal superstar from you know, Tottenland, Throich, Real Madrid, and then went on to play for l AFC.

And he hasn't really said while he's retiring of and then this is a transition and a change in his life. But I think a lot of people were like, really, yeah, so you couldn't even watch him on the West Coast living in San Francisco and watching foot always been really hard. But I am surprised he's retiring and he is a global superstar from Wales, joining the pantheon of legends like Tom Jones, Katherine Zeta Jones, all the Joneses. But you know,

it's a real surprise. And look taking to Instagram, taking to Twitter, not just people of Whales, but fans of football across the world. I think they're surprised that he's hanging up his boots. And isn't it just notable the way in which these announcements are made. He did it with a public statement immediately onto Twitter, onto social media,

directly to his fans. It's just a new way in which people sort of well suggests their their life's curvature and whether or not you're putting a CV on LinkedIn or whether you're telling everyone about your next job move by the power of various social media. It's definitely that you waited. I'm sad, but thank you, Gareth Bale. That's all I'll say. Wow, that does it for this emotional addition of romag technology. I'm so pleased you are here

all weeks. The emotional about Gareth Bell, but we're also going to be pretty excited about space, right Dan Hart, version Orbit CEO, and I think maybe someone else joining us tomorrow. Don't forget to check out our podcast wherever you find your podcast Terminal, Apple, iHeart Radio, and Spotify. This is Bloomberg