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From Mahart where Innovation, money and power Collie in Silicon Valley, Nbon. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
And Caroline Heinder Bloomberg's world headquarters in New York. This is Bloomberg Technology coming up in Vidio. It tops two trillion dollars in market value, becoming the world's fourth most valuable company. For coverage, Ahead Plus will break down reddits filing to go public, from its AI ambitions to its largest shareholders, and Sam Altman.
Here's Omni present.
We've got you covered and Calvana shares pop by the most of seven months after the used car retailer defied challenges of higher interest rates and inflation to actually post we kind of solid end to twenty twenty three.
We sit down with the company's CEO. I mean, while not all.
Earnings are glorious, and Mircado Libre manages to underperformer off by thirteen percent, one of the worst performers on the day. Not to mention Warner Brothers, which will be digging into a little bit later, But first, let's just peel back
all of these narratives. When it comes to earnings, when it comes to the AI boom, and really decide whether there's more legs to run on In terms of this market, Erica claren Places says, well, that's what folio manager of a PGM Jennison Technology Fund her read on tech on
markets on and video. Of course, I mean, we look at the one point nine at seven trillion dollar market capitalization, we're clawing our way to the two trillion mark, Erica, And I'm interested as to whether you think the hype has reality underneath it and ultimately whether we will see a leg higher or well we'll see a broadening at last in terms of the AI love.
Well, to answer your question, I think yes to both. Jennison has always had a very long term outlook on trying to dimension what these opportunities are. We've always been very very positive. We were very early in investing in Nvidia back in twenty sixteen, and all of our expectations, even as ambitious as they were, have been absolutely blown out of the water.
To the upside. I mean, Jensen is an operator.
He manages to guide and then beat and guide and beat each time and still managed to be a global business. And I think that's sort of what's been extraordinary that this is a company that is finding working with China more difficult, largely because of US Chinese geopolitics. How much do you have to factor that into some of these big tech names.
Well, certainly the political landscape right now is much more challenging for companies as they have restrictions in terms of where they can sell what they can sell into China. China had risen to about twenty percent of in Nvidia's data center revenue. That contracted down to five percent in the most recent quarter. But what we're seeing is for companies like in Vidia, they've been very nimble, very innovative in terms of coming out with products that comply with
all the export laws. Those will start to ship later this year. We believe at Jennison that there's a lot of pent up demand from those Chinese customers that will contribute to the company's overall performance in the second half.
Let's broaden out from Nvidia.
Therefore, is there room market share ability and capability for the likes of MD and some of the other rivals in the space.
Should we look to other chip makers?
Our view is yes, at Jennison, we see that in Nvidia in its own process of innovation has opened up the doors of opportunity for many other companies, from compute companies as you mentioned, like Advanced micro Devices and Broadcom which we own in size, to storage companies, to networking companies, and of course to software companies that are able to harness this incredible compute.
Power to deliver software.
That enables tremendous games and productivity and innovation.
When just going back to Nvidia for a moment, is there anything that makes you give pause a two trillion dollar market valuation an issue of China or indeed of just like running out of road of exuberance, or really you have to go back to well forward pe ratios that still make the company look really rather attractive and not that expensive.
Well, what we try to do at Jennison is really take a longer term view. We've actually written some white papers that are on our website about this. But looking out over the entire TAM of the installed base of infrastructure, we see that as a one trillion dollar opportunity today.
But the very innovation that Nvidia and others are bringing to the table is expanding that TAM and will really only maybe ten to fifteen percent penetrated at this point, so we see years of opportunity ahead for further penetration of those markets, further updating to this brand new way of compute, which is known as parallel processism.
Where else is the slack then, because there is.
If you talk to the VC community, yes they're looking at the underlying compute and the large language models, but they're also looking at the applications and the.
App layer to AI.
But where are you looking from an industry perspective where ultificient intelligence can bring real opportunities for productivity.
Basic Well, you know, there are, of course the obvious places that people talk about, the big hyperscalers being able to recommend with much more accuracy and targets companies like Amazon Google using these tools to improve their recommenders. However, one of the I guess two big new opportunities that have emerged in the market unexpectedly in twenty twenty three and are accelerating into twenty twenty four. One would be the healthcare industry, where companies are using this technology for
much faster drug development times. And then also we've seen an extraordinary interest in sovereigns country's coming in saying we want our own version of Chatchibt and our own native language. They have their own sets of concerns with regards to oversight that they can then control, and they are looking for US counterparts to enable them to bring these technologies to the market.
How about the cyber iml of all of this, because it felt like that was a real tailwind for syvestalks as well. And then you get the awnings of Palo outs on networks and everyone's worried and then not going to factor in as quickly as people at anticipate. Is are there any parts of the technology space that you think is overdone? All the valuation's on attractive right now?
Well, you know, what we're seeing at Jennison is a real tale of haves and have not those companies that are bringing technologies to the table that are truly disrupting the industries that they are in, and those companies that may be facing challenges over the longer period, particularly with
regards to pricing. People talk about, for example, as you mentioned, cybersecurity, there's so many different flavors of where cybersecurity exists, whether it's in the end market, in your phone or your computer, whether it's in your enterprise or even whether it's within the internet. So one really has to be very careful in looking at the various players where they exist, whether or not they have pricing power, and the sustainability of that pricing power over a longer period of time.
Is your focus about the US paying the output FORMERHA when it comes. There's been a lot of ongoing narrativists whether China is ahead with AI or US, and it feels as in the US still is. But where is the global opportunity because as we reference at the top of the show, European stocks are a record high. On the back of this, Japanese docks managed to go on the record high, and all of US are factoring in AI because of that.
I think that the answer to this question is that the predominance of the opportunities that we see are in the United States. However, there are incredible opportunities overseas as well. For example, ASM Lithography has a dominating position in the area of lithography. This is an essential you cannot get around it in using this tool to make the next generation of semiconductors as well as the older generation of semiconductors.
This company is an incredibly innovative company, which is reflected in its margin profile, grows profit margins, operating margins, free cash flow margins, and so we do find opportunities overseas as well, but the majority of the innovation that we're and is in the United States today.
It's just been fantastic having your voice, your expertise on the show. Thank You, you will come back, have a wonderful weekend. Erika Klaarr, she's portfolio manager for the p Jim Jennison Technology Fund, really taking us through all the big hitters.
Of the week.
Mean while coming up WI another big hitter which eventually might become public. Reddit it's filing for its IPO. All the details on this company that's long been waiting to get into the public markets. Meanwhile, let's go to those public markets check in on what's happening with Walmart.
Up sixtens of percent. We're basically seeing flat.
Though on the company that it's looking to be acquiring a ten spot ninety nine Viseo holdings.
Of course, Walmart's.
Acquisition of Video is a warning bell, according to Massachusetts Democrat Elizabeth Warren.
She's putting this in a post on.
Social media platform x In fact, regulators should scrutinize this merger and they will potentially be looking as to whether it will extend Walmart's dominance, especially threatened competition.
She says.
Remember Walmart also gained on some strong results earlier in the week.
This is Roommate Technology.
Let's talk about potential IPOs San Francisco, BA social media company read it and has publicly filed for that IPO.
Long waited, and.
Of course it's going to be a big test for VC backtech IPOs for the year. Here to break down what we now know from the S one filing for New Meg's Katie Rufe, who you've been tracking this closely, waiting with baited breath, and we have ultimately got to group to the fact that this company is not yet profitable.
That's true, that's right. They reported they have over eight hundred million in annual revenue, but they are not profitable. They lost less than one hundred million last year. Their losses are shrinking and their revenue is growing, but not profitable.
They are hoping that this new AI partnership is going to be what excites Wall Street, the partnership with Google, and they're thinking that this is the time to announce that, you know, the Google partnership that's going to scrape some of their data from Reddit will excite.
And we'll see whether, of course that extends to other large language models, most notably open Ai, where we understand now that sal Maltman, who is a temporary CEO for the company, is of course a big shareholder. But Katie remind us who is going.
To be winning, who is whether or not they win.
Remember, this is kind of a down round compared to its last money in from vcs at a ten billion valuation. But are we anticipating some good liquidity events for some KEYVC names out there.
Well, so Bloomberg has reported that they might just be valued about five billion when they go public, although it remains to be seen because a lot of this just gets socided the night before based on how the market
is trading. They have. You know, it's interesting because they've been around since two thousand and five, so some of their early shareholders are no longer major in vesters, you know, Conde Nasts actually they've been a major shareholder and Reddit and so this has been a long time coming for their investment. But you look at some of the early names, like a founder Alexis o'hanian. He wasn't even on the prospectus.
He did not make the cuite for a five percent shareholder, which is what it's required to see in the filing. So you know, at this point, since Reddit's been around nineteen years, I would imagine a lot of the original shareholders actually sold shares on the secondary markets and got some early liquidity before the actual liquidity event.
Advanced Magazine publishes, as you say, the new house family behind Conye Nast, and plenty of other publishing set to be a Kia and or in this particular event.
We thank you, Katie.
We've just breaking down the intricacies of what's going on. Let's get into well that secondary market, how active it is, how positive is on Reddit getting to any sort of whipne it anywhere near a five billion dollar evaluation. We've got Brian Lynch with us of Market inside of Equityzen which connects to a holders of private companies with invested seeking alternative investments, and just how active has read it been in the secondary market.
Redda has definitely been a popular name in the secondary market over the years since Katie said, this is a nineteen year old company, So there has been a lot of demand foreign liquidity from early shareholders over time.
You know. We know they did a tender offer in twenty twenty one, so I think that.
Helped alleviate maybe some of that liquidity need. But I think there's still a lot of demand for a liquidity that will come you know, via the IPO. For what we've seen from you know, trades that have been reported recently in the secondary market is about a four and a half for four point eight billion dollar valuation. So the fact that they're eyeing a five billion dollar valuation kind of makes sense since companies tend to trade at a discount in the private markets where you don't have that.
Same liquidity that you do in the public markets.
Who if you can on and it's a tool from the activity in the secondary market.
Is this going to be a retail name?
Given well ready it became synonymous with means stock investing because the wool Street bets is it more likely to be bought by retail investment? Will institutional players be interested in a company that isn't yet posting profits.
I think they're really betting on there being retail interest in this name or you know, in their s one they even say as a risk factor, the fact that there is retail interest, or they expect retail interest, is going to cause.
Volatility in the stock.
The fact that they are issuing shares to seventy five thousand power users, or allowing those users to buy into the IPO, will also create some volatility. Since there's no lock up to those shares, they're going to allow those shares to trade freely.
So I think they're expecting a lot of.
Retail activity, which isn't likely to increase the volatility of the stock, especially in its early days. From an institutional investor perspective, I think you're right. You know, we've seen over time that institutions are less interested in these unprofitable companies.
And Reddit is interesting because while they are.
A nineteen year old business, they really didn't start monetizing until twenty so their.
Monetization engine is relatively.
Young and unproven, and advertising is ninety eight percent of that engine now. And there are opportunities for them on the data license in front, as Katie mentioned the Google partnership they talked about this week, but a lot of that is very forward looking and unproven, so I'm curious to see how institutions.
You take that into account.
And Steve Hoffman, having been there at its birth in two thousand and five, still driving that new iteration of Reddit.
And where is the risk factor in cozying.
Up with large language model makers, with the big tech firms that want to scrape the data?
Yeah, I think.
I mean, we've heard this from the Reddit community that there has been some pushback about this and concern, but it really is these human conversations that are needed to train these models. And Reddit has, you know, billions of posts and comments on its platform that are the exact types of posts and comments that will help.
Train those models.
So I think there could be a little backlash from users on the platform, but it is a huge monetization opportunity. At the sixty million dollar contract they're talking about with Google, that only makes up about seven and a half percent of their current revenue, But if this is something that they can replicate with others, it could become a much more sizeable part of their business. But an interesting thing that they do note is that these language learning models.
Could also hinder their business.
So if people go to chat GBT instead of Reddit to ask whatever question they'd ask on Reddit, Reddit may lose daily active users and that's really going to hurt their ad revenue in the end.
So it's a double edged sword.
Well said, I'm interested in that advertising focus. Ultimately, when analysts go out there and try to decide whose reddits competitors are, are they immediately going to be looking to alphabet, to meta to other social media platforms.
I think those are the obvious, you know, competitors in the space, and this market has gotten a lot more competitive as ad dollars have been pulled back. What Reddit is really trying to sell investors on is the fact that they can allow advertisers to reach a much more niche target audience. So, you know, you're a sleeping bag manufacturer,
you want to talk to people who are camping. We have a conversation of thousands of people who are specifically talking about this and their ability to actually convert people. From their own research, they've shown that sixty one percent of their users say they're more likely to trust an ad that comes from Reddit.
So if that can.
Be proven in the clicks and the impressions that these ads get, they may have a bit of an edge, even though their audience is much smaller than these other platforms, but I think we're still early improving now.
Trying to be proving out the niche factor and whether that's a drawer. Brian Lynch really great to catch up with you.
Thank you.
Time now for talking tech. First up, GM's autonomous driving unit, Cruise, is nearing the resumption of its robotaxi testing after the grounding of its fleet last year. Now, according to sources, Cruises in talks as several metro areas Houston Dallas, for example, about test driving on public roads with safety drivers, and before the suspension of the operations, company had hundreds of cars in San Francisco and smaller numbers across Austin, Houston,
and Phoenix. Meanwhile, the investment firm that manages part of the fortune of Ali Baba chairman Joe Zai Bluepool, It's called It's all Over thirty four million Blue Owl shares for eighty three percent of its remaining holdings in that alternative asset Giant.
Now, the shares would have been worth about.
One or sixty million dollars in weighted average price at the stock over the last three months. Now, let's turn our attention to some other shares that are being hit at the moment. Warner Brothers Discovery. We were just looking at it before the break media company reporting its fourth quarter revenue profits. They fell short of estimates, and we're seeing the stock at a record low.
Chris pal Mary joins us.
Now on basically like weakness in linear television, weakness and the advertising spend. I mean, was there any area that was good?
Yeah, I guess you could say if things weren't that bad. In their direct to consumer the streaming business, it was unprofitable, but for the full year it was profitable, and the losses were much lower in the fourth quarter, and subscribers were a little bit better than they hoped, but not dramatic growth. Actually lost subscribers in domestically instilled way behind Netflix and Disney in that department.
And all of this just highlights the dia straits that basically the entire ecosystem finds itself in. We are understanding there's going to be M and A that's going to be consolid because a lot of these companies are struggling with the same sort of headwinds.
Ran Yeah, And one of Brothers CEO, David Savo, is pretty candid on the call. He said, this really does illustrate all the challenges we're facing. I mean TV, traditional TV advertising down at double digits.
And you know, the strikes really hurt them.
It turns out hoots last year, actors and writers being out of not working, and so that studio business was down. You know, Warner Brothers had a big push in December, releasing three big movies at once. It was kind of bold where revenue theatrically we're up, where profits were down, Aquaman.
Being the biggest disappointment there.
So there's a lot of they talked about on the call, the superhero fatigue sort of. So there's a lot of work to be done in these traditional media companies.
Sure is. And I know you'll be across at Chris Palmary. We really appreciate it. Welcome back to being that technology im caindin High in New York. Let's focus in on a company that eventually will have its market capitalization for all to see on the public markets Reddit. Of course, company filing publicly for its IPO just yesterday after the Bell.
One name in the filing stood out.
He's everywhere Open AI CEO Sam Altman was listed to one of the company's major shareholders, joining us now is Bloomgg's Ryan Gould, and.
We shouldn't be surprised.
He was a for eight whole days the interim CEO of this company. He of course was there at the there at the y Combinator alongside the founders of Reddit back in two thousands, early two thousands. But why does he hold so much in the stock, Like who else is also holding a lot of the stock here?
Well, I mean, you know, he let their series be fifty million dollars in twenty fourteen. You know, he's sitting alongside the advanced magazine publishers entity that is sort of the new House family, the big Conde lost family that owns around thirty four percent of the stock there.
You know, the new House family.
Sort of bought read it in two thousand and six then spun it out in twenty eleven. So you know, there's still a lot of Kerry. But I think, Caroline, what's interesting is that this is kind of an ipio for the moment. It has everything. It has, Ai has sam Altman, it has advertising. It's reckoning with you know, large language models and what it means for partnerships and suddenly with Google and such. So yeah, I mean it's really, it's really an ipio for the moment, I would.
Say, and ipeo that comes at time where markets are at record or near record highs. We've had just smp A clips a new one we've just had, you know, Europeans stock markets are a record high, Japanese stock markets are record high. What do you think the narrative has to be to ensure that we don't question the market cap too much. We're hearing from sources what about a five billion dollar level for Reddit.
But that's a huge.
Markdown from where it recently, well not recently but a few years ago, raised money.
It is.
It's a good point, and I think much of the sort of talk so far, you know, on the testing, testing, the waters meetings has been around. You know, let's not get too ahead of ourselves here. Let's be realistic. This is probably, you know, the first large venture capital back tech alperiod we've had in a while. Obviously Clavier happened last year, but this is kind of a different breed.
It's had a very story journey, and so I think, you know, the banks investors are sort of coming together and saying, well, you know, let's not really push this too hard. Let's not end up in a situation where we feel like, you know, we've been of more, we can more than we can chew. And I think that kind of reflects and how Reddit thinking about it as well.
It kind of wants to get past this history that it's had for the past two years of being a company that's just waiting and waiting and waiting to go public, and it wants to get on with being a public company.
Steve Harfman himself wants to get on when.
Being a public CEO, having helped birst It back in two thousand and five and still now he is the current CEO. Rangled great to catch up with him as IPO markets get a little bit more exciting now. Turning from IPOs to the Moon to space more broadly, American made lander It touched down on the Moon for the first time since the Apollo era, and it happened last night. I think a string of what have been pretty obvious failures and making it the first prime at spacecraft to
ever reach the lunar surface. Intact Nalanda, built by Houston based Intuitive Machines, reach the Moon at six twenty three pm New York time on Thursday is what NASA Administrator Bill Nelson had to say about.
The feet a commercial lander name Odysseus, powered by a company called Intuitive Machines, launched upon a SpaceX rocket, carrying a bounty of NASA scientific instruments and bearing the dream of a new adventure.
Here to talk us through that dream of a new adventures, Bloomberg's Lauren Grush and Lauren this shows us not just a dream, but the reality of the way in which NASA is now working. It is turning to private companies, and not just SpaceX anymore, but more start ups, more other companies to help it basically make space a bit cheaper, right.
It's it's you know, NASA does want to go back to the Moon, but they want to go back to your moon in a very different way where they bring many plenty of companies with them. And this was such a great example of kind of this new paradigm shift that NASA is working with. This was a private company, I mean as a publicly traded company, but a private sector entity landing on the Moon. They did receive some development funding from NASA a little less than one hundred
and eighteen million dollars. They also had to raise their own capital in order to get the rest of the funding they needed to make this mission work.
We now see a market cap of more than a billion for intuitive machines, and we've seen it rise about two hundred and twenty six million dollars in the day.
We're twenty eight percent. Where does this all point us next?
What are we anticipating that is achieved after this? We understand about well, south pole, more of the moon, but what are the next situations of the space economy?
Right?
So there are really two goals with this mission. One you mentioned this was the first mission to land closest to the south pole of the Moon. India also landing near the south pole but an enticing place for NASA because it's thought to have water ice, and so they are curious to see if we can go there to mine that water ice. It's where NASA hopes to land future astronauts.
When they do return to the Moon.
But the goal is also.
To spur a commercial lunar economy. So the idea is that NASA wanted to trigger the development of this commercial lander so that the company could have a way to transport NASA payloads, but then also in turn use that lander to create and note their own business transporting experiments and payloads to the Moon. So that lander had NASA payloads on it, but it also had commercial customer payloads on it. So the idea is to see, you know, can that be a sustainable business moving forward?
And who knows what Jeff Coon's piece is going to be doing rolling around on the Moon.
After this Lord?
But who are the other names out there? We put so much of our exuberance around the space economy on SpaceX call still a private company. We now look at Intuitive Machines entering on Lexican, but who else has been now them making moves and sometimes failing at that?
Right, So another company kind of considered Intuitive Machines's rival. It was a company called Astrobotic. They actually launch launched their lander first. They were another partner with NASA's through the same program that Intuitive Machines was a partner with. They launched in January, but unfortunately they suffered an engine failure right after getting to space and ultimately precluded their chances of actually attempting to touch down.
On the Moon, and they ended up bringing back that.
Lander to Earth and disposing it in the atmosphere. But they're going to try again. They have another mission lined up. Intuitive Machines has more missions lined up. There's another company, Firefly Aerospace, that is also partnering with NASA. So NASA is looking to you know, dole out funding to those that really do want to make a business going to the Moon. There are plenty of companies that are interested.
And you know, as this return to the Moon gets more mature, I feel like there's going to be even more opportunities for companies.
To get into the game. And long Golash going to turn to you in those moments.
We thank you so much for talking us through well really what it was meant by yesterday's landing. Meanwhile, coming up we'll have all the details into how disputes within Klana. That's of course, the fintech over in Europe has spilled over into a high profile VC drama. It's coming up next meanwhile, talking a drama. Unfortunately, there is some among Rivian shares. Check this out in terms of a long term share price chart of Rivian down almost ninety percent.
Of course, this on the back of some lackluster earnings that were just posted after the bell on Wednesday, and yesterday the stock fell hard as they said they were going to be and letting go of.
Some staff as well. From New York.
This will be med technology. We're going to get into a bit of a VC drama brewing at the moment. Sequoia Capital has named a new board member for fintech Klana. Now, this is an effort to a conflict between Well the VC firm is from a partner Michael Moritz and Ashley Well issues between two of the founders of Klana too, Hitch help break it all down. Kind of extraordinary story bringing baxst to Sarah McBride. So what's going on? What was the spark of the issue that's occurred with Klana?
Oh, Caroline, it is such a mess. So what happened is a little bit unclear, but it seems that there was some sort of dispute at Klarna about a governance or control issue and Sequoia Capital's partner, who was on the board, Matt Miller, saw things one way and Michael Moritz, a legendary VC who was until very recently a partner at Sequoia, side another way. And the upshot is that
Michael Morritz still has his board seat. He now represents a related firm called Sequoia Heritage and Matthew Miller, the board member from Sequoia Capital, is out. I know that's a little head spinning, but hopefully it makes a bit of sense.
And so the drama seems to have unfolded between Sebastian Victor, the two co founders, people sort of taking side. How often or not does sort of drama accursor. It feels like it's relatively rare, but of course the money's involved, things do get dramatic, right.
So Klarna is doing very well. It had some hiccups, as many companies did over the past couple of years, but basically it's a very richly valued company that should be headed for an IPO at some point. And when this type of drama unfolds, it's usually behind the scenes. Whatever disagreements happen at the board level rarely make it beyond those doors.
And then when they do.
To have two partners affiliated so closely with one firm have a dispute like this is almost unheard of. So people are surprised it happened, but more than anything, they're surprised at how word of it became so public and the CEO ended up having to fly to Silicon Valley to make amends and smooth things over with Sequoia. Sequoias has had to appoint a new board member. It's all gotten unusually messy.
And all of the time, where Sequoia itself is transitioning and having new leadership and splitting from its China division, there was a whole host of stories going on on your side of the world right now, Sarah McBride, we're so pleasy you're able to bring it to us, the inside trank you. Now, let's stick with VC maybe a slightly calmer part of it at the moment, and we're pleased to welcome Jet Fine onto the show for VC Spotlight. Let's actually talk about the investments being made at the moment.
Let's talk about the bread and butter of what you up to a headline benches. It is wonderful to have you with us, Jet, and one I've had time and time again, an interestingly quite a lot this week at a conference was that consumer tech is dead, don't go anywhere near it. That was all twenty ten and onwards. And for now we've all got to be in healthcare and climate tech and AI of course, but you don't think that's the.
Case, Well, thanks Caroline.
Yeah, it's a pleasure to be with you this morning. Thank you for having me. Yeah, as you mentioned, I'm a partner at Headline, and we are a tech enabled global mentor capital firm where I focus on consumer oriented investments, among other things, and we've had the good fortune over the years to lead consumer investments like Go Puff Bumble, Axios, The Real Real, Farfetch among others. And listen, you're exactly right,
you know. To answer your question, I think you have to look behind the front page here, a little past the rumor mill. You know, if you look at Fang for example, Fang is all consumer. In fact, the most valuable companies in.
The world are our.
Consumer companies, Apple, Amazon, Tesla, Snap, Facebook of course, right, and you know, going forward, we think at Headline that that will continue to be the case, particularly given this generational technology shift with with AI.
Let's get more specific then, because you mentioned Tesla and Snap, but both have faced significant headwinds their own share prices and headwinds to ultimately consumer demand for some of their products at the moment and stimying growth. When you're looking at some of the exits that you've had, I mean, really notable companies but Farfetch has had a terrible time of it and ultimately sort of big bought out of bankruptcy.
E commerce may be a hard place to be.
Where is the place to be when you want to have exposure to a consumer that is still out there and is still buying some stuff.
Absolutely, Yeah, it's a great point. Listen, consumer companies that have historically relied on paid customer acquisition are facing real headwinds, and so you know, what we're quite excited about at headline is the opportunity to partner with companies that have real distribution advantages. And what I mean by that are companies that leverage the benefits of community content, celebrity or creators.
And we're seeing more and more of those companies come up, of course in the world of of TikTok, Timu Shean and other companies that leverage those distribution advantages beyond beyond solely paid acquisitions.
So am I anticipating more celebrity beauty brands?
Is that?
Is that the way that we're going to be sort of seeing this come to life?
Well, certainly, certainly there will be more. Absolutely, I think that's one way that companies can find real distribution is utilizing celebrity creators and content and community.
Well, Jet, we'll see what companies you're backing, watch ones manage to find that consumer fit and what celebrities are currently bringing things to market headline ventures general partner, Jet Fine really great to catch up with you.
Truly global perspective.
This company is everywhere in Latin America, Asia, around Europe. Let's checking on other earnings today. Carvana shares absolutely rocketing. Company reported profits are some past estimates. Managing to avoid headwinds from well somewhat circumvent and reduce some of those headwinds from high interest rates from inflation. Joining us now for more on that earnings report, CEO founder Annie Garcia
and thirty one percent higher. And you have had to, like many in the private market and the public market, suddenly shift gears from growth at all costs to profits at all costs. What have you been doing to be able to prove yourself in this recent report?
So I think you know it's one of those things where you start see results come through pretty quickly, but there's a lot of work that goes in for a long time before. And so I think you know twenty twenty two like it was for so many companies. Was a time where the winds shifted pretty quickly for us and for everyone else. And I think the team came together, we came up with the plan that we thought really kind of made sense in that moment with the new
pressures that were out there in the world. And I think the team has just executed incredibly well over the last two years, and we're starting to see that now.
I think the results that we just reported and the results.
That we see coming in the future are something that we're extremely excited about. And it is the result of the team coming together and doing incredible work. And so thank you to the team. Just cannot thank you enough for everything you've done.
And some of the analysts like William Blair, analysts Sharon really talking about the steep increases and profits.
And the return to unit growth.
But some more cynical people out there would say, look, this thirty percent optic in the stare price is because it's just squeezing out some of the shorts and you wear a heavily shortened name. What do you say to those people who are still standing by betting against your company?
Oh, well, I think there's room in the world for shorts, and I think, you know, it's okay. Skepticism is helpful, it creates pressure. I think there was a one of the ancient I believe Greek philosophers said, hater's going to hate players going to play, But me, I'm just gonna shake, shake, shake.
Shake it off, shake it off.
I believe that may have been Aristotle, that may have been it could have been Plato too.
I could be wrong.
Well, she has a way with words. I will give her that.
I'm interested there and eerie in more seriously, like the debt market, that's been a tough space, and we are, of course as Bluemberg focused on equity markets.
We're all focused on bonds in particular.
How are you thinking about well not having to restructure once again, how are you thinking about paying down debt?
I think, you know, listen, the most important thing that we do as companies we deliver great experiences to customers, and we grow into this huge opportunity that we have. I think it was really hard from the perspective of a year ago to see the incredible gains that the team has made over the last year. And I think that those games were possible because the offering that we give to customers is unique. The business that we've built is very hard to replicate, and the team that we've
assembled is incredible. And so I think our job now is to take advantage of those things and just keep moving forward.
And I think the rest take care of itself.
You talk about that team, and I know as a business leader, it's incredibly hard to have to think about how you scale back or reduce headcount. Is that something you're having to think about into the future.
Is the team where you want it?
The team's in a great spot.
I think you know, we, like I said, twenty twenty two is a tough time for us, like it was for so many companies. We had to make adjustments. The team's in a great spot. I think you know. One of the things that we did a really I would like to say, did a really good job with going through that period is we were able to make tough decisions and to move forward and to do the hard work that had to be done to put ourselves in
a position to really succeed. And I think this is now a team that is battle tested and battle hardened, and it's a team that, as I said, I every time you bring it up I'm going to just say thank you because I could not be more grateful.
And let's look at ultimately where the consumer is at from your perspective, because you have been able to take more of a cart for each car that you're shifting, but consumers have bought a lot of second hand vehicles that we are seeing a more competitive space. How do you outperform bill competitors?
So I think you know, this is a big, mature industry right Every year, roughly speaking, there's about forty million used cars that are transacted in the US. And that's because there's two hundred and seventy million cars out there driving around. And as a consumer, all of us, you know, we get tired of the car we're driving and we're insted in driving a new one.
And so that pushs us to go do a swap.
And I think what the entire automotive industry is all about is it's about finding those moments where one customer wants to switch into the next car and making it as simple as possible and is cost efficient as possible to get that car from one customer to the next. And I think that's what our whole business is designed to do. We've built an entirely new supply chain. We've
built an entirely new transaction capability. It's supported by all this technology that we've built to weave it together, so it's simple for a customer. And I think as long as we keep delivering that experience that gives them the best price, the best selection, the best experience, I think we're in a really good spot. We grew, you know, from a seat of an idea in twenty thirteen to where we are today by doing that in a market that was relatively flat.
I think today there.
Are actually, you know, there have been some tailwinds that have been nice, and those tailwinds have been lowering car prices which were very high for several year period. That was tough for a lot of consumers and made it hard for them to switch to that next car they may have been excited about. So I think, you know, overall, our goal is just to keep executing, keep delivering great
experiences and take market share. And we think secondarily that we think secondarily the market will do its thing.
Market's going to do its thing.
Caw Vana CEO, you do your thing on TV with us, we can so much. Founder Ernie Garcia. We appreciate you being with us. We've got some breaking news Jamie Diamond. He's been letting go of some shares, one hundred and fifty million dollars worth of JP Morgan shares and what.
Is a first sale.
His family is selling that amount of the bank stock from New York, from San Francisco. That does it for this edition of Blue Meg Technology Don't Forget About Podcast