Bloomberg Audio Studios, podcasts, radio news from the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Live from New York and San Francisco. This is Bloomberg Technology coming up.
A U turn for Tesla.
Shares rise as Musk vows to pull back from doge plus.
News of potential job cuts send Intel shares soaring.
And Counterfeitzgerald teaming up with Tether and SoftBank to start its own crypto firm led by Jack Mallers. We have him live later on in this hour. The first that's check in on the markets and bigcoin is on the high side, so to a stocks Let's look at how the NASDAC is currently adding to a two day gain that is the best two day gain in about ten days since April tenth. Were actually about two weeks now.
We're adding about six hundred billion dollars in terms of market capitalization to the NASDAK one hundred and I'm looking at the magnificent seven.
It really is big tech on top.
We're at four point eight percent and what are you looking at in the micro I'm looking.
At Tesla and a stock that is up eight percent, and frankly, it is shocking when a company misses earnings by that wider margin, which we'll go through later in the show, and the stock reacts in this way. And it's about a single story Elon Musk key Man Risk and him saying next month May I will pair back the amount of time that I'm spending on Doge and
I will allocate more time to Tesla. It's exactly what the market wanted to hear, and we throughout the hour and to go deep on that name because it's such a critically important one.
Carrot, Let's talk.
A little bit more about US Treasury Secretary Scott Besson. He's soothing the markets further with a recognition that America first does not mean America alone.
He also showde for the IMF and World Bank.
He shared some support, but he spoke of the need to course correct Bluemox. Kaylee Lines has more from DC. This seems to be a calming, a soothing to the market that's going on right now.
Well, yeah, and you're seeing that evident in the price action today, Caroline. This is just another instance of a kind of a tone shift we've seen from the administration over the last several days, as there has been, of course, a lot of disdain for multilateral institutions emanating from the
Trump White House. Scott Vessant, to some extent, putting the worst of those fears to bed, saying that the administration is willing to work with the IMF and World Big so long as they keep to their missions and avoid what he called mission creep focusing on things like carbon footprints or climate change. He also, to your point, the key line that investors likely will seee on here is
America first, does not mean America alone. Kind of underscores that this administration is trying to pivot away from perhaps the worst case scenarios the markets had considered around American isolationism and protectionist policy. Keeping in mind that today's speech came after Scott Vessant yesterday told a closed door meeting of investors that the current tariff situation with China specifically
is unsustainable that he expects a de escalation. President Trump then followed those remarks, speaking in the Oval Office to reporters yesterday by saying he does expect a deal with China, that the ultimate terriff freight will be well below the one hundred and forty five percent where it currently stands.
And of course, we got some fresh reporting from the Wall Street Journal today that the administration could be looking at cutting those tariffs on Chinese goods by as much as half, in the range of fifty to sixty five percent, depending on the product and whether or not it is pertinent to US national security interest. So we're seeing kind of a walking back of some of these most extreme policies.
I would point out, though President Trump right now is speaking with reporters on the north lawn of the White House and still reiterating that he thinks both China and the European Union have been ripping the US off, though he reiterated he does think they will get a fair.
Deal with China.
Bluemos Kye Lines in DC, thank you very much. Just turn back to Tesla. The company's rise in the market today can be attributed to one key moment on the earning School yesterday.
Starting in next month, may my time allegation to do as will draft significantly. I'll have to continue doing it well.
I think we appoy the remainder of the President's just to make sure that the waste and fraud that we start does not come roaring back.
Plas saying he will allocate more time to test the starting in May, reducing his doge activity from more. Let's go to Bloomberg's estraday and I go back to irrespective of what must just said on the top and bottom line, this was one of the worst courses for a long time, but Wall Street and investors around the world are looking past that.
Yes, that's absolutely right.
I mean, whichever way you will.
Slice these numbers, these were absolutely terrible numbers, numbers that have been not been seen in years for especially when you go to first quarter comparisons. Despite that, expectations were that numbers will be terrible, So that was kind of built into the stock, and that exactly is what the stock market.
Is telling us.
Like the stock is up five person last I checked, and a lot of it is really coming on from the fact that Musk is now saying that he will start pulling away from his government work and kind of focusing back on Tesla, and this is exactly what investors were hoping to hear.
Now up eight percent near session highs Bloomberg session day. Thank you very much for more on Tesla. William Stein Truest Securities Managing director joins us now he maintains a hold rating on the company with a price target of two hundred and eighty dollars. You know, well, you're traditionally a semiconductor analyst, right, you think about compute and you think about AI. But I did note in your research that you, even against your own models, the fundamentals of
this business missed by a really wide margin. Just take me through that data set that you have and then we'll get onto the other stuff like ROBOTAXI and AI.
Yeah. I don't mean to be disagreeable or controversial, but I on mysef very clearly that that you know, when we look at results of companies, you know, it's important to understand both the broker or cell side aggregate consensus but also the byside consensus view. The company had already updated investors in the street with delivery numbers about a month ago, and I think many investors had not updated, or at least on the cell side, had not updated models.
So when you compare versus sort of the so called consensus numbers, it looks like this huge miss, but in reality, you know, relative to our model that had been updated, and I think compared to other models, where if you looked at just the consensus of updated estimates, the miss was not very big. In fact, you know, relative to our model, only one and a half percent on revenue actually beat on gross profit, missed on operating profits somewhat,
and they missed on by six cents. This was not like some disaster, at least relative to what we were expecting following the update a month ago. They were somewhat disappointing results relative to what we expected. The disappointment came in two places. One was in energy forage and generation, so that you think about solar roots and megapacks and
that sort of thing. And the other was operating expenses, where they accelerated some AI R and D investments, And you know that's I don't think the end of the world for investors. In fact, one could take a positive spin on that.
William I get that perhaps it doesn't miss versus downgraded expectations. But a profit dropped the worst profit numbers is twenty twenty one. A revenue drop nevertheless shows real fundamental issues. Here are the fundamental issues going to be alleviated by more time spent at the company by musk.
Oh, I think in at least two ways, right, I mean, the two sort of obvious ways are. Number One, if you accept the supposition that Musks in the way that the investor relations team has described it to me that his greatest superpower is in delivering huge technological advancements by spending very little money but just very focused talent, then it's a big positive from that perspective. And the other is to moderate what I think musk characterized as political sentiment.
I think spending less time in the public eye doing government projects will be good for the stock.
We want to thank you so much William Stein, who's been joining us from Truest Securities. I know you're a man who focuses a lot on the AI opportunity, a lot on the semiconductor space as well, so we appreciate your time today. Meanwhile, though, coming up, we're going to get more on semi conductors. Intel planning more than twenty percent of job carts ahead of earnings tomorrow.
More on that scub ahead. This is bluemin technology.
Let's look at Intel shares surging after Bloomberg reported the company's looking to cut more than twenty percent of its staff. It will be the first major restructuring under new CEO lit Bhutan Bloombazi and King joins us with more. This is based on what a source told us, and yes there's a bloat issue, right, but there's also a refocusing issue. Reading the report, it's like, get rid of middle management and focus on actually making some money on technology that's competitive.
Yeah, I mean, I think our understanding from our sourcing is that the problem is the decision making it. Intel has become bloated that everything that should be happening quickly isn't happening quickly. There's a lot of meetings, a lot of you know, empire building, a lot of silos that need to be swept away in order for them to get back on track and to try and catch up with competitors liking video and all.
Eyes on how they can make moves in AI. In King, we appreciate it. It was a great scoop that came out. Meanwhile, looking at the broader tech markets and we've got on called Crawford with us ALGA portfolio manager who can speak more broadly to the tech space. But just going to this need to focus in on generative AI. The opportunity by a company like Intel. Is it still all about AI?
Are we able to focus on the long term opportunity when you've got headlines just now from Trump saying well that the US will have a fair deal with China.
Yeah, I look, AI is the next revolution that we have to chase. So it is important that Intel fixes a house. But you know, I think Intel has kind of lost the game on AI. What they have to figure out is if they can hold the kind of prowessign manufacturing and catch up with TSMC, because that becomes a more strategic comparative then being able to develop a competing AI chip to Nvidia.
How ELSEO manufacturing there was meant to becoming more to home Ohio for example. That then gets pushed back because of current quandaries about whether there's gonna be government support for the chips acts anymore, whether there's gonna be money coming from the government. How is Intel any chip maker currently to navigate whether they invest in the US or not.
Well, definitively, we need to invest in the US. I think the administration has made it very clear. I think it is a necessity that we start investing in the US. So I am completely on board with that. I don't actually think that the lack of chip Act funding is the reason that Intel is not investing in the US. I believe that they've actually lost the benefit of being first and they are struggling with going from one node to the next. We'll see where they are on at
which is the next note. But as of right now, they're still outsourcing to Taiwan Semi, which shows you that, in fact TSM has taken the lead on these last three notes.
And we will find out more Thursday evening when Intel post numbers, I think they'll have to answer a lot of those questions. Earnings is so interesting right in the context of everything happening around the world. I want to bring up this chart, which is average GPS Surprise and we're still kind of rattling our brains a little bit on about the Tesla share performance in this session relative
to the numbers it posted. And the reason I like this chart I find it so interesting is that actually Tesla has a terrible track record compared to the other mag seven names in positive surprise on EPs. That's all to say, do you think that given the macro environment right now, all of these names might get a bit of a pass this quarter.
Yeah, I think sentiment has gotten so dire that many of these companies are putting up okay numbers. Like you look at Iserge yesterday in healthcare, you know the numbers were okay. However it was better than expected. Tesla the same way. The numbers were okay, but they talked about I think some of their growth drivers, which are humanoids. They talked about how they're going to have autonomy by the end of this year. I think he said millions
of vehicles by the second half of this year. And even if it's not second half of this year, as long as there's a roadmap to true autonomy, I think that's what's going to drive the next leg in Tesla. Not necessarily that the margins on the on the Auto.
Side, they also pulled guidance. Do you expect that to be a move elsewhere in the MAGS seven names.
I think that we could get many companies not actually giving any guidance because the uncertainty is high. So if you're a CFO or a CEO trying to navigate this market, you really have a hard time right now because you know, what do you guide to? Do you guide to one hundred and forty five percent terra for forty percent terra from China? Do you guide to and what you're seeing today? For example, invertive, i'veardive basically has assumed or an I
search have assumed you know, full tariff impact? So you know I searched last night. The CFO said one hundred and forty five percent tariff is what they have included in their guidance and have guided that way just in order to buffer any kind of impact on their earnings.
You say it's difficult for a COO, CEO, a CFO to navigate.
Boy, is it also difficult for you and investor?
Oh?
For sure?
So do you remain committed in the longer term? Do you stick to the longer term narratives that have driven these stocks higher over the last couple of years, or do you pause?
Do you take money out?
So so, I think if you haven't taken your money out already and protected yourself, now is not the time to do it.
So that's the first thing.
Secondly, you know by September I would I will go out on a limb and say, by September we are no longer going to be talking about these trade wars, and we will have moved on to something else and maybe maybe we'll be looking at the midterms and how great the economy is doing, but it won't be the trade wars. So I think this is a kind of a short term focus geopolitically to play a game that the US the administration is currently playing. However, it will
be behind us shortly. You know, as we move forward, the AI trade is still very, very prevalent and there's no escaping it. That train has left the station. So you know, yes, we will start again, and you know, right now there's some very compelling opportunities in the market.
Should America's biggest technology companies prepare for a recession?
You know, tough to.
Tell, and I think it's a it's a binary answer, and in part because the policies are going to dictate if we go into a recession. So you know, if we do have one hundred and forty five percent tariff and we keep ratcheting up these these tariffs on foreign goods and we have a retaliatory effect, yes we are going to go into a recession. And I would say that there would like ninety some percent probability that that
would happen. If we can thread the needle and not be quite as aggressive, the situation changes and maybe we have a bit of a soft landing at you know, one percent GDP growth instead of negative.
GDP growth on core crawl food of Alsia. Great to have you on the show. Thank you very much.
The European Union.
It's fine Apple and Meta for violating. It's tough new anti trust rules for big tech. Now the finds total seven hundred million euros about seven hundred ninety eight million dollars. They're actually relatively modest compared to previously U finds, and it's likely to be thought to be avoiding further provoking President Trump for more. Let's bring in Bloomberg's Sam Stolten. But it's provoked the hour of Apple and Meta. They've got some fighting talk in response.
In hasing days. Yes, hello Karenine here from Brussels. Yes, well, Apple has said that it will actually appeal is fine, and it's about five one hundred million euros against the California firm. And Meta has gone even further with Joel Kaplan, who, of course you'll remember, spent quite a few years himself in the White House. But now Meta's global head of policy, saying that this is a discriminative act from the European Union and that it is continuing to unfairly targets American businesses.
So it's certainly a ratcheting up in these transatlantic tensions. Indeed, metas find itself was a bit less than than Apple's, it was only two hundred million. But generally, despite these finds being lower than traditional anti trust penalties, they still haven't particularly pleased firms on the other side of the Atlantic.
The logic being that because they're lower than historic penalties, they won't draw the hor of President Trump. He won't retaliate. But I think that a spokesperson that for the E that we spoke to you for the story, points out that this had nothing to do with trade.
Sam Yeah, I mean that's the message coming from the European Commission. This is an independent regulatory action. It's got nothing to do with the trade talks whatsoever. But the scuttle butt here in.
Brussels and around town generally is that, of course the EU has had powers under the Digital Markets Act to find these companies up to ten percent of global annual revenue, and actually these finds are less than zero point one point five percent of global annual revenue for both Matter and Apple. So there is something that is holding the EU back here, and it is more likely than not despite what the European Commission says, these ongoing trade negotiations.
Being there's Sam Stalton in Brussels, thank you very much. Another story we're tracking, the co founder of Instagram says the photo sharing app could have thrived without Facebooks. Kevin Sistrom testified that Meta CEO Mark Zuckerberg treated Instagram's growth as quote threat and starved the app of resources after the purchase. The US government's c to prove the social media giant created an illegal monopoly through its acquisitions of Instagram and the messaging service WhatsApp curR.
Yet more antitrust case is going on ed and the Justice Department's effort to break up Google is one of them. Mrks Dave Alba joins US on the latest out of what is trying to find remedies to ensure that Google no longer seems to be a monopoly. One of those remedies the government wants is to sell off Chrome, and seemingly there's a buyer for it.
Yeah, Yeah, we heard in trial testimony yesterday that the head of product for Chad gbt Nick Turley, from open Ai, said that open Ai would be interested in buying Chrome if it were actually for sale. Google of course does not intend to sell it and is fighting sort of this remedy that is proposed by the DOJ. But you know, they will see how the rest of this remedies trial goes and what judge Meta, the judge in this case, eventually decides.
DAVI.
A point of intrigue is that Chromium, the underlying code based for Chrome, is open source, right, and I think Google will lean heavily into the idea that in the browser market that's a really good thing. Has there been any debatea that so far?
Yeah.
Absolutely.
Google's defense in not wanting to spin off Chrome is that, look, the underlying technology for Chrome is open source, and it's used by different browsers from different companies, including Amazon's Silk Browser.
But the DOJ still contends that Chrome is a key gateway into the Internet and Internet search specifically, and if it were to be controlled by another party, then that would help sort of break up the power that Google has about users, data, users, queries, everything that feeds into Google Search and improving that product.
Bloo Books.
Davie Albat, thank you very much. We have some breaking news crossing the Bloomberg. Treasury Secretary Scott Besson says that there has been no unilateral offer from Trump to cut China tariffs. He is speaking to reporters on the sidelines of the Institute of International Finance event in Washington, where he was giving a keynote, and this is the keywording, no unilateral offer from Trump to reduce tariffs on China.
There had been earlier reports, of course from the Wall Street Journal that the President was considering a tiered approach to tariffs, but the wording here incredibly specific. He also has been commenting on remarks by the President about firing Federal Reserve Chair Powell, saying that in Besson's case, the Treasury secretary quote does not have a stand on the Trump Powell firing remark. And Caro, that's something in the
market's context. With the Nazak one hundred pushing up three point one percent that we've been tracking.
Closely off of its highs, are still trading up on the day.
Welcome back to Bloomberg Technology and Caroline Heide.
In New York and I met lod Loo in San Francisco. Carry some moves in the market.
Boy are their moves, and we may higher on the Nasdaq, up more than three percent on the Nasdaq one hundred, even as we try and digest some.
Of the overall headline risk.
Whether or not we're seeing a cooling down of tensions around China, whether we have Trump having some more positive narrative towards the country, but Scott Bessant coming out clearly saying, look, there is no full China trade deal yet. It's going to take two to three years. So we come off of our highs a little bit. We're up two point eight percent. No unilateral offer from President Trump to cut
China's tariffs as yet. But we look underneath the hood with some of the individual stocks that are on the move. I want to shine light on European trading. We just finish SAP surged eight point eight percent. We had the best innings in six years. They post really strong profitability and a great backlog for their cloud orders. What does that mean for the company that is run by Bill McDermott, which is a service now of course he used to run sap over in Germany.
Now he runs service.
Now up six point percent their earnings after the bell. Will they post some resiliency? Remember they're exposed some and the DOGE cuts across government. So two is IBM. We're up just two percent ahead of their earnings after the bell as well. Revenue is likely to flatline for that particular business.
Ed.
Let's go back to Tesla.
The stockers also pulled back literally in the last couple of minutes on those headlines from Treasury Secretary Scott Bessen, but still up seven percent. Not up on fundamentals or the core of the earnings report, but literally the commentary from Elon Musk that he will pare back time at DOGE and add more time, allocate more time to Tesla. Bloomberg's Craig two Dell, who leads our global coverage of
the auto industries with US. You and I have been pouring through the commentary on the call and the earning steck, and there are contradictions in there about the core business demand hit from the backlash to DOGE, or is it the brand or is it something else?
Hello, I do think the first quarter we absolutely have to acknowledge that the model why changeover was disruptive, right, and it's going to take us some time to to sort of parse, you know, just how much demand there is for that that model. It is after all, Tesla's most popular far and away and it's one of the
best selling vehicles in the world. You know, the question is going to be, you know, how much can Tesla rely on on that one vehicle and you know, can it reliably continue to be you know, sort of a one trick pony where the Model three has has you know, been a letdown despite that vehicle getting a makeover recently, and the rest of the lineup is is you know, kind of sucking win. The cyber truck is not living up to Musk's expectations in the least.
Yeah, significant number in sales down for the cyber truck, but there is going to be a cheaper model why in the first half of this year. That's what helps send the shares higher. So two is the Robotaxi outlook for what's happening in Austin, and there was real recommitments scenarios of the business.
Yeah, I do think that there was a concern after some reporting by by Reuters a few days ago that Uh, maybe there was a setback in the timing for more affordable vehicles that they've been you know, saying well, we'll be on the way for the first half. I think there was, you know, not necessarily a full throated denial of that. There was a comment during the call about you know, a ramp not going as as smoothly as as hoped.
Uh.
And I do think that you know, the even even the you know, driverless rides that they're going to start in Austin, I think you know, Musk talked about that, you know, being a pretty limited initial launch of you know,
just a handful of vehicles. So maybe some expectations setting there in light of how you know, Musk tends to really sort of promise the moon, it's maybe a little surprising to see the shares jumped so dramatically, you know, when you know, when some of these reasons for sort of being swage were not necessarily forthroaded.
Bloombergs Crage dool in London. Thank you very much for more on Tesla. We're joined now by Alexandra Mertz, a longtime Tesla shareholder on social platform x. She goes by at Tesla, Booma Mama and is seen frankly as a leader among the very large group of retail investors that follow the ev maker closer. She's also the CEO and founder of L and F Investors Services. Alexandra, thank you
for joining us back on Bloomberg Technology. Let's just start with the basic reaction you have to Elon Musk opening the call saying, starting in May, I will pair back the amount of time spent on Doge and allocate more time to Tesla.
Thanks for having me ed yes with pleasure. Well, first of all, I wanted to thank Elon for having done the job at Dodge. He's been doing this has been important for any US taxpayer and for anybody that's interested in the United States becoming the power it should be. And he has been stellar in getting this organized. How he is stellar in organizing anything, So I'm really pleased
he puts some time and effort into this. It's always been clear both by Elon and by President Trump that this would be limited in time for his full time, a full time allocation of time. But this is coming to an end in May, which is not surprising at
all other than people who may not have listened. So him dialing it down to one to two days a week, and do remember Elon's week is a seven day week and not a five day week, So him dialing it down to one to two days of Dodge oversight and still being available to it doesn't mean he's completely backing out of it. We're happy as Tesla shareholders that he's going to put more time into Tesla, but frankly, nothing has been delayed or missing the four or five months
that he has now been with Dodge. The launch of the new model why simultaneously in four factories and three continents, shows how strong the Tesla team is, whether Elon is in Washington, DC or somewhere else in the world. So there is really you know, there was no concern whatsoever and people being surprised by the stock going back up. As Greg said, I think they have not watched what Tesla is actually going to accomplish.
Alexandria something you just said that nothing has been missed. I was also trying to understand there was some contradiction between what Elon must said on the demand side and absence of macroeconomic impacts. They don't see an impact of demand, but the CFOs in Asia was quite clear about the brand impact in the quarter, the first quarter and quote the changing political landscape having an impact on future sales.
I have a question for you from X from the audience, from one of your fellow community members essentially, and it asks you you usually live in California, what is your gauge of quote brand damage given your geography? And that question comes from Farzad.
Yeah, that's a very good question of Farzad. I honestly hear in Santa Barbara don't see any impact. There are more Teslas out there. I picked up my new model why last Saturday, and the Tesla Center was busy. It was crazy actually, But at the same time, from ten to twelve there was the typical Saturday morning protestation in front of the teslast always the same people. They get carried in with buses at ten o'clock, they start at twelve o'clock, they go off. And this will have an impact.
This has an impact on people that probably would not have purchased Tesla's but still want to make noise. On the other side, on the upside, there is now a whole new Cleontele. We're seeing many people that have never considered EV's now considering EV's And in particular Tesla's and so you know it is give and take. I'm not saying it was completely without brand damage, but clearly the overall goal of Tesla putting real a on the streets being the one vector that will be the one transporting
anybody and everybody in the next decade. That hasn't been changed in anything.
But Alexandra, they're kind of late to that party, certainly slower than Weimo. I got my Weaimo in Arizona just last week. What of the rollout and when it becomes a real business.
Model action here?
That was actually the key phrase I found yesterday in the in the Earning School when Elon for the first time quantified when he expects significant revenues from full self drive, which he set by middle of twenty twenty six, and that is just around the corner. So and the Weymo model. That was actually really a fun moment because the whole team there had a good chuckle about Waymo costing way
more money. I mean, as you know, Weimo is built on other companies vehicles, is very expensive and is GEO fenced, so it is in no way comparable. But I mean no doubt they have done a great service of bringing full self driving to the masses and have to be congratulated for it is in no way comparable what Tesla has.
Tesla's will work everywhere, as has been proven with the rollout of FicT in China, they had hardly any any information on Chinese roads, yet were immediately able to adopt first to China.
Alexandra is always great to have you on the show. Thanks you for our taking losing so Alexandra Marts of L and F Investor Services. Now coming up, Jeff Rosenthal joins us to discuss his new venture capital funds CIV, back in tech startups tackling energy and manufacturing as a blue meg technology, There's a new venture capital fund on the scene, CIV, launching with an inaugural two hundred million dollar fund to back startups trying to reshape manufacturing electrician
compute needs. Jeff Rosenthal, co founder a managing partner of CIV, joins us.
Now, you've got some big.
Names behind you as well, some real founders in USV for example, Fred Wilson's on board grins shotwell as well of SpaceX. Where are you already allocating the money because you've already invested in certain startups.
Yeah, you know, we built this firm for a specific purpose, and that is to back and build companies focused on critical infrastructure and industry here in the US, and so
that spans digital infrastructure, robotics, AI and compute. Really guided by this fast moving, fast approaching set of megatrends with AI and compute and the power needs behind it, the reshowing and reindustrialization of global industry following COVID Ukraine and now a new administration, and really just the electrification of everything.
So we're seeing this inflecting demand, you know, driving this demand and supply, and it now is not only a deep need for our economic well being, but it's also national security issue.
Jeff, when did you conceive the idea for the firm and the fund and when did you start building it, because clearly this is very much in line with what this administration is trying to do in America with heavy industry of different types.
We started building this firm a couple of years ago. Really, you know, thinking about the origination of the idea of backing and building in these spaces, I don't think that we could have predicted that these trends would have accelerated the degree that they have in the last say six to twelve months across nuclear and critical infrastructure, supply chain, logistics, manufacturing.
But you know, we have both the background in investing in these themes but also building companies in these things, and so we're not just passive capital. We actually also roll our seeds up.
I mean, you've invested in SpaceX, Patrick has founded a clean energy business, You've got a a joy over from COT. But what of the thesis of where you invest in how you actually seed but also co found businesses like a new me a business.
So what's the recipe here?
Yeah, so we're principally an investment firm. We spend the majority of our time in capital really identifying and then earning the right to back the best founders when we have a really defined thesis, a real right to win, and a partner who is going to lead that business as the active co founder and CEO.
Only then what we co.
Found businesses on platform. So before we raised in the outside capital, really to prove the thesis to ourselves ourselves, we made six investments, five or direct investments in companies like base Power, Crux, Verse Center Systems, and then our first build company As you mentioned, we co founded the Nuclear Company, which is a fleet scale nuclear developer really powering AI.
In large gale industry here in the United States, Jeff, Manufacturing and growing manufacturing requires capital. It's expensive. You're looking at the early stage. So what are the innovations that you hope to find that I guess lower the cost of doing business in this country or something of that effect.
Yeah.
Absolutely, I think that when you look at just the cost of doing business in this country, when we think about the reshoring of heavy industry or critical industry, one of the things that people will point to as a major challenge is just the cost of labor. And I think that there's a lot of technological innovation across robotics and AI that gives us confidence that that is something that we will be able to compete on a global
scale here domestically. The beauty of many of these businesses compared to say, traditional venture capital Silicon Valley style software companies, is that they scale often with non deleute of capital. So we focus on businesses that are actually highly efficient to equity and then can scale with asset capital or debt.
Jeffros Civ, co founder, managing partner thank you for joining us here on the show.
Crypto News Counterfitzgerald is teaming up with Teather and SoftBank to create a new crypto company called twenty one Capital. It's going to be accumulating bitcoin in a similar fashion to say that of Michael Sailor's strategy, plans to lord more than forty two thousand bitcoin, of course worth more than four billion dollars.
And Jack Mallis is also co founder.
He's CEO of twenty one Capital, and he joins us, Now we asu you have you on because a strike.
Can get me fired up.
How you doing, Calind Good to see you Jack. When did this idea come to buy?
Uh?
The founding story? So I co founded the business with Tether. I would say I've known the Tether group for over a decade. There just weren't that many bitcoiners around over ten years ago. So we you know, we've done a lot of work together in El Salvador, et cetera. We've been so inspired by Michael Saylor and all of the
public companies acquiring bitcoin. But I would say over the last few years that inspiration turned into what we thought was an opportunity and a hole in the market that we could deliver on which is bringing blue chip credibility and startup upside. We feel like we can bring enough capital and be big enough to win. We're small enough to grow, and most importantly, a pure bitcoin business. A lot of these companies, they're pivoting from a past operating business,
they're rebranding, changing their name. They're maybe selling video games to buy bitcoin, or selling medical equipment to buy bitcoin. And we're a purpose built bitcoin company. We're gonna build bitcoin products, bitcoin cash flow, and we're going to give bitcoin per share growth to shareholders and be hopefully the best way for investors to get bitcoin exposure in the public markets.
Jack, I think off camera just before we started to use the word vehicle at vehicle for bitcoin, I think like a reasonable question that people have is what does the CEO of a new company whose mission is to accumulate bitcoin do day to day? What is it that you're going to try and manage or achieve.
Yeah, So for all the bitcoiners out there, we encourage you to check out our filing. We've introduced two new metrics to the public markets. One is BPS stands for bitcoin per share as opposed to earnings per share, and the other is BRR, which stands for Bitcoin return rate. And my job and what I'm dedicated to do for our shareholders in which we view similar to our customers,
is grow our bitcoin per share. So we're an operating company, and when you buy a share of twenty one in a hypothetical sense, what we intend to do is, let's say our bitcoin per share zero points zero five, our intent is to be able to grow that to zero point zero six bitcoin per share zero point zero seven bitcoin per share. Where a vehicle, like an ETF, your
exposure is static. So twenty one is an operating business and we will be building bitcoin products, bitcoin operative cash flow, and then using the capital markets to accreatively grow the bitcoin on our balance sheet. So we want our shareholders to get wealthier, get richer in bitcoin terms, and our metrics encourage the market to view us, not in fiat terms, in bitcoin terms, because we're not here to necessarily beat
the market. We're here to build a new one and encourage the world to adopt bitcoin in a sense that we believe it hasn't yet.
But Jack, you already have a bitcoin product and it strike yes, and it's where people can buy, sell, stall that crypto. Well, how much of that are you still going to be leading that business?
Yeah?
And the CEO both companies we're actually disclosing today X Strike some of our financials. So Strike immensely profitable. We have over twenty percent even a margin, eighty five percent gross profit margin. We have only twenty five employees, so on a grosser net profit per employee basis, we got to be one of, if not you know, the biggest in the bitcoin space in that regard, and so it's
an incredibly strong business. It's doing well. I'm so proud of the employees and our investors, and thankful for our customers. And you know, Caroline, you can just do things. And I'm going to lead both businesses. I truly believe my purpose on this planet is to try and help bitcoin have a chance to change the world. And what I believe is the right direction, and I think Strike in twenty one both independently work towards that.
Jack, you have plans to raise capital, and I guess not just like as a one off over time raise capital, Right, how will that work in practice? What mechanisms we use? And a lot of people that watch the show like ask if they're not registered institutional invest is like, how can they participate in that?
Yes, I thought for a second you were going to offer me some money to buy some bitcoin.
Absolutely not, absolutely not. Can and go with my actual question.
No, totally, So listen. We are hopeful to have our share listed on a stock exchange under the ticker XXI. Today we are trading under CEP, which Caroline mentioned is our Canter Equity Partners, and that stock is trading and live today. If it's successfully merged, upon closing, it will be XXI. We do intend to raise as much capital as we possibly can to acquire bitcoin. Again, my one rule to my shareholders is it will be a creative Our bitcoin per share will grow. We will never have
bitcoin per share negative at least that's our intent. Our intent is to make sure that when you're a shareholder of twenty one that you're getting wealthier in bitcoin terms, and that's my job as a CEO to deliver that. So we plan on raising capital in all different type of sectors in markets and really blending bitcoin and incorporating it in the traditional financial system to deliver a powerful equity to the public markets.
For bitcoiners is that the selling poin versus ETF because you came up with this idea over the course of years, and since that time there's not just been strategy that you can invest in or block, but you can get st bitcoin ats what's the upside? And in fact, a viewer from boombergs asking like, how can you have more bits than an ATF?
Right?
Okay, So I gotta be clear, I'm not preaching a future that I can I can promise. This is hypothetical
and this is our intent Somewhere. My lawyers are like, that's our guy, right, But our intent, Caroline, is that when you buy a share of twenty one, and let's say that's zero points zero zero five bitcoin per share, we go out and we intend to close deals, build products, add bitcoin to our treasury, to where in which you get a press release and you say, wow, twenty one's bitcoin per share group from zero points zero five to zero point zero six. I just got more bitcoin exposure.
I got wealthier in bitcoin terms, just by being a shareholder of this company. And ETF is not an operating company, you know, IBID is an outgrowing your exposure to bitcoin. It's a static exposure through their security instrument. Whereas for us we're a business. I'm a CEO. I get up, I work every day to grow how much bitcoin your share represents on our balance sheet, that's the big difference.
Twenty one Capital CEO Jack mallers Endstrike CEO. Great to have you back on.
The show, Caro, And that does it for this edition of Bloomberg Technology.
Are busy one ad?
Yeah, let's just quickly look at some of the names we care about. Tesla it's up because Elon Mask has pledged to return to Tesla, less time at DOGE Intel Bloomberg Reporting is cutting twenty percent of staff, getting focused on tech, cutting out middle management, and the market broadly's pulled back right carrow since those bestent heads. But there's green on.
That screen, green on the screen as we anticipate IBM service now earnings, and of course we've got Intel tomorrow.
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