The SEC Sues Gemini and Genesis

What could this mean for Bob Biga? And we talk with a venture capital founder backed by Melinda French Gates about her new fund dedicated to investments in longevity, the

spending power and influence of women and diverse communities. But first let us check in on these markets, because once again, friends, it was a day of macro affecting your benchmarks and looking at the CPI print, the inflation data actually show aid drop in overall prices in the month of December versus the month of November, down north point one percent.

If you look at month or month overall, we're still seeing that CPI showing that inflation is cooling, maybe even peaked that as the market liked nascack up six cents of percent all country World Index now up for five straight days, similar moves to the NAZTAC five stup days. It's the longest winning street we've seen since July twenty two. And really the key move was in borrowing costs yields bonds.

We see yields come down by twelve basis points on a five year, but across the curve we see borrowing costs fall. As we think the Federal Reserve it's going to start slowing that pace of hiking. Certainly we're hearing from a libany of the members of the f O m C talking about now just a quarter of a percentage point is a new norm. Let's flipping it on because I wanted to look at there for what happens to the US dollar. The US dollar has been on

a weakening trajectory. In fact, it was down versus basically every single G ten currency. Look at the Japanese N. The w c RS function World Currency Rankings on the Bloomberg shows that the Japanese N on the day was up more than two point four percent than nor we Chrone, Ozzie dollar, Europe all doing well. This, of course is a story of strength versus the US dollard. Yeah, we've

got some breaking news also happening after market. Carrow Apple saying in a regulatory filing that Tim Cook's salary for three his compensation will be reduced to a more modest million dollars. They're saying the regulatory filing that Tim Cook had some influence on this, and going forward they'll re evaluate his pay relative to peers, bringing it more in line to the eighty to ninety percentile, which you know, still a lot of money, but interesting development, happy areas.

There's a sort of modest reaction down a tenth to a cent on Apples dog in that after ours move, we got the reaction we expected when inflation came in in line with expectation. When it came to tech dogs, that was kind of one of the primary movers. Interesting forward ten straight days of gains, its longest streak on record. No real catalysts or news in the news cycle, but interesting to see that performance to start the year from Ford as it shifts towards E V East. Tesla up

three tens and one percent. It had been lower for much of the session. Disney, We're gonna get into investors. It's not clear whether this was kind of part of the broader market move or investors cheering the activism that we're seeing from Tryann and Nelson Pelts. We're going to talk about that in just a moment. In t SMC really interesting, it's US listed shares. It's a d r

S up six point four percent this Thursday. The company cutting its capex in response to slowing demand, particularly consumer electronics. Revenue forecast for the FISC WAL first quarter slightly below street expectations, but they're saying they're seeing improvement of supply, particularly for automotive and how there's been a shortage of chips there. Bitcoin interesting, We continue to see strength and bitcoin. I want to get straight to a Bloomberg tuminal chart

behind me. There's still this really high correlation right between bitcoin and technology stocks, and that this hasn't add to that futures in this charts case. I think it will be really interesting carry to look at this correlation as we go forward. Right the narratives move now to twenty five basis point hikes in the short term from the Federal Reserve that's got the tech balls coming out. Well, if the balls are out for stocks might not seek

some continued momentum for bitcoin as well. Well, let's look at what might be a more bearish and narrative. Currently in crypto, we have breaking news that the SEC is suing the crypto brokerages Genesis and Gemini. This is for offering unregistered securities through their joint Earned product as it was called. Now, this is all, of course, the product to do with Cameron Winkle us and currently the attack

he's making on DCG S Barry Silvert. They've been fighting back and forth about really who's to blame for what has been well, the fallout ever since the Earned program has of course been a problem following the claps of crypto more broadly. But the SEC really deeming that basically you cannot be using these sorts of products that let customers loan out their assets in exchange for interest payments,

and they're saying, of course this is unregistered securities. Shinnalie Bassett joins us for more so, the SEC once again weighing in on crypto, certainly in a big way. Caroline, here you have the SEC has complained here calling into question Genesis and Gemini in the same complaint. Now, why is that interesting? We have again to your point that you're making here these two counterparties that had previously been suiting over how the situation has been handled since holding withdrawals.

Now what does the complaints say? As you said, they're looking at the unregistered offer and sale of securities to US retail investors. You also have the SEC talking about the marketing from both parties here, both parties, and I want to be very specific, it is Genesis Global Capital, the subsidiary of that large Genesis trading desk here that is part of the defendants being named in this complaint, but both of them marketing these assets to investors and

being called into question by the SEC. Now, remember this comes just days after that big open letter you saw from Cameron winkle Boss, after a number of correspondences between DCG, that Digital Currency Group, that big entity run by Barry Sobert, as well as the Winkel Bosses twins Gemini for this gem the earned product. And it's days after you have

Cameron Winklevoss alleging here private lies and accounting fraud. And also in the same week that you have Barry Silber, the head of Digital Currency Group, also reaching out to investors with a very large multi page question and answer here that addresses how Digital Currency Group uses the proceeds of loans borrowed from Genesis Capital, the same asset here

in question that is under the sec review. Now there will be a lot of questions both from investors as well as regulators on where the money went, what, what kind of money was lost, how you get it back. But at the end of the day, as I said before, these two are being named the complaint together after days and days and days months really sparring. And so how they handle this when they're both listed together as under

the complaint of the Securities and Exchange Commission. Yeah, this is an interesting development in POD because Bloom reported last week according to sources, that federal prosecutors were looking into Barrios Barry Silber in the Digital Currency Group. So now we have this triangle, right, Vinkl Voss Silber regulators. As you said, the complaint is joint between them. Bring tie

that all together. What is the relationship as it stands now between Barry silver and the Winkl Voss brothers twins as it stands Remember they have been both kind of at war here, uh, And I think what's worth kind of pointing out here is the difference between how Genesis frames this issue versus the wink of Voss twins. We reported in late November actually that when Genesis was out kind of looking for money, we had reported they had reached out to a number of big investors to try

to really stave off some of these issues. As they did that, they revealed all of these loans that existed between Genesis as well as other Digital Currency Group experts here or entities here. Now remember those entities um investors of Digital Currency Group did have clarity into how the

entity worked. So the big reveal here then becomes now you know, regulators asking questions about where the money went at the end of the day, but also the allegations being made by Gemini and Gemini earns products on behalf of those more than three hundred thousand customers. Remember when you look at Digital Currency Groups response to this publicly, they said this is a way for Gemini to be

deflecting blame. But again the way that this is culminating now they both are under this complaint for the sec Let's weave all of this narrative together, Shinali, because a lot of the reasons that the funds have been trapped in Genesis is because of the ongoing fallout across crypto. Then in many parts wasn't just started by the collapse of fd X. It came much prior to that. Actually

some of them related to lending products themselves. But just talk to us about what we've heard from sat Magman Free today about the st X full out and really how all of this is one big similar collapse that

is just having so much of a contagion effect. Yeah, it's really interesting because we've heard of course Sam Bigen freed before the indictment came out, him have his media tour, but then since he's been on house arrest, we've seen him tweet here and there, and now we have a sub stack coming out as well in which he's detailing kind of his defense here on this idea that he didn't steal funds, he didn't stash them anywhere. That the name of this sub stack was ft X pre Mortem Overview.

He also links the issue to how he was treated by rivals. He's been complaining about finance and the handling of assets for a while here. Now, at the end of the day, what happened in the middle of last year, Luna three Arrows, people lost a lot of money, and it's spirals from there, and it's kind of as simple as that, alright, bloom bog Stionnali Bassett keeping us posted on every twist and turn in an industry under duress, executives under the spotlight, And speaking of executives under the

spot let's talk about Disney, where activists invested. Nelson Pelts has nominated himself to the board. This could become a highly public abait over Disney's returning CEO, Bob Iger and his leadership. Bloomberg's managing editor for Global Business, Creating Harrison with us in New York. I guess the question you go straight to is what is Nelson Peltz trying to get out of this Well, he's trying to get the

things out of it. Then Nelson Peltz is always trying to get out of these things, right, which is we can squeeze cost savings, we can run this business more efficiently. You know. He argues that Disney has been overpaying for assets for a while, especially the Fox steal from a few years back. Um. You know, he criticizes them for

having gone after Sky which they did not win. But we're willing to bid up the price quite a bit on he has it's time to shake things out and uh and and and have a little more focused on operating margins and restored the dividend. He's calling for the dividend to be restored by five Remember that went away early in the pandemic, as it did for many companies. Now, none of these perhaps challenges and concerns must be that much of a shock to Disney. They know that they've

had some issues. They've just announced changes at the board level, perhaps in a focus at least on success should but ultimately they're not gonna want Pelts on the board. No, they very much do not want Pelts on the board. I think Bob Iger would like to, you know, have a chance to run this show himself without without input from Nelson Um. But they are, you know, sort of acknowledging that there's at least some public facing changes that

they need to make. One interesting little piece of brinkmanship is that Pelts was supposed to unveil his big campaign this week, and it's Disney actually got out ahead of it with the announcement of the change in this board. Now, it says Susan Arnold had already hit the age limit or I'm starry, not the age limit, but the tenure limit to be on the board. Um. But the coincidence is there if you want to read into it. Um. They also did announce that they're establishing a succession committee

at the board level. So that's a signal to investors, Hey, we know we need to you know, set our course on the future and decide who will eventually replace Bob Iger in a couple of years. UM. That is very much, you know, sort of a first volley in what is likely to be a months long five This is like one of those stories where you actually do some contexts of recent history where you know Iger has returned to see having retired quote unquote, they don'tly just renewed JPEX

contract before he was dismissed. Essentially, we actually asked our audience if Pelts has a point? Here? Does Pelts have a point? Um? These are the results from the Twitter poll that we did. I'm not entirely surprised by this. Respondents asking who who is Pelts? The answer really is he's a classic activist, isn't he? And he built up that stake in November. Um, I guess does he have

any track record? Of achieving these things. Absolutely. He changed Disney absolutely, and you can argue that he already has with these moves, right. Um, but you know, you look at examples like Procter and Gamble General Electric, the executives of those companies would say he very much changed it. There's a great example of DuPont, which is a company that he didn't actually win his activist fight, but the CEO was out months later. They had a bunch of

cast cuts there now. So he is a big deal and he will make his presence felt, and some analysts say maybe they need to listen to the point thing. Great to have you here, Thank you so much, cause Bloomberg's managing editor of Global Business, Claydon Harrison. Meanwhile, coming up, we've got a little bit of sprinkling of VC action, right Eddie. We're talking about pitch Book. It's out with its new report on the state adventure capital in two.

Spoiler alert, it's not too pretty. More on that. Next, this is Bloomberg. We raised this round in a context where the business was growing incredibly well. We grew AX one, we grew almost forex in twenty two. Yes, the market is more difficult. Um, I think there is much greater scrutiny of our financial financial performance. You're and so on, but underlying, you know, the numbers really did speak for themselves.

That was Peppy co founder and co CEO Rejewla poor A talking with Carrol twenty four hours ago about the current environment for raising money, and I think we've got to get some context on this. This is the talking point beyond Silicon Valley where founders and those who have backed them historically are thinking about what on earth is going on in all sorts of economies. Carl Stanford, lead vcn lists at pitch Book, joins us from San Francisco.

Pitchbook out with its report for two and the State of Venture Capital two in summary, was a transition year, right, Kyle. It was difficult, It was hard, There was a pullback in funding overall. What is the conclusion that you guys reached when you took to a look back at the year. I think a transition year is a really were a really good way to describe what we saw in two.

Throughout the year, the momentum of the venture market that had really grown in faded pretty quickly from Q one, which we saw as in the most active quarter in our dataset to Q four, we saw deal count drop, we saw deal value drop sixty which is an incredible number when you look at where that is coming from, though a lot of that is coming from the unicorns, the late stage, the gross age of venture which really saw a huge amount of capital pushed into the market

of the past few years, which when when you see the crossover investors pull out and readjust their investment strategy, that capital, that is those late stages every led on

came out pretty quickwo. I think what's really interesting in Caroline, and I've have been discussing this every single day, is how actually it wasn't completely doom and gloom, and it may not be complete dooming Glean three because at the early stage, you know seed precede um, that there seems to be more appetite to deploy capital because right if you're a venture capitalist, you take a long term view. You know, you know you're not going to have an

exit for for a while. Is that a fair assessment of the psychology I suppose of this industry right now? Yeah, that's exactly right. When you think about seed stage companies or even Series A, Series B, those companies, even the most successful ones are years and years away from the public markets, so they do have a little bit of

an immediate installation from the broader Macwick economy. But we do believe that there is still some deflation to come out of this market after the exuberance, and the longer the macro volatility persists, we do expect early stage and seed to start to see that crunch that the late stages is seen. Right now, go global for US if you can, because well, it's interesting. Is the outperformance of late last couple of months of the public markets in

Europe visit v the US. I'm interested. Of course, that comes from a lower base, whether Europe and other areas we've heard from Textiles for example, talking about exuberance and excitement going on in Africa, and at least from a seed stage around and indeed from the actual startup culture there at the moment. Are we likely to still see the money in Silicon Valley, New York or is it going to spread out a little bit more? I think we've seen the spread out really happened over the past

few years. But when you look at the data, the way we tracked data, and all the capital being located in the headquarters of the fund. We at seventy seven billion dollars raised in Silicon Valley this year. UM. A lot of those huge mega funds that we see being raised our headquarters are by firm's headquartered in Silicon Valley. So when you look at the data, it does look

very concentrated. But we do believe, especially from kind of the the change towards zoom and towards a more global venture market, we will see that capital spread out UM. One interesting notable report is that the Silicon value of the Bay Area actually saw less than of deal count in the US for the second quarter in a row, which is the first time that's happened in our data set. UM. And so even though the capital is staying here, there

is a much more global venture economy. Would that be you know, moving the capital to the Midwest or to some of the second tier cities in the US, or to seeing capital go to Latin America or Europe. We've seen a lot of growth everywhere and talk to us. Can you break it down by industry Where remained relatively healthy, Where was able to weather some of the concerns, All were able to break it out as much as well. Hell Care fintech cybersecurity store remains pretty resilient in the

face of a recessionary environment. I'm not sure any sector really weather the storm in two. I think everyone was. Every sector was there right for some kind of pull back from VC because of the exuberance, and then the media we saw one. But when we look from a sector of perspective, the first place we look is the public markets. Fintech had a really difficult year. Cloud has stayed a little bit better, and you can see that reflected in the valuations that are coming across in the

private market. I think that there's two data points I want to hit with you really quickly. Kyled it they even though they weren't necessarily the deals in two. I think I'm right in saying that actually venture capitalists all around the world launched quite a few new funds, right. They at least got their war chests set up. If they didn't then deploy them right, and we may not see them deployed this year. The other data set that really catches my eyes that about capital invested in female

founded companies. Could you just speak to us about that that trend that you saw in four female companies. Yeah, I think female founder companies have been um, you know, uh, a point of interest for for much of the industry. In the past few years. UM, there's been a lot of new funds that have been raised by female gps. There's been a lot of uh, you know, you know, help from the industry to make sure that there's more

capital going to female founding companies. I think one data point that gets tossed around there is the percentage that is raised by female founding companies of the total deal value. And the unfortunate part of that is that it is very low, and no matter whey you cncisate, it's not going to look great. But a lot of that is is influenced by the huge deals that we've been seeing

over the past few years. We had eight hundred fifty seven hundred million dollar deals closed in one we had a you know, a four hundred fifty of those closes in and many of those are artists, older companies, and they have been started by by by men, and so there has been a push towards more investment in female founding companies and hope, we're hoping that because of the fundraising that has been done by by female led gps as well as the initiative of you know, the broader industry,

that we will see a sustained growth in investment into female founding companies, and we've got a female lad fund coming on a little bit later in the show, Carl, just briefly from the diversity's perspective, many have been worrying that, you know, it's a recent trend that money had been put to work in this and therefore when we go back retrench worry people go back to their previous old norms.

Are you hearing that three people are still gonna be stood by ensuring their backing diverse founders, diversity of thought In a similar way from investment, we we thought the exact same thing was going to happen to the small, small ecosystems that had really popped up in the Midwest and then hadn't had the local fundraising and had received a lot of capital from the East Coast or a

Bay area. What we did see, though, there was a sustained growth in the smaller markets, and we believe that whether it be in female founding companies or whether they be even more diverse founder um group, we do believe that there has been the sustaina momentum behind that um, and we do believe that should be a good year because of the number of funds that were raised to focus on those different initiatives. Thank you for REMINISCINGO and pushing us forward to Carl Stanford. We thank you. VC

anless over at pitchbook time for top tech calls. First up Netflix Jefferies upgrading to buy from hold with a new price target for three five dollars. The firm seas upside surprises to the company's operating margin and believes the second half of twenty three and should be good for Netflix, but also looks at electronic cards, Take two and some toy stocks despite short term pressure points. Moving on to Best Buy downgraded by X and BNP Paraba from outperformed

to neutral. The new price target now seventy four dollars, implying a four teen percent decrease from its last price. Other analysts weighing in on this stock before Goldman Sacks, for instance, upgraded shares best Buy last month from a cell rating to neutral, lifting their target price to three dollars. Finally, security software named c Scaler downgraded at Morgan Stanley's slower growth for security landscape lowering its price target from one six two to one tenny. A little bit positives and

some secular tail wins there for that stock carrow. Fascinating group to keep close eye on. Welcome back to Bloomberg Technology and we've got to talk to see a little bit of it. Stick with it, and let's go to San Francisco. You're not there, but some key players are. There is a new fund in play in SF. Cake Ventures it's just closed its first fund, seventeen millillion dollar vehicle. It's going to invest in minority founders, those building products

for changing demographics across America. Backers include Bag of America, Melinda French Gates, Pivotal Ventures founder Many Woodard is joining us now from the studio, and Mini. I mean congratulations and talk to us about the layers. I liked the description you called cake Ventures the layers in which you're going to be targeting when looking to deploy your money exactly.

Thanks for having me having me so. Cake Ventures is focused on big technological changes combined with demographic shifts, and we back and invest capital into companies that touch areas of demographic change, including aging and longevity, increased spending power of women, and the rise of a new majority. Talk to us about the rise of a new majority, because

I think that's a really fascinating shift. Just sort of talking about tech adopters who are coming from well minority led areas, particularly more more, the people of color Asian communities that are building something culturally as well as financially,

really correct. Um. You know, these three groups, Asian, Black, and Latinos have an increasing influence on Internet culture, UH, increasing their spending power, and I think for Cake Ventures that means that this is an area that we want to invest in and invest in quite early and many congratulations. As Caroline said, it's really interesting to speak to a

new name in the world of venture capital. We've been talking to founders, you know, a week pretty much about how difficult it's been to raise money for those startups in this environment. And I kind of want to put the same question to you. You know, who are your LPs, Where did the money come from? And how how hard

was it for you to get this vehicle finalized. Well, we have great LPs like Pivotal Ventures and Melinda French Gates Company, Bank of America, Sindonna Capital, UH Foundry Group fund of funds like that, UM, and you know, we are in a really challenging time for entrepreneurs and for emerging fund managers. UM. I won't deny that, but UM, you know, if you were building, there's never been a better time to be building something uh game changing in technology,

and the capital is out there. But it is a difficult time and will continue to be a difficult time over the next several months, several months to a year um for people starting new companies. Hey, many, I'm also really interested in you as well. You know, I'm reading that you guys are kind of kind of cut five hundred thousand dollar checks that kind of increment. You know, how are you going to do business? Are you're gonna go out there and have one on ones with these founders?

Are you inviting pitches and pitch decks to come into you? I just want to know how it works, essentially. So I've already invested in in twelve companies out of this portfolio. UM. I'm I'm a long time venture capitalists. I was at five hundred startups before as a VC and UH also was a scout at light Speed, and so I have a really great deep network of people in venture who know me, know my investing thesis and track record and who I can work with and collaborate with in order

to do great deals. Now, I also go out and and hunt for deal which is one of my favorite things to do is finding new undiscovered founders building something that fits into the three layers of the cake. And that's really exciting for me. Where are these founders based? More often than not money. So although I'm based in San Francisco, six of the companies that I've invested in so far have been outside of quote unquote Silicon Valley San Francisco Bay area. And that's something that will continue

to press on. You know. I think that great innovation comes from many different places, uh, And we're excited to invest in places that are outside of Silicon Valley as well as companies that originate from right here. And let's dig in a little bit more to those layers that

I so love you talking about. But thinking about the way in which you're looking at demographic changes, longevity, and they're like, what companies are there for you backed what are the sort of problems Ultimately they're trying to fix. One of my companies is called Guaranteed, and they are using technology to change end of life in hospice care. That's that fits into the aging and longevity layer of

the cape. Were super excited to UM to back that company. UM. I've also invested in a company called Pamper, which focuses on nails and nail art. That fits into the women, uh women layer of the cake. UM and we're we're excited to continue, you know, filling out the layers of the cake with amazing companies building uh, not only consumer products, but also building in the business, business and enterprise space.

I mean, one of the things I'm always fascinated by when we we have vcs on I guess it's not just as simple as you handing over the money, right and I guess when you when you launch a thematic fund, my question to you is what other help do you offer these founders. What is it your pitch to them on why they should partner with you, why they should

take your check over somebody else's. So I built Cake to own the white space around demographic chain change, because demographic change is what is going to impact every single company that is being started today, whether you know it is strictly focused on aging or whether it is a more generalized company and so one of the things that UH founders and entrepreneurs looked to me and KEG four is really helping them understand and define which demographic changes

are going to be the most impactful to their companies and how to take advantage of those in a way that is both authentic and helps accelerate their growth. We were talking just about the economic environment when we now find ourselves and some have said, you know, obviously DIA strates to VC, but exciting times and seed and some many have thought maybe the talent, the talent is being let go at the moment with the countless layoffs means

people are going to build right now. Do you abide by that thesis or you thinking, actually, now is the time that you're looking for. The companies have already been built and perhaps aren't taking such a risk in this time. No, definitely, you know, layoffs are really challenging time for anyone. No one you know wants to hear about big companies laying

off a large amount of their staff. But you know, just like UH during the Great Financial Crisis, a lot of those a lot of those people ended up starting companies that are that have been category defining companies like Airbnb and Uber, and I think that because we are in a recession and we are in a um you know, we are really in a challenging economic time, a lot of people will now start to uh start new companies of their own and these can be the you know,

the next big companies that that experience amazing growth. Alright, Monique Wild of Cake Ventures, were so grateful to have you day one, you know, officially of the vehicle launch, and in best of luck to you and the founders

that you invest in. What what is happening is there is clearly themes playing out in front of Orise every day on the show, we're discussing the same thing, which is, okay, there might be a pullback in in investments from the VC world, not in early you know, precede seed stage companies.

That's number one. Number two, we are seeing thematic investors look to focus on prioritize get capital to those that need it most women led startups, minority groups US And yes it's repetition, but this is what we're talking about

every every single day on the show. It seems it's literally happening in real time and it's interesting to hear the dovetailing of what pitch Book has seen and the commitment, yes it is still always coming from a small base, but the resilient commitment to women minority led businesses even throughout the back end of two that you know, many have worried, Many have worried as we are into some sort of downturn, that there will be the first ones to be left behind, sort of the last ones in

first ones out mentality. But that doesn't seem to be bearing out. That doesn't seem to be the case. And ultimately people want to particularly Gen Z millennials, want to invest and spend with purpose. In some way, it feels like something that you just say, but actually it's not just talking to talk. We're walking the walk in somewhere. We're seeing people get build and getting the fund in closing those rounds and actually writing those checks already what

was it twelve. We're seeing the data and then from you know, investors, I mean, we're seeing it in action, you know the story behind it. Next, I think we've got to also focus a little bit on public markets because we forget, actually we're so focused right now on private There's a lot going on in the world of stocks will be right back. This is Bloomberg malcome back to me technology. I'm Caroline Hine in New York and pay please say still in New York is one Ed

Ludlow only for one more day. But let's talk your favorite let's talking. Yeah, it's interesting. There's a lot in the news flow right now around electric vehicle and a lot in the market. So I thought i'd tied all together. The first thing that com actually was Lucid. I wrote a story this morning about Lucid's four year twenty two. They produced just over seven thousand vehicles, exceeding just that

their guidance or target. Remember, Lucid cut it targets twice in side the year, saying they'd make twenty thousand vehicles. They cut its fourteen thousand. They cut it against seven thousand and all told, the end of the year they produced just over seven thousand, but delivered very few to customers. The market liked it, though, It's kind of relief we saw in the stock up almost five percent. Tesla was

actually significantly lower at the open. Despite you know, there was this logic that you get the inflation print where we thought it would be. The FED will raise rates and lower increments tested trades at twenty five times forward earnings, maybe it would get caught up with the rest of the tech trade. It didn't, although it did close up three tenths of one percent and Ford up one point six percent. It's tenth straight session higher in the green,

longest streak on record. I think that's really interesting. There's no hard news peg, but we did get that data last week about its full year twenty two EV sales in particular, so I thought to take a look at this chart because Ford is now the number two seller of electric vehicles in the United States. But this kind of tells the story, right, those big bars last year and this year for Tesla. It's e V sales globally, right, and one point three million at the end of two

globally granted. But I put that US data for Ford next to it because that's principally where they're selling. Right. You've got like the the F one e one hit, the Lightning being released, the transit van, but the mainstay of what they're selling is the Mustang Mackie sixty thod or so units. So context is king right. You know, Ford is catching up, They're closing the gap. My question to all our guests going forward, is you know, is the competition coming for Tesla. That chart is simply there

to demonstrate this is the market incumbent with Tesla. Right. That lead is so dramatic, it is hugely and it means so many funds are exposed, so many still committed to that stock, but some questioning how committed they should be. Let's talk to one Mark stokell a love because he's outspoken as a CEO and senior portfolio manager over Adam's Funds, which has a two point six billion dollars under management.

And Mark a great quote the called r I which was immediately why I Eddie was like, we need to get this man and again, and it's because you said, with all the moving parts, basically said that there's currently too many unknowns to get a good handle on what an appropriate valuation is for Tesla. You see as a potentially a train wreck, is it? Well, it could be.

I mean I think if you if you have a stock that's down, I think that's the beginning of train wreck anyway, if if it if it isn't in its own right, But I do think that there are For first of all, it's a it's a great company. But one of the things that we spent we try to spend a lot of time doing when we're looking at stocks is trying to separate the difference between a great company and a really good stock. And I do believe it's a great company. We just don't believe it's a

great stock right now. And you know, some of the unknowns uh you know, have been have been pretty well documented. You know ed talked about about some of them. Um. You know, when you go from having a over a three month three month wait list to get to get a car to none when you see price price cuts in China. Now, granted China is a little different market, but they do have competition, so you know, how long

until those price cuts come to the United States? And so you you you put those things together and then trying to figure out what's the appropriate price for that? What are you supposed to pay for for for for these earnings? And you know, there are a lot of people that will say, well, now it's trading at twenty four times I think it's twenty four times something like that. Um, so it's down for it sounds significantly so, and it's down, so that must be okay, And that's not the way

I think investors are supposed to look at it. Uh. And what I meant by unknowns is because we don't know, because it's unclear whether how long the price cuts are gonna have to keep going in China, whether they're going to come to the United States. Um, why why would you jump in now? Why wouldn't you just wait to to let the dusk clear? Because I don't think it's going to get away from you? Ikaroking It estimated p currently training at thirty times that maybe even more innovated

to certain degree. Mark are what do you need to hear? Is it the cult around you know, mosque, the way he can talk up a stock? Is it the fundamentals you need to see change in China? Yes? Is there anything that could be fixed and would immediate make you go ah, this is getting back to a good stock again. I wouldn't say immediately, but certainly there are some things.

I think the rhetoric, I mean, one of the interesting things, and we I said this in a meeting yesterday is when's the last time Musk tweeted something that was silly? I mean he's done, he does it a lot, But I think he's starting to get it. I mean, I think he's starting to get that that that, you know, much of the things that he's doing outwardly is not helping not helping Tesla, So we he it appears he's backed off of that. I do think, I mean, demands

the issue. And frankly, it's not just the United States and talked about Ford. Uh you know, they've they've got really good, robust competition in China. Um, I think it's waiting a quarter or two to see where is demand really going to shake out? You know. And the other thing is said, you know, they've sort of had this market to themselves for quite a long time. Uh. And and and you know there are other companies that can make good evs. Certainly Tesla makes a good ev but

other companies do as well. I mean, the must than is pretty cool. Actually, hey Mark, I just want to point out real quick, you guys do hold Tesla shares, don't you. We We we do own it. I will be quick to tell you that we are underweighted. We we're benchmarked to the SP five hundred, So we own it. We're own it, but we're underweight. And frankly, if you have a second. I'll talk a little bit about that,

because I think it's mean to us. The volatility of Tesla, both on the upside and the downside, is such that we think being out of it completely exposes you too much to to to the SP five hundred, So we are underweighted. That's kind of a sort of market structure

and dynamics point. We showed a banner essentially on the show a second ago about Tesla's expansion plans in China being on paws and what Bloomberg reported even I it was according to sources, this plan to double the capacity of the Shanghai plant to nearly two million vehicles annually is on the whole due to influence from the Chinese government.

The concern is that Elon Musk, who is also the CEO SpaceX and and SpaceX offering the starlink product is concerning to the Chinese government because if starlink would be able to use in mainland China, it could bypass Chinese firewalls, et cetera. Just bringing you the Bloomberg reporting latest on that. My question, how core is the China story to a name like Tesla and how closely our investors like you watching the economy in China. It's it's very important and

I do think actually it's interesting. I think the reporting that you just talked about is likely correct. I also wonder how much of the putting putting it on pause was. We see a lot more competition now that we do. It's six months ago, a year ago, and and and therefore it might be prudent to to slow your role a little bit um rather than go full full force. But we we do look at not only do we look at the number of vehicles that are being being delivered,

we we do look at a geography in China. China is a big market and that's why I mean, that's why there are a lot of other ev players in there. Um, So it is it is important. Can we talk a little bit about Disney and my understanding is you have a very smallholding of Disney. But you know, we've talked in the show about what's happening with activists, Investor Trey and Nelson Pelts. Does Pelts have a point? That is the question? I think the short answer is absolutely. You know,

let's let's let's look at a couple of facts. One is I think it starts. I think the issues with Disney start at the top. And I don't mean Bob I your I mean the board. I think the board has The board has sat around and watched this company since two thousand sixteen underperformed the S and P five hundred by almost sixty and but for one director, they've all sat through all of that. Uh. They also sat through trying to figure out how to find a successor

for Eiger year after year. I mean he I think it was four different contracts, the extensions that he had before before he ended up vanded up picking shapec um. But he does. He does have a point. And I think that in many respects Bob Iger. There's a halo around Bob Iger. And people say, well, you know, but it's Disney. Well, it is Disney, but but the performance

of Disney has been miserable. Uh. And and you know, I think that Nelson Pell's I'm not a big fan of activists in general, but but I think that he can bring a discipline too. He may be able to bring a discipline to Disney that it's been lacking. Uh, you know, with whether it's on expenses, whether it's on where M and a um, there are a lot of

things that did it has done wrong. But again everybody, everybody has this soft spot in their heart for Disney and and soft spot in their heart form for Bob Iger. But at the end of the day, it's for us. It's an investment, and that investment has not been very good. So you're having one of twelve seats be Nelson Pell's when he's come and been very honest about I'm not looking to replace Iger. I'm just you know, I think we could use some strategy help. I think that the

Pells might be able to help them. Mark Sto call very matter of facts with the investors perspective, No magic with Disney, Senior portfolio manager in CEO Adams found Mark so call, We're great, what to have you on? But today's going viral. We had to do the story coming out of Twitter in Asia because did you hear Singapore office of Twitter it's Asia headquarters. No less, Eddie. We're told to empty out their desks and vacate the premises

by the end of the day. This is all according to people familiar with the situation, and we kind of know why in a musk continuing to lower expenses around the globe, but you know more than anyone in or was he even paying his rent? So there's so many threads to this. The first is that that office was gutted unfortunately. You know, there was a big victim of the layoffs. But it's completely in congress with the policy

at San Francisco office. Because remember in San Francisco, according to sources, and you've seen the photos, they put beds into the office so that employees could sleep there overnight, which of course upset the city efficient sinks he took beds. So am I right? He's not paying the landlords in San Francisco, but everyone's still made to work there, whereas perhaps he's not. Maybe that's the argument here, perhaps paying over in Singapore, and that's why they they kicked out.

Didn't the landlords say that there's still a current tenant. He's just not paying the rent. You imagine, just stop paying your rent. Well, that's what's happening here. Don't go doing that meanwhile, that does it. From this edition of Bloom Technology Friday, were pleased to say we're having a music conversation Luminate CEO Rob Jonas, who is in charge of the world's largest music data company, and speaking of audio don't forget to check out the podcast I Heart Radio, Apple, Spotify,

wherever you get your podcast. There's a lot to review this week. This is Bloomberg