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P&L: Josh Green Goes Inside The Trump Bunker · Bloomberg Intelligence

• 0:04
  Speaker 1: Welcome to the Bloomberg pim L Podcast. I'm pim Fox.
• 0:08
  Speaker 1: Along with my co host Lisa Abramowitz. Each day we
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  Speaker 1: bring you the most important, noteworthy, and useful interviews for
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  Speaker 1: you and your money, whether at the grocery store or
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  Speaker 1: the trading floor. Find the Bloomberg p L Podcast on iTunes,
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  Speaker 1: SoundCloud and at Bloomberg dot com. All right, let's turn
• 0:30
  Speaker 1: our attention now to a program in the future. It
• 0:33
  Speaker 1: maybe a Donald Trump program, and it may come to
• 0:35
  Speaker 1: you courtesy of Facebook. I want to bring in Joshua
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  Speaker 1: Green are Washington correspondent for Bloomberg News. He also also
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  Speaker 1: the co author of this week's cover story of Bloomberg
• 0:45
  Speaker 1: Business Week, which is as much about the future of
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  Speaker 1: political campaigns as it is about marketing. Josh Green, thank
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  Speaker 1: you very much for being with us. All right, So,
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  Speaker 1: in fact, there was a quote in this story where
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  Speaker 1: I believe someone who interviewed said, oh, yeah, you know,
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  Speaker 1: political campaigns, they just like marketing campaigns. Yeah. My my source,
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  Speaker 1: high level Trump official, liking at the selling burgers in
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  Speaker 1: a burger shop, that you have to you have to
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  Speaker 1: appeal to a wide audience and convince them that you
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  Speaker 1: got the right product and doing that is the key
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  Speaker 1: to success. All Right, I kind of pushed you ahead
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  Speaker 1: a little bit. I want you to step back. Tell
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  Speaker 1: everybody what the story is about and why this is
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  Speaker 1: such an interesting look inside a political campaign. Well, I've
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  Speaker 1: been covering the Trump campaign the whole cycle, and during
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  Speaker 1: that time and speaking to a few senior Trump officials
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  Speaker 1: and members of the family. Uh, they have said the
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  Speaker 1: contrary to the public perception that Trump's campaign is really
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  Speaker 1: just Trump and a Twitter feed, they actually have a
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  Speaker 1: pretty sophisticated voter targeting and turnout operation that they built
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  Speaker 1: in San Antonio, Texas of all places. So I appealed
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  Speaker 1: to them to let me go down and check it out,
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  Speaker 1: and along with my colleague Sasha Eisenberg, we got exclusive
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  Speaker 1: access to Trump's digital operations for the cover story in
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  Speaker 1: this week's Business Week. So what did it look like
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  Speaker 1: in their in their sort of campaign operations that could
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  Speaker 1: easily parlay into a media It's like, on what what
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  Speaker 1: interstate is it? I forty? I think it's four ten.
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  Speaker 1: But it looks honest, Yeah, any other campaign headquarters. You know,
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  Speaker 1: you've got Trump signs everywhere, You've got a lot of
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  Speaker 1: you know, young eager. Um, uh, kind of geeky looking people. Frankly,
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  Speaker 1: this is a digital operations. They also had a call
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  Speaker 1: center there where the folks were a little older and
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  Speaker 1: tend to be carrying guns. Who's the guy that looks
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  Speaker 1: like a martial mixed martial arts expert. This would be
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  Speaker 1: Brad par Scale, who is Trump's digital director and has
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  Speaker 1: a wild backstory. Uh, never been involved in politics before,
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  Speaker 1: but did make the Trump Foundation's website, also made Trump
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  Speaker 1: wineries websites. Is a guy who's in the Trump orbit,
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  Speaker 1: and as Trump cycled through various campaign staffers, par Scale
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  Speaker 1: kept rising with each successive turnover to the point where
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  Speaker 1: he now runs the campaign's media budget and oversees the
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  Speaker 1: staff of about a volunteers, more people down in San
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  Speaker 1: Antonio than there are in Trump Tower, New York. So, um,
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  Speaker 1: you said that they carry guns, Well that was you know,
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  Speaker 1: you don't usually see that at campaign headquarters. Remember this
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  Speaker 1: is in Texas and San Antonio, Texas to Republican candidate,
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  Speaker 1: open carry gun law, second Amendment, big big deal to
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  Speaker 1: voters down there. So yeah, they have a volunteer call
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  Speaker 1: center where you call Trump State hundred number. The volunteers
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  Speaker 1: answering the phone, and sure enough the guy started talking
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  Speaker 1: about look down and he has a gun hanging off
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  Speaker 1: the ship. Evidently he brings into work every day just
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  Speaker 1: in case, you know, somebody I don't know bum rushes
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  Speaker 1: him or something and he feels the need to defend himself.
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  Speaker 1: But you wouldn't see that in a Hillary Clinton headquarters
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  Speaker 1: for sure. Um And frankly, I don't know. If you
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  Speaker 1: go around uh San Antonio, you find a lot of
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  Speaker 1: people with guns just sort of hanging off them either
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  Speaker 1: despite the free carry laws. But so we're what's the
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  Speaker 1: what's the end goal of this operation? I mean, it's
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  Speaker 1: obviously to get Donald Trump elected president? But is there
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  Speaker 1: some sort of ambition lying underneath this that goes beyond
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  Speaker 1: the election? Yeah? I think so. I mean Jared Kushner's
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  Speaker 1: son in law, is the one who really put together
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  Speaker 1: this organization after Trump won the nomination, you know, and
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  Speaker 1: up to that point he really wasn't much more than
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  Speaker 1: just Trump and a Twitter feed. But I think Kushner
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  Speaker 1: recognized that, look, if we're gonna run a presidential campaign,
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  Speaker 1: we need a serious, small dollar fundraising operation. Reached down
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  Speaker 1: to a lot of Silicon Valley marketers and essentially looked
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  Speaker 1: at it like a like like you would any ordinary
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  Speaker 1: business problem, like we need to get customers in the door.
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  Speaker 1: So what they did was spend an awful lot of money, uh,
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  Speaker 1: some of which they raised selling the Trump hats. They
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  Speaker 1: also had a bunch of autopen machines down they're signing
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  Speaker 1: Trump hats like full time, all day, every day to
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  Speaker 1: sell the people. But they've used this, this influx of
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  Speaker 1: money to essentially build a massive Facebook list of Trump
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  Speaker 1: supporters and donors, which and this is key because it
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  Speaker 1: was paid for with Trump campaign funds. Trump's campaign will
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  Speaker 1: own this after the election win or lose, and could
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  Speaker 1: conceivably pored it over to become the audience or say
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  Speaker 1: a Trump TV network or a Trump new media venture.
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  Speaker 1: So as usual, Trump kind of has his eye, I
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  Speaker 1: think on the bottom line, regardless of what the outcome is.
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  Speaker 1: Un November eight, Josh, could he also end up selling
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  Speaker 1: or at least renting some of that information to the
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  Speaker 1: Republican National Committee? Is his operation more sophisticated than the GOP? Well,
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  Speaker 1: yes and no. His list is bigger than the GOP's
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  Speaker 1: because it includes not only the r n c's information,
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  Speaker 1: which they handed over to Trump when he became the nominee.
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  Speaker 1: But also information that Trump's own campaign has managed to
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  Speaker 1: go out and harvest from commercial databases from supporters. So
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  Speaker 1: he has a very big and very valuable list that
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  Speaker 1: strategists would value anywhere between probably fifty and a hundred
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  Speaker 1: million dollars. Now, what what presidential means typically do if
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  Speaker 1: they lose is they can license that to other candidates,
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  Speaker 1: other entities. You know, Mitt Romney has a list that
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  Speaker 1: you know he'll rent out to other Republicans to raise money.
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  Speaker 1: So Trump could could do that. But but a wink Trump,
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  Speaker 1: that could also be broader commercial applications, and so he
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  Speaker 1: could really do any number of things with it. Thanks
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  Speaker 1: very much, Josh Green. He is our national correspondent Bloomberg
• 6:09
  Speaker 1: Business Week cover story getting inside Bunker Trump. This is
• 6:15
  Speaker 1: Bloomberg Trunk. We just can't stop saying that name. Today,
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  Speaker 1: Ganette dropped its six eighty three million dollar bid for
• 6:34
  Speaker 1: rival Trunk. Here with us to break down what this
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  Speaker 1: means for both companies going forward, why it failed, and
• 6:40
  Speaker 1: everything else related to Trunk is Alex Srman of Bloomberg News. Alex,
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  Speaker 1: thank you so much for being with us. How long
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  Speaker 1: does this segment when we only four minutes? Can we
• 6:47
  Speaker 1: just go back and forth saying Trunk, I'll say Trunk
• 6:50
  Speaker 1: and then you can please you're speaking my language. Um. Yeah, Look,
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  Speaker 1: this is something that I've been following for months now.
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  Speaker 1: This is this is going to be in a Harvard
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  Speaker 1: case study on how to do M and A. Um.
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  Speaker 1: Ghannette came after Trunk a few months ago, offering twelve
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  Speaker 1: dollars and cents a share for Trunk after just three
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  Speaker 1: months or so after Trunk sold shares to h it's
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  Speaker 1: new chairman, Michael Farrow at eight dollars and seventy five
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  Speaker 1: cents a share. So it seemed like if Trunk felt
• 7:18
  Speaker 1: like the value of its company was eight dollars and
• 7:20
  Speaker 1: seventy five cents or roughly in that ballpark in February,
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  Speaker 1: then it should be certainly worth twelve just three months
• 7:28
  Speaker 1: or so later. And yet Michael Farrow said, no, we
• 7:30
  Speaker 1: feel like it drastically undervalues the company. So ghanett up,
• 7:34
  Speaker 1: that's been to fifteen dollars a share, and still Trunk
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  Speaker 1: said no, this is not good enough, simultaneously selling more
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  Speaker 1: shares to a billionaire Patrick Sun Chiang four fifteen dollars
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  Speaker 1: a share. But the thinking they're being that Patrick Sun
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  Speaker 1: Chiang was going to participate in the growth strategy, which
• 7:49
  Speaker 1: I want to talk about in a minute of trunk,
• 7:51
  Speaker 1: so it's not worth it to just sell out. So
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  Speaker 1: Gannette went back to the drawing board and offered eighteen
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  Speaker 1: dollars and seventy five cents a share, an enormous premium
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  Speaker 1: a company that earlier this year was trading under eight
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  Speaker 1: dollars a share. But of course it's in the hyper
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  Speaker 1: growth industry of newspapers. So finally, yes, finally the two
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  Speaker 1: sides reached a deal. Uh, And yet the financing was
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  Speaker 1: not there at eighteen dollars. In other words, banks felt
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  Speaker 1: uncomfortable lending at that price because of the deteriorating businesses,
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  Speaker 1: and potentially because of the banks that Gannette used in
• 8:25
  Speaker 1: this case, which were p NC, SunTrust, Jefferies. These are
• 8:29
  Speaker 1: not sort of your bulge bracket banks, and many of
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  Speaker 1: the sources I'm speaking to today have told me they
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  Speaker 1: think that if Gannette had used different banks, maybe this
• 8:38
  Speaker 1: would have worked out differently. But in essence, this morning
• 8:41
  Speaker 1: we learned that Gannette throwing in the towel. So these
• 8:43
  Speaker 1: two companies will operate as standalone entities, and the shares
• 8:47
  Speaker 1: of Trunk down more than fifteen and a half percent currently,
• 8:52
  Speaker 1: which basically they're trading about ten dollars ten dollars a share. Trunk.
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  Speaker 1: The name was supposed to, as you described earlier, to
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  Speaker 1: do with Tribune online content, but it also is a
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  Speaker 1: term if you happen to be in the British Isles.
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  Speaker 1: It describes the tip jar in a restaurant. In fact,
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  Speaker 1: there's the name of a person is called the trunk master,
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  Speaker 1: and that's the person that you know gets the tips
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  Speaker 1: and sort of pays out everybody in the establishment in
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  Speaker 1: details now, But the reason I go there is because
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  Speaker 1: this is not me saying. This is Mr Farrow who
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  Speaker 1: described it this way when they changed the name of
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  Speaker 1: the company. Are there pieces of trunk that really are
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  Speaker 1: worth a decent amount of money. Yeah, there's a reason
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  Speaker 1: why Kennette wanted to go after this. And they have
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  Speaker 1: a couple of prize assets. They own the l A Times,
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  Speaker 1: that's probably the biggest prize and they own the Chicago Tribune,
• 9:43
  Speaker 1: which is another prize asset. Gnnett owns USA today, but
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  Speaker 1: after that they don't own any large regional newspapers. So
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  Speaker 1: the feeling would be that there are a lot of
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  Speaker 1: potential synergies the big newspapers could sort of funnel into
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  Speaker 1: USA today in l A. Is there an l A magnet?
• 9:59
  Speaker 1: Is there a person in Los Angeles? Patrick? Right? I mean,
• 10:03
  Speaker 1: why not just have because Jeff Bezos correction, why not
• 10:06
  Speaker 1: him just and in fact, from my understanding that that
• 10:09
  Speaker 1: actually that structure was in fact contemplated here, but they
• 10:13
  Speaker 1: had already gone so far down the road with sort
• 10:15
  Speaker 1: of the transaction as is, meaning Genet buying Trunk that
• 10:19
  Speaker 1: in the days that in the recent days where this
• 10:21
  Speaker 1: deal was coming apart, it just seemed like it was
• 10:24
  Speaker 1: sort of a nonstarter from Trunk. So maybe this continues.
• 10:26
  Speaker 1: Maybe maybe he comes in now and he says, okay,
• 10:29
  Speaker 1: if Trunk can't push its stock price back up to
• 10:32
  Speaker 1: at least fifteen dollars a share. Look, Patrick soun Sunk
• 10:35
  Speaker 1: himself is underwater significantly now because he bought in that
• 10:38
  Speaker 1: fifteen a share and the stock is currently under ten
• 10:40
  Speaker 1: dollars a share. Trunk reports earnings later today, and certainly
• 10:43
  Speaker 1: they're going to speak to what their go forward strategy is.
• 10:47
  Speaker 1: But I want to talk about what that might be.
• 10:50
  Speaker 1: There is a video online for people that have not
• 10:52
  Speaker 1: seen this where Trunk describes why they changed their name
• 10:55
  Speaker 1: to Trunk. And I want to read you two sentences
• 10:59
  Speaker 1: from this video so you have an idea of what
• 11:01
  Speaker 1: you will hear. This is from their chief digital officer
• 11:04
  Speaker 1: and him, as you pointed out, the whole strategy for
• 11:06
  Speaker 1: Trunk is to go online. Here's the quote. One of
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  Speaker 1: the key ways we're going to harness the power of
• 11:11
  Speaker 1: our journalism is to have an optimization group. This Trunk
• 11:15
  Speaker 1: team will work with all of the local markets to
• 11:18
  Speaker 1: harness the power of our local journalism, feed it into
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  Speaker 1: a funnel, and then optimize it so we reach the
• 11:24
  Speaker 1: biggest global audience possible. So there it is. There's the
• 11:28
  Speaker 1: strategy optimize. What does that doesn't mean anything? Pim It
• 11:34
  Speaker 1: is a bunch of nonsense. So I have no idea
• 11:38
  Speaker 1: what they're going to say today. If it's just gonna
• 11:40
  Speaker 1: be buzzwords, maybe maybe turnalists will be put into it.
• 11:44
  Speaker 1: But this is also tell me about the distribution that exists,
• 11:47
  Speaker 1: because as you said, there's got to be some value
• 11:49
  Speaker 1: here for somebody that knows what they're do. Sure, Look,
• 11:51
  Speaker 1: the whole idea of of newspapers going online, you can
• 11:55
  Speaker 1: sell the so called native ads, and you can make
• 11:57
  Speaker 1: a little bit more money by sort of building the
• 11:59
  Speaker 1: ads right in to the content and having them. And
• 12:04
  Speaker 1: of course video adds that you can put online make
• 12:07
  Speaker 1: a lot more money than sort of your display advertising.
• 12:10
  Speaker 1: And you can go to a pay wall. And there's
• 12:12
  Speaker 1: all sorts of things that have been tried and none
• 12:14
  Speaker 1: of it really works. I mean, you know, the newspaper
• 12:17
  Speaker 1: industry continues to decline. The transition from print to online
• 12:21
  Speaker 1: has certainly not been a flying success for any newspaper companies.
• 12:25
  Speaker 1: But that's I was gonna wonder, you know, is Trunk
• 12:28
  Speaker 1: more valuable? Uh? Is split into pieces? Right? I mean,
• 12:32
  Speaker 1: if somebody buys the l A Times, the Chicago Tribune
• 12:35
  Speaker 1: rather than buying the whole thing and optimizing and funneling
• 12:38
  Speaker 1: and etcetera, maybe maybe we'll have to see, you know
• 12:41
  Speaker 1: that the idea here is the answer to that is no,
• 12:43
  Speaker 1: according to Michael Farrow, that this company really is going
• 12:46
  Speaker 1: to do something different than the rest of the newspaper industry,
• 12:48
  Speaker 1: and therefore it was worth it to refuse a takeout
• 12:51
  Speaker 1: offer at fifteen a share. But how much rope do
• 12:54
  Speaker 1: they have here before shareholders revolt was going to the
• 12:57
  Speaker 1: big question. I was gonna say, just give you the numbers, right,
• 13:00
  Speaker 1: because you always work off the off the sales, right,
• 13:02
  Speaker 1: the numbers right, So we're talking one point six is
• 13:04
  Speaker 1: a one point six billion dollar sales for the year, right,
• 13:09
  Speaker 1: and you come out with net income of eighty million dollars, right,
• 13:12
  Speaker 1: Net income of eighty million dollars on a one point
• 13:15
  Speaker 1: six billion sale exactly, So that is not a strong business,
• 13:18
  Speaker 1: as is uh. And again, the the ideas that have
• 13:21
  Speaker 1: been thrown around by the newspaper industry in general, this
• 13:23
  Speaker 1: is not just speak to trunk, have not been so
• 13:26
  Speaker 1: compelling that there has been a wave of you know,
• 13:29
  Speaker 1: euphoria in this industry. And in fact, the reason we
• 13:32
  Speaker 1: see consolidation in the newspaper industry is the same reason
• 13:35
  Speaker 1: we see it in so many industries that in many
• 13:37
  Speaker 1: ways these companies have run out of ideas. And so
• 13:39
  Speaker 1: you can solid it, you can at least cut costs
• 13:41
  Speaker 1: and just look across the entire newspaper industry. When people
• 13:44
  Speaker 1: talk about synergies, you know, everyone says, oh, that means
• 13:46
  Speaker 1: layoffs in the newspaper industry. It's true, certainly, these companies
• 13:50
  Speaker 1: really tighten up. They've been doing it for years, and
• 13:52
  Speaker 1: we just see continued layoffs even at the big national newspapers.
• 13:56
  Speaker 1: I want to thank you very much, Alex Sherman, as
• 13:58
  Speaker 1: always are Bloomberg Deals reporter, giving us the lowdown on
• 14:03
  Speaker 1: Gannette walking away from an acquisition of Tromp pleasure. You
• 14:17
  Speaker 1: know when we get to talk to the CEO of
• 14:19
  Speaker 1: a company, Synaptics, this one particularly. It has a market
• 14:23
  Speaker 1: cap at one point eight billion dollars based in San Jose, California,
• 14:26
  Speaker 1: and you've probably interacted with many of their products because
• 14:29
  Speaker 1: they are leaders in display driver technology. Rick Bergman is
• 14:34
  Speaker 1: the chief executive and he joins us now from our
• 14:37
  Speaker 1: San Francisco studio home to nine sixty Bloomberg nine six.
• 14:41
  Speaker 1: Thank you very much for being with us. Rick Bergman,
• 14:44
  Speaker 1: thank you very much. It's great to be here. Okay,
• 14:46
  Speaker 1: now tell me what's going on with with Synaptics, because
• 14:49
  Speaker 1: you've got to dial back to June. You were in
• 14:51
  Speaker 1: talks perhaps with a Chinese company about a takeover. The
• 14:55
  Speaker 1: stock is up today substantially, but it's down about thirty
• 14:59
  Speaker 1: three so far, uh this year. Maybe just tell us
• 15:02
  Speaker 1: a little like six month history what's been going on
• 15:04
  Speaker 1: at Synaptics. Well, of course, we're a major supplied to
• 15:08
  Speaker 1: all the smartphone manufacturers in a couple of them have
• 15:11
  Speaker 1: had some stumbles over the past six months, and kind
• 15:14
  Speaker 1: of as they go, we go. But based on our
• 15:17
  Speaker 1: guidance in what we just announced last week, we're back
• 15:22
  Speaker 1: in a healthy growth period again for the company. Does
• 15:25
  Speaker 1: that mean that smartphone UH purchases are increasing faster than
• 15:30
  Speaker 1: you've expected, or just that you've got more contracts than
• 15:32
  Speaker 1: you expected? What's that do too? Well? Where we're seeing
• 15:36
  Speaker 1: our growth as an area where we've really innovated, which
• 15:39
  Speaker 1: is around integration. So earlier you mentioned that we're in
• 15:42
  Speaker 1: the display business, and we certainly are, but we're combining
• 15:45
  Speaker 1: that actually with a touch controller, so when you touch
• 15:47
  Speaker 1: your smartphone, that's that Synaptics behind that technology, and we're
• 15:51
  Speaker 1: combining those two and are really leading the industry in
• 15:54
  Speaker 1: that particular area. Well, can you just expand a little
• 15:57
  Speaker 1: bit more on what the strategy of the company has
• 15:59
  Speaker 1: been because I recalled directly that um in that review
• 16:05
  Speaker 1: that you gave. I believe in June UH you talked
• 16:09
  Speaker 1: about that sizeable revenue shortfall during the March quarter and
• 16:13
  Speaker 1: you said that that was going to carry into fiscal
• 16:15
  Speaker 1: Q four. Well, we finished up our fiscal Q four
• 16:19
  Speaker 1: and and and certainly did that come to fruition. That
• 16:23
  Speaker 1: is that what happened because you talked about the week
• 16:24
  Speaker 1: PC business as well. Well, we did have a weaker
• 16:29
  Speaker 1: Q four Now for us, that was June, the September quarter.
• 16:32
  Speaker 1: We just announced it was sequentially growth versus at Q four,
• 16:38
  Speaker 1: So and then we guided to another seventeen percent if
• 16:40
  Speaker 1: you take our midpoint. So, so we feel we we
• 16:43
  Speaker 1: have the growth engines back on track. For Synaptics. Earlier
• 16:46
  Speaker 1: this year, there was a Chinese buyer group. Uh, you're
• 16:50
  Speaker 1: an active negotiations with to possibly take over Synaptics. The
• 16:56
  Speaker 1: shares are down more than of Synaptics so far this year.
• 17:01
  Speaker 1: Is that still on the table? Well, I can't confirm
• 17:05
  Speaker 1: or deny market speculations, and that's kind of in our
• 17:08
  Speaker 1: stance for about a year now. Uh. And so we
• 17:11
  Speaker 1: are focused on growing the company, as I said, and
• 17:14
  Speaker 1: we're actively out there. We've been pretty open about that
• 17:17
  Speaker 1: about looking up targets ourselves for M and A to
• 17:19
  Speaker 1: allow us to go forward with inorganic growth in the
• 17:23
  Speaker 1: human interface area. What would be the natural thing to acquire.
• 17:26
  Speaker 1: I mean, what would be um a natural type of
• 17:29
  Speaker 1: business that you would be interested in acquiring that bolster
• 17:32
  Speaker 1: your existing platform. That's a great question. So as as
• 17:37
  Speaker 1: we discussed, Synaptics is well known for our touch technology
• 17:40
  Speaker 1: and also our our display technology, so you kind of
• 17:42
  Speaker 1: get the touching and seeing part of the human interface experience.
• 17:46
  Speaker 1: So as you can imagine, we're also interested in things
• 17:48
  Speaker 1: like audio or voice, or motion or three D gestures. Well,
• 17:54
  Speaker 1: smells probably ways out there, but uh we we look
• 17:58
  Speaker 1: at other technolog metal goal health technologies certainly also fall
• 18:02
  Speaker 1: under that umbrella. Talking about gross margins and how they
• 18:05
  Speaker 1: are performing at Synaptics well as as in an American
• 18:11
  Speaker 1: company or semi conductor company, our margins are are lower
• 18:14
  Speaker 1: than what you see from other semi conductor companies. We
• 18:17
  Speaker 1: made a strategic decision that we're going to co compete
• 18:20
  Speaker 1: in the consumer markets like smartphones are PCs, and that's
• 18:24
  Speaker 1: how we're going to get growth and actually grow our
• 18:26
  Speaker 1: earnings for share. What what that's meant over the last quarters,
• 18:30
  Speaker 1: our gross margins have come down, But as I mentioned conversely,
• 18:34
  Speaker 1: is what's going up is our top line. You know,
• 18:36
  Speaker 1: assuming that you're talking about how Synaptics really relies on
• 18:39
  Speaker 1: the smartphone industry. There's been a lot of talk about
• 18:42
  Speaker 1: how the industry is is saturated, that it's not going
• 18:45
  Speaker 1: to expand that much more. Anyone who wants a smartphone
• 18:48
  Speaker 1: probably has one at this point. What's your take on this, Well,
• 18:51
  Speaker 1: we have some great innovations coming and when people talk
• 18:54
  Speaker 1: about slow growth, it's still mid single digit type of growth.
• 18:59
  Speaker 1: And you're talking about a billion and a half smartphones
• 19:01
  Speaker 1: per year sold. So if you just do the math,
• 19:03
  Speaker 1: it's a hundred million units of smartphones in addition each
• 19:07
  Speaker 1: year that we can can participate and where and our
• 19:09
  Speaker 1: plan is to grow our footprint within that smartphone market.
• 19:12
  Speaker 1: We've added fingerprint sensors is another example where we've really
• 19:17
  Speaker 1: grown our dollar contribution per phone. Rick bergband president and
• 19:21
  Speaker 1: CEO of Synaptics, thank you so much for being with us.
• 19:34
  Speaker 1: You know, Lisa Abramo, it's uh. The price of oil
• 19:37
  Speaker 1: is trading higher by more than eight percent right now
• 19:40
  Speaker 1: on the New York NIMEX. This comes after a an
• 19:44
  Speaker 1: explosion in the western Shelby County, Alabama, and this is
• 19:48
  Speaker 1: a pipeline that was being worked on and apparently it
• 19:53
  Speaker 1: supplies a great deal of gasoline to the southeast. In fact,
• 19:58
  Speaker 1: this is a sort of major hub for for a
• 20:01
  Speaker 1: major transit point. I beg your pardon for gasoline, and
• 20:04
  Speaker 1: here to tell us about it is Laura Blewett, our
• 20:06
  Speaker 1: own first word Bloomberg first word oil reporter. Laura, thank
• 20:10
  Speaker 1: you very much for being with us. Tell us about this,
• 20:12
  Speaker 1: this pipeline, it's connection to higher gas prices in the southeast. Yes,
• 20:18
  Speaker 1: absolutely so. This is the major artery shifting gasoline from
• 20:22
  Speaker 1: the Gulf Coast refining hub into the main consuming hub
• 20:25
  Speaker 1: in New York. Um. It's the pipeline that was hit yesterday.
• 20:29
  Speaker 1: It flows from Houston to Greensboro, North Carolina, and then
• 20:32
  Speaker 1: there are some connecting lines that Hallett Field north to
• 20:36
  Speaker 1: New York. So. Um. This explosion comes about uh six
• 20:41
  Speaker 1: or seven weeks after another spill in September that shut
• 20:45
  Speaker 1: the line for twelve days. Um. So Um. They were
• 20:48
  Speaker 1: working on the pipeline, working to make some repairs after
• 20:51
  Speaker 1: that spill, and it looks like in the midst of
• 20:54
  Speaker 1: that work, UM, a track ho was doing some digging
• 20:58
  Speaker 1: and it hit the line. And I'm right now colonial
• 21:02
  Speaker 1: pipeline has shut down. Both of the main lines that
• 21:04
  Speaker 1: ship gasoline and diesel up to the Northeast. And I
• 21:08
  Speaker 1: just want to correct myself. I believe gasoline is higher
• 21:11
  Speaker 1: on the nymex It is higher dollar fifty three a gallon.
• 21:16
  Speaker 1: Right now on the n I mix up eight and
• 21:18
  Speaker 1: a quarter percent. I beg your pardon. Yeah, that was
• 21:21
  Speaker 1: a flash jump yesterday on the news. M Gasoline traders
• 21:24
  Speaker 1: here in the US that I speak to, we're up
• 21:26
  Speaker 1: all night trading. Um. This looks like at this point
• 21:29
  Speaker 1: it's all speculation, but this line could be shut down
• 21:32
  Speaker 1: for several weeks, which would have a huge, huge impact
• 21:36
  Speaker 1: on drivers in the Northeast stand Eastern Seaboard. So pair
• 21:41
  Speaker 1: this with the dynamic that's the opposite dynamic over in
• 21:45
  Speaker 1: the Middle East, where it seems like perhaps OPEC will
• 21:48
  Speaker 1: struggle to get some agreement together on limiting UH limiting output. Um,
• 21:53
  Speaker 1: and there is evidence that US stockpiles are increasing. I mean,
• 21:56
  Speaker 1: does this materially eat into those stockpiles and potentially UH
• 22:02
  Speaker 1: put a floor under oil prices regardless of an opaque agreement. Yes,
• 22:06
  Speaker 1: I think it would actually because I'm at this point, Um,
• 22:10
  Speaker 1: the gasoline that's normally produced in the Houston area is
• 22:12
  Speaker 1: going to be trapped down here in the Gulf Coast,
• 22:15
  Speaker 1: so we're going to have less need for the crude
• 22:17
  Speaker 1: supplies to process into gasoline, So we're going to see
• 22:21
  Speaker 1: demand drop for oil in this area. We're already seeing
• 22:24
  Speaker 1: some of the Louisiana light sweet um crude going down
• 22:29
  Speaker 1: because the demand is going to be lower. So, you know,
• 22:32
  Speaker 1: it's interesting because oil westex oil spot price right now
• 22:37
  Speaker 1: does not appear to be moving that much. It seems
• 22:40
  Speaker 1: like both factors are kind of working at odds. I mean,
• 22:43
  Speaker 1: how will this sort of work itself out, which which
• 22:46
  Speaker 1: one will win? At this point, it looks like gasoline
• 22:50
  Speaker 1: will win. Um. If you look at the price of
• 22:53
  Speaker 1: gasoline relative to w t I that has surged as well.
• 22:57
  Speaker 1: And fundamentally, this is the gest issue in the US
• 23:01
  Speaker 1: that we've seen probably since Superstorm Sandy or Katrina. UM.
• 23:05
  Speaker 1: So as Americans love to drive, you know, we're going
• 23:08
  Speaker 1: to see that this is going to be driving the
• 23:11
  Speaker 1: market in the next couple of weeks. And just to
• 23:14
  Speaker 1: to add to your reporting, uh Laura, that that one
• 23:18
  Speaker 1: person has been killed and five others injured in this
• 23:21
  Speaker 1: in this explosion, we don't know the fate of those Uh, injured,
• 23:25
  Speaker 1: of course, a terrible accident. Is Is there any redundancy
• 23:30
  Speaker 1: built into this system? Laura, UM, it's really a very
• 23:35
  Speaker 1: very important pipeline that UM, we don't see too much.
• 23:39
  Speaker 1: Didn't they know there's another pipeline called the Plantation that
• 23:43
  Speaker 1: supplies UM about half as much gasoline as Colonial and
• 23:48
  Speaker 1: UM there's some other US laws that restrict barges or
• 23:52
  Speaker 1: tankers from moving gasoline from Houston up to the Atlantic coast.
• 23:57
  Speaker 1: So we're going to have to turn to Europe the
• 23:59
  Speaker 1: other four in origins for those supplies. Laura Blewett, Bloomberg
• 24:04
  Speaker 1: first word oil reporter, Thank you so much for being
• 24:06
  Speaker 1: with us. This is something that we'll have to keep
• 24:08
  Speaker 1: an eye on to see how long it will take
• 24:11
  Speaker 1: before this oil this gasoline will continue to be pumped,
• 24:15
  Speaker 1: and how long it'll take it to get it back online.
• 24:23
  Speaker 1: Thanks for listening to the Bloomberg P and L podcast.
• 24:25
  Speaker 1: You can subscribe and listen to interviews at iTunes, SoundCloud,
• 24:29
  Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm
• 24:34
  Speaker 1: out there on Twitter at pim Fox. I'm out there
• 24:37
  Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast.
• 24:40
  Speaker 1: You can always catch us worldwide on Bloomberg Radio.