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Nvidia and Target Earnings · Bloomberg Intelligence

0:02
Speaker 1: This is Bloomberg Intelligence with Alex Steinhl and Paul'sweenye.
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Speaker 2: The real AP performance has been the US corporate high yield.
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Speaker 3: Are the companies lean enough? Have they trimmed all the fats?
0:11
Speaker 2: The semiconductor business is a really cyclical.
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Speaker 1: Business, breaking market headlines and corporate news from across the globe.
0:18
Speaker 3: Do investors like the M and A that we've seen?
0:21
Speaker 2: These are two big time blue chip companies.
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Speaker 3: The window between the peak and cut changing super fast.
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Speaker 1: Bloomberg Intelligence with Alex Steinhl and Paul'sweenye.
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Speaker 2: On Bloomberg Radio. On Today's Bloomberg Intelligence Show, we dig
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Speaker 2: inside the big business stories impacting Wall Street and the
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Speaker 3: Each and every week we provide in depth research and
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Speaker 3: data on some of the two thousand companies and one
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Speaker 3: hundred and thirty industries our analysts cover worldwide.
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Speaker 2: Today, we'll take a look at how one company is
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Speaker 2: looking to fix your terrible board meetings.
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Speaker 3: Plus we'll discuss why many Swings Day voters say they're
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Speaker 3: worried about violence surrounding the US presidential election.
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Speaker 2: But first we dive into big tech and in Vidia.
0:59
Speaker 2: This week, maker gave a bullish forecast for second quarter.
1:02
Speaker 3: Revenue Nvidia also reported that its sales in the first
1:04
Speaker 3: quarter more than triple to twenty six billion, and this
1:07
Speaker 3: shows that spending on artificial intelligence computing remains strong for more.
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Speaker 2: We were joined by Kunjon Sobani, Bloomberg Intelligence Senior semiconductor analyst.
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Speaker 2: We first asked for his takeaways from Nvidia's results.
1:19
Speaker 4: Demand on most of their products keep running ahead of supply.
1:23
Speaker 4: We don't see any slowing down in terms of purchasing
1:27
Speaker 4: from their customers. In fact, beyond their largest cloud customer,
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Speaker 4: enterprise and consumer intern companies are coming in strong, so
1:35
Speaker 4: we don't see any sort of big risk that says
1:37
Speaker 4: they cannot continue.
1:38
Speaker 2: So, Kunjon, I was selling Alexon. When we get smart
1:41
Speaker 2: people on like yourself, I like to ask the question
1:43
Speaker 2: about competition. I'm kind of surprised that, you know, in
1:47
Speaker 2: Nvidia has this competitive leadership position relative to everybody else.
1:51
Speaker 2: How proprietary is their chip design versus I don't know
1:55
Speaker 2: the AMDs of the world, even as Cisco. What is
1:59
Speaker 2: the competitive landscape?
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Speaker 4: Yeah, I mean, look, they were I would say almost
2:03
Speaker 4: two to even arguably three years ahead of everyone, and
2:07
Speaker 4: it's not easy in the chip landscape to catch up
2:10
Speaker 4: when someone has that kind of a lead. They have
2:13
Speaker 4: actually aggressively gone out and out in it their peers.
2:18
Speaker 4: Before they were on an eighteen to twenty four month
2:21
Speaker 4: product cycle, Now they are on a twelve month product cycle.
2:24
Speaker 4: So they just keep staying ahead of their combination. Their
2:26
Speaker 4: combination is trying to catch up. AMD has made significant
2:29
Speaker 4: progress and now is another second viral alternative in the market.
2:34
Speaker 4: Hence you see that in their significant growth as well.
2:37
Speaker 4: But we don't think at this point there is anyone
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Speaker 4: else who can rival the total system tco and performance
2:43
Speaker 4: that they have.
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Speaker 3: I was mentioning earlier that Nvidia gets about forty percent
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Speaker 3: its revenue from the big four players, Microsoft, Meta Alphabet,
2:49
Speaker 3: and Amazon. What kind of risk is that, if any?
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Speaker 4: I mean there have been concerns around it. So there's
2:55
Speaker 4: two good data points that came out of this print.
2:58
Speaker 4: One that concentration did rid use for the very first time,
3:01
Speaker 4: and what we liked it, It was not reduced because
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Speaker 4: the cloud guys slowed their purchasing. In fact, those top
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Speaker 4: four guys that are expected to increase their capec spent
3:10
Speaker 4: by forty five percent this year and they are all
3:12
Speaker 4: lined up to purchase its newest Blackwell products. But what
3:16
Speaker 4: was good was that the share was taken by strong
3:19
Speaker 4: enterprise demand, which we really like because that is much
3:22
Speaker 4: more diversified and sticky.
3:24
Speaker 2: Kunjan. Let's say I'm at Amazon and I buy one
3:26
Speaker 2: of nvidious chips. When do I have to replace it?
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Speaker 5: Question?
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Speaker 4: There's two answers to it. If we were in a
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Speaker 4: normal sector semicaractor cycle like you are in smartphones or PCs,
3:39
Speaker 4: the refreshed time would be longer, so I would say
3:43
Speaker 4: on ideally three to five years. But what's going on
3:46
Speaker 4: right now is all of these customers are just racing
3:48
Speaker 4: against each other, so they cannot afford to stop. So
3:52
Speaker 4: as soon as a newer, better chip is available that
3:54
Speaker 4: they can change, they are going to change.
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Speaker 3: What would stop all this? We know that AI is
4:00
Speaker 3: going to grow, We know that there will be demand
4:02
Speaker 3: for chips. We know all that. That's a structural shift
4:05
Speaker 3: within the economy. But what makes it cyclical?
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Speaker 4: I think the first point of cyclicality would be when
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Speaker 4: the demand momentum stops, which we haven't seen no signs of. Look,
4:17
Speaker 4: the supply keeps on coming up, so at some point
4:20
Speaker 4: demand is going to be meeting supply. And after that,
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Speaker 4: if we see any kind of weakness in demand. Look, look,
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Speaker 4: if the largest cloud providers don't see return on that investment,
4:30
Speaker 4: don't see monetization benefit, don't see their earnings and revenue
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Speaker 4: grow from these investments, that's when we can start worrying
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Speaker 4: about sort of a cyclical DOWNTOWND.
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Speaker 2: All right, So how else in your universe of semiconductors,
4:44
Speaker 2: how else do you if you play this trend?
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Speaker 4: Look, it's still Nvidia still remains sort of the best
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Speaker 4: pure play AI play in semiconductors. So I don't know
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Speaker 4: why you would want to look elsewhere, but if you
4:54
Speaker 4: were forced to, we also like you know, players like
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Speaker 4: broad Common MA when it comes to AI networking, and
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Speaker 4: it comes to the ask chips, which and media's largest
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Speaker 4: customers are designing themselves. So these are the two areas
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Speaker 4: where we see significant growth coming in over the next
5:13
Speaker 4: two years.
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Speaker 2: Our thanks to Kunjan Sobani, Bloomberg Intelligence senior semiconductor analysts.
5:19
Speaker 3: We move now to the home improvement retailer. Low's Lowe
5:21
Speaker 3: said the comparable sales fell four point one percent in
5:24
Speaker 3: the first quarter, though they were better than analysts projected.
5:27
Speaker 2: This all comes as uncertainty around interest rates and inflation
5:29
Speaker 2: continue to weigh on home improvement demand.
5:32
Speaker 3: For more on all of this, we were joined by
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Speaker 3: Drew Redding, Bloomberg Intelligence US home building analyst.
5:36
Speaker 2: First asked Drew for his key takeaways on Loew's most
5:39
Speaker 2: recent report.
5:40
Speaker 6: Quarter was a little bit of a tug of war
5:41
Speaker 6: between sales and margins. Part of that sales performance was
5:45
Speaker 6: due to the fact that there was a more promotional
5:47
Speaker 6: environment out there. If you think back to when Home
5:50
Speaker 6: Deepot reported last week, they cite a late start to
5:53
Speaker 6: spring is something that muted sales lows actually said. Spring
5:57
Speaker 6: got off to a good start, and that has to
5:58
Speaker 6: do with them being more we're aggressive on promotions as
6:02
Speaker 6: part of their Spring Fest, and I think that really
6:04
Speaker 6: speaks to, you know, what we're seeing really across the
6:07
Speaker 6: retail landscape with the consumer, and that's that they're looking
6:09
Speaker 6: for value wherever they could get it. Now, they did
6:13
Speaker 6: reaffirm their full year operating margin guidance, but that's going
6:16
Speaker 6: to require the company to execute on some internal initiatives.
6:19
Speaker 6: In the back half of the year. Loses made good
6:22
Speaker 6: progress in improving their their margin profile and them narrowing
6:26
Speaker 6: the gap with home Depot has really been a key
6:29
Speaker 6: that investors have kind of you know, grasped onto. So
6:32
Speaker 6: the fact that they're taking a little bit of a
6:34
Speaker 6: step back here maybe making them a little bit uneasy.
6:37
Speaker 3: How much would the stock have to re rate for
6:40
Speaker 3: investors and analysts to say, okay, fine, the margins are suffering,
6:43
Speaker 3: but at least the volume and the sales are there.
6:46
Speaker 6: Yeah, Well, the stock is still trading above you know,
6:49
Speaker 6: the ten year average, even if you go back to
6:51
Speaker 6: prior to the pandemic. So from a pure valuation perspective,
6:55
Speaker 6: you know, it's still a little bit elevated. The move
6:58
Speaker 6: they've made on margins and now rowing the gap with
7:00
Speaker 6: Home Depot has been impressive over the last couple of years,
7:03
Speaker 6: So I think, you know, the bulls would argue that
7:05
Speaker 6: this is kind of a one off, and as we
7:08
Speaker 6: get to the back half of the year, margins start
7:10
Speaker 6: to improve as they implement some of their PPI initiatives,
7:14
Speaker 6: And in terms of sales, you know, we're not expecting
7:17
Speaker 6: a huge rebound in sales this year and the second
7:20
Speaker 6: half comps will definitely get easier, but even Lows has
7:22
Speaker 6: stated that comps may turn positive, but that's not a
7:25
Speaker 6: reflection of an improved demand. Environment. It's strictly a reflection
7:29
Speaker 6: of easier comps. So we think as we get into
7:31
Speaker 6: twenty twenty five, that's when we would expect the market
7:34
Speaker 6: to see more of a turn, as we get more
7:36
Speaker 6: of a rebound and existing home sales.
7:38
Speaker 2: How about lumber, that's something they buy a lot of.
7:42
Speaker 2: How's the cost of lumber these days? How's that impacting
7:44
Speaker 2: their margins?
7:46
Speaker 6: Yeah, lumber is about ten percent of sales for both
7:49
Speaker 6: Home Depot and Low's. Lumber was really more of a story.
7:53
Speaker 6: Last year was extremely volatile, so you saw the impact
7:56
Speaker 6: on the on their top line. There not so much
7:58
Speaker 6: of a story this year. I think Cody, particularly lumber
8:01
Speaker 6: are going to have less of an impact in the
8:03
Speaker 6: near term.
8:04
Speaker 3: So you feel like we're not going to really see
8:06
Speaker 3: a benefit in hold twenty twenty five. I mean, some
8:08
Speaker 3: analysts are looking for the back half of this year
8:10
Speaker 3: maybe some improvement, but for you, it's really like a
8:12
Speaker 3: year out kind of thing.
8:14
Speaker 6: Well, I think as we get to the end of
8:16
Speaker 6: this year, I think you'll start to see a little
8:18
Speaker 6: bit of a turn, and you know, a lot of
8:19
Speaker 6: that is predicated upon with what happens in the housing market. Obviously,
8:23
Speaker 6: people are looking for the FED to cut rates at
8:25
Speaker 6: some point this year. Obviously not as much as we
8:28
Speaker 6: had hoped for previously, but we think that you know,
8:31
Speaker 6: when you when you look at existing home sales, we're
8:34
Speaker 6: you know, at the lowest levels in you know, more
8:36
Speaker 6: than two decades. So there's not a whole lot lower
8:39
Speaker 6: we can go absent you know, a broader economic decline
8:42
Speaker 6: where you start to see a lot of job loss.
8:44
Speaker 6: So we think that you know, if it's come in
8:46
Speaker 6: a little bit, you could kind of start to build
8:47
Speaker 6: a little momentum ending this year carrying into next year.
8:50
Speaker 6: When we think, you know, bigger picture about the home
8:53
Speaker 6: improvement market, there's some there's some solid tail winds out there.
8:56
Speaker 6: You know, you have homeowners who are sitting on record
8:59
Speaker 6: amount of home equity. When you think about you know,
9:01
Speaker 6: the rise and home prices we've seen over the last
9:03
Speaker 6: several years, you've got an aging housing stock, and I
9:07
Speaker 6: think the fact that mobility has been so low is
9:10
Speaker 6: going to continue to encourage people to invest in their
9:12
Speaker 6: house And I think what kind of triggers that is
9:14
Speaker 6: rates coming back in a little bit so you can
9:16
Speaker 6: start to tap that equity.
9:17
Speaker 2: True, how many stores as lows have and are they
9:20
Speaker 2: adding stores, are they pairing backstores? Kind of worthy with
9:23
Speaker 2: their store count these days.
9:25
Speaker 6: Yeah, so they're under two thousand. It's an interesting dynamic.
9:28
Speaker 6: So their competitor, Home Depot, is actually embarking on their
9:32
Speaker 6: first store expansion in a long time. Lows, on the
9:35
Speaker 6: other hand, has cut back. They got out of their
9:37
Speaker 6: Canadian business, which reduced their store count. But what they're
9:41
Speaker 6: doing from a store perspective is really introducing new formats.
9:44
Speaker 6: So they're starting to go after the rural customer. Their
9:48
Speaker 6: stores tend to be located in more rural locations compared
9:51
Speaker 6: to Home Depot, which are more densely populated locations, and
9:55
Speaker 6: they found success with that, so they're starting to compete
9:57
Speaker 6: more with the detractor supplies of the w world. They're
10:00
Speaker 6: also introducing Lows outlets, so if you think of, you know,
10:05
Speaker 6: appliances that might have things and scratches, you could go
10:08
Speaker 6: there and get heavily discounted items. And that's another way
10:11
Speaker 6: they're looking to kind of, you know, drive traffic through
10:14
Speaker 6: the Low's brand.
10:15
Speaker 3: Okay, now you're speaking my language. You put outlet there
10:18
Speaker 3: and I'm like, boom, we will go find things that
10:20
Speaker 3: are cool.
10:21
Speaker 2: I don't do outlets either.
10:23
Speaker 3: I know you don't do outlets. That's my thing. It's
10:26
Speaker 3: just my thing. Even if I had a bazillion dollars,
10:29
Speaker 3: I wouldn't pay full price part of the hunt. Okay,
10:31
Speaker 3: AnyWho so drew based on all this, If I wanted
10:35
Speaker 3: to play this housing market right now, what is the
10:38
Speaker 3: best play? And I say that because it's not like
10:40
Speaker 3: the housing market that the demand isn't there, The supply
10:44
Speaker 3: might not be there, the costs are a little too high,
10:47
Speaker 3: mortgage rates are too high, but eventually it'll normalize. What's
10:50
Speaker 3: the best way to capitalize?
10:52
Speaker 6: We think right now, kind of sitting at the top
10:55
Speaker 6: of the broader housing ecosystem is the home builders. We think,
11:00
Speaker 6: you know, from a supply perspective, they're in a good position.
11:03
Speaker 6: Their ability to buy down mortgage rates and make payments
11:06
Speaker 6: more palatable to the consumers is something that differentiates them
11:10
Speaker 6: versus the resale market. They're going to grow community counts
11:13
Speaker 6: in the coming year, so we really think that they're
11:15
Speaker 6: still in a good position from a competitive perspective. And
11:18
Speaker 6: when you look at you know, within the home building space,
11:21
Speaker 6: you have the large, well capitalized, publicly traded homebuilders who
11:25
Speaker 6: have access to land, access to labor, and you compare
11:28
Speaker 6: that versus the smaller private piers, and you have to
11:30
Speaker 6: remember home building is a very fragmented industry, particularly outside
11:35
Speaker 6: some of the largest markets. But those smaller private peers
11:38
Speaker 6: tend to rely on regional banks for growth capital. And
11:42
Speaker 6: with you know, a slowing economy and more concern there,
11:45
Speaker 6: you're starting to see a poolback and lending. So we
11:48
Speaker 6: think it's a good opportunity for those larger builders to
11:50
Speaker 6: continue to take share.
11:52
Speaker 2: Our thanks to Drew reading Bloomberg Intelligence, US home building analyst.
11:55
Speaker 3: All right, coming out, we're going to say on retail
11:56
Speaker 3: and breakdown targets quarterly results.
11:59
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
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Speaker 2: depth research and data on two thousand companies and one
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Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via
12:07
Speaker 2: bi go on the terminal. I'm Paul Sweeney and.
12:09
Speaker 3: I'm Alex Steel, and this is Bloomberg.
12:18
Speaker 1: This is Bloomberg Intelligence with Alex Steel and Paul Sweeney
12:23
Speaker 1: on Bloomberg Radio.
12:25
Speaker 3: We look now at the retailer target. This week, the
12:27
Speaker 3: company reported first quarter earnings that missed analyst expectations and
12:30
Speaker 3: at sales fell about three percent year over year.
12:33
Speaker 2: Target also said it remains cautious on discretionary spending over
12:36
Speaker 2: the coming months, despite having optimism for later this year.
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Speaker 2: For more, we were joined by Jennifer bartashis Bloomberg Intelligence
12:43
Speaker 2: Senior analyst Retail, Staples and packaged Food.
12:45
Speaker 3: We first asked jen for her reaction to this week's report.
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Speaker 7: Target missed on profit, but they are very optimistic about
12:52
Speaker 7: second quarter and for the rest of the year, and
12:54
Speaker 7: so I think there's a little bit of reticence about
12:56
Speaker 7: how realistic that is when it comes to second quarter
12:59
Speaker 7: in terms so same store sales. You know, Target says
13:02
Speaker 7: that they're going to return to profit, like they're going
13:04
Speaker 7: to return to growth in second quarter. It's feasible, but
13:08
Speaker 7: remember last year second quarter is when they had the
13:10
Speaker 7: blowback from all of the boycotts, so they have a
13:13
Speaker 7: really easy comparison when you talk about a year over year.
13:17
Speaker 7: So that return to growth, yes, but there's a caveat
13:21
Speaker 7: around it. That means to me that the second half
13:23
Speaker 7: is going to be really important if they're going to
13:25
Speaker 7: reach those goals that they put out to is the.
13:28
Speaker 2: Target shopper the same similar no relation to the Walmart shopper.
13:33
Speaker 7: Well, historically speaking, the Target shopper has been a slightly
13:37
Speaker 7: higher income household. They tend to be a little bit
13:39
Speaker 7: more fashion forward, fashion focus type individuals, so there's been overlap.
13:45
Speaker 7: But Walmart has slowly been encroaching on what has been
13:48
Speaker 7: Target's kind of main audience, and Target has seen that
13:52
Speaker 7: their customers are under a lot of pressure because they're
13:56
Speaker 7: sort of middle income households. There's been a lot of
13:59
Speaker 7: inflationary press sure, a lot of cutbacks and discretionary spending,
14:02
Speaker 7: so there's been kind of pressure from both sides, and
14:05
Speaker 7: so Walmart says they're going to up their private label game,
14:08
Speaker 7: especially in apparel. That could be a threat to Target,
14:11
Speaker 7: but it is one of Target's core strengths. So if
14:14
Speaker 7: they can get people to come back and start engaging again,
14:17
Speaker 7: that's really what historically has helped Target drive their success.
14:22
Speaker 3: So reaffirming their guidance for the full year, I mean,
14:24
Speaker 3: like you mentioned, that means they're going to have to
14:26
Speaker 3: really deliver in the back of what are the levers
14:28
Speaker 3: they can pull to do that.
14:30
Speaker 7: So from a profit perspective, they have a lot of
14:32
Speaker 7: things that are that they've been doing in terms of
14:34
Speaker 7: cost control, in terms of streamlining their supply chain. Their
14:37
Speaker 7: inventory was down in another seven percent this quarter. Those
14:40
Speaker 7: are all great things because it helps make them more
14:43
Speaker 7: efficient and cost effective. So from a margin perspective, you know,
14:47
Speaker 7: there's still some runway to continue to expand margins. The
14:50
Speaker 7: real question is are they going to be able to
14:53
Speaker 7: drive sales growth. What's concerning is that the in store
14:57
Speaker 7: sales for same store sales are still significantly lower. And
15:02
Speaker 7: you know, part of the idea behind the discretionary categories
15:05
Speaker 7: is that people come into stores and they browse and
15:07
Speaker 7: they find an outfit or they find an accessory. And
15:10
Speaker 7: it's great that digital sales are reaccelerating, but if people
15:13
Speaker 7: aren't in the store, that's a hard thing for Target
15:15
Speaker 7: to deal with.
15:16
Speaker 2: Hey, Jen, want to think back to the Walmart releases
15:19
Speaker 2: that I've really paid attention to. I always see double digit,
15:22
Speaker 2: maybe twenty percent e commerce sales growth. How does Target
15:25
Speaker 2: do there?
15:26
Speaker 6: Well?
15:26
Speaker 7: Target actually does pretty well in terms of digital sales growth,
15:30
Speaker 7: but there's a very different strategy. Walmart is pursuing a
15:33
Speaker 7: strategy of as many possible items as possible on the
15:36
Speaker 7: Walmart dot Com. They do a lot of third party sales.
15:39
Speaker 7: When it comes to Target, their broader assortment is much
15:42
Speaker 7: more curated, and so they are very thoughtful about which
15:46
Speaker 7: vendors they bring onto the target dot com to enhance
15:49
Speaker 7: the offering that Target has. So they're different approaches to
15:53
Speaker 7: e commerce. Both are seeing some success, but you can't
15:56
Speaker 7: really compare them strictly side by side.
16:00
Speaker 3: What other company, like what did you make of then TJX,
16:03
Speaker 3: for example, because in some ways they can be immune
16:06
Speaker 3: from the slowdown, right because everyone me included, we'll go shop.
16:09
Speaker 3: There are we seeing that reflected in the numbers?
16:13
Speaker 7: I mean, I think the strong results from TJX just
16:15
Speaker 7: underscore that people still like the treasure hunt, but people
16:18
Speaker 7: are seeking value and one of the things that Target
16:21
Speaker 7: talked about is that they need to reinforce that value proposition.
16:25
Speaker 7: That's part of why they've rejiggered their entire Target loyalty
16:28
Speaker 7: program with Target Circle TJX, everybody knows you can go
16:33
Speaker 7: and you have the potential to find something that is
16:36
Speaker 7: an amazing deal, and that's enough to draw people into stores.
16:40
Speaker 7: Target has has gotten a little bit away from that.
16:43
Speaker 3: Yeah, yeah, see polism. So pauls, we've been in a TJX.
16:46
Speaker 3: I don't think he truly understands the beauty of this.
16:48
Speaker 2: I went to my first Walmart last weekend.
16:50
Speaker 3: Yeah, I'm so. That's like a semi gold star. So
16:53
Speaker 3: they have not only just discounted stuff, but they have
16:56
Speaker 3: the runway and that's the jam. That is designer stuff
17:00
Speaker 3: on some serious sale and you can get that on
17:03
Speaker 3: clearance and you're looking at like a ninety percent off
17:05
Speaker 3: a designer kind of situation.
17:07
Speaker 2: Do you know beforehanded whether it's going to be there?
17:09
Speaker 3: No, that's that's that's fun. Then you add the treasure hunt,
17:12
Speaker 3: and you don't know the beauty that will be unveiled
17:15
Speaker 3: as you go in. Am I selling this appropriately?
17:17
Speaker 6: Jen?
17:18
Speaker 7: Absolutely? I mean that is that is some of the appeal.
17:21
Speaker 7: You just you never know what you're going to find,
17:22
Speaker 7: and so you go as often as you as you
17:24
Speaker 7: can because there's a chance you'll find that amazing deal.
17:27
Speaker 2: What's the promotional environment out there, Jenner. Are the Walmarts,
17:31
Speaker 2: the tjx's, the targets. Are they putting out a lot
17:35
Speaker 2: of promotions to get people in the store or to
17:37
Speaker 2: click that button.
17:38
Speaker 7: The promotional environment has been escalating, and so we talk
17:42
Speaker 7: you hear Walmart talk about rollbacks that's basically putting things
17:45
Speaker 7: on sale or discounts. Target talked about cutting prices by
17:49
Speaker 7: the end of the summer up to five thousand items,
17:51
Speaker 7: all for essential So the idea is to try to
17:54
Speaker 7: advertise that there's value proposition there and you know in
17:57
Speaker 7: force that they're they're looking at for the customer, trying
18:00
Speaker 7: to get people to engage in coming back and perhaps
18:03
Speaker 7: buying a little bit more. And let's be honest, it
18:06
Speaker 7: doesn't hurt from a public relations perspective when you have
18:09
Speaker 7: the White House talking about retailers not being responsible enough
18:12
Speaker 7: and rolling back costs on essentials. So there's certainly a
18:15
Speaker 7: little bit of a play there to help appease some
18:18
Speaker 7: of that political pressure.
18:19
Speaker 3: Is but that doesn't make me want to buy the
18:20
Speaker 3: stock though, No.
18:21
Speaker 7: But you know it does help ultimately from a consumer perspective.
18:26
Speaker 7: If you think that it's a better value to shop there,
18:29
Speaker 7: or that you're getting more for your money, you're more
18:31
Speaker 7: inclined to shop there, and that ultimately leads to your
18:34
Speaker 7: traffic and your sales, and that is what is appealing
18:36
Speaker 7: to investors.
18:37
Speaker 2: What are the dollar stores seeing these days? Are they
18:40
Speaker 2: seeing a pickup in traffic, maybe the people trading down
18:44
Speaker 2: from a Walmart or Target.
18:46
Speaker 7: There's been some trade down into the dollar stores, and
18:48
Speaker 7: we tend to see that every time we go through
18:50
Speaker 7: sort of an economic depression. One of the challenges for
18:53
Speaker 7: the dollar stores is that people are coming in, but
18:56
Speaker 7: they've abandoned the discretionary spending, even though at dollar store
19:00
Speaker 7: the discretionary spending is not that expensive, so their consumables mix.
19:05
Speaker 7: For example, a Dollar General is is close to eighty
19:07
Speaker 7: percent of their sales are what would could be considered
19:10
Speaker 7: consumable items. That is good in terms of people coming
19:14
Speaker 7: into the store, but it's not great for the long
19:16
Speaker 7: term mix for the company because those are very low
19:20
Speaker 7: margin sales. They're high frequency, but people have been really
19:23
Speaker 7: watching those, you know, watching their wallets, and so the
19:26
Speaker 7: basket sizes are a little smaller, the mix is more
19:29
Speaker 7: just you know, more consumable. So we'll be watching for
19:32
Speaker 7: any signs that they're getting some hir income households coming
19:35
Speaker 7: in to spend on those more discretionary items, or that
19:39
Speaker 7: their their core consumers are loosening spending a little bit.
19:42
Speaker 7: But honestly, this quarter is probably not going to be
19:45
Speaker 7: you know.
19:45
Speaker 3: Panning out No, definitely not. I'm target falling the most,
19:48
Speaker 3: I should say, going back to Target the most is
19:50
Speaker 3: November of twenty twenty two. Does that feel extreme to you,
19:53
Speaker 3: considering that the actual numbers weren't like terrible terrible.
19:58
Speaker 7: I think you shouldn't distarget it for being target. I
20:01
Speaker 7: guess this is my response to that. And what I mean, Like,
20:05
Speaker 7: what I mean by that is, you know, Target has
20:07
Speaker 7: always been about the fashion. It's been about the discretionary categories.
20:11
Speaker 7: It's been about home decor, it's been about things you
20:14
Speaker 7: know of that nature. They've never tried to be you know,
20:18
Speaker 7: heavy on the essentials category. And so when you've got
20:21
Speaker 7: consumer weakness and you've got people who aren't spending in
20:23
Speaker 7: those categories, it's hard to beat up Target for being
20:26
Speaker 7: true to what their values are. And so what I
20:29
Speaker 7: would say is, you know, if we see some improvement
20:32
Speaker 7: in just the discretionary spending, Target will start to take
20:35
Speaker 7: off again. You know, their sales will accelerate, people will
20:38
Speaker 7: be coming back. It seems more of a waiting game
20:40
Speaker 7: for when the consumer is ready for that at this point.
20:43
Speaker 3: Our thanks to Jim Bartasha's Bloomberg Intelligence Senior analysts for
20:46
Speaker 3: Retail staples and packaged food.
20:47
Speaker 2: On Bloomberg Intelligence Radio, we bring you all the top
20:50
Speaker 2: analysts providing in depth research and data on two thousand
20:53
Speaker 2: companies and one hundred and thirty industries.
20:55
Speaker 3: We also have something here at Bloomberg called Bloomberg New
20:57
Speaker 3: Energy Finance, and the idea behind it is to provide
20:59
Speaker 3: data on commodities, power, transport, industries, buildings and agriculture and
21:04
Speaker 3: also new technology.
21:05
Speaker 2: This week we also looked at a BNF report that
21:07
Speaker 2: said governments and companies need to spend an extra thirty
21:10
Speaker 2: four trillion dollars on the clean energy transition between now
21:14
Speaker 2: and twenty fifty to reach net zero emissions.
21:17
Speaker 3: For more, we're drawn by Aiman Farhat, Bloomberg European Power
21:20
Speaker 3: and Renewables reporter.
21:21
Speaker 2: We first asked in for more context on the BNEF report.
21:25
Speaker 5: I mean they were pool outlines two scenarios. One of
21:27
Speaker 5: them is exactly that trying to get to net zero
21:29
Speaker 5: by twenty fifty, So it is possible it will cost
21:32
Speaker 5: something like one hundred and fifteen trillion dollars between now
21:34
Speaker 5: and twenty fifty, and twenty percent more than the actual
21:37
Speaker 5: kind of base case, which is if we just go
21:39
Speaker 5: along with all the all the different technologies actually make
21:41
Speaker 5: economical sense. So the net zero scenario is about governments
21:44
Speaker 5: putting in policy and putting in drivers to make it
21:46
Speaker 5: happen faster.
21:47
Speaker 2: Are the big I guess players globally. I'm thinking just
21:51
Speaker 2: the West broadly defined China. Do we have global buy
21:55
Speaker 2: in to any of this right now or is it
21:58
Speaker 2: just piecemeal?
22:00
Speaker 5: I think that's a good question. I think one of
22:01
Speaker 5: the things that the report does is look till twenty fifty,
22:03
Speaker 5: but as well as that, they also look for the
22:05
Speaker 5: next like five ten years, and they show that the
22:07
Speaker 5: investment level that's being planned for the next even just
22:09
Speaker 5: so twenty thirty isn't really there to keep on track
22:11
Speaker 5: to be reaching that zero. It isn't even there to
22:13
Speaker 5: be reaching any kind of these scenarios. So I'd say
22:16
Speaker 5: what the report redes say is that it is possible
22:18
Speaker 5: we have to really stop moving immediately, and that most
22:20
Speaker 5: players aren't moving fast enough. It's all a bit too slow.
22:23
Speaker 3: Say that number again, about how many trillions of dollars?
22:26
Speaker 5: More so, it's two hundred and fifteen trillion for net zero,
22:28
Speaker 5: So that's about thirty four trillion dollars more than the
22:31
Speaker 5: base case.
22:31
Speaker 3: Oh my gosh, Okay, where does that is that all
22:34
Speaker 3: going to come from governments? I mean, at the end
22:36
Speaker 3: of the day, whether it's through taxes, et cetera.
22:39
Speaker 5: So that's going to be coming from government, from like
22:40
Speaker 5: private investment. I mean, this covers everything. This covers everything
22:43
Speaker 5: from grid to evs to you know, like how you're
22:45
Speaker 5: going to be getting your solar panels on your houses,
22:47
Speaker 5: getting wind farms in the sea. It really covers everything.
22:50
Speaker 5: But it just shows that when you take a holistic view,
22:52
Speaker 5: the cost is very high. You know, when you break
22:54
Speaker 5: it down by year, it might be you know, a
22:55
Speaker 5: few trillion per year, but over twenty sixtyeth period, that
22:59
Speaker 5: is a lot of money for the world to bear.
23:02
Speaker 2: So Aiman, talk to us about the next ten years.
23:04
Speaker 2: What are some of the critical milestones that need to
23:08
Speaker 2: be met here? It feels like it's more than just
23:10
Speaker 2: everybody's going to have an electric vehicle.
23:12
Speaker 6: Yeah.
23:12
Speaker 5: So when I was reading through this beautiful ten fifty
23:14
Speaker 5: page report, thing one thing that really stuck out to
23:16
Speaker 5: me at first is the report says that right now
23:18
Speaker 5: we start the tenure countdown, in ten years time, there
23:20
Speaker 5: will be one ice vehicle sold. It'll be all electric
23:23
Speaker 5: vehicles being sold. They want to triple renewables in that
23:26
Speaker 5: period as well to be on track for next year,
23:27
Speaker 5: and then triple them again in the next twenty years.
23:29
Speaker 5: So it really is kind of everything is doubling down.
23:32
Speaker 6: You know.
23:32
Speaker 5: They have this whole section about sustainable aviation fuel, trying
23:35
Speaker 5: to decarbonize aviation. I think they said that something like
23:37
Speaker 5: the crops you have to grow to get this spio
23:40
Speaker 5: mass to get the stainial aviation fuel will take up
23:43
Speaker 5: as much space as the whole European Union. So some
23:45
Speaker 5: of these numbers are just really really huge, but are
23:47
Speaker 5: needed in the next ten fifteen years.
23:49
Speaker 3: And that's so important because we also need the stuff
23:52
Speaker 3: for food and things, so there's also that that poses
23:55
Speaker 3: a lot of issues. I'm also curious as to the
24:00
Speaker 3: divide between developed and emerging markets when it comes to energy,
24:04
Speaker 3: because you know, Europe, in the US, we may have
24:06
Speaker 3: the money to tax and then maybe have the money
24:09
Speaker 3: to put forth, but India is sure doesn't, Africa sure doesn't,
24:13
Speaker 3: parts of Southeast Asia sure don't. How does the report
24:16
Speaker 3: address that lack of financing?
24:19
Speaker 5: Yeah, it's interesting I think on both hands on some
24:21
Speaker 5: ways when it comes to like example, grid grid is
24:23
Speaker 5: a huge thing, one of the actually the second biggest
24:25
Speaker 5: costs to come into this twenty fifteen trillion, and actually
24:27
Speaker 5: in some of the developing nations, as you said India
24:29
Speaker 5: for example, because the grid is actually knew there, it's
24:32
Speaker 5: easier to upgrade it and to kind of build it out,
24:33
Speaker 5: you know, when you're talking about the British grid or
24:35
Speaker 5: the American grid, these ones are much older and harder
24:38
Speaker 5: to move forward. But then when it comes to things
24:39
Speaker 5: like renewables, you know, we still see lots of coal,
24:42
Speaker 5: lots of gas, lots of fossil fuels being used in
24:44
Speaker 5: Southeast Asia into the twenty thirties just because you know,
24:47
Speaker 5: they need that. Supply demand is growing, econditioning demand is growing,
24:51
Speaker 5: you know, a growing middle class, which means that they
24:52
Speaker 5: just need to keep up and they can't be going
24:54
Speaker 5: on too renewables as quickly as Europe can.
24:56
Speaker 2: For example, our thanks to Aman Farhat Lumberg European Power
24:59
Speaker 2: and Renewables Reporter.
25:01
Speaker 3: Coming up on the program, we're going to take a
25:02
Speaker 3: look at how one company is looking to fix your
25:04
Speaker 3: terrible board meetings.
25:05
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio providing in
25:09
Speaker 2: depth research and data on two thousand companies and one
25:11
Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via
25:14
Speaker 2: Big on the terminal.
25:15
Speaker 3: I'm Paul Sweeney and I'm Alex Steel, and this is Bloomberg.
25:24
Speaker 1: This is Bloomberg Intelligence with Alex Steel and Paul Sweeney
25:28
Speaker 1: on Bloomberg Radio.
25:31
Speaker 3: We move now to politics. Half of swing state voters
25:34
Speaker 3: say they're worried about violence surrounding the US presidential election. Now,
25:37
Speaker 3: that's according to the May Bloomberg News Morning Console poll.
25:40
Speaker 2: Many swing state voters also said they're worried that the
25:42
Speaker 2: growing presence of artificial intelligence could one day diminish privacy
25:46
Speaker 2: and hurt job prospects.
25:47
Speaker 3: For more, we were joined by Jody Schneider, political news
25:50
Speaker 3: director for Bloomberg TV and Radio, and we first asked
25:52
Speaker 3: Jody about violence being that big concern in the latest poll.
25:55
Speaker 8: We've been doing this poll now since last fall, as
25:58
Speaker 8: you know, Paul, and we've been asking about the candidates themselves,
26:03
Speaker 8: and we continued to ask about that, but we wanted
26:05
Speaker 8: to ask on some issues as well, and this seemed
26:08
Speaker 8: to be one that's percolating out there quite a bit
26:11
Speaker 8: that we hear a lot from and so we went
26:14
Speaker 8: and asked the voters themselves, as in these swing states,
26:18
Speaker 8: in these seven swing states, and as you noted, about
26:21
Speaker 8: half say they are concerned about that, and it seems
26:24
Speaker 8: to be pretty evenly split between Republicans and Democrats in
26:29
Speaker 8: terms of that concern. So that's real and that could
26:33
Speaker 8: affect them in terms of how they vote, perhaps whether
26:36
Speaker 8: they vote, because both parties really need a big turnout.
26:41
Speaker 8: It's going to be, as everyone expects, a close election,
26:44
Speaker 8: close in terms of the popular vote, and of course
26:47
Speaker 8: that affects the electoral college, which is where it comes
26:51
Speaker 8: down to where the rubber meets the road.
26:53
Speaker 3: If you will, Jody, does the fear sway how people
26:58
Speaker 3: are going to vote.
26:59
Speaker 8: Well, I think it more could affect whether they vote, Alex,
27:03
Speaker 8: I really think that's part of it. If you fear that,
27:06
Speaker 8: you know, perhaps there's going to be violence surrounding this,
27:09
Speaker 8: or there's this kind of fear about things, maybe you say.
27:12
Speaker 8: And we've seen a lot of polling around the fact
27:15
Speaker 8: that there isn't a lot of excitement around either candidate.
27:19
Speaker 8: We had at one point polls showing that they wish
27:22
Speaker 8: there was someone other than Biden. Or Trump, but this
27:25
Speaker 8: is who we have, This is who's going to be
27:27
Speaker 8: on the ballots, and so I think it's more going
27:31
Speaker 8: to be a turnout issue. We'll see now. Of course,
27:34
Speaker 8: we do this pulling and we all talk about polls
27:37
Speaker 8: a great deal in an election year like this, but
27:41
Speaker 8: it's still it's still about five and a half months
27:44
Speaker 8: out before the election, and a lot of people don't
27:47
Speaker 8: make up their minds fully until after Labor Day. So
27:51
Speaker 8: this is still this is an issue that could affect voting,
27:55
Speaker 8: but we still have plenty of time before people actually
27:58
Speaker 8: start voting.
28:00
Speaker 2: So Jody, aside from these issues, what are kind of
28:02
Speaker 2: the key issues that are polling has kind of illuminated
28:07
Speaker 2: are kind of going to be the key issues for
28:09
Speaker 2: these candidates through the election.
28:11
Speaker 3: Yeah, so the race is narrowing.
28:13
Speaker 8: According to again, these are seven swing states where we think,
28:17
Speaker 8: you know, a lot of the election will be determined.
28:20
Speaker 8: And we found that six and ten of the voters
28:23
Speaker 8: worry about misinformation, not only violence but misinformation. Forty six
28:29
Speaker 8: percent had concerns about perhaps foreign interference in the election.
28:35
Speaker 8: So that's an interesting take. We've seen former President Trump's
28:40
Speaker 8: swing state lead dipping slightly. He is still ahead in
28:43
Speaker 8: many of these swing states according to our poll, but
28:46
Speaker 8: it has dipped slightly since the last time we pulled
28:49
Speaker 8: about a month ago, So that could be viewed as
28:52
Speaker 8: a little bit of encouraging news for those who support Biden,
28:56
Speaker 8: but those who support Trump say, well, he's still ahead there,
29:00
Speaker 8: So we have that. We also have that Biden gaining
29:03
Speaker 8: ground from April in each of the competitive sun Belt states,
29:08
Speaker 8: So that's an interesting factor that he's gaining there. The
29:13
Speaker 8: states where he needs to win. He absolutely must win
29:16
Speaker 8: what we're calling those blue wall states of Wisconsin, Pennsylvania, Michigan,
29:21
Speaker 8: which he won last time, which Hillary Clinton famously did
29:25
Speaker 8: not win in her race against Donald Trump. We're finding
29:29
Speaker 8: that he is doing a little bit better there. They're
29:32
Speaker 8: separated by no more than two percentage points in those
29:37
Speaker 8: blue wall states, so very close there.
29:41
Speaker 3: Judy, when you talked about misinformation, do we have an
29:44
Speaker 3: idea where voters are going to get their information if
29:46
Speaker 3: they're worried about misinformation.
29:49
Speaker 8: Well, that's a really good question, Alex and so many
29:51
Speaker 8: of them talk about misinformation, but then they go to
29:54
Speaker 8: places where they are, you know, where there's potentially misinformation
29:58
Speaker 8: and a lot of voters are getting their news from
30:02
Speaker 8: a lot of places that we don't necessarily consider traditional
30:06
Speaker 8: news outlets, so it's an interesting question. We did ask
30:10
Speaker 8: about TikTok. That's been a big issue the US government
30:13
Speaker 8: has under legislation that was passed for emergency funding for
30:19
Speaker 8: Ukraine and other places in the world. It was in
30:21
Speaker 8: there a ban on TikTok if the Chinese parent by
30:25
Speaker 8: Dance does not sell it. We asked these swing state
30:28
Speaker 8: voters whether they thought it was a good idea to
30:30
Speaker 8: ban TikTok, and almost half said they thought it was,
30:34
Speaker 8: So another interesting wrinkle there in terms of information all right.
30:38
Speaker 3: Thanks to Jody Schneider, political news director for Bloomberg TV
30:41
Speaker 3: and Radio, we.
30:42
Speaker 2: Now moved to the cloud space. ZECH, a cloud based
30:44
Speaker 2: software company, is now trying to fix any potential dread
30:47
Speaker 2: you may have for an upcoming board meeting.
30:49
Speaker 3: The company distills hundreds of pages of corporate documents and
30:52
Speaker 3: your interactive websites for boards to expedite meetings, and even
30:55
Speaker 3: has an AI product, and recently ZEK announced it closes
30:58
Speaker 3: seven and a half million dollar investment led by Salesforce Ventures.
31:01
Speaker 2: For more and all this, we were joined by ZECH
31:03
Speaker 2: co founder Edward Norton. We first asked him more about
31:06
Speaker 2: what zech is trying to do.
31:08
Speaker 9: We're trying to make the experience between management of organizations,
31:15
Speaker 9: and I say that meaning corporations or nonprofits because obviously
31:19
Speaker 9: we've got a couple of million nonprofit organizations in this
31:22
Speaker 9: country that have governance and boards and stuff like that.
31:26
Speaker 9: We're trying to take what we feel is an increasingly
31:30
Speaker 9: toxic dynamic and reform it into being what it's supposed
31:35
Speaker 9: to be, which is a relationship that propels in organizations, supports,
31:40
Speaker 9: you know, brings additional leverage positivity to an organization. And
31:45
Speaker 9: we you know, I've definitely had some people say to me, like,
31:49
Speaker 9: you have an interesting day job, why would you get
31:51
Speaker 9: involved in a.
31:52
Speaker 2: Your day job. Just for folks that on the radio,
31:54
Speaker 2: Edward Norton actor has been in a bunch of movies
31:56
Speaker 2: and all that kind of stuff.
31:57
Speaker 9: Yeah, the and I and I will, I will admit that,
32:02
Speaker 9: you know, on the surface, like a software platform for
32:07
Speaker 9: for board governance features seems pretty esoteric, but it grew
32:12
Speaker 9: out of it grew out of my own experiences over
32:15
Speaker 9: the last thirty years, not disimilar to years from serving
32:19
Speaker 9: on the board of arts organizations. Serving on you know,
32:22
Speaker 9: conservation organization boards. And then as I built my own companies,
32:27
Speaker 9: and I've built a few software companies that we had
32:30
Speaker 9: our own boards, people like Fred Wilson from Union Square
32:34
Speaker 9: or you know Excel or Graylock or these these firms.
32:38
Speaker 9: We were on the management side and we were experiencing
32:40
Speaker 9: what it meant to have a board. And then when
32:43
Speaker 9: I sold one of my companies and I joined the
32:44
Speaker 9: board of GoFundMe, the company that acquired us, you know,
32:48
Speaker 9: I started sitting on corporate boards and we my partners,
32:52
Speaker 9: and I really started feeling that that this there was
32:55
Speaker 9: this elephant in the room, which is that is that
32:58
Speaker 9: companies go through four to eight times a year. They
33:00
Speaker 9: go pencils down to get ready for this thing that
33:03
Speaker 9: essentially to them feels like a hall monitoring moment. And
33:07
Speaker 9: board members, on the other hand, when I was a
33:08
Speaker 9: board member, you got thirty six hours before the meeting,
33:11
Speaker 9: You get a ninety page PDF and you're supposed to
33:13
Speaker 9: read it in the airport terminal, and then you go
33:15
Speaker 9: to the meeting and get it read back to you.
33:17
Speaker 2: You know what I mean.
33:18
Speaker 3: Like there was just so you're looking to make it
33:21
Speaker 3: a more what interactive visual engaging experience.
33:24
Speaker 9: I think we say two things. One is quantitatively, board
33:28
Speaker 9: meetings are an enormous waste of time for everybody, and
33:31
Speaker 9: that has to do with the amount of redundant time
33:33
Speaker 9: waste on setting these meetings up and the presentation materials.
33:36
Speaker 9: And that can be crushed down by having cloud based
33:40
Speaker 9: AI powered tools that make it like a tenth the
33:43
Speaker 9: time for a company. On zech, a company can set
33:46
Speaker 9: up for a board meeting in one tenth the time
33:48
Speaker 9: that they were using to prep before it. Board members
33:53
Speaker 9: should get to read something that's you know, you wouldn't
33:56
Speaker 9: read in the New York Times or Bloomberg on a PDF.
33:59
Speaker 9: You read it in a mobile friendly scroll right that
34:03
Speaker 9: we expect that now and so everything about the user
34:06
Speaker 9: interface should be easier for both sides of the table.
34:09
Speaker 9: But also think about this, think about how much time,
34:12
Speaker 9: how many professional talented people with time is valuable sit
34:17
Speaker 9: there in board meetings, approving minutes, approvals, approving stock option packages,
34:22
Speaker 9: things that they ought to be able to do from
34:23
Speaker 9: the airport lounge in advance. So we built governance function
34:27
Speaker 9: that can be interactive and mobile.
34:29
Speaker 2: And also, so your customer is the board.
34:32
Speaker 9: The customer is the company and the board. You know, yeah,
34:35
Speaker 9: both sides, management and board members suffer in different ways,
34:41
Speaker 9: and we've tried to reform it. But when you crush
34:43
Speaker 9: the redundant inefficiency of time waste, you improve the quality
34:47
Speaker 9: of the meeting too, because a board meeting should be
34:49
Speaker 9: a forward looking experience, not a You don't want to
34:53
Speaker 9: spend hours looking backward. Everybody can ingest the looking backward
34:58
Speaker 9: part before the meeting. You want meeting to be propulsive
35:01
Speaker 9: and additive to where the company or the organization is
35:04
Speaker 9: trying to go. And the best thing about what people
35:07
Speaker 9: are saying to us is not just oh, we really
35:08
Speaker 9: love the user interface. It's much easier, it's easier to read.
35:12
Speaker 9: We love that they're saying to us. This has radically
35:15
Speaker 9: improved the quality and the value of the meeting itself
35:19
Speaker 9: and what we're getting out of our board.
35:21
Speaker 3: So you guys just raised about seven and a half
35:23
Speaker 3: million Series A led by Salesforce Ventures, including some other
35:28
Speaker 3: guys as well. What are you gonna do with it?
35:30
Speaker 3: And what's sort of your angle here?
35:32
Speaker 9: Well, you know, I think if you look at I mean,
35:34
Speaker 9: first of all, Salesforce to this day is still I mean,
35:39
Speaker 9: they still are the greatest innovator in cloud based corporate tools.
35:45
Speaker 9: And I've known Mark Benyov a long time, even though
35:48
Speaker 9: I never told him that we were doing this with
35:50
Speaker 9: his own team until it was done, because I didn't
35:52
Speaker 9: I didn't want to, you know, I didn't want it
35:54
Speaker 9: to come from the top down. The Salesforce team is
35:57
Speaker 9: really phenomenal. But you know, our fantasy was to work
36:00
Speaker 9: with Salesforce because really nobody, nobody understands the business of
36:07
Speaker 9: cloud based corporate tools better than they do. And I
36:11
Speaker 9: also like their ethos as a company. I think they
36:13
Speaker 9: have a great customer service ethos there. But you know,
36:16
Speaker 9: if you look at think about today, would you ever
36:20
Speaker 9: get a FedEx package with signature tabs on your legal documents?
36:24
Speaker 7: No?
36:24
Speaker 9: You get it in DocuSign now right. You don't manage
36:28
Speaker 9: your cap table in Excel spreadsheets anymore. You use Karta.
36:32
Speaker 9: And we've made this evolution towards lots of aspects of
36:36
Speaker 9: corporate function have gone into the cloud, but this really
36:39
Speaker 9: critical function hasn't. And we think that on a business level,
36:43
Speaker 9: to be honest, if you look at you know, Karta,
36:46
Speaker 9: which is a seven billion dollar private company and DocuSign
36:49
Speaker 9: is a fifteen billion dollar public company. There's an enormous
36:52
Speaker 9: market in relatively low priced corporate software tools, and we
36:59
Speaker 9: really thought that this was a good business. We think
37:02
Speaker 9: there's a very large marketplace of companies and nonprofit orgs
37:07
Speaker 9: that need to reform this critical piece.
37:10
Speaker 3: All right, thanks? Is that co founder Edward Norton