Latest / Bloomberg Intelligence / BI Weekend: Live Nation Suit, Micron Earnings, Kimmel Return

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BI Weekend: Live Nation Suit, Micron Earnings, Kimmel Return · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio, Studios, podcasts, radio news. This is Bloomberg Intelligence
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  Speaker 1: with Scarletfoo and Paul Sweeney.
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  Speaker 2: How do you think the FED is looking at tariffs?
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  Speaker 2: The uncertainty of terriffs.
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  Speaker 2: A lot of investors getting whipsaled every day by news.
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  Speaker 1: Events, breaking market headlines, and corporate news from across the globe.
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  Speaker 3: Could we see a market disruption of market event?
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  Speaker 3: You see some so called low quality stocks driving this
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  Speaker 3: short term rally.
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  Speaker 1: Bloomberg Intelligence with Scarletfoo and Paul Sweeney on Bloomberg Radio, YouTube,
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  Speaker 1: and Bloomberg Originals.
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  Speaker 2: On today's Bloomberg Intelligence Show, we dig inside the big
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  Speaker 2: business stories impacting Wall Street and the global markets. Each
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  Speaker 2: and every week, we provide in depth research and data
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  Speaker 2: on some of the two thousand companies and one hundred
• 0:52
  Speaker 2: and thirty industries our animalts cover worldwide. Today, we'll look
• 0:55
  Speaker 2: at why the Trump administration is warning about tiele on
• 0:58
  Speaker 2: all use during pregnancy. Plus we'll look at what's in
• 1:01
  Speaker 2: store for the telecommunications company T Mobile after naming a
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  Speaker 2: new CEO. But first we begin in the anti trust Space.
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  Speaker 2: We recently heard that the US Federal Trade Commission and
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  Speaker 2: seven states have sued Live Nation Entertainment and its ticket
• 1:15
  Speaker 2: Master subsidiary. It's for failing to prevent the use of
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  Speaker 2: automated ticketing bots and large scale resale operations. From more
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  Speaker 2: co hosts, Scarlettfield and I were joined by Jennifer Ree,
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  Speaker 2: Bloomberg Intelligence Senior litigation analyst. We first asked for Jens
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  Speaker 2: first impressions on the latest news.
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  Speaker 4: Well, I think, first of all, not too much of
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  Speaker 4: a surprise, because they did recently sue a much smaller
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  Speaker 4: entity over the same law, which is called the Better
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  Speaker 4: Ticketing Online Sales Act or the Bots Act, and Live
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  Speaker 4: Nation was mentioned an awful lot in that lawsuit, so
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  Speaker 4: it sort of led to the conclusion that there might
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  Speaker 4: be another suit brought. And President Trump did order the
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  Speaker 4: Federal Trade Commission to better enforce this act back in
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  Speaker 4: an executive order in March, and they have a report
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  Speaker 4: due to the President on September twenty seventh, so saying
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  Speaker 4: what if they done to better enforce the act. So
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  Speaker 4: I think it's not a surprise that a big lawsuit
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  Speaker 4: came down before that report is due.
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  Speaker 2: You know, you talk you talk to a lot of
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  Speaker 2: nation people, and I've known them for a long time.
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  Speaker 2: I think they want to clean this stuff up. They
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  Speaker 2: want to take out the middleman, the scalper. They want
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  Speaker 2: to simplify the fees because they know the feedback is
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  Speaker 2: terrible from their customers. But this is still a thing,
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  Speaker 2: isn't it.
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  Speaker 4: I mean yeah, no, right, Well, first of all, antitrust
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  Speaker 4: cases tend to be backward looking, so what they may
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  Speaker 4: be taking efforts today, but we're looking at what they've
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  Speaker 4: been doing since twenty eighteen. Essentially. The other thing is
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  Speaker 4: they do say that, and they have said that to
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  Speaker 4: the Department of Justice and to Congress as well. But
• 2:37
  Speaker 4: if you look at what's been alleged in this lawsuit,
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  Speaker 4: they're an awful lot of statements and documents cited to
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  Speaker 4: when their internal business communications going on. That suggests that
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  Speaker 4: they've kind of turned a blind eye to the broker
• 2:48
  Speaker 4: activity because they profit from the resale market of those
• 2:52
  Speaker 4: tickets as well. How did they do that well, because
• 2:54
  Speaker 4: they sell the primary ticket and take fees, and then
• 2:57
  Speaker 4: the brokers buy in bulk and then they put it
• 2:59
  Speaker 4: they resell on Ticketmaster's resale arm. Ticketmaster charges just to
• 3:03
  Speaker 4: list it and then they take another fee when the
• 3:05
  Speaker 4: ticket's actually sold, So they're basically double dipping on the
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  Speaker 4: same ticket.
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  Speaker 2: How is this different?
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  Speaker 3: I know that's not good. How is this different from
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  Speaker 3: what ticket resellers, vivid Seats or access or any of
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  Speaker 3: those other companies that consumers have the option of using,
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  Speaker 3: how they operate and how they collect fees.
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  Speaker 4: So this is about whether they knowingly resell these tickets. Now,
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  Speaker 4: a reseller could sell a ticket that's been bought improperly
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  Speaker 4: by a bot but not know it. They could implement
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  Speaker 4: security measures, not understand the extent to which the bots
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  Speaker 4: in the scalpers have been able to technically go around
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  Speaker 4: those security measures, and then, you know, in an honestly
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  Speaker 4: attempt to provide a place to resell tickets, resell the tickets.
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  Speaker 4: In this case, what the FTC is saying is that
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  Speaker 4: Ticketmaster knowingly did this, and they didn't step in the way,
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  Speaker 4: They didn't implement any of the rules that they have
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  Speaker 4: internally to.
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  Speaker 2: Let it happen.
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  Speaker 4: They let it happen. So it remains to be seen
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  Speaker 4: whether some of the other resellers have that same kind
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  Speaker 4: of evidence internally. It may be that they're doing what
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  Speaker 4: they can to prevent the conduct and in that case
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  Speaker 4: it may not violate the Bots Act.
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  Speaker 2: How about the Department of Justice, what are they doing
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  Speaker 2: with this company? I mean, is there talk of breaking
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  Speaker 2: up Live Nation from the Ticketmaster?
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  Speaker 4: The Department of Justice has been going after this company
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  Speaker 4: for years, ever since Live Nation acquired Ticketmaster, which yes, Paul,
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  Speaker 4: I know you worked on that deal, right, and that
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  Speaker 4: was done with the consent order, meaning Live Nation promised
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  Speaker 4: to behave a certain way if they were allowed to
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  Speaker 4: buy the company, and essentially it's been alleged and investigated
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  Speaker 4: and found twice now that they violated that. So now
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  Speaker 4: the Department of Justice has just sued them and said,
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  Speaker 4: you're engaging in all kinds of anti competitive activity by
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  Speaker 4: virtue of your strong position kind of in every aspect
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  Speaker 4: of the live concert and live event industry. And you
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  Speaker 4: know the only answer at this point is to force
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  Speaker 4: you to sell Ticketmaster because when we impose behavioral conditions,
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  Speaker 4: you just ignore it.
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  Speaker 3: How do you see this resolving. Is this going to
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  Speaker 3: be something where they battle it out to the very
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  Speaker 3: end and get a verdict or are they going to
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  Speaker 3: try to settle.
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  Speaker 4: Well, I think two different answers depending on the lawsuit
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  Speaker 4: I think on the FTC lawsuit over the Bots Act
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  Speaker 4: probably ends in a settlement because the penalties are astronomical,
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  Speaker 4: you know, over fifty three thousand dollars per violation, and
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  Speaker 4: we're talking about probably five million violations a year, accounting
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  Speaker 4: and counting right starting in twenty eighteen. So that probably
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  Speaker 4: ends in a settlement for a fraction of what ultimately
• 5:27
  Speaker 4: could be fined the Department of Justice suit. I suspect
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  Speaker 4: Live Nation will fight and fight for many years. That
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  Speaker 4: goes to trial in front of a jury in March.
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  Speaker 4: So we're actually probably going to have a verdict in
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  Speaker 4: the first quarter unless they managed to finacle a settlement,
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  Speaker 4: which I understand they're trying hard right now to settle
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  Speaker 4: with the Trump administration. But if they don't, it goes
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  Speaker 4: to trial in March. We'll have a jury verdict. I
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  Speaker 4: think it'll be hard to find a jury that's not
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  Speaker 4: going to be inclined to rule against Live Nation if
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  Speaker 4: they've ever tried to buy a ticket.
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  Speaker 3: For an event like how many finds one who's completely
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  Speaker 3: impractive about this and has no real firsthand experience exactly.
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  Speaker 2: Now, I look like as old stock analysts I am,
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  Speaker 2: I look at the stock, it's a twenty six percent
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  Speaker 2: yeah day. Is that the market telling me we've got
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  Speaker 2: an administration in office right now that might be open
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  Speaker 2: to a deal. Is that kind of what it's saying.
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  Speaker 4: I think so. I think there are those out there
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  Speaker 4: that think Live Nation may be able to get some
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  Speaker 4: sort of a deal. You know, we know they're making
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  Speaker 4: a lot of efforts to do so in doing things
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  Speaker 4: the way seem to be have been successful for others
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  Speaker 4: with this administration, and I do think that's the sentiment.
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  Speaker 4: But and also it's a long way away from something happening.
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  Speaker 4: Even if they lose this jury trial in March, then
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  Speaker 4: the judge has to decide on a remedy, then they appeal,
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  Speaker 4: that remedy probably gets stayed pending the appeal, So we're
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  Speaker 4: really not looking at an impact for a couple more years.
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  Speaker 3: In the meantime, you have artists trying to you know,
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  Speaker 3: limit how they sell their tickets as well, and that
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  Speaker 3: just creates confusion for consumers too, you know, like they'll
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  Speaker 3: release a you know, slate of tickets and then hold
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  Speaker 3: off and then release another slate of tickets, and if
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  Speaker 3: you want to transfer tickets to someone it's very different
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  Speaker 3: goal on the Ticketmaster app because they want to make
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  Speaker 3: sure that you're an actual person on the bot. I mean,
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  Speaker 3: it just gets difficult for people who just want to
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  Speaker 3: go see.
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  Speaker 4: A show, right, And that's why this is a politically
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  Speaker 4: popular cause. You know, this is the one thing that
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  Speaker 4: leads me to think maybe the DJ won't settle with
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  Speaker 4: Live Nation despite the efforts, because this is really you know,
• 7:17
  Speaker 4: the Taylor Swift fiasco brought it all to the forefront
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  Speaker 4: more than ever. Springsteen whor's Springsteen Right. There have been
• 7:23
  Speaker 4: other issues since then, and it is politically popular. See
• 7:28
  Speaker 4: what happens there.
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  Speaker 2: The only way you know, musical folks can make money
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  Speaker 2: is touring, right.
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  Speaker 3: And don't get Spotify doesn't pay you anything.
• 7:36
  Speaker 2: No, I mean, it's it, that's why you got. I mean,
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  Speaker 2: I saw Clapton, Eric Clapton.
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  Speaker 3: And the dude's eighty was sitting the entire time, no.
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  Speaker 2: No standing most of the time. Sounded great. You know,
• 7:47
  Speaker 2: I don't know, but I mean, yeah, you know, there's
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  Speaker 2: either selling their catalogs for hundreds of millions of dollars, right,
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  Speaker 2: and they're still touring.
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  Speaker 4: And merch merch tons and tons, and that's the problem
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  Speaker 4: with these astronomical ticket prices that doesn't go back to
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  Speaker 4: the artist, you know, it's just going to the middle
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  Speaker 4: man or going to Live Nation or Ticketmaster, whoever the
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  Speaker 4: reseller is.
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  Speaker 2: Our thanks to Jennifer Ree, Bloomberg Intelligence Senior Litigation Analyst,
• 8:09
  Speaker 2: we move next to news from the memory chip maker Micron.
• 8:13
  Speaker 2: This week, shares of the company fell after its forecast
• 8:16
  Speaker 2: for the first quarter failed to impress investors, and this
• 8:18
  Speaker 2: comes despite revenue and profit expectations being higher than estimated.
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  Speaker 2: In the backdrop, Micron stock has nearly doubled this year,
• 8:26
  Speaker 2: rising at a faster pace than most of its chip piers,
• 8:28
  Speaker 2: reflecting AI fueled optimism for more. Co host Scarlettfield w
• 8:32
  Speaker 2: Anden I were joined by Jake Silverman, Bloomberg Intelligence Semiconductor analyst.
• 8:36
  Speaker 2: We first asked Jake why investors were disappointed with Micron.
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  Speaker 5: I think it has a lot to do with just
• 8:41
  Speaker 5: very high expectations coming into the quarter. But overall, look,
• 8:45
  Speaker 5: I mean, the fundamentals of the business remained very strong.
• 8:49
  Speaker 5: I think the commentary on the call for management was
• 8:51
  Speaker 5: very positive, and so I think we're going to continue
• 8:54
  Speaker 5: to see an up cycle and memory at least for
• 8:56
  Speaker 5: the near term.
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  Speaker 2: So what is the call here, what's the street looking
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  Speaker 2: for for this name? Again, A stocks just as you mentioned,
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  Speaker 2: ripped this year up ninety four percent year today. What's
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  Speaker 2: the call here?
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  Speaker 5: Yeah, No, I mean, I think investors are really looking
• 9:10
  Speaker 5: at high bandwidth memory, They're looking at AI, They're looking
• 9:14
  Speaker 5: at data center related revenue. In the last fiscal year,
• 9:18
  Speaker 5: data center related revenue was fifty to six percent of sales.
• 9:21
  Speaker 5: So as demand continues for that, we also have to
• 9:25
  Speaker 5: keep in mind that, you know, there's traditional products as
• 9:29
  Speaker 5: well that are an important part of the business, that
• 9:31
  Speaker 5: includes smartphones and PCs. Investors really want to see continued
• 9:35
  Speaker 5: pricing strength. And as demand continues to grow for high
• 9:40
  Speaker 5: bandwidth memory, which is very important for AI, and as
• 9:44
  Speaker 5: capacity for that shifts over to high bandwith memory, it
• 9:47
  Speaker 5: can further constrains the supply because it has lower yields,
• 9:51
  Speaker 5: it has larger die sizes, so there's only so much
• 9:54
  Speaker 5: capacity industry and it's shifting over in favor of AI,
• 9:58
  Speaker 5: and that's just constraining supply for traditional products. Which given
• 10:02
  Speaker 5: the supply and demand, the importance of supplying demand balancing
• 10:05
  Speaker 5: the industry, it would suggest that as long as demand
• 10:09
  Speaker 5: for AI continues to grow, we'll see further pricing increases.
• 10:12
  Speaker 3: So that's a lot of conditions. I mean, you talk
• 10:14
  Speaker 3: about memory chips, which Micron is the biggest US maker of.
• 10:18
  Speaker 3: We know that this business is kind of famous or
• 10:20
  Speaker 3: infamous really for merging between booms and busts, and that
• 10:24
  Speaker 3: results in these price wings to compensate for the previous
• 10:29
  Speaker 3: you know, plethora of chips or dearth of chips. How
• 10:33
  Speaker 3: does the AI revolution change this dynamic?
• 10:36
  Speaker 4: Yeah?
• 10:37
  Speaker 5: No, And as I said before, really I want to
• 10:38
  Speaker 5: put emphasis on the fact that high bandwidth memory demand
• 10:42
  Speaker 5: constrain the supply for other products, specifically with DRAM. But
• 10:45
  Speaker 5: DRAM now accounts for about eighty percent of sales for
• 10:48
  Speaker 5: the company, so it's vastly more important than what we're
• 10:52
  Speaker 5: seeing in NAND. But the other twenty percent of sales
• 10:54
  Speaker 5: in NAND, we're also seeing strength for enterprise solid state drives,
• 10:58
  Speaker 5: which are also important for AI. So yeah, look, I
• 11:01
  Speaker 5: mean I think historically we've seen cycles up cycles tend
• 11:05
  Speaker 5: to last somewhere between seven to ten quarters, but we're
• 11:08
  Speaker 5: now extending beyond that. I mean, we're looking at, based
• 11:11
  Speaker 5: on the guidance, at least twelve quarters and then based
• 11:14
  Speaker 5: on the potential for further increases in pricing, it could
• 11:18
  Speaker 5: extend all the way through the next fiscal yeur at
• 11:20
  Speaker 5: a minimum. So yeah, I mean, really it's just kind
• 11:24
  Speaker 5: of an almost unprecedented situation, or at least not something that
• 11:26
  Speaker 5: we've seen in a very long time. And it really
• 11:29
  Speaker 5: just comes from structural tailments from AI, both on demand,
• 11:32
  Speaker 5: which is improving pricing via different products like high manWith memory,
• 11:37
  Speaker 5: but also just because like I said before, it's just
• 11:40
  Speaker 5: constraining overall supply, and that's not just unique to Micron,
• 11:44
  Speaker 5: that's true for both Skee Heinex and Samsung as well,
• 11:47
  Speaker 5: and the three of them account for the vast majority
• 11:49
  Speaker 5: of DRAM demand in the industry in nand as well.
• 11:52
  Speaker 2: Yeah, Drake, that's kind kind of where I wanted to
• 11:54
  Speaker 2: go the competitive landscape here. It feels like there's again
• 11:57
  Speaker 2: you mentioned kind of three names there. Is that really
• 12:01
  Speaker 2: kind of what's driving? Are those three companies driving this business?
• 12:04
  Speaker 6: Yeah?
• 12:04
  Speaker 5: Yeah, yeah, so eske Heinez has really had the lead
• 12:07
  Speaker 5: in high bandwidth memory, Micron has become sort of a
• 12:10
  Speaker 5: very fast follower, and now there's reports that Samsung will
• 12:14
  Speaker 5: be supplying into Nvidia's Blackwell Ultra platform, which might pave
• 12:19
  Speaker 5: the way into Rubin for them as well. So I mean,
• 12:21
  Speaker 5: I think this three company dynamic that we'd seen for
• 12:24
  Speaker 5: a very long time. Obviously you've had some Chinese competitors
• 12:27
  Speaker 5: come on, but this three company dynamic that we saw
• 12:31
  Speaker 5: in traditional DRAM seems to be now shaping up again
• 12:34
  Speaker 5: for high bandwidth memory. So I think those past dynamics
• 12:39
  Speaker 5: that we've seen are going to be the dynamics going
• 12:41
  Speaker 5: forward again.
• 12:42
  Speaker 2: Our thanks to Jake Silverman, Bloomberg Intelligence semiconductor analyst, coming
• 12:46
  Speaker 2: up a look at how US drug Makropfiser is trying
• 12:48
  Speaker 2: to carve its share of the BCD DRUB market. You're
• 12:51
  Speaker 2: listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth
• 12:55
  Speaker 2: research and data on two thousand companies and one hundred
• 12:57
  Speaker 2: and thirty industries. You can access Bloomberg Intelligence VI A B.
• 13:00
  Speaker 2: I go on the terminal. I'm Paul Sweeney and this
• 13:03
  Speaker 2: is Bloomberg.
• 13:08
  Speaker 1: This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney
• 13:13
  Speaker 1: on Bloomberg Radio.
• 13:15
  Speaker 2: We move now to the news in a pharmaceutical space.
• 13:17
  Speaker 2: This week, the US drugmaker Pfizer said it will pay
• 13:20
  Speaker 2: four point nine billion dollars for the obesity startup met Sarah,
• 13:23
  Speaker 2: it's a bid to catch up the rival drugmakers after
• 13:26
  Speaker 2: failing to compete with its own weight loss medications From
• 13:29
  Speaker 2: work co hosts Scarlett Foe when I were joined by
• 13:31
  Speaker 2: Sam Fazzelli, Bloomberg Intelligence, Director of Research for Global Industries
• 13:34
  Speaker 2: and senior pharmaceuticals analysts. We first asked Sam to give
• 13:37
  Speaker 2: us some context on why this deal is important.
• 13:40
  Speaker 7: Obesity is one of the key causes of a whole
• 13:45
  Speaker 7: variety of diseases, cardiovascular, cancer, mental health. So if we
• 13:50
  Speaker 7: can treat it, if we can prevent it, if we
• 13:52
  Speaker 7: can reduce it, it's brilliant for the entirety of society.
• 13:56
  Speaker 7: Here there is a deal where Fizer thinks they've got
• 13:59
  Speaker 7: something that's going to be able to give them a
• 14:02
  Speaker 7: chance at playing in this very important area and very
• 14:05
  Speaker 7: massive market. Right. So the drugs are interesting, they're relatively
• 14:09
  Speaker 7: early stage. We're looking to see with some new data
• 14:13
  Speaker 7: coming up, whether some of the promise that we've seen
• 14:15
  Speaker 7: earlier for these drugs that the company has, which the
• 14:18
  Speaker 7: latest stage one is still in phase two they need
• 14:20
  Speaker 7: to start the phase three in twenty twenty six, whether
• 14:24
  Speaker 7: they are as competitive as they looked in the earlier trials.
• 14:27
  Speaker 7: There were some questions on efficacy less so than side
• 14:31
  Speaker 7: effect profile. So we'll have to wait and see how
• 14:33
  Speaker 7: that pans out.
• 14:34
  Speaker 3: Sam, can you get into the science a little bit
• 14:36
  Speaker 3: and maybe you know, keep it basic for folks like
• 14:39
  Speaker 3: Paul and me, because Metzara is described as the next
• 14:42
  Speaker 3: generation hopeful in obesities. They use these long acting analogs
• 14:45
  Speaker 3: versus GLP one and I'm wondering for people who might
• 14:49
  Speaker 3: be holding out for matsera's treatment what that means versus
• 14:53
  Speaker 3: the currently available zip bound or we go vi.
• 14:57
  Speaker 7: Yeah. Yeah, So the latest stage drug is very similar
• 15:00
  Speaker 7: to we go v and similar to zepetite or zip bound,
• 15:07
  Speaker 7: and the Amlin drug is a little bit early stay
• 15:10
  Speaker 7: earlier stage. There are companies we are more advanced drugs
• 15:14
  Speaker 7: in that world, but they all kind of feed into
• 15:17
  Speaker 7: the same pathway, which is the pathway that talks between
• 15:21
  Speaker 7: your food intake and your society centers in your brain
• 15:26
  Speaker 7: and your insulin centers in your pancreas it tries to
• 15:30
  Speaker 7: balance of eaten enough, let's stop eating now and let's
• 15:34
  Speaker 7: release some insulin make it more sensitive so that we
• 15:37
  Speaker 7: can deal with the onslaughter sugar that comes into our blood.
• 15:40
  Speaker 7: That's where they are, is that's central to that space.
• 15:43
  Speaker 7: There's cells in the gut that release glucle like JLP ones,
• 15:48
  Speaker 7: grouking like peptize the cells in other parts of the
• 15:52
  Speaker 7: body who are responding to it. So that's where these
• 15:54
  Speaker 7: things sit, and amlin is just one of those agents
• 15:57
  Speaker 7: in the middle of it.
• 15:58
  Speaker 5: Say, I'm just kind of stepping back.
• 16:00
  Speaker 2: Is GLP one drugs in general, there's a certain level
• 16:03
  Speaker 2: of efficacy today, there's a certain level of say, side effects,
• 16:07
  Speaker 2: whether it's large or something else today. Is there a
• 16:10
  Speaker 2: room for improvement on both efficacy and side effects going
• 16:13
  Speaker 2: forward with these drugs?
• 16:14
  Speaker 7: Yeah, I mean with it's the balance that's the most important.
• 16:17
  Speaker 7: With efficacy, I think we're pretty much there. I mean,
• 16:19
  Speaker 7: you know, there are folks that we know that go
• 16:21
  Speaker 7: on a drug for a week or two and they
• 16:22
  Speaker 7: lose four or five kilograms. That's fine. You don't want
• 16:25
  Speaker 7: to lose much faster than that, because I don't think
• 16:27
  Speaker 7: it's particularly healthy if you lose weight at a much
• 16:30
  Speaker 7: higher speed. And also you don't want to get much
• 16:33
  Speaker 7: lighter than a aty kilo or ninety kilo or seventy five
• 16:36
  Speaker 7: kilograms depending on your size. So the key is how
• 16:39
  Speaker 7: do you get there. If you get there by having
• 16:42
  Speaker 7: lots of side effects, then your probability of staying on
• 16:44
  Speaker 7: the drug is lower, but we want you to stay
• 16:46
  Speaker 7: on the drug. So it's a very very tight balance.
• 16:49
  Speaker 7: And then of course you have to figure out what
• 16:51
  Speaker 7: am I happy taking a weekly injection, which I think
• 16:54
  Speaker 7: a lot of people are not. Don't have a problem
• 16:56
  Speaker 7: with it, But what if Mitcera is right and push
• 16:58
  Speaker 7: it to once monthly, if some of the other competitent
• 17:01
  Speaker 7: is coming along with once every three months. Now, those
• 17:04
  Speaker 7: are things that we have to wait and see how
• 17:06
  Speaker 7: the data shows in terms of that balance of just
• 17:08
  Speaker 7: referred to.
• 17:09
  Speaker 2: Our thanks to Sam Fazeli, Bloomberg Intelligence, Director of Research
• 17:12
  Speaker 2: for Global Industries and senior pharmaceuticals analysts. Staying in the
• 17:16
  Speaker 2: pharmaceutical space. This week, the Trump administration linked thiland on
• 17:19
  Speaker 2: to autism and urge pregnant women to avoid the common
• 17:22
  Speaker 2: pain medication, and this comes despite the lack of widely
• 17:25
  Speaker 2: accepted scientific evidence supporting the risk. For more co host
• 17:29
  Speaker 2: Scarlett Field and I were joined by a Hunter Bloomberg
• 17:32
  Speaker 2: Intelligence senior equity analysts for biopharmaceuticals. You first asked Ann
• 17:36
  Speaker 2: about the science behind the latest news.
• 17:38
  Speaker 8: There are a lot of studies on it. It's certainly
• 17:42
  Speaker 8: driven by an increase in finding a solution for the
• 17:45
  Speaker 8: increased rates of ADHD and autism. I think it's really
• 17:48
  Speaker 8: important here to qualify or quantify what we're talking about
• 17:52
  Speaker 8: with frequent Thailand all use, and most of the studies
• 17:55
  Speaker 8: are looking at measured as more than twenty eight days
• 17:58
  Speaker 8: over the course of your pregnant see, so that is
• 18:01
  Speaker 8: a lot of tile and all use. We're not talking
• 18:03
  Speaker 8: about you have a high fever and you take it
• 18:06
  Speaker 8: for a day or two. This is this is kind
• 18:08
  Speaker 8: of more long term use. There is a correlation between
• 18:12
  Speaker 8: tile and all use and these disorders and children, and
• 18:16
  Speaker 8: I'll probably lose listeners if I go too deeply. But
• 18:19
  Speaker 8: correlation is not causation. Those are two separate things. And
• 18:23
  Speaker 8: while there's a lot of literature out there, a lot
• 18:25
  Speaker 8: of clinical studies, I would argue that the best ones
• 18:29
  Speaker 8: look at sibling analysis, so they compare a mother who
• 18:33
  Speaker 8: had frequent use during one pregnancy and not the next,
• 18:37
  Speaker 8: and that's the best way to kind of look at this.
• 18:39
  Speaker 8: And in those studies there was no findings of increased risks,
• 18:43
  Speaker 8: and there have been several There was a two and
• 18:45
  Speaker 8: a half million dollars a two and a half million
• 18:47
  Speaker 8: children study in Sweden, as well as a more recent
• 18:51
  Speaker 8: one out of Japan. Unfortunately, randomized trials are are difficult
• 18:55
  Speaker 8: to do, there's just too many variables. But the sibling
• 18:58
  Speaker 8: analysis is probably the best we have.
• 19:01
  Speaker 3: So And when I think about the companies that are affected,
• 19:03
  Speaker 3: certainly ken View, which owns the Talnyl brand. Tailanol's generic
• 19:07
  Speaker 3: name is a seed of menaphin, and there are many
• 19:09
  Speaker 3: other companies that make a seed of menaphin as well.
• 19:12
  Speaker 3: Are we seeing them impacted in any way?
• 19:14
  Speaker 7: You know?
• 19:15
  Speaker 8: This is even for ken View, this is maybe a
• 19:17
  Speaker 8: high single digit portion of sales, and that's thailenol overall,
• 19:21
  Speaker 8: So you assume that the pregnant population is a much
• 19:24
  Speaker 8: smaller percentage of those sales. And I'd argue even you know,
• 19:28
  Speaker 8: before all of this, a lot of physicians, certainly mine
• 19:31
  Speaker 8: when I was pregnant, recommended only taking tilenol when you
• 19:34
  Speaker 8: have one of those you know, high fevers, So I
• 19:37
  Speaker 8: wouldn't expect it to truly be a material impact to
• 19:41
  Speaker 8: any of these companies.
• 19:43
  Speaker 2: Is there anything else out there that is at risk here?
• 19:46
  Speaker 2: I mean from just the FDA, I mean your coverage here,
• 19:49
  Speaker 2: because I know there's a lot of uncertainty about which
• 19:51
  Speaker 2: drugs are you know, kind of favored by this administration,
• 19:55
  Speaker 2: which ones aren't. Is that Are you seeing that in
• 19:57
  Speaker 2: your coverage of your companies?
• 19:58
  Speaker 8: Well, for pregnancy in particular, I'd say, are there are
• 20:00
  Speaker 8: no favorite drugs? You know, you certainly were never suggested
• 20:05
  Speaker 8: to take aspirin and Tylenall was one of the few
• 20:07
  Speaker 8: things that was considered okay. But overall, you know, anytime
• 20:12
  Speaker 8: you get a lot of media attention on any drug
• 20:15
  Speaker 8: from politics or anything else, it's typically not a great
• 20:18
  Speaker 8: thing for the companies. But I think it does tend
• 20:20
  Speaker 8: to even out as it passes.
• 20:23
  Speaker 3: You are our senior equity analyst for biopharmaceuticals. When the
• 20:27
  Speaker 3: Secretary of Health, Robert F. Kennedy Junior, speaks, does he
• 20:30
  Speaker 3: tend to move companies in your universe?
• 20:33
  Speaker 8: I would argue, yes, for better or for worse, I'd
• 20:37
  Speaker 8: say they definitely move, but I would say that they
• 20:39
  Speaker 8: go back to a steady state.
• 20:40
  Speaker 7: Okay.
• 20:41
  Speaker 3: So it's an immediate knee jerk reaction and then things
• 20:43
  Speaker 3: calm down exactly.
• 20:45
  Speaker 2: Our thanks to Ann Hunter, Bloomberg Intelligence Senior equity analyst
• 20:47
  Speaker 2: for Biopharmaceuticals. We move next to some news in the
• 20:50
  Speaker 2: luxury space. This week we heard that The Finished Company,
• 20:54
  Speaker 2: or A Health, is raising eight hundred and seventy five
• 20:56
  Speaker 2: million dollars in a new Series E financing round, and
• 20:59
  Speaker 2: it's now closing in on a roughly eleven billion dollar valuation.
• 21:03
  Speaker 2: That's after selling about three million rings over the past year.
• 21:07
  Speaker 2: For more, co host Scarlett fil When I were joined
• 21:09
  Speaker 2: by Mark German, Bloomberg News Managing editor for Global Consumer Tech,
• 21:14
  Speaker 2: we first asked Mark for more background on the Aura
• 21:16
  Speaker 2: ring maker.
• 21:17
  Speaker 9: They want to scale production, they want to scale R
• 21:20
  Speaker 9: and D, they want to move into new regions, they
• 21:24
  Speaker 9: want to get into new retail stores, they want to
• 21:26
  Speaker 9: add new software features, so they're looking to grow quickly.
• 21:29
  Speaker 9: This nearly eleven billion dollar valuation. This is a pretty
• 21:33
  Speaker 9: specific hardware company. They really make one thing, and if
• 21:37
  Speaker 9: you look at their market cap now after that raise,
• 21:41
  Speaker 9: you compare it to other companies that are known for
• 21:44
  Speaker 9: really one type of hardware product. Peloton, Eye, Robot, Sonos
• 21:50
  Speaker 9: bows Or is now worth more than all of them. Combined,
• 21:55
  Speaker 9: which is pretty crazy to think about. So so far
• 21:58
  Speaker 9: this looks to be a success store. It's not a
• 22:00
  Speaker 9: very old company, but it's a company doing effective things
• 22:04
  Speaker 9: and they're clearly building a product that people like. They've
• 22:06
  Speaker 9: sold three million units in the last fourteen fifteen months
• 22:10
  Speaker 9: or so. They've sold five and a half million rings
• 22:13
  Speaker 9: to date. They're due to cross one billion in revenue
• 22:18
  Speaker 9: in twenty five, a billion and a half in twenty six.
• 22:21
  Speaker 9: They did five hundred million in twenty four, so they
• 22:25
  Speaker 9: seem to be growing quite nicely.
• 22:27
  Speaker 2: I don't know, not being into the ring fit ring
• 22:29
  Speaker 2: business myself. Fit ring, I like that fit ring. I mean,
• 22:33
  Speaker 2: this seems like something that your friends at Cooper Tina
• 22:35
  Speaker 2: could come out with tomorrow and copycat. How do you
• 22:38
  Speaker 2: think that's the competitive landscape?
• 22:40
  Speaker 9: Yeah, the competitive landscape is interesting. There's a few smaller
• 22:42
  Speaker 9: players that are also doing smart rings. Samsung rolled out
• 22:46
  Speaker 9: what they call the Galaxy Ring last year, and for Samsung,
• 22:49
  Speaker 9: who's actually been a dud, the functionality is just not
• 22:52
  Speaker 9: on par with Aura. What Aura has is a very
• 22:56
  Speaker 9: strong brand, They have very strong functionality, and they have
• 23:01
  Speaker 9: that big first mover advantage. But you're right, if Apple
• 23:05
  Speaker 9: comes out with a ring, They're gonna eat Aura's lunch.
• 23:08
  Speaker 7: You know.
• 23:09
  Speaker 9: Aura's perspective is that they have this gigantic and tried
• 23:13
  Speaker 9: and true in legal proceedings patent portfolio, and so they
• 23:19
  Speaker 9: feel that if Apple were to come out with a ring,
• 23:22
  Speaker 9: or another company were to really hit the nail on
• 23:24
  Speaker 9: the head with the ring, that they would be able
• 23:26
  Speaker 9: to defend their patents. And they've shown to be able
• 23:30
  Speaker 9: to do that. They have some cases in front of
• 23:32
  Speaker 9: the International Trade Commission and other organizations right now for
• 23:37
  Speaker 9: some of the other competitors, So we'll see what happens.
• 23:40
  Speaker 9: I don't anticipate Apple coming out with a ring anytime soon.
• 23:45
  Speaker 9: I will say that this ten billion dollar valuation is
• 23:47
  Speaker 9: a little bit of a double edged sword. On one hand,
• 23:50
  Speaker 9: that's amazing for the company. On the other hand, it
• 23:53
  Speaker 9: puts them in territory where they're probably not going to
• 23:55
  Speaker 9: be acquired or bought in, which would spur another company
• 23:58
  Speaker 9: like Apple if they wanted a ring, develop one versus
• 24:01
  Speaker 9: buy them. And definitely they're gonna have to make a
• 24:04
  Speaker 9: decision in the next couple of years whether they're going
• 24:07
  Speaker 9: to go public via an IPO spat or if they're
• 24:10
  Speaker 9: going to stay private all right.
• 24:11
  Speaker 2: Thanks to Mark German, Bloomberg News Managing editor for Global
• 24:15
  Speaker 2: Consumer Tech, coming up a look into the current succession
• 24:18
  Speaker 2: plan at T Mobile. You're listening to Bloomberg Intelligence on
• 24:21
  Speaker 2: Bloomberg Radio, providing in depth research and data on two
• 24:24
  Speaker 2: thousand companies and one hundred and thirty industries. You can
• 24:26
  Speaker 2: access Bloomberg Intelligence via Big on the terminal. I'm Paul Sweeney,
• 24:30
  Speaker 2: and this is Bloomberg.
• 24:38
  Speaker 1: This is Bloomberg Intelligence with Scarlett Fou and Paul Sweeney
• 24:42
  Speaker 1: on Bloomberg Radio.
• 24:44
  Speaker 2: We next moved to some news in a telecommunications space.
• 24:47
  Speaker 2: This week, we heard that T Mobile is promoting Chief
• 24:50
  Speaker 2: operating Officer Shriney Gopalon to the top job. He replaced
• 24:54
  Speaker 2: CEO Mike Sievert, who will become vice chairman. And this
• 24:58
  Speaker 2: comes as T Mobile competes for customers market that now
• 25:01
  Speaker 2: also spans home internet and satellite service.
• 25:03
  Speaker 10: For more.
• 25:04
  Speaker 2: Co host Scarlett Field and I were joined by John Butler,
• 25:06
  Speaker 2: Bloomberg Intelligence senior telecom analyst. We first asked John if
• 25:10
  Speaker 2: he's surprised with T mobiles changeover.
• 25:13
  Speaker 10: Not at all. This was incredibly well broadcast. Shriney has
• 25:18
  Speaker 10: been hitting the conference circuit. So at this time of year,
• 25:21
  Speaker 10: all the major investment banks hold these conferences, and he's
• 25:25
  Speaker 10: been in almost everyone sort of out there telling the
• 25:28
  Speaker 10: T Mobiles story. And in my mind it answers one
• 25:32
  Speaker 10: of two questions. Right with any incoming CEO, You're like,
• 25:36
  Speaker 10: can they manage the company effectively? And can they manage
• 25:40
  Speaker 10: the stock effectively? Can they get that narrative out spin
• 25:44
  Speaker 10: a good story? And he is really good at that.
• 25:47
  Speaker 10: So he's answered the second question, and I think in
• 25:51
  Speaker 10: some ways he's answered the first as well.
• 25:54
  Speaker 2: Talk to us about the wireless business these days, it's
• 25:57
  Speaker 2: just a brutally competitive business. Just give us the lay
• 26:00
  Speaker 2: of the land there between AT and T, Verizon, T Mobile,
• 26:03
  Speaker 2: and I don't know anybody else who might be out.
• 26:05
  Speaker 10: I mean, the big three are still dominant. Paul and
• 26:07
  Speaker 10: T Mobile has executed beautifully over the past few years.
• 26:12
  Speaker 10: You know, they've done a very good job of sort
• 26:15
  Speaker 10: of securing the lead in terms of subscriber growth by
• 26:19
  Speaker 10: you know, marketing on this hip counterculture brand image. They
• 26:25
  Speaker 10: continue to be, I think, having an outsized impact on consumers.
• 26:31
  Speaker 10: When you think a wireless it really is a consumer
• 26:34
  Speaker 10: retail business. They all have thousands of stores. They advertise
• 26:38
  Speaker 10: on the Super Bowl, they have giveaways, and I think
• 26:41
  Speaker 10: T Mobile, more than most, really does that well. And
• 26:44
  Speaker 10: I think the Big Three, because of their scale set,
• 26:48
  Speaker 10: it sort of sets this sort of wide mote for
• 26:51
  Speaker 10: any newcomers that want to come in. So T Mobile
• 26:54
  Speaker 10: as number two in the industry, I think is going
• 26:57
  Speaker 10: to remain firmly in that place, if not move into
• 27:00
  Speaker 10: the number one position over the next several years.
• 27:03
  Speaker 3: Number one Verizon.
• 27:04
  Speaker 10: Number one is Verizon still, so I'm a Verizon person.
• 27:08
  Speaker 3: I am too, But I just went to Italy and
• 27:11
  Speaker 3: how did it? What did you do for your phone needs?
• 27:13
  Speaker 2: Fine, it's just a lot. I have a plan that
• 27:15
  Speaker 2: just ports over to an international.
• 27:17
  Speaker 3: Okay, because I do uh huh all of my offspring.
• 27:19
  Speaker 2: That's the only thing that I still pay for the Yes, no.
• 27:25
  Speaker 3: One wants to give that up. Why pay for your
• 27:26
  Speaker 3: own cell phone service when dad will pay for it.
• 27:29
  Speaker 3: I switched over to T Mobile because of the giveaways, Yes,
• 27:32
  Speaker 3: because of the free iPhone last cycle, and also because
• 27:35
  Speaker 3: you get free data and free international texting when you're
• 27:38
  Speaker 3: overseas up to five gigabytes, so that means I never
• 27:41
  Speaker 3: have to buy an international data parison shopping.
• 27:43
  Speaker 10: That is the single biggest hook I hear. So when
• 27:46
  Speaker 10: people come to me and they're like, I'm a T
• 27:48
  Speaker 10: mobile subscriber, they have all these giveaways and they have
• 27:51
  Speaker 10: international goal.
• 27:53
  Speaker 3: That makes a big difference because when I was on
• 27:55
  Speaker 3: AT and T, I was paying ten dollars a day
• 27:56
  Speaker 3: and that adds.
• 27:57
  Speaker 10: Up really quickly, does it really?
• 27:59
  Speaker 4: You know?
• 27:59
  Speaker 3: And then only one person the family can get it
• 28:01
  Speaker 3: because you know, not everyone's going to get.
• 28:02
  Speaker 2: It right and yeah, four offspring plus an next wife
• 28:05
  Speaker 2: you're still thinking for Well, there you go. Charlie Pellett
• 28:09
  Speaker 2: is on the T Mobi. He always tries to sell.
• 28:11
  Speaker 3: Me to get Charlie also knows the great deal. That's
• 28:13
  Speaker 3: the secret here a Bloomberg Charlie was.
• 28:15
  Speaker 2: Tracking the strange parts of the world where he probably
• 28:17
  Speaker 2: needs that kind of stuff. So what's the future of
• 28:19
  Speaker 2: wireless in this country? Is it just our poop growth?
• 28:22
  Speaker 2: Average revenue per user? And is that kind of the
• 28:25
  Speaker 2: story for.
• 28:26
  Speaker 10: That is So that is a great question, that is
• 28:29
  Speaker 10: what's driving growth? Now for a telco, you start of
• 28:32
  Speaker 10: run out of room for adding new subs and so
• 28:35
  Speaker 10: you need to drive that up that average revenue per
• 28:39
  Speaker 10: user and they're doing it with the giveaways we were
• 28:41
  Speaker 10: just talking about. They actually charge modestly for those. In
• 28:46
  Speaker 10: some cases they're selling you phone insurance. T Mobile is
• 28:50
  Speaker 10: now pushing into the advertising business, but the real avenue
• 28:54
  Speaker 10: of growth to watch for them going forward is broadband.
• 28:57
  Speaker 10: They are making more and more inroads into the market
• 29:01
  Speaker 10: and T Mobile it's what I'm watching with the new
• 29:04
  Speaker 10: CEO here to see what he does in fiber broadband,
• 29:07
  Speaker 10: because if T Mobile has had any sort of a
• 29:10
  Speaker 10: misfire over the past decade, it's not getting into fiber
• 29:14
  Speaker 10: broadband in a bigger way in the way that AT
• 29:17
  Speaker 10: and TM Verizon both have through sizeable and aggressive acquisitions.
• 29:22
  Speaker 10: So it'll be interesting to see what he does there.
• 29:26
  Speaker 10: My call is he's going to start building quickly and aggressively,
• 29:30
  Speaker 10: would be my guess.
• 29:31
  Speaker 2: A R thanks to John Butler, Bloomberg Intelligence Senior Telecom analyst.
• 29:34
  Speaker 2: We move next to the media entertainment space. This week,
• 29:37
  Speaker 2: Late night host Jimmy Kimmel returned to television. ABC parent
• 29:41
  Speaker 2: Walt Disney had pulled the show off the air. That's
• 29:43
  Speaker 2: after Kimmel said conservatives were trying to score political points
• 29:47
  Speaker 2: off the fatal shooting of conservative activists Charlie Kirk. In
• 29:50
  Speaker 2: his return, Kimmel didn't shy away from poking fun at
• 29:53
  Speaker 2: President Donald Trump and FCC Chairman Brendan Carr and making
• 29:56
  Speaker 2: an impassioned case for free speech for more and all
• 29:59
  Speaker 2: this scarlet field. When I were joined by Githa Ranganath
• 30:01
  Speaker 2: and Bloomberg Intelligence senior media analyst, we first asked Githa
• 30:06
  Speaker 2: what this news means for late night networks and whether
• 30:08
  Speaker 2: they still make money.
• 30:10
  Speaker 6: They don't make a whole lot of money, Paul, not anymore.
• 30:13
  Speaker 6: It used to be that, you know, late night television
• 30:15
  Speaker 6: would bring in a lot of ratings, would bring in
• 30:17
  Speaker 6: a lot of AD dollars. That has really changed. We've
• 30:21
  Speaker 6: we've seen linear TV kind of hemorrhage viewers now over
• 30:26
  Speaker 6: so many years, and late night has no exception. So
• 30:29
  Speaker 6: if you just kind of look at, you know, Jimmy
• 30:31
  Speaker 6: Kimmel's show, for instance, it generates roughly about fifty million
• 30:34
  Speaker 6: dollars in AD revenue. Compare that to a few years
• 30:37
  Speaker 6: ago when it used to generate close to about one
• 30:38
  Speaker 6: hundred and fifty million. So definitely AD revenue going down,
• 30:42
  Speaker 6: and most of these late night shows are losing money.
• 30:46
  Speaker 6: Just given the programming budget for these shows. So not
• 30:51
  Speaker 6: really a needle mover in a financial sense for Disney.
• 30:55
  Speaker 3: Okay, But in a cultural sense, it is because these
• 30:57
  Speaker 3: are shows that define the networks, and so thank you
• 31:01
  Speaker 3: for putting numbers to that, because I think there's a
• 31:03
  Speaker 3: lot of concern or skepticism from certain corners of American
• 31:09
  Speaker 3: communities that question whether Stephen Colbert's show should have been
• 31:12
  Speaker 3: canceled for financial reasons, as CBS asserts it was. Keita,
• 31:16
  Speaker 3: Is ABC going to pay some kind of price for
• 31:18
  Speaker 3: allowing Kimmel to go back on air because the President,
• 31:21
  Speaker 3: for instance, alluded to making more money off the company
• 31:24
  Speaker 3: for doing so.
• 31:25
  Speaker 6: Yeah, it's certainly possible. I mean, we've seen President Trump
• 31:28
  Speaker 6: kind of go after you know, the broadcast networks threatened
• 31:32
  Speaker 6: to kind of revoke licenses, so he goes after anybody.
• 31:35
  Speaker 6: He uses his power, you know, the courts, to attack
• 31:38
  Speaker 6: anybody who says anything unflattering about him. But that's, you know,
• 31:41
  Speaker 6: definitely possible from a Disney perspective. Though you have to
• 31:45
  Speaker 6: remember this is a very very diversified company, So yes,
• 31:50
  Speaker 6: ABC is definitely a very important asset. But again, if
• 31:53
  Speaker 6: you put some numbers around this, scarlet. It makes up
• 31:56
  Speaker 6: only about they generate of Disney itself generates about nine
• 32:00
  Speaker 6: to one hundred billion dollars in revenue every year. ABC
• 32:04
  Speaker 6: is about five billion, five to six billion in revenue,
• 32:06
  Speaker 6: so it's just about five percent for the company. So again,
• 32:10
  Speaker 6: you know, small potatoes in the context of the company's financials.
• 32:14
  Speaker 6: But yes, you bring up a very important point about
• 32:16
  Speaker 6: culture wars. Unfortunately, I think Disney is in a losing
• 32:19
  Speaker 6: position whichever way, because they're either going to anger you know,
• 32:23
  Speaker 6: the conservatives or the other end of the spectrum.
• 32:26
  Speaker 4: So it's just tough.
• 32:28
  Speaker 3: Yeah, very quickly get that. In the days following kimmel suspension,
• 32:31
  Speaker 3: a number of people canceled or threatened to cancel their
• 32:34
  Speaker 3: Disney plus streaming services. Do we have a sense that
• 32:37
  Speaker 3: this might get kind of noisy when it comes to
• 32:39
  Speaker 3: the earning supports and the streaming numbers and subscriptions.
• 32:43
  Speaker 6: I mean, we've seen this kind of backlash before happen,
• 32:46
  Speaker 6: you know, in the case of certain programming and you
• 32:49
  Speaker 6: know with Netflix, with other streaming services. Typically we haven't
• 32:53
  Speaker 6: really seen it reflected in the numbers, even though there's
• 32:55
  Speaker 6: a lot of noise around it. So yes, maybe a
• 32:59
  Speaker 6: little bit of up and down, but I don't think
• 33:00
  Speaker 6: it'll have again any big needle moving effect on the
• 33:03
  Speaker 6: Disney Plus subscriber numbers.
• 33:05
  Speaker 3: Ah.
• 33:05
  Speaker 2: Iight, Keith, Well we got you here. I have to
• 33:06
  Speaker 2: ask do we have any news on succession to Bob Iger?
• 33:09
  Speaker 6: Hmmm, not yet, Not yet, Paul, I mean, that's the
• 33:12
  Speaker 6: biggest question always for Disney. He is supposed to retire
• 33:16
  Speaker 6: by the end of twenty twenty six. There is a
• 33:18
  Speaker 6: lot of rumblings that it might be somebody internal, you know,
• 33:22
  Speaker 6: we keep hearing about Dana Walden. Of course, nothing certain
• 33:26
  Speaker 6: just yet.
• 33:27
  Speaker 2: Our thanks to KEITHA. Rung Anathan Bloomberg Intelligence Senior Media Analyst.
• 33:31
  Speaker 2: We move next to some news in the food and
• 33:32
  Speaker 2: beverage industry. The coffee giant Strawbucks announced it will close
• 33:35
  Speaker 2: stores and eliminate nine hundred jobs in a one billion
• 33:38
  Speaker 2: dollar restructuring effort under new chief executive officer Brian nicchol.
• 33:41
  Speaker 2: For more, co host Scarlett Ffuh and I were joined
• 33:43
  Speaker 2: by Michael Halen, Bloomberg Intelligence Senior Restaurant and food service analyst.
• 33:47
  Speaker 2: We first asked Michael for his take on this week's news.
• 33:50
  Speaker 11: This was very clearly communicated to the street. Back in
• 33:54
  Speaker 11: April on their fiscal call, Management said that you know,
• 33:57
  Speaker 11: we expect more restructuring charges. Is we're going to continue
• 34:01
  Speaker 11: to evaluate our store base. Really, management wanted new CFO
• 34:06
  Speaker 11: Kathy Smith to be involved in the process, so this
• 34:10
  Speaker 11: was not a surprise, all right.
• 34:11
  Speaker 2: A shout out to my Starbucks on Route thirty five
• 34:13
  Speaker 2: and Wall Township, New Jersey. They do a great job,
• 34:15
  Speaker 2: great folks, very efficient, very good Mike. What does this
• 34:20
  Speaker 2: company need to do? What do they say is under
• 34:23
  Speaker 2: to do list to turn this company around? What are
• 34:25
  Speaker 2: you looking for?
• 34:26
  Speaker 11: Yeah, it's more operations in marketing and we're starting to
• 34:30
  Speaker 11: see things kind of inflect here. We think fiscal twenty
• 34:33
  Speaker 11: six should be a nice bounce back year. So you know,
• 34:38
  Speaker 11: first it's with the operations, right, so it's eliminating menu items,
• 34:43
  Speaker 11: increasing labor, which baristas. We're very happy about, creating a
• 34:49
  Speaker 11: smart queue for mobile orders, right, so the stores aren't
• 34:53
  Speaker 11: as chaotic and baristas aren't serving you know, mobile orders
• 34:58
  Speaker 11: for somebody thirty miles away before it help someone inside
• 35:01
  Speaker 11: the store. And then service standards, right, they're rolling out
• 35:05
  Speaker 11: these green Apron service standards this year. It's a big
• 35:08
  Speaker 11: investment on training and really nailing the consumer experience in
• 35:13
  Speaker 11: the store. And then from there it's the marketing and
• 35:15
  Speaker 11: marketing seems to be working. They pulled back on discounts
• 35:19
  Speaker 11: and what they're doing is more marketing. You'll see some
• 35:21
  Speaker 11: TV ads right. They're doing more digital marketing, and we
• 35:25
  Speaker 11: think that's a smart move. It seems to be paying
• 35:27
  Speaker 11: early dividends. Starbucks non rewards member transactions are up. Non
• 35:34
  Speaker 11: discounted rewards members transactions are up, and we think these
• 35:39
  Speaker 11: are a sign that sales are going to inflect higher
• 35:41
  Speaker 11: in the coming months.
• 35:43
  Speaker 3: Okay, but this is taking a while. Paul and I
• 35:45
  Speaker 3: were just saying that Brian Nickel owns this now he's
• 35:47
  Speaker 3: been CEO for a year and they're still in turnaround mode.
• 35:50
  Speaker 3: They're still in kind of like let's figure out our
• 35:52
  Speaker 3: path forward. Investors, please be patient. Are investor is going
• 35:56
  Speaker 3: to continue to be patient for another six months to
• 35:58
  Speaker 3: one year?
• 35:59
  Speaker 11: I don't think they're going to be patient for six
• 36:01
  Speaker 11: months to one year. In terms of the stock price,
• 36:03
  Speaker 11: I think Brian Nichols job is very much safe. You know,
• 36:07
  Speaker 11: you can't turn around an aircreraft carrier on a dime, right,
• 36:10
  Speaker 11: This is a massive organization eighteen thousand stores just here
• 36:14
  Speaker 11: in North America over forty thousand globally. So yes, this
• 36:18
  Speaker 11: is taking longer than a lot anticipated you know, myself included.
• 36:23
  Speaker 11: You know, our investor is going to be happy if
• 36:26
  Speaker 11: they don't see same sore sales inflect here in the
• 36:28
  Speaker 11: first quarter of fiscal twenty six. No, they're not going
• 36:32
  Speaker 11: to be happy, and you're going to see it reflected
• 36:34
  Speaker 11: in the share price.
• 36:35
  Speaker 6: Right.
• 36:35
  Speaker 11: So yeah, I mean I think they're they're making the
• 36:38
  Speaker 11: right moves. This has been a longer turnaround than most
• 36:42
  Speaker 11: had expected. But you know, I think Brian Nichols pressing
• 36:46
  Speaker 11: all the right buttons right now.
• 36:47
  Speaker 2: Our thanks to Michael Halen, Bloomberg Intelligence senior restaurant and
• 36:50
  Speaker 2: food service analyst. That's this week's edition of Bloomberg Intelligence
• 36:53
  Speaker 2: on Bloomberg Radio, providing in depth research and data on
• 36:56
  Speaker 2: two thousand companies and one hundred and thirty industries. And
• 36:59
  Speaker 2: remember you can that is Bloomberg Intelligence via b I
• 37:01
  Speaker 2: go on the terminal, I'm Paul Sweeney. Stay with us.
• 37:04
  Speaker 2: Today's top stories and global business headlines are coming up
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  Speaker 7: M