Latest / Bloomberg Intelligence / A Bitcoin ETF Could Make The Cryptocurrency Safer: SEC’s Peirce

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A Bitcoin ETF Could Make The Cryptocurrency Safer: SEC’s Peirce · Bloomberg Intelligence

0:05
Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox.
0:08
Speaker 1: Along with my co host Lisa Bramowitz. Each day we
0:11
Speaker 1: bring you the most important, noteworthy, and useful interviews for
0:15
Speaker 1: you and your money, whether you're at the grocery store
0:17
Speaker 1: or the trading floor. Find the Bloomberg p m L
0:20
Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Yesterday,
0:33
Speaker 1: the Curious Exchange Commission rejected her request to list a
0:36
Speaker 1: Bitcoin e t F run by the Winklevoss Brothers. They
0:40
Speaker 1: were study concerns about the reliability of trading and volume
0:43
Speaker 1: data for the cryptocurrency. Hester Purse was the only SEC
0:47
Speaker 1: commissioner to dissent from that ruler ruling, saying that she
0:50
Speaker 1: would have allowed the Bitcoin e TF to listen. She
0:53
Speaker 1: joins US now, commission or thank you so much for
0:55
Speaker 1: joining us. I want to start with why did you
0:57
Speaker 1: disagree with your colleagues on this issue? Sure, thanks for
1:01
Speaker 1: having me on. I I disagreed because it was really
1:04
Speaker 1: a technical disagreement. I think that the way this was
1:08
Speaker 1: presented to US is an exchange presented to US um
1:13
Speaker 1: this this a rule change which would allow them to
1:17
Speaker 1: trade this particular product and um, the standards by which
1:22
Speaker 1: we review that should be whether or not the exchange
1:25
Speaker 1: can manage trading in that product, and instead, I think
1:29
Speaker 1: we looked to the underlying bitcoin market and we um,
1:33
Speaker 1: we looked at things in that market that we we
1:37
Speaker 1: didn't like, and we said we're not going to let
1:39
Speaker 1: the product trade, which to me doesn't seem like the
1:42
Speaker 1: right approach at all. Commissioner person, I was reading your
1:45
Speaker 1: descent and I found it really interesting. The implication seemed
1:48
Speaker 1: to be that a bitcoin e t F may help
1:52
Speaker 1: actually bring more transparency to the market. Was I reading
1:56
Speaker 1: that correctly right? I think that in this case, it
1:59
Speaker 1: wasn't an e t F specifically, but an exchange traded product,
2:02
Speaker 1: which would would allow institutions to play a bigger role
2:07
Speaker 1: in the bitcoin market, which I think would would be
2:09
Speaker 1: good for the market, and I think would be good
2:11
Speaker 1: for retail investors as well. Just can you offer your
2:16
Speaker 1: definition of what is a cryptocurrency and what is behind
2:20
Speaker 1: the potential value in a cryptocurrency? Well, I think there
2:25
Speaker 1: are many different cryptocurrencies, so I think it's hard to
2:30
Speaker 1: provide one definition for all cryptocurrencies. Um. You know, bitcoin
2:34
Speaker 1: has been traded for quite some time, and and offers
2:38
Speaker 1: the ability for people to exchange value in a very
2:42
Speaker 1: efficient way. UM. And So you know, I think that
2:46
Speaker 1: there there are a lot of people think that there's
2:49
Speaker 1: real potential in bitcoin. UM. As I said in my descent,
2:53
Speaker 1: I'm not trying to make a judgment one way or
2:55
Speaker 1: the other on bitcoin or any cryptocurrency. I'm just trying
2:58
Speaker 1: to give investors an opportunity to participate in this market. So,
3:03
Speaker 1: Commissioner I was interested by a study that came out
3:06
Speaker 1: by coin Metrics this week that showed that up to
3:09
Speaker 1: two thirds of the transaction activity registered on the bitcoin
3:12
Speaker 1: network has no economic value, with volumes being more influenced
3:17
Speaker 1: by reshuffling balances between accounts and outright scams. So how
3:21
Speaker 1: did the Winklevoss brothers propose to offset that with their
3:25
Speaker 1: e t F that would give sort of more confidence
3:27
Speaker 1: to the institutional investors. Well, the way this product was
3:31
Speaker 1: set up, as it was pegged to the price on
3:34
Speaker 1: on one exchange to the auction the closing auction at
3:37
Speaker 1: the end of the day, and so that was that
3:41
Speaker 1: was how they chose to do it. There are other
3:43
Speaker 1: there are other approaches that one could take, and others
3:46
Speaker 1: have come in with different potential potential suggestions of how
3:51
Speaker 1: to do that. But again, I mean as you get
3:55
Speaker 1: more institutions involved, the markets are going to become more regular, regularized,
4:00
Speaker 1: and you know as to whether or not there's economic
4:03
Speaker 1: value in particular trading. I think we need to be
4:05
Speaker 1: careful in making those kind of kinds of judgments UM
4:09
Speaker 1: in our equity markets to there are people who are
4:11
Speaker 1: involved in the markets for all different reasons. We have
4:14
Speaker 1: people who are who are planning to buy and hold
4:16
Speaker 1: for long term, we have people who are holding for
4:19
Speaker 1: much shorter for much shorter time frames. And we have
4:22
Speaker 1: people who are UM providing liquidity and who are trading
4:25
Speaker 1: in and out quite rapidly, and all of those different
4:28
Speaker 1: people have a different function in the market. But but
4:31
Speaker 1: I don't think we need to make judgments about UM
4:35
Speaker 1: whether their their activity has value or not. Commissioner, do
4:38
Speaker 1: you think that there's a regulatory bias against bitcoin right
4:42
Speaker 1: now and cryptocurrencies because there are people questioning whether they
4:46
Speaker 1: have inherent value and whether they are a bubble that
4:48
Speaker 1: have sort of nothing behind them. Well, I think there
4:52
Speaker 1: are people who are questioning the value of bitcoin UM,
4:55
Speaker 1: and I think that as regulators, our role is not
4:59
Speaker 1: to judge investments, what the what the value of an
5:03
Speaker 1: investment is. It's to give people an opportunity to make
5:05
Speaker 1: those judgments themselves. UM. And you know, there are a
5:09
Speaker 1: lot of very very smart people who are very engaged
5:12
Speaker 1: in the crypto space and have UM have real ideas
5:17
Speaker 1: about how it could transform our lives. And I think
5:19
Speaker 1: we need to give those people an opportunity to UM
5:23
Speaker 1: work work with with what they have, and to to
5:26
Speaker 1: see what they can make of it. And and I'd
5:29
Speaker 1: rather that we as regulators make sure that disclosure is good,
5:33
Speaker 1: which is which is certainly a key part of our
5:36
Speaker 1: responsibility UM, but then allow investors to make their own choices. Commissioners,
5:40
Speaker 1: do you expect that your fellow commissioners will change their
5:45
Speaker 1: mind and could approve a bit coin or other cryptocurrency
5:48
Speaker 1: e t F in the near future. Well, I do
5:53
Speaker 1: think it's possible. I mean, things in this space are
5:55
Speaker 1: changing fast and and UM some of the concerns that
5:58
Speaker 1: have been laid out by the commission are ones that
6:01
Speaker 1: you know every day people are working on developing solutions
6:05
Speaker 1: and addressing those concerns. So I think if we work
6:08
Speaker 1: with people in this space, UM, we may be able
6:11
Speaker 1: to get more comfortable about things that that have, uh,
6:14
Speaker 1: that have raised concerns from my colleagues. So I can't
6:18
Speaker 1: speak for them, you know, I can say from my perspective,
6:20
Speaker 1: I think we could have gone forward with this with
6:23
Speaker 1: this particular et P, and I think that, uh, doing
6:28
Speaker 1: so would have been would have been the right thing
6:31
Speaker 1: to do for investors. What do you think should happen
6:34
Speaker 1: in order to mitigate the agency's concerns over fraudulent and
6:38
Speaker 1: manipulative acts or practices that could be perpetrated using cryptocurrencies. Well,
6:46
Speaker 1: I think that in many underlying you know, in many
6:50
Speaker 1: many assets, underlying products that trade on our exchanges, their
6:55
Speaker 1: concerns about manipulation and so um. Yeah, But what could
6:59
Speaker 1: specifically be in order to mitigate this having to do
7:01
Speaker 1: with cryptocurrencies because this is an unregulated offshore market, Well,
7:07
Speaker 1: there there are onshore markets and offshore markets, so you're
7:11
Speaker 1: you're right, it's a global marketplace, uh, And and there
7:15
Speaker 1: are players involved in this space who are very interested
7:19
Speaker 1: in making sure that there's no manipulation. And so there
7:22
Speaker 1: is quite a bit of self regulation going on right
7:26
Speaker 1: now to address manipulation or or charges The manipulation, and
7:29
Speaker 1: I think that's valuable um and I think if we
7:32
Speaker 1: were to bring in the possibility of more institutionalization in
7:37
Speaker 1: the market, I think there would be even more watching
7:40
Speaker 1: for manipulation that would be going on by people who
7:43
Speaker 1: definitely have skin in the game. So, yes, there there
7:48
Speaker 1: is manipulation and and and there is the potential from
7:52
Speaker 1: manipulation and lots of markets and and we uh, we
7:57
Speaker 1: can see that that people involved in the those markets
8:00
Speaker 1: take steps to address that. And and so obviously the
8:04
Speaker 1: exchange that would be offering this product has a real
8:07
Speaker 1: interest in making sure that it's offering a product that
8:11
Speaker 1: isn't being manipulated, and if it sees problems in the
8:14
Speaker 1: underlying it can step in and stop trading. We've got
8:17
Speaker 1: to leave it there, But I want to thank you
8:19
Speaker 1: very much for your time and your comments. Hester Purse,
8:21
Speaker 1: Securities and Exchange Commissioner, speaking about the rejection of the
8:26
Speaker 1: VINKL Boss Twins Crypto e t F. Another company that
8:45
Speaker 1: has been in the news is n XP a semiconductor
8:49
Speaker 1: Why because Qualcom was looking to acquire the company, but
8:54
Speaker 1: that deal has gone by the wayside. And here to
8:57
Speaker 1: tell us a little bit more about it is Rick Klemmer,
9:00
Speaker 1: President and the chief executive of an XP Semiconductors. Thank
9:04
Speaker 1: you very much for being here. Maybe just explain why
9:07
Speaker 1: do you believe the deal didn't get done. Well, you know,
9:10
Speaker 1: it's hard for us to understand completely. We don't think
9:13
Speaker 1: there was any real regulatory issue that prevented the transaction
9:16
Speaker 1: from being approved in China. It was approved by twenty
9:19
Speaker 1: something other countries around the world, so it really wasn't
9:22
Speaker 1: a true regulatory issue, So it was probably a political issue.
9:25
Speaker 1: But you know, at this point in time, it's all
9:28
Speaker 1: about how we move forward and how we can get
9:30
Speaker 1: back to driving the growth that's the best for our
9:32
Speaker 1: company and our shareholders. When you talk about moving forward,
9:35
Speaker 1: I have to wonder did you get about ten calls
9:38
Speaker 1: from other potential acquirers right after that saying hey, I
9:42
Speaker 1: want to meet for coffee. We haven't, and you know
9:45
Speaker 1: we don't plan on doing that. I mean, with the
9:47
Speaker 1: issue being the regulatory approval process, I don't know why
9:50
Speaker 1: it would be any different with anyone else. So you know,
9:53
Speaker 1: we have a bright future when you look at where
9:54
Speaker 1: we are, we're the leading semiconductor supplying to the automotive market,
9:58
Speaker 1: very focused on autonomas driving, which really in the next
10:01
Speaker 1: few years are actually probably next ten years, is about drive,
10:05
Speaker 1: making driving safer, not really automatic driving, and so we're
10:09
Speaker 1: focused on that. We're focused on facilitating the Internet of Things,
10:12
Speaker 1: which you know is going to have seventy five billion
10:15
Speaker 1: connected devices by three times what it is today. And
10:19
Speaker 1: our technology really is in a position where it can
10:22
Speaker 1: take advantage of that and really provides some useful solutions
10:25
Speaker 1: for everyone. Now, just to knowe you have a career
10:27
Speaker 1: that goes all the way back to the world of
10:28
Speaker 1: Texas instruments. Correct, Okay, Uh. The reason I bring that
10:32
Speaker 1: up is because an XP Semiconductor Phillips. I mean, that's
10:38
Speaker 1: really can you look forward into and tell us what
10:41
Speaker 1: do you think the chip company of the future is
10:43
Speaker 1: really gonna look like? Well, you know, we're trying to
10:46
Speaker 1: be sure that we're that. So I I get I
10:48
Speaker 1: get that. But it's come through a lot of acquisitions
10:50
Speaker 1: and combinations, and so we did a merger of equals
10:53
Speaker 1: about three years ago with three freest which was the
10:55
Speaker 1: Motorola Semiconductor company, and and that's proved to be very
11:00
Speaker 1: successful for us in the automotive space where we can
11:02
Speaker 1: bring the combination of both technologies together to be able
11:05
Speaker 1: to make a difference for our customers in the car industry.
11:09
Speaker 1: And so I think that those opportunities are really key.
11:12
Speaker 1: But it's about focusing on the future. And you know,
11:15
Speaker 1: we are in a unique position where we can provide
11:17
Speaker 1: the processing and the security because with all the hacking
11:20
Speaker 1: and risk of of hacking, being able to provide security
11:24
Speaker 1: in the connected world as a critical value. What did
11:28
Speaker 1: it do to morale to have this deal after so
11:30
Speaker 1: much hype and so much drama fall apart. You know,
11:33
Speaker 1: it was really interesting. Initially our organization was very excited
11:37
Speaker 1: about the combination with Qualcom. When the confusion came in
11:40
Speaker 1: when Broadcom made the hostile bid for Qualcom late last year,
11:44
Speaker 1: it really created a damper on the environment because no
11:48
Speaker 1: one was looking forward to be in a position to
11:51
Speaker 1: be there. But you know, we've gotten through that fatigue.
11:54
Speaker 1: Now the organization is re energized. We we had an
11:57
Speaker 1: all hands meeting after the morning after it was announced,
12:00
Speaker 1: and everyone was quite excited about the future and just
12:02
Speaker 1: having certainty and clarity about where we're going. Just to
12:05
Speaker 1: quickly when a client or a customer goes to a
12:09
Speaker 1: store and pays using their mobile phone like Apple Pay
12:14
Speaker 1: or Google Pay. What are they using an an XP product?
12:19
Speaker 1: Most likely they are. We have roughly a d eighty
12:22
Speaker 1: five percent market share in the mobile wallet. We invented
12:25
Speaker 1: NFC some near field communications, yes absolutely, which facilitates the
12:29
Speaker 1: mobile wallet, and so we're designed in and most of
12:32
Speaker 1: those applications to be able to do that. We see
12:34
Speaker 1: that expanding, especially in Asia where it's becoming much more
12:38
Speaker 1: useful used for transit and other applications. Uh in India,
12:42
Speaker 1: they're actually where people don't have a bank account are
12:44
Speaker 1: now using their phone basically as their bank account to
12:48
Speaker 1: facilitate transactions, to be able to store money, save money.
12:51
Speaker 1: So we're seeing a real boom in usage in the
12:54
Speaker 1: India for the population that really doesn't even have a
12:57
Speaker 1: bank account today. So you know, Apple talking about your
13:00
Speaker 1: smartphone use and and the smart pay. Apple has talked
13:05
Speaker 1: about possibly creating more of its own chips and trying
13:09
Speaker 1: to create more of its own infrastructure. How concerned are
13:13
Speaker 1: you about that? Well, you know, Apple has certainly got
13:17
Speaker 1: a bright future and they've clearly moved towards where they're
13:20
Speaker 1: creating a significant amount of their own technology. I think
13:24
Speaker 1: we're uniquely positioned with some key technology that they probably
13:27
Speaker 1: don't want to invest in to be able to drive
13:30
Speaker 1: based on the broad usage from a broad customer base
13:33
Speaker 1: where they wouldn't be able to serve. So I think,
13:35
Speaker 1: based on our experience, we think we have a good
13:37
Speaker 1: relationship with OLI our uh you know, mobile handset customers,
13:41
Speaker 1: and I think we can continue to make good progress there.
13:44
Speaker 1: Biometric passports. I love the details of this stuff, so
13:47
Speaker 1: I mean that's you as well, right, Biometric chips. We
13:51
Speaker 1: we do the chip that's used in the electronic passport
13:54
Speaker 1: that helps facilitate you know, processing information. So we do that.
13:58
Speaker 1: And I think any six countries around the world, what
14:02
Speaker 1: do you think is going to be the biggest smart
14:04
Speaker 1: market that is not smart right now? In other words,
14:08
Speaker 1: where chips going to be in the future that where
14:11
Speaker 1: they aren't today. You know it's gonna be ever place.
14:14
Speaker 1: You know, as you start thinking about seventy five billion,
14:17
Speaker 1: you know it's huge. And so like your thermostat, all
14:19
Speaker 1: thermostats are going to be connected. Security, your security and
14:23
Speaker 1: your home or office or industry is all going to
14:25
Speaker 1: be connected so you can see what's going on wherever
14:28
Speaker 1: you are around the during your work day or around
14:32
Speaker 1: travel or whatever. So I have regulators been working closely
14:36
Speaker 1: with you Is they start to get concerned about surveillance
14:39
Speaker 1: and safety and all that. We we work with a
14:41
Speaker 1: number of governments relative to how to provide that best security.
14:46
Speaker 1: But you know, with the new implementation of the you know,
14:49
Speaker 1: the new acts in Europe, we have to be very
14:51
Speaker 1: careful about that information and certainly we're working with them
14:54
Speaker 1: to be able to protect it but not ensure that
14:56
Speaker 1: it's not abused. Alright, well, I guess that uh, the
15:01
Speaker 1: future of an XP semiconductor as you see it right
15:04
Speaker 1: now independent. Absolutely, we look forward to continuing to drive
15:09
Speaker 1: a bright future. And is the M and A wave
15:11
Speaker 1: in the semiconductor space dead? You know, I don't know
15:14
Speaker 1: that it's dead. It's clearly going to go through a
15:17
Speaker 1: very thoughtful process. If this transaction didn't get approved in China,
15:22
Speaker 1: where it was approved by the twentysomething countries around the world,
15:25
Speaker 1: I think people are gonna have to really think about,
15:27
Speaker 1: you know, how much risk they want to take. Twenty
15:29
Speaker 1: one months is a long time to put your organization
15:32
Speaker 1: into a disruptive nature. So I think there will have
15:35
Speaker 1: to be a reflection associated with that. Did you feel
15:39
Speaker 1: any of the effects of the ban on purchasing products
15:43
Speaker 1: from China's ZTE Corporation purchase shipping product in Yes, we
15:50
Speaker 1: z T is a good customer of ours, and just
15:52
Speaker 1: last quarter we announced thirty one million dollar impact for
15:55
Speaker 1: the fact that the US had had prevented that from
15:59
Speaker 1: taking place. So I think they're a good customer. I think,
16:02
Speaker 1: you know, it's important that you know the UH the
16:05
Speaker 1: appropriate steps are taken to provide the security about information.
16:09
Speaker 1: But with the proper oversight, it seems like it's only
16:12
Speaker 1: appropriate for the company to be able to to be competitive.
16:16
Speaker 1: There are no US companies that are still in that
16:19
Speaker 1: market the ZT serves, so it's not certainly not like
16:23
Speaker 1: it's UH anti competitive for any US company. And they
16:26
Speaker 1: probably purchased around three and af or four billion dollars
16:29
Speaker 1: a year of semiconductor components, and my guess is sent
16:33
Speaker 1: percent of that is from US companies are US manufactured
16:36
Speaker 1: like our product is. So you know, I think it's
16:39
Speaker 1: a big decision, and you know, I I applaud what's
16:41
Speaker 1: been done recently where they're putting them in a little
16:45
Speaker 1: bit different fashion with appropriate oversight to protect U s
16:48
Speaker 1: national security, but yet at less, at least letting them
16:53
Speaker 1: continue to operate as an independent company. Rick Clamora, thank
16:56
Speaker 1: you so much for being with us. Really a pleasure
16:58
Speaker 1: to speak with you. You're such a celebrity and sort
17:01
Speaker 1: of star of this soap opera we've been talking about
17:03
Speaker 1: for so long. Uh, the potential tie up of Qualcom
17:06
Speaker 1: and n XP. Rick Klemmer as a president and chief
17:09
Speaker 1: executive of n XP Semiconductor's NXP Semiconductors to remain independent
17:14
Speaker 1: for the foreseeable future, you know, talk about another curveball.
17:34
Speaker 1: Investors in Twitter got a nice curveball and they whipped
17:38
Speaker 1: down right now. And here to tell us a little
17:41
Speaker 1: bit about Twitter's results and the changing nature of social
17:44
Speaker 1: media is Jim Anderson. He is the chief executive of
17:48
Speaker 1: social Flow. Uh. They are a company that sort of
17:53
Speaker 1: measures and monitors flows of information on social media. And
17:58
Speaker 1: in full disclosure, social Flow is a platform used by
18:01
Speaker 1: Bloomberg for social media purposes. Jim Anderson, thanks very much
18:05
Speaker 1: for being here. Tell us, did I describe what you
18:08
Speaker 1: do at all accurately? You did. We're the platform most
18:11
Speaker 1: of the big media companies used to get their content
18:13
Speaker 1: out to Twitter, Facebook, and other social platforms. We do
18:16
Speaker 1: a measure and sort of if you think about stock
18:17
Speaker 1: market analysts, we're not an analyst of the stocks, where
18:20
Speaker 1: an analysts consumer attention, right, And that's important because as
18:23
Speaker 1: a publisher, you want to know whether real people are
18:27
Speaker 1: really looking at your content. That's exactly right, that's the
18:30
Speaker 1: entire game. If you can't get real people to pay
18:32
Speaker 1: attention to what you're doing, why are you doing it? Okay?
18:35
Speaker 1: Is Twitter getting more real people to do what they're
18:38
Speaker 1: supposed to do on the Twitter platform? The irony is yes.
18:41
Speaker 1: I mean you wouldn't know it from their stock price,
18:43
Speaker 1: and I think the takeaway and Facebook in the same category.
18:45
Speaker 1: When you're a tech growth stock and you're not growing
18:47
Speaker 1: as much as is the market expected you to grow,
18:50
Speaker 1: you're you're going to be punished. But the reality is
18:52
Speaker 1: there are just as many, if not more, real people
18:55
Speaker 1: using Facebook and Twitter today then there were six months ago,
18:59
Speaker 1: three months ago, yesterday. I mean they're still growing, they're
19:01
Speaker 1: just not growing as fast as they were and as
19:04
Speaker 1: the market expects. And Twitter's results are sort of complicated
19:07
Speaker 1: a little bit by this whole bond problem, and they're
19:08
Speaker 1: trying to clean up their ecosystem when I think they
19:10
Speaker 1: deserve amazing credit for trying to do that. But the numbers,
19:13
Speaker 1: you know, the total accounts, and whether they report them
19:15
Speaker 1: and whether they were including the numbers, you see a
19:17
Speaker 1: lot of you know, sort of questions about how you
19:19
Speaker 1: count these things. Well, Jim, you know, it's interesting that
19:22
Speaker 1: you say that there are more real users that are
19:25
Speaker 1: paying attention and signing up for Twitter and Facebook. Roger mcnameee,
19:29
Speaker 1: one of the original investors in Facebook and currently head
19:34
Speaker 1: of Elevation Partners, was on Bloomberg Television yesterday and he
19:36
Speaker 1: said that he thinks that Facebook in particular is running
19:40
Speaker 1: out of potential users in its more profitable markets. Do
19:43
Speaker 1: you agree, yes. I mean Facebook's over two billion people
19:46
Speaker 1: and there's seven and a half billion people on the planet.
19:49
Speaker 1: You know that a significant number of them aren't going
19:51
Speaker 1: to be candidates for for Facebook for all kinds of reasons.
19:53
Speaker 1: So I think that's absolutely uh been on their horizon
19:57
Speaker 1: for a long time. It's an open question how far
19:59
Speaker 1: can they grow. Of course, you have to wrap up
20:01
Speaker 1: Instagram in there, which is owned by Facebook. You have
20:03
Speaker 1: to wrap up What'sapp. So again you get into these
20:05
Speaker 1: counting questions. But without a doubt that that point I
20:08
Speaker 1: think has to be front and center. How big can
20:09
Speaker 1: you possibly grow? Having said that, if you are an advertiser,
20:15
Speaker 1: what is the alternative? Is it Amazon? Well? Increasingly so.
20:19
Speaker 1: I mean I think it's interesting. You know, we talked
20:21
Speaker 1: about the fang stocks, right, Facebook, Apple, Amazon, Netflix, Google,
20:24
Speaker 1: and now you see the analysts starting to decouple Amazon.
20:27
Speaker 1: Amazon didn't hit his revenue target either, and there are
20:29
Speaker 1: stocks up four percent, but their profitability to make sense
20:33
Speaker 1: of Wall Street, which I know, it's it's kind of crazy.
20:37
Speaker 1: Well except for the fact that Amazon has demonstrated the
20:40
Speaker 1: ability to layer on higher margin services on top of
20:43
Speaker 1: a relatively low margin, low profit commerce business, and so
20:47
Speaker 1: Amazon is closer to the point of purchase than anybody
20:51
Speaker 1: out there, even Google. I mean, look at how profitable
20:53
Speaker 1: Google is. It knows when you type in the search
20:55
Speaker 1: box I want to, you know, go on a vacation
20:57
Speaker 1: or whatever. They know you're shopping for a vacation. That's
20:59
Speaker 1: one of the reasons Google is able to make so
21:01
Speaker 1: much money off of advertising. Amazon is poised to become
21:05
Speaker 1: an advertising powerhouse that they have fift of e commerce
21:09
Speaker 1: revenue in the US goes to Amazon. They know what
21:11
Speaker 1: I'm buying, and I say that in all candor, they
21:13
Speaker 1: know what probably what you're buying is once they get
21:16
Speaker 1: you in this store. Yeah yeah, But Jim, that raises
21:18
Speaker 1: a question for the profitability and usefulness of Facebook and
21:23
Speaker 1: UH and Twitter as advertising advertising behemoths because they don't
21:27
Speaker 1: have the direct channel to the actual retailers. I mean,
21:30
Speaker 1: could this be part of the issue that from a
21:33
Speaker 1: consumer engagement standpoint, Twitter and Facebook just are not the
21:38
Speaker 1: best places to advertise. I don't know that. I would
21:40
Speaker 1: say that. I I put Twitter and Facebook more in
21:43
Speaker 1: the category of Netflix, which may seem odd I mean,
21:45
Speaker 1: they they're completely different business models. You know, ones ad
21:47
Speaker 1: supported and free and the other is subscription and doesn't
21:50
Speaker 1: have ads. But they all three of those companies, Facebook, Twitter,
21:54
Speaker 1: and Netflix are really trying to get as much of
21:57
Speaker 1: your consumer attention as possible, essentially your recreational entertain information time.
22:01
Speaker 1: Amazon is really quite different. I don't know too many
22:03
Speaker 1: people who go to Amazon just to entertain themselves, right,
22:05
Speaker 1: I go to Amazon when I need to. You know,
22:09
Speaker 1: shopping is uh, shopping is an activity fair points, So okay,
22:15
Speaker 1: I guess my male bias here. I don't go to
22:19
Speaker 1: I'm just saying, you know, you look at what people
22:21
Speaker 1: purchase and how they purchase it, and you think did
22:24
Speaker 1: you need that? You know, you didn't need that, but
22:27
Speaker 1: you were there and you started clicking around and pretty soon,
22:29
Speaker 1: you know, another brown Box shows up. But then it
22:32
Speaker 1: raises a question entertainment, Right, what is the sort of
22:36
Speaker 1: uh I guess the Amazon. Is it as effective to
22:41
Speaker 1: advertise on that type of platform versus one where people
22:45
Speaker 1: are actually focused on actually buying things, they're opening up
22:48
Speaker 1: their pocketbooks. Well, you're getting into now, and this is
22:51
Speaker 1: a really big deal in the world of advertising, is
22:53
Speaker 1: sort of upper funnel brand awareness versus lower funnel direct response.
22:57
Speaker 1: And historically that the simple way to think of this
22:59
Speaker 1: was face Book was traditionally more upper funnel. You know,
23:02
Speaker 1: I just want your Volvo wants people to know that
23:04
Speaker 1: Volvo cars are great and safe and and you know,
23:07
Speaker 1: all the attributes they're trying to convey. Contrast that with
23:09
Speaker 1: sort of Google more click to buy. Right. I know
23:11
Speaker 1: that you're planning a trip to uh an exotic locale,
23:15
Speaker 1: and I want to sell you a hotel room or
23:17
Speaker 1: or airline tickets, and so all of advertising is tending
23:20
Speaker 1: to move towards more direct response, and so again Amazon
23:24
Speaker 1: is incredibly well poised to capitalize, and I think that's
23:26
Speaker 1: part of what we're seeing in the markets. Well, certainly
23:29
Speaker 1: that is what the investors believe. So you're seemingly on
23:32
Speaker 1: target there, because if you look at Amazon shares today, uh,
23:36
Speaker 1: they are up one and a quarter percent. Twitter shares
23:40
Speaker 1: not so much. Twitter shares down a little bit more
23:43
Speaker 1: than Thanks very much for being with us, Jim Anderson,
23:48
Speaker 1: Chief Executive. Social Flow. Alzheimer's is a crippling disease that
24:06
Speaker 1: affects millions of people. One company, as I, has created
24:12
Speaker 1: a drug that will slow the progression of the earliest
24:15
Speaker 1: stages of the devastating condition, and a new study show
24:18
Speaker 1: that it did so by thirty percent. The response, however,
24:22
Speaker 1: in the company shares with a steep decline. Joining us
24:25
Speaker 1: now is Ivan Chung, Chairman and chief executive of as I,
24:29
Speaker 1: which is based in Woodcliff Lake, New Jersey. Ivan, thank
24:32
Speaker 1: you so much for joining us. Were you surprised by
24:35
Speaker 1: the market's reaction given that this sounds like a pretty
24:38
Speaker 1: positive result. Thanks for having me. I'm not in a
24:42
Speaker 1: position to comment on the short term movements in the market,
24:47
Speaker 1: but um as we present it at the scientific Congress.
24:51
Speaker 1: This is the first large trial that if you could
24:57
Speaker 1: remove enough a lot of toxic amyloid plaque in the brain,
25:03
Speaker 1: it could slow down Alzheimer's disease. Mr Chung explained to
25:09
Speaker 1: our listeners the way in which cognitive ability was measured
25:17
Speaker 1: in the study, whose results were released at that Alzheimer's
25:21
Speaker 1: Association conference in Chicago. Thank you for the question. We
25:28
Speaker 1: use an endpoint called at cooms, which is a composite
25:33
Speaker 1: of the key elements from three well validated traditional measures.
25:40
Speaker 1: These three well validated traditional measures have been used for
25:44
Speaker 1: many years primarily to detect improvement in later stages of
25:50
Speaker 1: Alzheimer's disease, such as what as I developed almost twenty
25:56
Speaker 1: years ago are accept now we are testing to four
26:00
Speaker 1: SERO one in earlier stages of Alzheimer's disease because as
26:05
Speaker 1: you can imagine, these earlier stages of Alzheimer's disease patients,
26:09
Speaker 1: they're still functional, most of them are still at home.
26:11
Speaker 1: So we have to detect the initial milder changes so
26:17
Speaker 1: that we can delay the progression of these of this disease.
26:21
Speaker 1: And that's why we developed the atcoms which have the
26:25
Speaker 1: key elements that are more sensitive to the earlier onset
26:30
Speaker 1: of these milder cognitive impairments. UM. So I'm wondering, even
26:36
Speaker 1: just given the fact that there was definitely some proof
26:40
Speaker 1: in this study that there was a slowdown in the progression,
26:44
Speaker 1: but perhaps not as much as people were expecting, do
26:47
Speaker 1: you still see an accelerated approval as a possible path
26:52
Speaker 1: or a viable path to pursue for this drug. I
26:57
Speaker 1: think in the scientific community there are different numbers being
27:01
Speaker 1: thrown out. For example, improvement would be clinically meaningful. In
27:07
Speaker 1: our study, we specifically defined improvement will be clinically meaningful.
27:14
Speaker 1: As you saw in the presentation earlier this week, we
27:18
Speaker 1: have shown a thirty percent uh improvement in delaying the
27:24
Speaker 1: decline and progression of Alzheimer's disease. We definitely believe is
27:27
Speaker 1: clinically meaningful, and by two other measures, which are the
27:31
Speaker 1: more traditional measures. One we saw forty seven percent decline
27:36
Speaker 1: forty seven percent less decline and the other measure percent
27:39
Speaker 1: less decline. So we are confident about the robustness and
27:43
Speaker 1: the clinical meaningfulness of this data set. With regard to
27:47
Speaker 1: the Health authority and the FDA, let us do the work.
27:50
Speaker 1: We'll meet with them, we'll, I'm sure we'll have a
27:53
Speaker 1: productive conversation to understand the best path forward for pan
27:56
Speaker 1: too for CERO one. Not just to give a little
27:59
Speaker 1: more detail, there were there was a high dose arm
28:03
Speaker 1: to the study, right, yes, correct, tell people what is
28:06
Speaker 1: a high dose arm. The high dose arm is taking
28:10
Speaker 1: pen midigram per kg twice a month. That's the high
28:15
Speaker 1: dose arm. And in this study, the high dose arm
28:18
Speaker 1: is the one that's the best dose that showed statistically
28:21
Speaker 1: significant and means clinically meaningful results as what I described earlier. Okay,
28:27
Speaker 1: the reason I raised that issue is that European regulators
28:33
Speaker 1: have raised some concerns about some of the issues related
28:39
Speaker 1: to that high dose arm. They were worried about the
28:42
Speaker 1: threat of brain swelling. Right that was back in two
28:47
Speaker 1: thousand and uh fifteen when the trial was at the
28:52
Speaker 1: initial stage. At that time, none of us in the
28:56
Speaker 1: field knew too much about this phenomenon call old area E,
29:01
Speaker 1: and that's why the European authority took more conservative approach.
29:07
Speaker 1: Now the European Authority does not have that concern anymore.
29:11
Speaker 1: Together with our partner Baugan, we have two other Phase
29:14
Speaker 1: three late stage clinical development programs for two other compounds.
29:18
Speaker 1: We are in the European site and we have no
29:21
Speaker 1: such issues. That was a matter a few years back
29:26
Speaker 1: when the field didn't know much about how to take
29:28
Speaker 1: care of this issue, and now we don't have that
29:31
Speaker 1: issue anymore. All right, I want to thank you very
29:33
Speaker 1: much for helping us understand this a bit. Ivan Chung
29:37
Speaker 1: is the chairman and the chief executive of a SI.
29:40
Speaker 1: The parent company is ASI Company based in Tokyo, and
29:44
Speaker 1: he's talking about the release of new information having to
29:47
Speaker 1: do with their study of an Alzheimer's drug that was
29:51
Speaker 1: released at the Chicago Alzheimer's meeting on Wednesday. Thank you
29:55
Speaker 1: very much for joining us. Thanks for listening to the
30:01
Speaker 1: Bloomberg P and L podcast. You can subscribe and listen
30:04
Speaker 1: to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform
30:08
Speaker 1: you prefer. I'm pim Fox. I'm on Twitter at pim Fox.
30:13
Speaker 1: I'm on Twitter at Lisa Abramo wits one. Before the podcast,
30:16
Speaker 1: you can always catch us worldwide on Bloomberg Radio.