Latest / Bloomberg Intelligence / Why TikTok May Prefer A Weaker U.S. Partner: Howard Yu

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Why TikTok May Prefer A Weaker U.S. Partner: Howard Yu · Bloomberg Intelligence

• 0:01
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
• 0:04
  Speaker 1: with my co host of Bonnie Quinn. Every business day
• 0:06
  Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,
• 0:10
  Speaker 1: along with essential market moving news. Kind the Bloomberg Markets
• 0:13
  Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,
• 0:17
  Speaker 1: and on Bloomberg dot com. So it's been an interesting morning.
• 0:21
  Speaker 1: We've been talking a lot about various deals out there,
• 0:23
  Speaker 1: from the Verizon deal to the TikTok deal slash arrangement.
• 0:28
  Speaker 1: For somebody who you know can tell us a lot
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  Speaker 1: more about it. Now, let's go to Los Angewitz, London,
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  Speaker 1: Howard You, who is lego Professor of Management and Innovation
• 0:37
  Speaker 1: at I m d Business School. So the story is
• 0:41
  Speaker 1: that Oracle edged out Microsoft in negotiating for the US
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  Speaker 1: operations of China owned TikTok, which is the subsidiary of
• 0:49
  Speaker 1: by Dance. But Professor You explain to us exactly what
• 0:54
  Speaker 1: kind of a quote unquote deal this is. Well, it
• 0:57
  Speaker 1: remained slightly unclear how that technical partnership is gonna be
• 1:02
  Speaker 1: with Urticle and TikTok. What has been clear right now
• 1:05
  Speaker 1: is Microsoft historically or over the past few days, we're
• 1:09
  Speaker 1: thinking about acquiring tech talk and make it safe for
• 1:12
  Speaker 1: US user, and possibly they need to open the algal
• 1:16
  Speaker 1: or the software code and make it much more transparent
• 1:19
  Speaker 1: going forward. And in the end it's bike Dance. The
• 1:22
  Speaker 1: owner of TikTok said no to Microsoft, and in a
• 1:25
  Speaker 1: way that the technical partnership is probably keeping whatever algal
• 1:31
  Speaker 1: behind will stay intact and trying to appease to government
• 1:35
  Speaker 1: at the same time. So, professor, what was the political
• 1:39
  Speaker 1: overhang of this deal or the political influence of this
• 1:43
  Speaker 1: deal from your perspective, I mean, this is a big
• 1:47
  Speaker 1: major development in the sense that for the first time
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  Speaker 1: government are really adding on acting on an ad hot basis.
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  Speaker 1: So starting from the Trum administration, all of these executive orders,
• 1:58
  Speaker 1: there is no industry saltation, there is no independent inquiry
• 2:02
  Speaker 1: per se. And then after all the Chinese government at
• 2:07
  Speaker 1: the same time we're basically saying, you know, by Dance,
• 2:10
  Speaker 1: you cannot export any software code in the name of
• 2:14
  Speaker 1: you know, national security. On the ramification is the following
• 2:17
  Speaker 1: that business is find it really really difficult going forward
• 2:20
  Speaker 1: to plan ahead, whether it's long term R and D
• 2:23
  Speaker 1: or product sales and marketing. Given all of these becomes
• 2:26
  Speaker 1: much more of an ad hot basis in your estimation,
• 2:31
  Speaker 1: is Oracle the right kind of company to be doing this?
• 2:35
  Speaker 1: I mean in the ideal world. This is kind of
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  Speaker 1: strange because if you think about Oracle is historically it
• 2:41
  Speaker 1: is really a B two B company. They sells database services.
• 2:45
  Speaker 1: It doesn't really have a large B to C market
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  Speaker 1: as a result, to know how that they have would
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  Speaker 1: be arguably much less than Microsoft, where is running xboxes
• 2:55
  Speaker 1: or this game, And of course the B two C
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  Speaker 1: market is huge and sort of the technical ability around
• 3:01
  Speaker 1: AI is also amazing too. However, if you're thinking about
• 3:05
  Speaker 1: tech talk, probably one of the biggest worry is once
• 3:08
  Speaker 1: they've gone through the deal potentially go through, would they
• 3:12
  Speaker 1: completely lose their independence. From that angle than Oracle potentially
• 3:16
  Speaker 1: becomes much more attractive. That's smaller than know How around
• 3:20
  Speaker 1: B two SEA market is much less, and quite frankly,
• 3:23
  Speaker 1: they are not very strong in building our goal. So
• 3:26
  Speaker 1: from that angle, it's not too surprising that techtok would
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  Speaker 1: actually prefer a weaker partner in this case Oracle. So
• 3:34
  Speaker 1: do you think this deal this arrangement? I guess it's
• 3:36
  Speaker 1: probably the better way to term it. Do you think
• 3:38
  Speaker 1: this will actually work, Will it go through and we'll
• 3:40
  Speaker 1: actually do what it's supposed to do? You think, I
• 3:43
  Speaker 1: mean over the long run, um is probably simply a
• 3:47
  Speaker 1: cosmetic touch. Um. I mean both administration where it's Beijing
• 3:52
  Speaker 1: and and and the US government is most worry oh,
• 3:56
  Speaker 1: using this as a excuse of threatening national security. So
• 4:00
  Speaker 1: what the business executive right now is trying to come
• 4:03
  Speaker 1: up with a mixed shift solution to a piece on
• 4:06
  Speaker 1: both sides. But I think going forward, what really have
• 4:10
  Speaker 1: highlight is organization can no longer pick side despite the
• 4:14
  Speaker 1: tou politics between China and US. If you're any multinational
• 4:18
  Speaker 1: particular here in Europe, when I'm talking to executives, they
• 4:22
  Speaker 1: really cannot afford to pick side and ignore one market
• 4:26
  Speaker 1: versus the other. Um. So that would cause tremendous termoil
• 4:30
  Speaker 1: in the business community as all eyes are watching how
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  Speaker 1: TikTok is trying to find for itself. Yeah, it's really interesting.
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  Speaker 1: Can you put a value on the USA sets of TikTok, professor? Right?
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  Speaker 1: I mean right now they're talking about fifty billion dollar right.
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  Speaker 1: It really comes down to depending on how the US
• 4:51
  Speaker 1: acquirer can really leverage both of the user base on
• 4:55
  Speaker 1: what is remaining as you can back engineers and our goal.
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  Speaker 1: So you know, at first I thought Walmart and Microsoft
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  Speaker 1: bid is interesting because it potentially TikTok can be a
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  Speaker 1: very interesting e commerce platform to rejuvenate Walmart e commerce.
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  Speaker 1: So that's a direct symergy that you could put the
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  Speaker 1: tag price on and fifty billion dollars kind of okay.
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  Speaker 1: Now for you know Oracle, then I'm not too certain
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  Speaker 1: what kind of price they would eventually agree a point
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  Speaker 1: because again without the software algorithm being sold potentially, and
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  Speaker 1: if Oracles simply a technical partner for distribution itself, then
• 5:37
  Speaker 1: the payback becomes much less tenuous in a way. But
• 5:41
  Speaker 1: maybe they are motivated by other factors as well. Maybe
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  Speaker 1: they want to tell a new story to Wall Street,
• 5:47
  Speaker 1: or who knows, maybe there's political motivation in stepping in
• 5:51
  Speaker 1: and making sure that it goes through UM. But from
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  Speaker 1: a commercial aspect, fifty billion dollar without some directs in
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  Speaker 1: g on e commerce for instance, will sound a little crazy.
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  Speaker 1: So Professor, just thirty seconds left, get your thoughts on
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  Speaker 1: what some people are talking about is a technology cold
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  Speaker 1: war between China and I mean, the Internet is totally
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  Speaker 1: fractured these days. I think what business executive around the
• 6:18
  Speaker 1: world we have to understand right now, we're stepping into
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  Speaker 1: a bipolar world. Right. You have the U S system,
• 6:24
  Speaker 1: the China system, the European zone as well, and in
• 6:27
  Speaker 1: terms of GDP size, all three are important, and yet
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  Speaker 1: they conform very different norm very different regulation. So the
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  Speaker 1: idea you can be one product and spread around the
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  Speaker 1: world and conquer the world is totally over going forward.
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  Speaker 1: Decentralization's priority. Conforming to local regulation is second, and the
• 6:48
  Speaker 1: third is the customer insight would be very different as
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  Speaker 1: the Internet world continued to fracture. So I think this
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  Speaker 1: is one of the key dynamics that executive must prepared
• 6:57
  Speaker 1: themselves going forward. How are you? Thank you so much
• 7:00
  Speaker 1: for joining us. How would you as the LEGO Professor
• 7:02
  Speaker 1: of Management and Innovation I am the business school based
• 7:06
  Speaker 1: in Switzerland. And Vonnie, it just seems that there is
• 7:10
  Speaker 1: a growing kind of cold war when it comes to
• 7:12
  Speaker 1: technology out there. Well, I imagine it's the type of
• 7:15
  Speaker 1: thing that we'll see the they'll drawn back upon within
• 7:18
  Speaker 1: the next few months. I mean, we already know the
• 7:20
  Speaker 1: Steve Milution is going to come to some kind of
• 7:21
  Speaker 1: a decision this week on this particular affair of the
• 7:24
  Speaker 1: Oragle TikTok affair. And you know, we just don't know
• 7:26
  Speaker 1: enough details yet. Yeah, exactly right. Not sure the structure here.
• 7:31
  Speaker 1: This is Bloomberg Markets with Paul Sweeney and Bonny Quinn
• 7:35
  Speaker 1: on Bloomberg Radio. Merger Monday is back. And it's not
• 7:39
  Speaker 1: just TikTok. We also have another big tech deal chip
• 7:43
  Speaker 1: giant in video forty billion dollar deal for SoftBank's ARM unit.
• 7:48
  Speaker 1: That's a UK based business. Let's get some color on
• 7:51
  Speaker 1: that huge deal. We can do that with On and
• 7:53
  Speaker 1: Triny Vaston, senior semiconductor and hardware analysts for Bloomberg Intelligence,
• 7:58
  Speaker 1: so on, And first of all, give us to your
• 8:01
  Speaker 1: foot view of this deal for video. Yeah, hey, Paul,
• 8:06
  Speaker 1: good morning money. This is a fantastic deal for video. Right,
• 8:09
  Speaker 1: So you're expanding your ecosystem from being a graphics provider
• 8:14
  Speaker 1: for um PC, video gamers and m AI engines if
• 8:19
  Speaker 1: you made for the data center, and you're expanding it
• 8:22
  Speaker 1: to an ecosystem that powers all of um the world's smartphones,
• 8:27
  Speaker 1: all of the world's tablets, all of the world's network devices.
• 8:31
  Speaker 1: So dramatic expansion of the ecosystem. Um difference between in
• 8:36
  Speaker 1: video and ARM is that in video predominantly monetizes directly
• 8:40
  Speaker 1: through chips it makes UM, and AR monetizes predominantly through
• 8:44
  Speaker 1: intellectual basic building blocks that it makes UM, which are
• 8:48
  Speaker 1: used by multiple chip makers, some of whom are in
• 8:51
  Speaker 1: video competitors, and and so it creates a little bit
• 8:55
  Speaker 1: of a sticky wicket from a regulatory perspective. But financially
• 8:59
  Speaker 1: it's great for in video and greatful ARM as well
• 9:02
  Speaker 1: because they get a R and D boost UM as
• 9:05
  Speaker 1: a result of the deal. What does it mean for
• 9:07
  Speaker 1: soft Bank? Was this telegraphed in anyway? Yeah? For soft Bank,
• 9:12
  Speaker 1: I would imagine that this raises cash, although the cash
• 9:16
  Speaker 1: component of it is much smaller than we had initially
• 9:19
  Speaker 1: estimated UM. So it helps them sort of going private
• 9:23
  Speaker 1: ambitions are amplified a little bit UM when the deal closes.
• 9:28
  Speaker 1: They'll get more in video stock, they'll get more cash,
• 9:30
  Speaker 1: they can buy back more of their own stock, etcetera.
• 9:33
  Speaker 1: And it further is their ambitions. They've held in video
• 9:35
  Speaker 1: stock before, so it's not like the Vidio asset is
• 9:39
  Speaker 1: an unknown quantity for softmak alright on it. So your
• 9:43
  Speaker 1: technical analysis of the regulatory is a sticky wicked. I
• 9:47
  Speaker 1: bet if I spoke to January, who does it for
• 9:49
  Speaker 1: a living antitrust animals for Bloomberg Intelligence, would she tell
• 9:52
  Speaker 1: me they have a very steep antitrust curve to climb. Yeah,
• 9:57
  Speaker 1: I mean you can see that by the fact that
• 10:00
  Speaker 1: you need regulatory clearance US, UK, Europe and China, and
• 10:05
  Speaker 1: even without the um so the US China friction that
• 10:09
  Speaker 1: is currently ongoing, this would dramatically expand the market. You
• 10:15
  Speaker 1: have a sort of a neutral player being acquired by
• 10:18
  Speaker 1: a customer slash competitor. How will they keep the entity separate?
• 10:24
  Speaker 1: Um They would obviously have to promise their process in
• 10:27
  Speaker 1: writing that in video will not interfere with ARMS licensing model.
• 10:34
  Speaker 1: But the fact that ARMS intellectual property will be first
• 10:38
  Speaker 1: known to Invidio, the roadmaps will be first um uh,
• 10:42
  Speaker 1: Invidia will have first access to it. That sort of
• 10:45
  Speaker 1: creates an advantage for Nvidia that potentially none of its
• 10:49
  Speaker 1: others peers, customers, competitors, etcetera. Have. So Jen is probably
• 10:54
  Speaker 1: going to tell you the same thing that it is
• 10:56
  Speaker 1: a sticky wicket. Yeah, I mean, ARMS customers are Apple
• 11:00
  Speaker 1: and Intel. You know, they're the hugest customers in the world.
• 11:04
  Speaker 1: ARM will become a US firm if this all goes through,
• 11:07
  Speaker 1: how would that impact our relationship with China, given the
• 11:10
  Speaker 1: China still controls ARMED China. Yeah, so that's a very
• 11:13
  Speaker 1: good question, Monnie. And it was asked on the on
• 11:16
  Speaker 1: the recent merger call that Nvidia and ARM had. The
• 11:20
  Speaker 1: claim is that the intellectual property origination is still based
• 11:25
  Speaker 1: out of Cambridge and are in Video intends to keep
• 11:29
  Speaker 1: that asset as is and the intellectual property tomasow as is.
• 11:33
  Speaker 1: So technically it's even though ARM becomes owned by an
• 11:38
  Speaker 1: American company, the intellectual property origination is out of the UK.
• 11:42
  Speaker 1: So technically, according to them anyway, it doesn't come under
• 11:47
  Speaker 1: the purvey of the regulators in a more stringent manner.
• 11:52
  Speaker 1: I mean, that's going to be a hard, um hard
• 11:56
  Speaker 1: piece of thing to convince the US regulators that some
• 12:00
  Speaker 1: how they should not be involved in in that piece
• 12:02
  Speaker 1: of the pipe because in Video is now the owner
• 12:05
  Speaker 1: of that asset. So I think that adds to the
• 12:08
  Speaker 1: complexity of this. And then we haven't talked about it,
• 12:10
  Speaker 1: but China um Is has used M and a um
• 12:15
  Speaker 1: sort of extended out the M and a um um
• 12:19
  Speaker 1: a deal regulation for for extend periods of time they
• 12:22
  Speaker 1: scuttle the Quacom n XP deal, if you remember, so
• 12:25
  Speaker 1: they could use this as a as an example showcase
• 12:29
  Speaker 1: to show, Okay, this is how you mess with me,
• 12:32
  Speaker 1: this is how I repay you. UM. So that could
• 12:34
  Speaker 1: be one part of it. The second part of it
• 12:36
  Speaker 1: is also a lot of arms They could squeeze out
• 12:40
  Speaker 1: arm licensing deals UM in the in China as a
• 12:43
  Speaker 1: result of this, make sure that they have access to
• 12:46
  Speaker 1: ARM I P because they're trying to build up their
• 12:48
  Speaker 1: semiconductor industry. So a lot of complexity is involved. I think, UM,
• 12:53
  Speaker 1: the eighteen months is definitely needed, UM and the regulatory
• 12:57
  Speaker 1: part is definitely the stickiest wicket here on a Triny Boston,
• 13:03
  Speaker 1: thank you so much. We appreciate that. A big, big
• 13:06
  Speaker 1: deal in the space here. The question is when we
• 13:10
  Speaker 1: see some more deals of ANNIE. But very interesting on
• 13:12
  Speaker 1: a Triny Boston, senior tech analysts for Bloomberg Intelligence giving
• 13:15
  Speaker 1: us the breakdown on this NVIDEO deal for armed forty
• 13:19
  Speaker 1: billion dollars short of face some repertory uh roadblocks I
• 13:24
  Speaker 1: think on many countries ANNIE, that's for sure. But I'll
• 13:28
  Speaker 1: tell you something. Investors are obviously very hopeful about this
• 13:30
  Speaker 1: because in Video's talk is of seven percent, which is
• 13:33
  Speaker 1: quite the move upwards, and it's holding onto those gains
• 13:36
  Speaker 1: where we saw Oracle, for example, earlier on make huge
• 13:39
  Speaker 1: gains and not hold onto them. Meantime, Jeffries has boosted
• 13:42
  Speaker 1: the price targets to six d and eighty dollars from
• 13:45
  Speaker 1: five hundred and seventy. And don't forget, we're at five
• 13:47
  Speaker 1: twenty now, so that's a full one sixty dollars higher
• 13:50
  Speaker 1: than we are now for Nvideo. Based on this extraordinary
• 13:54
  Speaker 1: deal flow coming out of the market today, well as
• 13:59
  Speaker 1: we saw the number of deals announced today this morning
• 14:03
  Speaker 1: over the weekend. Technology remains at the forefront of investors
• 14:07
  Speaker 1: perspective that includes such new and exploding technologies as blockchain.
• 14:13
  Speaker 1: Get more color on that. We are welcome. We welcome
• 14:16
  Speaker 1: Doug Barthwick, chief marketing officer and head of business development
• 14:19
  Speaker 1: for a company I n X based in New York City. Doug,
• 14:22
  Speaker 1: thanks so much for joining us here. Let's start off
• 14:24
  Speaker 1: with just you telling us, give us a good sense
• 14:26
  Speaker 1: of what I n X is, what you guys are doing. Sure, so,
• 14:30
  Speaker 1: I n X is a company that we set up
• 14:32
  Speaker 1: a couple of years ago and it's got two different areas.
• 14:36
  Speaker 1: One is for a platform for the trading of cryptocurrency
• 14:39
  Speaker 1: and the other one is a platform for the trading
• 14:40
  Speaker 1: of security tokens. Now you may not be familiar with
• 14:44
  Speaker 1: security tokens, but if you think about something like Nike
• 14:47
  Speaker 1: stock trading twenty four hours a day in a digital environment,
• 14:50
  Speaker 1: that's what a security token is. And it's our belief
• 14:53
  Speaker 1: that in the near future all equities will end up
• 14:57
  Speaker 1: going on the blockchain and going digital because of the efficiency.
• 15:00
  Speaker 1: So you can find with that. And so we created
• 15:02
  Speaker 1: an exchange for trading of digital securities and at the
• 15:05
  Speaker 1: same time created a digital security that for the first
• 15:09
  Speaker 1: time as an F one registered with the SEC And
• 15:12
  Speaker 1: I encourage your listeners to go look at it because
• 15:13
  Speaker 1: I'm going to talk about some things and that F
• 15:16
  Speaker 1: one is the first one that's ever been done. It's
• 15:18
  Speaker 1: on the blockchain. But also this is the first I
• 15:21
  Speaker 1: p O and the U S history that accepts at
• 15:23
  Speaker 1: the I p O Bitcoin, Ether and U s dc
• 15:26
  Speaker 1: or or are stable coins, so first time you can
• 15:29
  Speaker 1: accept cryptocurrencies, and the I p O is currently ongoing.
• 15:33
  Speaker 1: So Doug explained to us how this is different from competition.
• 15:37
  Speaker 1: I believe the wink of as Twins did something like
• 15:40
  Speaker 1: this before. Am I right? I could be wrong? Well,
• 15:42
  Speaker 1: you are correct, and the wink of as Twins have
• 15:44
  Speaker 1: one exchange and Gemini. I think that's the one you're discussing,
• 15:48
  Speaker 1: and certainly you know you can trade current cryptocurrencies on that,
• 15:51
  Speaker 1: but in terms of security tokens, that's not something that
• 15:54
  Speaker 1: they offer right now. And security tokens come under a
• 15:57
  Speaker 1: very different regulator than does let's say, cryptocurrency cryptocurrencies come
• 16:01
  Speaker 1: under States MT licenses or money transmitter licenses, whereas security
• 16:05
  Speaker 1: tokens come under the SEC. And so you know, it's
• 16:08
  Speaker 1: a very big step for essentially it's not debt, it's
• 16:11
  Speaker 1: not equity, it's a security token or a digital assets
• 16:14
  Speaker 1: and that's what we've one come up with, and then
• 16:16
  Speaker 1: two we're creating the exchange to trade it. So do
• 16:20
  Speaker 1: you have exchanges up and running now trading securities or
• 16:23
  Speaker 1: trading assets right now? We do not know. And so this,
• 16:27
  Speaker 1: this this raise that we're doing right now is to
• 16:29
  Speaker 1: get them on board in terms of getting to market.
• 16:33
  Speaker 1: Now we've built them, they're ready to go, but we
• 16:35
  Speaker 1: need to raise capital in order to go out and
• 16:38
  Speaker 1: get some of the licenses that we're looking for. So
• 16:40
  Speaker 1: today we could trade with the US, but we're not
• 16:43
  Speaker 1: turning it on yet until we've finished with the I
• 16:45
  Speaker 1: p O. Dog. Who are the typical investors in an
• 16:48
  Speaker 1: IPO like this, Well, the typical investors are are twofold one.
• 16:52
  Speaker 1: You've got the folks that are already understand the crypto environment.
• 16:55
  Speaker 1: So that's you know, the folks that are holding bitcoin
• 16:57
  Speaker 1: theoryum that that go on and on about it, and
• 17:00
  Speaker 1: that's probably about point two percent of the population. Now
• 17:02
  Speaker 1: they see what we do as being putting handcuffs on
• 17:05
  Speaker 1: securities because our security for the first time has k
• 17:08
  Speaker 1: y C and a m L built into it do
• 17:10
  Speaker 1: what's called a smart contract. That means you can't tell
• 17:13
  Speaker 1: take an I n X token and sell it to
• 17:15
  Speaker 1: someone else unless they've already gone through KYC. So this
• 17:18
  Speaker 1: is like, you know, a huge, big change now for
• 17:20
  Speaker 1: securities markets. So that's of the population they're very interested
• 17:24
  Speaker 1: in because this is a giant leap forward for securities markets.
• 17:27
  Speaker 1: Not only you know, can you do an I P O,
• 17:29
  Speaker 1: but you can also do it you can accept different
• 17:31
  Speaker 1: crypts of currencies, but you can also do it whereby
• 17:33
  Speaker 1: you could list in many many countries at once with
• 17:35
  Speaker 1: the security token just through a couple of lines of code,
• 17:38
  Speaker 1: as opposed to tens of millions of dollars of legal fees.
• 17:42
  Speaker 1: And so you know, we're really making a big change.
• 17:44
  Speaker 1: But also think about this. You know Nike trading twenty
• 17:47
  Speaker 1: four hours a day, that would be fantastic. And millennials today,
• 17:50
  Speaker 1: of their top five holdings, one of them is g
• 17:52
  Speaker 1: BTC or Gray Scale Bitcoin Trust and that means that
• 17:55
  Speaker 1: you know that the millennial generation has a great interest
• 17:59
  Speaker 1: in digital and yet they don't understand why their dads
• 18:02
  Speaker 1: or their moms look at news at four o'clock on
• 18:04
  Speaker 1: a Friday, a bad news on an equity and they say,
• 18:07
  Speaker 1: don't worry, we'll get out of it at nine thirty
• 18:08
  Speaker 1: in the morning on the Monday. That just doesn't make
• 18:10
  Speaker 1: any sense to them. And this is the Amazon generation
• 18:12
  Speaker 1: that wants to be able to do things right now,
• 18:15
  Speaker 1: and so we've created a product for folks to trade
• 18:17
  Speaker 1: equities immediately, twenty four hours a day. What's the regulatory framework?
• 18:22
  Speaker 1: What's the SEC saying? For example, Well, the SEC is
• 18:26
  Speaker 1: who have we've been talking to for two and a
• 18:28
  Speaker 1: half years. We've spent over nine hundred and fifty days
• 18:30
  Speaker 1: creating the F one that can be found on the
• 18:32
  Speaker 1: Edgar database, and then then then there it's shows transparency
• 18:36
  Speaker 1: into a field that traditionally no one's ever had transparency.
• 18:39
  Speaker 1: I think when you think about crypto and you think
• 18:41
  Speaker 1: about exchanges, you know they're all privately owned, most of
• 18:43
  Speaker 1: them are held off shore. There certainly isn't transparency. What
• 18:46
  Speaker 1: we're trying to do is raise money through a community
• 18:49
  Speaker 1: and build a community. When someone comes in and buys
• 18:51
  Speaker 1: the token, we see that as being a potential user
• 18:54
  Speaker 1: of our platform as well. So I mean I think
• 18:56
  Speaker 1: that's a good run up. Yeah, it's so interesting. I mean,
• 19:01
  Speaker 1: if you know nothing about the blockchain and you know
• 19:03
  Speaker 1: nothing about cryptocurrencies, would you still advise somebody like that
• 19:08
  Speaker 1: to put, you know, give this a go. Well, I
• 19:10
  Speaker 1: wouldn't advise anyone to give it a go. I think
• 19:12
  Speaker 1: that they should look at the F one that the
• 19:14
  Speaker 1: ad your database. But if you do believe that everything,
• 19:17
  Speaker 1: whether it's equities, whether it's fixed income, whether it's commodities,
• 19:21
  Speaker 1: are going to move onto the blockchain, and we already
• 19:23
  Speaker 1: know that China's and talks to do that with their
• 19:25
  Speaker 1: currency that europs and talks to do that that the
• 19:27
  Speaker 1: US is discussing a digital dollar. So if currencies are
• 19:30
  Speaker 1: going to move on the blockchain, and given that regulators
• 19:33
  Speaker 1: of love K y C and they like to know
• 19:35
  Speaker 1: who owns what where, and they like to be able
• 19:37
  Speaker 1: to make sure that bad actors don't own things, then
• 19:40
  Speaker 1: I think you can be pretty sure that equities are
• 19:42
  Speaker 1: going to move onto the blockchain as well. And we're
• 19:44
  Speaker 1: the first. Well dog, thank you for coming on and
• 19:48
  Speaker 1: giving us the the explanation about all of this, and
• 19:51
  Speaker 1: I do hope you come back and explain to us
• 19:53
  Speaker 1: more what's going on as we progress. It seems like
• 19:57
  Speaker 1: the blockchain and come to currencies have been around a while,
• 19:59
  Speaker 1: but I'm certainly no more educated than I was before.
• 20:03
  Speaker 1: I have to re educate myself every couple of years
• 20:05
  Speaker 1: on all of this because the change is so fast
• 20:07
  Speaker 1: and it does seem to be a bit of a
• 20:08
  Speaker 1: land crab as well. So really interesting to follow Dug
• 20:11
  Speaker 1: Boarth with because chief marketing officer and head of business
• 20:13
  Speaker 1: development at i n X well a good start to
• 20:18
  Speaker 1: the week from the equity market's perspective, lead in large
• 20:21
  Speaker 1: part by sixty nine billion dollars worth of M and
• 20:24
  Speaker 1: A announced bringing Merger Monday back to the markets, back
• 20:28
  Speaker 1: to the four to get a sense of kind of
• 20:30
  Speaker 1: how we think about all this M and A in
• 20:32
  Speaker 1: the context of where we are with the markets. We
• 20:35
  Speaker 1: welcome Peter Kenny, father of Kenny's Commentary and Strategic Board Solutions. Uh, Peter,
• 20:40
  Speaker 1: thanks so much for joining us here. Well, Merger Monday
• 20:43
  Speaker 1: is back with a vengeance that pushes the pandemic at
• 20:45
  Speaker 1: least a little bit off the front page, at least
• 20:47
  Speaker 1: for a moment here. What do you make of this
• 20:50
  Speaker 1: spade of deals that we're seeing today? What does it
• 20:52
  Speaker 1: mean for the market from your perspective? Well, thanks for
• 20:56
  Speaker 1: having me um. First of all, the timing couldn't be
• 20:59
  Speaker 1: better because if you look at the Nastack, SMP and
• 21:02
  Speaker 1: the Dow all closed last week at or close to
• 21:05
  Speaker 1: their fifty day moving averages, which which means basically there
• 21:09
  Speaker 1: was effectively a retest of that low that was established
• 21:13
  Speaker 1: on Monday of last week. So this is really really
• 21:17
  Speaker 1: up Tuesday of West week. This is really welcome news.
• 21:20
  Speaker 1: It's great. I love the fact that it's big names
• 21:22
  Speaker 1: like Oracles, saft Bank, the vaccine stories and really really important,
• 21:27
  Speaker 1: and that's lifting the market. It really is coming at
• 21:30
  Speaker 1: a great time because in the note that I wrote
• 21:32
  Speaker 1: and put out the street this morning, um my concern
• 21:36
  Speaker 1: was that with all the indexities industries really resting on
• 21:40
  Speaker 1: a fifty day and without any news out there that
• 21:42
  Speaker 1: I could you know, shake a stick at, it seems
• 21:45
  Speaker 1: to me or it seemed to me as though there
• 21:47
  Speaker 1: was going to be continued weakness and potentially a drop
• 21:50
  Speaker 1: all of the fifty day for all three Well, does
• 21:53
  Speaker 1: the Oracle news signals that the China standoff might get
• 21:58
  Speaker 1: sort of eased if you like, because it's it's a
• 22:02
  Speaker 1: major deal. This was one of the ways that the
• 22:04
  Speaker 1: Trump administration was going after China in a very practical manner. Yes, absolutely, Bonny,
• 22:09
  Speaker 1: this was actually a very significant deal on several fronts.
• 22:14
  Speaker 1: First of all, you know, of course, there's a political
• 22:17
  Speaker 1: basis for a lot of what's going on here, and
• 22:20
  Speaker 1: there's a nationalist security concern. But this is a way
• 22:23
  Speaker 1: out that I don't think anybody was really looking at,
• 22:26
  Speaker 1: and frankly, I don't think anybody was really talking about Oracle,
• 22:29
  Speaker 1: So um, it is a way forward that saves space
• 22:34
  Speaker 1: and allows for a constructive exit from where we currently stand,
• 22:39
  Speaker 1: which was very, very I think it was tense. Frankly,
• 22:45
  Speaker 1: it was tense, so Peter. Typically, when a CEO and
• 22:48
  Speaker 1: a board decided to go forth with a large acquisition,
• 22:52
  Speaker 1: it signals their confidence in not only their business model
• 22:55
  Speaker 1: and the acquired business model, but also the economy, geopolitics,
• 23:00
  Speaker 1: all those things are confident to put that kind of
• 23:02
  Speaker 1: capital to work. I'm not sure I see that confidence
• 23:05
  Speaker 1: out there is I look at some of the economic
• 23:06
  Speaker 1: indicators and the still uncertain nature of the path of
• 23:10
  Speaker 1: this pandemic. Oh I, I could not agree with you
• 23:14
  Speaker 1: more wholeheartedly, Paul. I mean, well, you have an awful
• 23:18
  Speaker 1: lot on our plate here. This was a one off,
• 23:20
  Speaker 1: this deal with Oracle and TikTok, this is a one off.
• 23:23
  Speaker 1: This is not speaking to a broader picture other than
• 23:25
  Speaker 1: what Vonnie really intimated. That is that this is a
• 23:28
  Speaker 1: graceful exit out of something that could have been a
• 23:30
  Speaker 1: significantly larger conflict. So the deal is important and it's welcome,
• 23:36
  Speaker 1: but it's a one off. The broader landscape in terms
• 23:40
  Speaker 1: of trade, global growth, domestic our, domestic economy, there's an
• 23:46
  Speaker 1: awful lot on the table that is that's going to
• 23:48
  Speaker 1: be an act as a headwind from here on to
• 23:50
  Speaker 1: the end of the year, and of course throwing presidential politics,
• 23:54
  Speaker 1: I mean, the biggest variable of all time. Right, what
• 23:57
  Speaker 1: are you telling your clients about the election, Peter um,
• 24:02
  Speaker 1: head your bets, Um, just manage risk. Polls are very
• 24:08
  Speaker 1: very close. Um. I think that it's regardless of who
• 24:14
  Speaker 1: is elected, the aftermaths of the election is going to
• 24:17
  Speaker 1: test the nerves of the average American because I think
• 24:22
  Speaker 1: it's going to be an awfully um difficult um social
• 24:29
  Speaker 1: economic scene on the streets. I mean, if if what
• 24:31
  Speaker 1: we've been living through over the last month as any indication,
• 24:35
  Speaker 1: I'm afraid it's not going to get a whole lot
• 24:37
  Speaker 1: better even with the resolution of the presidential elections. How
• 24:40
  Speaker 1: would you suggest hedging that kind of uncertainty, which is
• 24:44
  Speaker 1: we haven't really seen that much in our past history.
• 24:47
  Speaker 1: So if you're in high growth names, if you're in
• 24:51
  Speaker 1: names that have really driven this rally and your today
• 24:54
  Speaker 1: performance by the NANATAK which is far outstripped the SMP
• 24:57
  Speaker 1: and the Dad Johns industrial level act on those names
• 25:02
  Speaker 1: looking to be in names that have not really provided
• 25:06
  Speaker 1: much of the growth story impetus, but have provided consistent dividends. Um,
• 25:11
  Speaker 1: you know, batting down the hatches, reduce your risk exposure.
• 25:14
  Speaker 1: There's nothing wrong with metals, there's nothing wrong with alternatives,
• 25:18
  Speaker 1: but keep your eye on those aspects of your portfolio
• 25:23
  Speaker 1: that tend to drift drift in parabolic waves. Um. They're
• 25:29
  Speaker 1: great for traders, but they're not great for the everyday
• 25:31
  Speaker 1: investor on nine Street. So just batting down the hatches. Yeah,
• 25:35
  Speaker 1: it's amazing, you know, batten down the hatches. And at
• 25:38
  Speaker 1: the same time, there's not much you can do, you know,
• 25:42
  Speaker 1: hedge wise, right, Peter, I mean that's right, it's all.
• 25:45
  Speaker 1: It's all in equities right now. You the whole story
• 25:50
  Speaker 1: right now for investors exequities. If you look at bonds,
• 25:53
  Speaker 1: there's no yield. If you look at the global macro story,
• 25:56
  Speaker 1: there's very little. I mean you're getting negative yields and
• 25:58
  Speaker 1: much of Europe. Um, there's really no place to go.
• 26:02
  Speaker 1: Any argument for just holding onto some cash, Peter, holding
• 26:07
  Speaker 1: on the cash, hold on their precious metals. Have a
• 26:10
  Speaker 1: defensive posture and your portfolio, look for dividends, and just
• 26:13
  Speaker 1: make sure that the exposures that you do have going
• 26:16
  Speaker 1: into the president this whole election is covered either through
• 26:19
  Speaker 1: options or by just simply reducing your exposure. Yeah, Peter,
• 26:23
  Speaker 1: thank you. Always eliminating to speak with you. Peter Kenny
• 26:26
  Speaker 1: is founder of Strategic Board Solutions and of course also
• 26:29
  Speaker 1: brings out some excellent commentary daily and weekly on the
• 26:34
  Speaker 1: Wall Street Beat if you like. And he's been a
• 26:37
  Speaker 1: member of the New York Stock has changed for the
• 26:38
  Speaker 1: last twenty years and lots more than that. So, Paul,
• 26:42
  Speaker 1: if we weren't expecting to come into a tape that
• 26:45
  Speaker 1: was nicely in the green, but here we have at
• 26:47
  Speaker 1: the Sea up one and three wards of percent, the
• 26:49
  Speaker 1: Nastack up two point three percent this Monday morning. Thanks
• 26:54
  Speaker 1: for listening to the Boomberg Markets podcast. You can subscribe
• 26:57
  Speaker 1: and listen to interviews at Apple Podcasts or or whatever
• 27:00
  Speaker 1: a podcast platform you prefer. I'm Bonnie Quinn. I'm on
• 27:03
  Speaker 1: Twitter at Bonnie Quinn, and I'm Paul Sweeney. I'm on
• 27:06
  Speaker 1: Twitter at pt Sweeney. Before the podcast, you can always
• 27:09
  Speaker 1: catch us worldwide at Bloomberg Radio.