Latest / Bloomberg Intelligence / Yaccarino Stepping Down as CEO of Musk’s X After Two Years

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Yaccarino Stepping Down as CEO of Musk’s X After Two Years · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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  Speaker 2: Normal Linda Paul Sweeney live here in our Bloomberg Interactor
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  Speaker 2: Broker Studio, streaming live on YouTube as well.
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  Speaker 3: Well.
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  Speaker 2: For me, being a media and entertainment background person, the
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  Speaker 2: news for me today was Linda Yakarino stepping down as
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  Speaker 2: chief executive officer of Elon musks x social media platform
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  Speaker 2: after only two years on the job. From her days
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  Speaker 2: at NBCUniversal. I knew Linda Yakarino. She's widely respected on
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  Speaker 2: Wall Street in the media entertainment business. I personally was
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  Speaker 2: surprised that she left NBCUniversal to go work for X
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  Speaker 2: simply because I didn't think anybody could work for Elon
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  Speaker 2: MUCKs Elon Musk because he's that hands on for the business.
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  Speaker 2: We are are perfectly time to speak with a good friend,
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  Speaker 2: Ed Ludlow, Bloomberg technology co host. He's in Sun Valley, Idaho,
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  Speaker 2: where all of the media and tech mobils are meeting
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  Speaker 2: up for a couple of days at the Allen and
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  Speaker 2: Company conference. Ed low ed, how did this news land
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  Speaker 2: in Sun Valley?
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  Speaker 4: Yeah, it's slightly surprising. It's interesting because, you know, in
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  Speaker 4: her post, Yacarino framed it as a you know, mission
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  Speaker 4: complete kind of turnaround process. But remember lower down in
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  Speaker 4: the post she references Xai, and what's changed in recent
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  Speaker 4: months is that Musk could combined x the social platform
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  Speaker 4: with Xai, the ai company under Xai Holdings. You hit
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  Speaker 4: a lot of the themes spot on pool that it
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  Speaker 4: is difficult to work for Elon Musk, But the turnaround
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  Speaker 4: bit that she cites in her post is one for debate.
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  Speaker 4: You know, as we understand it, revenues in twenty twenty
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  Speaker 4: four were down from twenty twenty three. They would look
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  Speaker 4: like they might be up in twenty twenty five. It
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  Speaker 4: was difficult to bring advertisers back to the platform, but
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  Speaker 4: Yakumino had said many had returns of the platform. Elon
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  Speaker 4: must being the sort of wild card about the appropriateness
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  Speaker 4: I guess of advertising on that platform. But yeah, there's
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  Speaker 4: a lot of ways we could go with this one.
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  Speaker 3: And I mean, you talked about you know, the volatility,
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  Speaker 3: especially when we think about a lot of Musk's businesses
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  Speaker 3: and what's happening inside for Linda, does it seem as
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  Speaker 3: though this was just a decision waiting to happen or
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  Speaker 3: what are you hearing?
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  Speaker 4: Yeah, nothing so far. We just don't know. I would
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  Speaker 4: note that it's sort of the latest high profile stepping
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  Speaker 4: down or departure from Elon Inc. We're seeing it happen
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  Speaker 4: across Tesla. As we reported Omei d Afsha, who for
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  Speaker 4: a really long time was basically Elon's chief of staff
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  Speaker 4: and later had more broader responsibilities across sales and manufacturing.
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  Speaker 4: We broke the story that he was gone out of
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  Speaker 4: Tesla in SpaceX. I know that internally, you know, we
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  Speaker 4: broke the story on their latest valuation yesterday. But internally
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  Speaker 4: departures have kind of ramped up recently as Musk's political
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  Speaker 4: activity has ramped up. It is not easy to work
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  Speaker 4: for Elon Musk Like kind of how the structure works
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  Speaker 4: at these companies is there are very capable people there.
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  Speaker 4: For example, Xai Xai is a really key point here
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  Speaker 4: about what's happening with x But there's a guy there
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  Speaker 4: called Ross Norden, who is also kind of like the
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  Speaker 4: chief of stuff, but he's doing a lot for Elon
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  Speaker 4: while Elon's out doing whatever Elon's doing. But at the
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  Speaker 4: end of the day, no matter how many decisions are
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  Speaker 4: made by committee, by this group of very talented people
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  Speaker 4: and all these companies, the final call is kind of
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  Speaker 4: made by Elon, and that can sometimes slow things down.
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  Speaker 4: It can sometimes lead to robust debate, you know, things
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  Speaker 4: like that. But again, I'm super really focused on where
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  Speaker 4: X fits into XAI long term. I think that's a
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  Speaker 4: big factor here. And there's a hint in that Yakarino post.
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  Speaker 2: I can see them. You're out in Sun Valley, Idaho.
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  Speaker 2: I love the background there. I skied that mountain many
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  Speaker 2: years ago. It's fantastic out there, summer or winter. I
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  Speaker 2: recommend at the Sun Valley conference out there, the Allen
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  Speaker 2: and Combay conference. What's kind of the expectation for these
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  Speaker 2: couple of days.
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  Speaker 4: Yeah, So it's interesting because there is a bit of
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  Speaker 4: movement in TMT and that goes to the history of
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  Speaker 4: this event, right, Paul, you know it so well. You know.
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  Speaker 4: The news that we got is that disney Hurst might
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  Speaker 4: look at selling their A and e asset, which is
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  Speaker 4: the cable channels like History Channel, So that's interesting. Just
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  Speaker 4: having that out there means that there's a marketplace right now.
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  Speaker 4: We know that Warner Brothers is on this plan moving
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  Speaker 4: into the middle of next year where they want to
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  Speaker 4: have a split right, a standalone streaming company and a
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  Speaker 4: standalone pure place studio. And we did manage to catch
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  Speaker 4: up with David Aslav, the CEO of Warner brother Discovery,
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  Speaker 4: who said it's kind of all on track. We don't
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  Speaker 4: need any approvals, We're not really ready to talk about
• 4:56
  Speaker 4: the debt side of things. They also just of course
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  Speaker 4: had Superman the Box Office and he was pretty pretty
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  Speaker 4: happy about that. But I think that the signals are
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  Speaker 4: that in that space media assets, there's some life and
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  Speaker 4: it just takes one domino for the rest of full
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  Speaker 4: if you know what I mean.
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  Speaker 3: Well, thanks so much to Ed Ludlow as we really
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  Speaker 3: break down what's happening at the Sun Valley conference, and
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  Speaker 3: of course that Linda Yakarino headline of her departure from X.
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  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 2: All right, folks, if you're sitting in front of a
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  Speaker 2: turmol type in read go and over the last eight hours,
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  Speaker 2: the number one read story has been about Goldman Sax
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  Speaker 2: Goldman asking their analysts to swear they haven't lined up
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  Speaker 2: pe jobs. I have no idea what's going on here?
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  Speaker 2: And back in my day, you work two to three years,
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  Speaker 2: you went and got your MBA, you came back to
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  Speaker 2: this associated w your money, and then he just kind
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  Speaker 2: of moved on and on right up? Ain't that way
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  Speaker 2: right now? Sally Bigwell joins us. Bloomberg US Finance team
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  Speaker 2: leader joins us Here, Sally, what's the story of Goldman
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  Speaker 2: Sacks here?
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  Speaker 5: Right?
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  Speaker 2: They have to asking their associates or their analysts to swear.
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  Speaker 6: That's right, and also just to say, back in your day,
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  Speaker 6: couldn't have been obviously that long ago. But yes, Goldman
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  Speaker 6: Sachs is asking its incoming class of analysts to effectively
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  Speaker 6: take a bit of its own kind of pledge of
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  Speaker 6: allegiance to the bank and certify that every three months
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  Speaker 6: they're not accepting an offer from basically a private equity firm.
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  Speaker 2: I just accepting I haven't even started Goldman Sacks, but
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  Speaker 2: I've already accepted something at KKR like two years later exactly.
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  Speaker 2: This is the practice. I'm interviewing at Goldman Sacks for
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  Speaker 2: a job, and I'm interviewing KKR for a job. Planners gotcha?
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  Speaker 6: Okay, that makes doesn't it sound terrific honestly? But yes.
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  Speaker 6: It's known as on cycle recruitment, and this is this
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  Speaker 6: practice where private equity firms try and recruit incoming junior
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  Speaker 6: bankers who maybe haven't even efficient got in the door
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  Speaker 6: at their bank programs analyst programs, and line them up
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  Speaker 6: to take on private equity jobs as soon as they
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  Speaker 6: finish those analyst programs. And you can kind of understand
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  Speaker 6: why they get this fully trained, fully formed mini junior
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  Speaker 6: banker who which then they haven't had to pay a
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  Speaker 6: penny to train them.
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  Speaker 2: Yep.
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  Speaker 3: I honestly feel like these big banks are always doing
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  Speaker 3: something that surprises me. There's always news coming out of
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  Speaker 3: these things, and I'm like, what's what's going on with
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  Speaker 3: the young bankers here?
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  Speaker 2: But well, I think the reason I think the banks
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  Speaker 2: have allowed this to kind of happen because who is
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  Speaker 2: Goldman Sachs's biggest customers the private equity firms. You don't
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  Speaker 2: want to upset them fair it's kind of a quid
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  Speaker 2: pro quo. Will train these kids if they want to
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  Speaker 2: go and work for you. Fine, it works for us
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  Speaker 2: long term because we've got a Goldman or Morgan Stanley
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  Speaker 2: alum that's now in KQR, and who knows where that
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  Speaker 2: person will be ten years from now that could be
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  Speaker 2: a big player, and it all kind of works out.
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  Speaker 2: But it's got silly now, hasn't.
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  Speaker 3: Is it uncommon? I mean, are we seeing a lot
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  Speaker 3: of other banks doing some of these stringent rules.
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  Speaker 6: So a few banks have started to push back. JP
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  Speaker 6: Morgan was the first. In recent months, Jamie Diamond has
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  Speaker 6: actually called this practice of on cycle recruitment unethical and
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  Speaker 6: warned that he wanted to eliminate it because he says
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  Speaker 6: it puts the junior bankers in a difficult position. They're
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  Speaker 6: barely in the door at a bank and they already
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  Speaker 6: have to start thinking about a career and they don't
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  Speaker 6: even know at that stage what they might want, what they.
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  Speaker 3: Might be good at out of college probably as well.
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  Speaker 6: Fresh out of college, and so JP Morgan earlier this month.
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  Speaker 6: It actually told incoming graduates that if they do accept
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  Speaker 6: offers during their first eighteen months at the bank, they
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  Speaker 6: will be fired. So it was a very clear message
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  Speaker 6: and actually a lot of some private equity firms have
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  Speaker 6: pulled back since then. Apollo is one, General Atlantic is another.
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  Speaker 6: They've actually said to their candidates that they will not
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  Speaker 6: be recruiting, they will not be doing this on cycle
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  Speaker 6: recruiting and recruiting junior analysts.
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  Speaker 2: So early it's yeah, it's just crazy. I know, times
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  Speaker 2: have changed. I mean it used to be you work
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  Speaker 2: two to three years as an and I'll set investment
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  Speaker 2: bank like I did, and then they literally kick you
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  Speaker 2: out the door and say go get your MBA. You
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  Speaker 2: go get your MBA. You come back and you double
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  Speaker 2: your money and you kind of do the same jobs
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  Speaker 2: twenty years ago. That in itself was kind of an
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  Speaker 2: odd situation. But now they don't even force you to
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  Speaker 2: go get an MBA because they don't want to lose you.
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  Speaker 2: I mean, you know, lose you to anybody.
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  Speaker 3: So are they having trouble with recruits?
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  Speaker 2: There's twenty seven great resumes for one slot. You think
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  Speaker 2: this is going to hold? Sounding thing?
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  Speaker 6: I think that's the big question. Does this spell the
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  Speaker 6: end of the practice. Probably not. I think it depends
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  Speaker 6: how competitive the market gets. Banks have periodically made bursts
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  Speaker 6: of effort over the last ten years or so. Morgan
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  Speaker 6: Stanley did back in twenty thirteen that didn't really go anywhere,
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  Speaker 6: so they've tried to sort of stem this tide. Whether
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  Speaker 6: it takes hold permanently, I think it's almost impossible to say.
• 9:55
  Speaker 6: It will depend on market dynamics. But this is certainly
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  Speaker 6: one moment where they seem to have created this pullback
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  Speaker 6: by private equity.
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  Speaker 3: From doing this. I mean, as a perspective junior banker,
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  Speaker 3: can you really even scout out a different bank or
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  Speaker 3: are they all doing the same thing?
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  Speaker 6: I think that's a great question, and I mean I
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  Speaker 6: think this is part of the rationale for the private
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  Speaker 6: equity firms are at least saying, you know that at
• 10:17
  Speaker 6: that stage in your career, you don't know what you're doing.
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  Speaker 6: I saddenly didn't know what I was doing at that age.
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  Speaker 6: I still barely do, so how can you make this
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  Speaker 6: kind of decision? And also puts you in a conflict
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  Speaker 6: of interest position. You know, you're in a bank, you
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  Speaker 6: have access to the bank's confidential information. But you're already
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  Speaker 6: admitted to a private equity job. I mean, that's not
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  Speaker 6: a good position to be in.
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  Speaker 2: Yeah, it's tough for the for the junior people from
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  Speaker 2: if that conflict of interesting and it's just it's just
• 10:41
  Speaker 2: a it's odd economic model. I never really understood why
• 10:44
  Speaker 2: they did it that way. So anyway that it's on
• 10:47
  Speaker 2: the Bloomberg terminal, it's probably on Bloomberg dot com by
• 10:50
  Speaker 2: now the number one read story at their Goldman asked
• 10:53
  Speaker 2: analyst to swear they haven't lined up job, so I
• 10:56
  Speaker 2: guess it's a pinky swear. I'm not sure how that
• 10:58
  Speaker 2: all works. But Sarah Baker joins us there and we
• 11:01
  Speaker 2: appreciate her reporting on that story, taking the time to
• 11:04
  Speaker 2: come into our studio.
• 11:06
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 11:10
  Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
• 11:13
  Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever
• 11:17
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 11:20
  Speaker 3: I do want to turn to Tim Craighead and he's
• 11:23
  Speaker 3: based in London. He's joining us via zoom. He's a
• 11:26
  Speaker 3: research director for content for Bloomberg Intelligence, and I'm looking
• 11:31
  Speaker 3: at this story that's out right now and lots of
• 11:34
  Speaker 3: really interesting illustrations, but the story is called Banking Booze
• 11:38
  Speaker 3: and Double seven Wheels. Ten companies to watch right now, Paul,
• 11:42
  Speaker 3: I have no idea where this is going. I'm so curious.
• 11:45
  Speaker 3: It's based off the headline alone. But Tim contextualizes for us,
• 11:49
  Speaker 3: tell us what is this list?
• 11:51
  Speaker 5: Yep, sure, thanks thanks for having me on. So these
• 11:55
  Speaker 5: these ten ideas are all part of a broader list
• 11:58
  Speaker 5: of what we call focus ideas. Ideas are where are
• 12:01
  Speaker 5: analysts around the globe, cross regions, cross sectors have high conviction,
• 12:06
  Speaker 5: fundamental points of view that they think are different from
• 12:11
  Speaker 5: what the market thinks, anti consensus, and importantly, they're catalysts
• 12:15
  Speaker 5: coming up that we think can change market perceptions. And
• 12:18
  Speaker 5: these ten all have important catalysts coming up during the
• 12:22
  Speaker 5: third quarter. And just to put it out there, you
• 12:26
  Speaker 5: can see all of these focus ideas on bi focus
• 12:30
  Speaker 5: on the terminal.
• 12:31
  Speaker 2: Tim, what I like about these ideas? You know, because
• 12:33
  Speaker 2: people are always looking for ideas long and short, you
• 12:37
  Speaker 2: guys have the ideas. And what I really like that
• 12:40
  Speaker 2: this research format is you have the triggers what's going
• 12:43
  Speaker 2: to make what has to happen in order for this
• 12:46
  Speaker 2: call to work on a particular stock Aston Martin. I'm
• 12:49
  Speaker 2: asking for Matt Miller, what's the call here on Aston Martin?
• 12:53
  Speaker 5: So the call on Acid Martin. As much as I
• 12:57
  Speaker 5: like the cars, and obviously this is where the double
• 13:00
  Speaker 5: low seven reference comes from. They've got a really interesting
• 13:05
  Speaker 5: new lineup of vehicles, but they're short on V twelves
• 13:11
  Speaker 5: and notwithstanding the world of evs and all that sort
• 13:15
  Speaker 5: of stuff, the high end V twelves from Ferrari and
• 13:18
  Speaker 5: Lamborghini are hot. And you look at the inventory levels
• 13:23
  Speaker 5: of Aston Martin on the lots, they're too high. We
• 13:26
  Speaker 5: think that there's a capital infusion that's likely needed in
• 13:30
  Speaker 5: coming months, and so we actually have a cautious view
• 13:35
  Speaker 5: on Aston Martin from that perspective.
• 13:37
  Speaker 3: Tim, you are always putting out super interesting stuff. I mean,
• 13:40
  Speaker 3: we had fifty companies to watch in January and then
• 13:42
  Speaker 3: we have the quarterly update in April, and then of
• 13:44
  Speaker 3: course now this story that's out loving the graphics here.
• 13:48
  Speaker 3: How long did it take to put us together?
• 13:51
  Speaker 5: Well, it's an ongoing process of working with our analysts
• 13:56
  Speaker 5: in terms of where do we see these ideas come
• 14:00
  Speaker 5: from and then you know, our friends in BusinessWeek like
• 14:03
  Speaker 5: to pull together the graphics on these things. It is
• 14:06
  Speaker 5: a It is a good looking piece on the UH on, Bloomberg,
• 14:11
  Speaker 5: dot Com.
• 14:13
  Speaker 2: Booze, Dago. What's the story there.
• 14:16
  Speaker 5: Yeah, the Agio it ties in a little bit with
• 14:20
  Speaker 5: a couple of ideas here. You know, I mentioned Aston Martin.
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  Speaker 5: That's obviously a high end consumer idea. And even though
• 14:26
  Speaker 5: we're consumed concerned about Aston Martin specifically, the high end
• 14:30
  Speaker 5: luxury vehicle market is good. Similarly with the Agio, high end,
• 14:36
  Speaker 5: high end, Booze high end spirits. They are the world's
• 14:38
  Speaker 5: largest spirits manufacturer, is doing relatively well. You know, their
• 14:43
  Speaker 5: recent sales trends have been robust. We think that's going
• 14:47
  Speaker 5: to continue to show through. There has been concern about
• 14:51
  Speaker 5: things like tariffs and what could be the impact, especially
• 14:55
  Speaker 5: from a US consumer base. We're less concerned and we're optimistic.
• 15:00
  Speaker 5: Another consumer, higher end idea you guys know and love
• 15:05
  Speaker 5: in the States is Dick Sporting Goods. You know, this
• 15:08
  Speaker 5: is a classic good old consumer's growth story where not
• 15:13
  Speaker 5: only do you know the store, but you might have
• 15:15
  Speaker 5: been in one of their new, bigger formats where they
• 15:20
  Speaker 5: have you know that much more kit. Their sales trends
• 15:24
  Speaker 5: continue to be quite good, despite concerns about what are
• 15:27
  Speaker 5: tear's going to mean for consumer here or there? So
• 15:31
  Speaker 5: you know those are all those are all consumer ideas.
• 15:33
  Speaker 5: There's certainly a common thread there.
• 15:36
  Speaker 3: You mentioned Dick said, I'm looking at easy Jet, which
• 15:38
  Speaker 3: of course we know is a low cost British airline,
• 15:41
  Speaker 3: and we have a sunny outlook here. But what do
• 15:43
  Speaker 3: you think will be the most surprising call here for readers.
• 15:48
  Speaker 5: Yeah, it's interesting in this instance. Obviously this is not
• 15:51
  Speaker 5: the high end consumer, this is everyday consumer. Is that
• 15:57
  Speaker 5: this isn't so much about the demand, which actually demand
• 16:00
  Speaker 5: for travel and experience continues to be pretty good. This
• 16:04
  Speaker 5: is more of a story on an operational basis. They're
• 16:07
  Speaker 5: replacing a lot of older planes with newer planes that
• 16:13
  Speaker 5: have bigger capacity and much more fuel efficient, so this
• 16:16
  Speaker 5: is a margin story. Easy Jet has historically lagged behind
• 16:21
  Speaker 5: Ryan Air at the other low cost carrier here in Europe.
• 16:24
  Speaker 5: We think that that's set to change.
• 16:27
  Speaker 2: Tim you live and work in London, but as most
• 16:30
  Speaker 2: of our listeners can tell, you're not an Englishman. You're
• 16:33
  Speaker 2: from the Great Commonwealth of Virginia. Talk to us. Are
• 16:37
  Speaker 2: the tourists Is it as crazy in London this year
• 16:40
  Speaker 2: as it's been in recent years. What's the tourism factor
• 16:43
  Speaker 2: they're in London you state.
• 16:44
  Speaker 5: The quick answer is yes, notwithstanding the fact that the
• 16:49
  Speaker 5: pound is actually pretty robust. Of late, streets are busy,
• 16:55
  Speaker 5: and you know it's true, it's true in the city
• 16:59
  Speaker 5: walk out the door here Tuesday, Wednesday, Thursday or the
• 17:03
  Speaker 5: New Friday has been a warm summer. But you know,
• 17:07
  Speaker 5: this is also the time for Wimbledon, and beyond that,
• 17:11
  Speaker 5: it's just been it's just been busy with people coming
• 17:14
  Speaker 5: from all over the world, whether it's China, whether it's
• 17:16
  Speaker 5: the US. This seems to be a hot ticket. So yeah,
• 17:21
  Speaker 5: it still feels pretty good.
• 17:23
  Speaker 2: Yeah, I'm trying to get, you know, Audrey child Friedman,
• 17:25
  Speaker 2: to get the euro back to parody because I'm coming
• 17:29
  Speaker 2: over to Europe in the fall little vacation, little holiday.
• 17:32
  Speaker 2: But I mean you mentioned the pounds sterling, but the
• 17:36
  Speaker 2: by the euro one seventeen that gets your attention.
• 17:39
  Speaker 5: Yeah, it does well. And you know, I guess from
• 17:43
  Speaker 5: from our perspective, and primarily Audrey's perspective, this is a
• 17:50
  Speaker 5: this is a week dollar story as opposed to stronger
• 17:54
  Speaker 5: other currency story, and we think that there's more legs
• 17:59
  Speaker 5: to this. You know. One of the big themes that
• 18:02
  Speaker 5: comes up on all the investor discussions or events that
• 18:05
  Speaker 5: I'm at is that is the long standing premise of
• 18:10
  Speaker 5: American exceptionalism. You pop money in US bonds, US stocks
• 18:14
  Speaker 5: and they take off. You know, is that holding valuations
• 18:17
  Speaker 5: a lot more interesting elsewhere?
• 18:19
  Speaker 2: All right? Tim, great stuff has always Tim Crackett, Chief
• 18:21
  Speaker 2: Content Officer, Bloomberg Intelligence.
• 18:25
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 18:28
  Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
• 18:32
  Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever
• 18:35
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 18:39
  Speaker 3: Welcome back to Bloomberg Intelligence Radio. I'm Normalanda here with
• 18:42
  Speaker 3: Paul Sweeney, and it is Wednesday morning. We're seeing stocks
• 18:45
  Speaker 3: that are higher right now. We've got consumer communication services
• 18:49
  Speaker 3: and consumer discretionary as some of the best performing sectors
• 18:52
  Speaker 3: in the S and P five pund you right now.
• 18:54
  Speaker 3: Lots to keep an eye on today, But we want
• 18:57
  Speaker 3: to talk to Jennifer Ree. She is Bloomberg Intelligence Senior
• 19:01
  Speaker 3: litigation analyst. And we're going to be chatting a little
• 19:03
  Speaker 3: bit about the US antitrust environment and what the second
• 19:06
  Speaker 3: half of this year looks like. I mean, Jennifer, the
• 19:09
  Speaker 3: anti trust environment was pretty aggressive under the Biden administration.
• 19:13
  Speaker 3: We were seeing a lot of those larger companies getting
• 19:16
  Speaker 3: caught in the crosshairs. Here, can you set up for
• 19:19
  Speaker 3: us what it looks like right now one of a
• 19:20
  Speaker 3: new administration?
• 19:22
  Speaker 7: You know, that's right, Nora. It was a really tough
• 19:25
  Speaker 7: four years, particularly for deal makers, and I think there
• 19:28
  Speaker 7: was a lot of uncertainty going into the election during
• 19:31
  Speaker 7: the fourth quarter of last year. But I think there
• 19:32
  Speaker 7: are some really good signs for those companies that want
• 19:35
  Speaker 7: to engage in big deals going forward. And the main
• 19:38
  Speaker 7: reason is because Trump's anti trust enforcers are willing to
• 19:42
  Speaker 7: accept settlements with a remedy to allow a bigger deal
• 19:45
  Speaker 7: to close, essentially meaning that if there's an overlapping product
• 19:48
  Speaker 7: and there'd be too much concentration in the market for
• 19:50
  Speaker 7: that product, that product line could be sold and the
• 19:52
  Speaker 7: larger deal can get closed. And the Buying administration essentially
• 19:56
  Speaker 7: refused to do that. They thought if a deal was problematic,
• 20:00
  Speaker 7: we're just going to sue it. And try to block it,
• 20:01
  Speaker 7: and it led to a lot of lawsuits, a lot
• 20:03
  Speaker 7: of abandonments, and a lot of deals that just didn't
• 20:05
  Speaker 7: get signed to begin with. So because we're seeing this
• 20:08
  Speaker 7: sign that deals can get settled, I do think we're
• 20:10
  Speaker 7: going to start to see more bigger deals getting signed
• 20:13
  Speaker 7: up in the second half and probably next year two.
• 20:16
  Speaker 2: So, you know, for all these agencies within Washington, they
• 20:22
  Speaker 2: obviously feel the presence of President Trump very keenly. The
• 20:26
  Speaker 2: folks that are in charge of the Federal Trade Commission,
• 20:29
  Speaker 2: the Department of Justice, how much independence do you think
• 20:32
  Speaker 2: they have at this.
• 20:34
  Speaker 7: Point, you know, Paul, probably not very much. You know,
• 20:39
  Speaker 7: in the past, in particular, the Federal Trade Commission was
• 20:41
  Speaker 7: supposed to be quite independent, and really it was because
• 20:44
  Speaker 7: it had five commissioners, only three of which could be
• 20:47
  Speaker 7: from one political party, and they needed a majority vote
• 20:50
  Speaker 7: to take any action with a deal. But President Trump
• 20:53
  Speaker 7: has fired the two Democrats, so we now have three Republicans,
• 20:56
  Speaker 7: and we have three Republicans that very much are behind
• 20:59
  Speaker 7: him and his political visions. So I think that they
• 21:03
  Speaker 7: will essentially do what they think he wants done. And
• 21:06
  Speaker 7: we have seen an example of that because they did
• 21:09
  Speaker 7: clear a deal between two huge ad agencies, OmniComm and
• 21:12
  Speaker 7: Interpublic with what we call a behavioral agreement, which they
• 21:16
  Speaker 7: have said that they don't tend to want to take,
• 21:19
  Speaker 7: agreeing that they wouldn't prevent advertisers from advertising next to
• 21:24
  Speaker 7: content that was right leaning or expressed conservative viewpoints that
• 21:29
  Speaker 7: they might not agree with. So that was very much
• 21:31
  Speaker 7: kind of in lined with this administration and what this
• 21:34
  Speaker 7: administration wants. So I do think we're going to see
• 21:36
  Speaker 7: alignment in terms of what these remedies are and the
• 21:39
  Speaker 7: deals that get cleared with what Trump is saying and
• 21:43
  Speaker 7: with what Trump wants.
• 21:45
  Speaker 3: So Trump terminated two Democratic FTC commissioners back in the
• 21:49
  Speaker 3: first quarter of this year, and of course we know
• 21:51
  Speaker 3: this did raise some significant constitutional concerns in terms of
• 21:55
  Speaker 3: the commission's historical independence and of course enforcement effort. What
• 22:00
  Speaker 3: is this really signaled in terms of potential policy changes.
• 22:06
  Speaker 7: Well, you know the thing is that, first of all,
• 22:08
  Speaker 7: we do all of these challenges are going up to
• 22:11
  Speaker 7: the Supreme Court, and we do think that this is
• 22:13
  Speaker 7: going to stick. We do think that because of some
• 22:15
  Speaker 7: of the other decisions about other agencies that even though
• 22:18
  Speaker 7: the two Democrats do have an ongoing lawsuit about their termination.
• 22:21
  Speaker 7: We think that probably the Supreme Court is going to
• 22:24
  Speaker 7: side with Trump and they are going to remain terminated.
• 22:27
  Speaker 7: For practical purposes, as I said, I don't think that
• 22:30
  Speaker 7: there's very much impact here because you do need a
• 22:33
  Speaker 7: majority vote to settle or to suit a block a deal,
• 22:36
  Speaker 7: so you need three out of the five. In the past,
• 22:39
  Speaker 7: we have seen that the FTCs operated on a very
• 22:42
  Speaker 7: sort of bipartisan or nonpartisan basis. We usually have a
• 22:46
  Speaker 7: unanimous or maybe a four to one decision, but it hasn't.
• 22:48
  Speaker 2: Been that way.
• 22:49
  Speaker 7: You know, starting with Biden, we were seeing a lot
• 22:51
  Speaker 7: of three to two decisions where along party lines, right,
• 22:55
  Speaker 7: So I think that we probably would have continued to
• 22:57
  Speaker 7: see that even if the two Democrats were still there,
• 23:00
  Speaker 7: you'd have the three Republicans. You'd probably get your three
• 23:02
  Speaker 7: to two vote to do whatever it was that the
• 23:05
  Speaker 7: Republican tengent wanted. So from a practical standpoint, it's not
• 23:09
  Speaker 7: going to have that much impact on the decision making
• 23:12
  Speaker 7: for deals of this FTC.
• 23:13
  Speaker 2: Are there any deals that are currently being held up
• 23:16
  Speaker 2: or being scrutinized that maybe the participants are saying, oh boy,
• 23:19
  Speaker 2: now we're going to really sail through, and we thought
• 23:21
  Speaker 2: maybe on our Biden it could be a tough slide
• 23:23
  Speaker 2: or anything we should keep an eye on.
• 23:26
  Speaker 7: You know, Paul, The one I'm really interested in is
• 23:28
  Speaker 7: the Google Whiz deal. And I say that because we
• 23:31
  Speaker 7: know this administration is no friend to big tech, and
• 23:34
  Speaker 7: we know that they're staying really aggressive on the monopolistic
• 23:36
  Speaker 7: conduct side, where Google and Apple and Amazon and Facebook
• 23:41
  Speaker 7: have all been sued for monopolistic conduct. And to me,
• 23:44
  Speaker 7: that deals very interesting because just from an anti trust perspective,
• 23:47
  Speaker 7: I don't really think it poses anti trust concerns. You
• 23:50
  Speaker 7: know that the concern would be that you have a
• 23:52
  Speaker 7: cloud company that's marrying with a cloud security company and
• 23:55
  Speaker 7: they could foreclose rivals. But I think that there's ample
• 23:58
  Speaker 7: competition on both sides, on the cloud side and the
• 24:01
  Speaker 7: cloud security side, that you probably don't have a very
• 24:04
  Speaker 7: strong theory of harm. But we know that this administration
• 24:07
  Speaker 7: doesn't necessarily love Google. I'm going to be interested to
• 24:10
  Speaker 7: see what happens there, but I suspect we're not going
• 24:12
  Speaker 7: to learn in the second half. It's probably going to
• 24:14
  Speaker 7: push into the beginning of next year.
• 24:16
  Speaker 2: All right, Jen, thanks so much for joining us a
• 24:18
  Speaker 2: general senior litigation analysts for Bloomberg Intelligence. He's got the
• 24:21
  Speaker 2: deep dive kind of looking at the whole antitrust world
• 24:25
  Speaker 2: under President Trump. You can find out on the Bloomberg
• 24:27
  Speaker 2: turmol It's great read, detailed, long report with a lot
• 24:30
  Speaker 2: of good stuff in there.
• 24:32
  Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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