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Wall Street Bonuses, Baker Hughes CEO on Earnings · Bloomberg Intelligence

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Speaker 3: Happy Friday, everybody, I'm Alexe alongside Paul Sweeney. This is
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Speaker 3: out on the terminal or also Bloomberg dot com slash
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Speaker 3: Big Take. And today it's about banker bonuses. Wall Street
0:52
Speaker 3: bonuses often come in the form of restricted stock units,
0:55
Speaker 3: So how did that actually perform? It's dicey, it's unpredictable.
1:00
Speaker 3: Do you actually make money off of those things?
1:02
Speaker 4: Well?
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Speaker 3: Joining us now is one of the authors of the story.
1:04
Speaker 3: Laura Noonan, Bloomberg News finance reporter Walkers to your story, Laura.
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Speaker 5: Thank you.
1:10
Speaker 6: So the story basically looked at the restricted shares over
1:13
Speaker 6: a period from the Frantic christ Sinteszan Night, and the
1:16
Speaker 6: question we wanted to ask is how does the number
1:19
Speaker 6: on the letter you get on bonus day compare to
1:21
Speaker 6: how much you actually get by the time those shares best.
1:23
Speaker 6: So we assume certain things, and what we showed was
1:26
Speaker 6: that in the case of the US banks, you usually
1:29
Speaker 6: end up making more, in the case of the European banks,
1:33
Speaker 6: you usually end up making less. And in some cases
1:35
Speaker 6: the numbers were quite severe. So there was one case
1:38
Speaker 6: we looked at where the Bank of America people who
1:40
Speaker 6: got bonuses in twenty eleven slash twenty twelve, they ended
1:44
Speaker 6: up if they had sold them as they could over
1:47
Speaker 6: a three year period, they would have got two hundred
1:49
Speaker 6: and seventy thousand dollars for every one hundred and for
1:51
Speaker 6: every one hundred thousand dollars in the letter. So that's
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Speaker 6: a big upside off the end of the spectrum of
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Speaker 6: the credit Switez. Bankers who got bonuses towards the end
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Speaker 6: of credit spesis life would have seen the money effectively
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Speaker 6: disappear when credits fee is collapsed in twenty twenty three.
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Speaker 4: Are we see investment banks pay more of the bonus
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Speaker 4: in stock or RSUs less cash more. Is that a trend.
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Speaker 6: It's been a trend since the financial crisis, which is
2:15
Speaker 6: why we started the analysis there. So the idea was
2:18
Speaker 6: to align the risk taking of the people who are
2:21
Speaker 6: making bonuses with the longer term fate of the banks that.
2:24
Speaker 4: They work for.
2:25
Speaker 6: Within the EU, there are rules about this, so you
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Speaker 6: have to get a certain percentage of your bonus in
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Speaker 6: these kind of restricted instruments, and the percentage that you
2:33
Speaker 6: get is higher depending on how senior you are. So
2:36
Speaker 6: it's certainly something the banks have been doing for risk management.
2:38
Speaker 5: They're also doing it in terms of.
2:40
Speaker 6: Pretention, in terms of if you are a really strong
2:43
Speaker 6: bank and your share price they expected to appreciate, and
2:45
Speaker 6: we want people to stay working for you, it makes
2:48
Speaker 6: sense to give them things which kind of align their
2:51
Speaker 6: fate with the fate of the bank because it makes
2:53
Speaker 6: them stay, which is what banks are trying to do,
2:55
Speaker 6: especially as they face more competition for for staff from
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Speaker 6: other industries like tes like some of the non listed
3:01
Speaker 6: banks and the and the private markets industry.
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Speaker 3: Paul's here shaking his head like it.
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Speaker 4: I'm just going to keep my mouth shed here because
3:10
Speaker 4: I think about the Europeans in their pay structure, and
3:14
Speaker 4: you don't like that.
3:15
Speaker 2: Ball not a fan.
3:16
Speaker 4: That's why there's no global investment bank coming out of Europe.
3:19
Speaker 4: That's why there's no technology coming out of I mean.
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Speaker 3: It's a fair point, like okay, I mean is a
3:25
Speaker 3: recovering former m and a media banker. So this is
3:28
Speaker 3: near and dear.
3:30
Speaker 6: There are a lot of issues in European investment banks
3:32
Speaker 6: and we will be telling you more about that. Those
3:34
Speaker 6: in different There are some unique structural issues around bank pay.
3:39
Speaker 6: Those do limit their capacity to attract some people. It's
3:43
Speaker 6: going to be really interesting in the UK market now
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Speaker 6: because the UK has just ruled off some of those
3:49
Speaker 6: crisis some of those rules introduced in the EU. The
3:51
Speaker 6: EUP obviously is outside the EU now they are liberating
3:53
Speaker 6: things here. It's going to be a really interesting market
3:55
Speaker 6: to see how people respond in terms of do people
3:58
Speaker 6: want to work for a Joyty Bank MP Paraba within
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Speaker 6: the London operators now or would they be even more
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Speaker 6: likely to go to a Gunman Sachs at JP Morgan
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Speaker 6: where you can now get really big bonuses.
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Speaker 3: Can I just ask about the whole credit Sueeze debacle there,
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Speaker 3: like what happened to all of those bonuses and payouts, etc.
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Speaker 3: When you take a look at Deutsche Bank and Credit Sweeze.
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Speaker 6: So Deutsche Bank has just had a very troubled share
4:24
Speaker 6: price situation. I mean, if you look at the share
4:26
Speaker 6: of Deutsche since Cintomatic crisis, it has pretty much it
4:30
Speaker 6: had a very very sharp decline over that period. So
4:32
Speaker 6: you know, I knew people who had Deutsche bonuses and
4:34
Speaker 6: they were like, oh, this will be the best trade
4:36
Speaker 6: I've ever made, because you get a lot of shares
4:39
Speaker 6: when your share price is low to get you to
4:41
Speaker 6: that dollar number. And they expected the share price to recover.
4:44
Speaker 6: The share price did not recover. It fell further and
4:47
Speaker 6: further and further. So they just had a very tough
4:49
Speaker 6: time share price wise. Creditsweez was interesting because if you
4:52
Speaker 6: look back over the analysis, there were some years when
4:55
Speaker 6: actually Credit sweez stock did really well, and that was
4:57
Speaker 6: because in the immediate after math of the crisis kind
5:01
Speaker 6: of ten eleven twelve is actually very strong. Where came
5:04
Speaker 6: crashing down to earth was in the more recent past
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Speaker 6: when those shares effectively got zeroed by the collapsash takeover
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Speaker 6: from Yes, there's a lot of nuance there. What I
5:12
Speaker 6: should also say is, for this analysis, we looked at
5:15
Speaker 6: twelve banks, the twelve banks who most commonly give bonuses. However,
5:19
Speaker 6: we have a tool for the terminal users. You can
5:21
Speaker 6: go on that you can click on it. You can
5:23
Speaker 6: enter any listed company in the world. You can enter
5:26
Speaker 6: any kind of vesting structure. You might have any dates,
5:29
Speaker 6: and you can see how your life would have been
5:31
Speaker 6: different if you got your bonus at a different bank,
5:34
Speaker 6: or if you made different career choices when you were
5:36
Speaker 6: like twenty five, or you know how your colleagues down
5:39
Speaker 6: the road have done. So there is a lot of
5:40
Speaker 6: fun that you can have. If you're into playing with
5:42
Speaker 6: Excel sheets, you're.
5:43
Speaker 2: In for a fun weekend.
5:44
Speaker 4: And I guess, I mean, you have some great stuff
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Speaker 4: in here about how the best year for bank bonuses
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Speaker 4: was twenty twenty twelve because I guess, you know, depressed
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Speaker 4: values and after.
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Speaker 6: That prices were not good. Yeah, so it's something some
5:56
Speaker 6: parts of better, kind of counter intuitive. But thinking about
5:59
Speaker 6: depressed values is they and this kind of goes without saying,
6:02
Speaker 6: but they have to recover. So I've seen people make
6:05
Speaker 6: some pretty bad decisions thinking that that, thinking that things
6:08
Speaker 6: will always rebound to some kind of normal. The one
6:11
Speaker 6: thing we've learned in European bank since the financial crisis
6:13
Speaker 6: is like me and reversion hasn't really been a thing
6:16
Speaker 6: in the way people think it was going to be.
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Speaker 6: Some business models turned out to be, you know, structurally flowed,
6:21
Speaker 6: structurally fatally flowed in the case of credit sweet So
6:24
Speaker 6: you can't always assume that it's going to bounce back,
6:27
Speaker 6: because I mean, if you talk to the credit feece Banger,
6:29
Speaker 6: they talk to the Liman bankers who live a different era.
6:31
Speaker 6: But they also and then I know a few people
6:33
Speaker 6: who work for both Lehman and Credits Feet and you
6:35
Speaker 6: know the Times Violin. They're silk white rich guys. However,
6:38
Speaker 6: they will be much in picture guys in other places.
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Speaker 3: All Right, Laura, thanks a lot. We're gonna leave it there.
6:42
Speaker 3: Thank you very much. Lauren and a Bloomberg News finance
6:45
Speaker 3: reporter joining us on Banker Bonuses.
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Speaker 2: flagship New York station, Just Say Alexa played Bloomberg eleven
7:06
Speaker 2: thirty one.
7:07
Speaker 3: Stock on the move to the upside is Baker Hughes.
7:10
Speaker 3: It is the best performing stock in the energy sector
7:13
Speaker 3: within the SMP. Baker Hughes is an oil services company.
7:16
Speaker 3: It has two main lines. One is literally oil services,
7:19
Speaker 3: so if you're an oil driller, you call Baker to
7:21
Speaker 3: help you drill the oil. The other is industrial and
7:24
Speaker 3: energy technology that's much more related to sort of the
7:28
Speaker 3: future of what the business will be. Encapsulates LNG export facilities,
7:32
Speaker 3: which they are a huge provider of. And this stock
7:35
Speaker 3: has car rushed its competition. You look at a comp
7:38
Speaker 3: chart Baker Hughes versus A, Halliburton and SLB. They've crushed
7:42
Speaker 3: it over the last year. They reported earnings last night
7:44
Speaker 3: the beat very high estimates and yet the stock is
7:47
Speaker 3: still up by about six percent. Were pleased to have
7:50
Speaker 3: the CEO, President and Chairman, Lorenzo Seminelli joining us. Now, Lorenzo,
7:54
Speaker 3: good to chat with you. I gave you a nice
7:56
Speaker 3: set up there. What do you think that you have
7:58
Speaker 3: if Pears don't.
8:03
Speaker 5: Say that again, Alex, what do.
8:05
Speaker 3: You have that your other peers don't in your best estimation?
8:10
Speaker 7: Well, Alex, firstval it's great to be with you and
8:13
Speaker 7: very pleased with the results of twenty twenty four.
8:15
Speaker 5: And I think it.
8:17
Speaker 7: Really talks to the portfolio and the capabilities of baking US.
8:21
Speaker 7: And as you mentioned, we have these two segments, one
8:25
Speaker 7: being oil field services and equipment and then the other
8:28
Speaker 7: being industrial and energy technology, and that capability of really
8:33
Speaker 7: being focused on where there's less cyclicality, less volatility. As
8:37
Speaker 7: you look at oil field services and equipment, we're much
8:40
Speaker 7: more on the production side, weighted and looking at the
8:44
Speaker 7: mature asset solutions. And when you look at the industrial
8:47
Speaker 7: energy technology, really on the liquefaction side, the gas infrastructure
8:53
Speaker 7: and also new energy and again we exceeded the guidance
8:58
Speaker 7: for new energy orders take in twenty twenty four, looking
9:02
Speaker 7: for another robust twenty twenty five. And it really comes
9:05
Speaker 7: down to the differentiation in the portfolio. And we're really
9:09
Speaker 7: not just an all field services company. We're an industrial
9:13
Speaker 7: energy technology company, and you know, we've created a portfolio
9:19
Speaker 7: that's unique within the space.
9:21
Speaker 4: All Right, Lorenzos, I've been telling Alex, who is the
9:24
Speaker 4: true expert here in Bloomberg for energy. I have watched
9:27
Speaker 4: season one of land Man, so I now consider myself
9:29
Speaker 4: an oil and gas expert. Just putting that in front
9:32
Speaker 4: of you there. Love to get your thoughts. Lorenzo on
9:35
Speaker 4: the implications of this new administration coming up. How much
9:39
Speaker 4: of a change in policy do you and your peers
9:43
Speaker 4: expect out of a Trump administration.
9:47
Speaker 7: You know, we've seen administrations in the past and changes,
9:50
Speaker 7: and obviously we had Trump administration previously as well. As
9:56
Speaker 7: we look at the outlook again, we think that an
10:00
Speaker 7: number of our customers and EMPs are going to continue
10:03
Speaker 7: to be disciplined, and we're seeing activity levels and production
10:08
Speaker 7: at least in the US slightly increasing. As we look
10:12
Speaker 7: at international again we see flatish year over year. But
10:17
Speaker 7: again I think as we look at the macro side,
10:22
Speaker 7: it's over the course of the next few years and
10:25
Speaker 7: the next decade and increasing demand for energy, and that
10:28
Speaker 7: means it's an all of the above strategy. It's going
10:31
Speaker 7: to be oil gas, it's going to be more renewables,
10:34
Speaker 7: and we see a good outlook on the macro side
10:37
Speaker 7: for Baker Hughes.
10:38
Speaker 3: In that environment, he does talk about Landman like all
10:41
Speaker 3: the time. So to break that down a little bit,
10:44
Speaker 3: I was talking to Mike Worth's CEO of Chevron earlier,
10:46
Speaker 3: and basically his theme in the Permian is to produce more.
10:50
Speaker 4: But with less, so less capex.
10:52
Speaker 3: It feels like the read through of that for the
10:54
Speaker 3: oil services business wouldn't be great for you guys. Walk
10:58
Speaker 3: me through what you're seeing from the big oil players.
11:02
Speaker 7: Again, as I mentioned the big old players, they're going
11:05
Speaker 7: to take the opportunity of benefiting from the consolidation and
11:08
Speaker 7: the acreage that they're bringing on.
11:11
Speaker 5: And what Mike.
11:13
Speaker 7: Is mentioning is really the aspect of doing more with
11:16
Speaker 7: what you have. And that's why Baker Hughes is well
11:19
Speaker 7: suited because we're more.
11:20
Speaker 5: On the production side. And again, as you.
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Speaker 7: Look at our portfolio, greater than fifty percent is associated
11:27
Speaker 7: with the production. That's the electrical submassible pumps, it's the chemicals,
11:34
Speaker 7: it's the ability to really take more.
11:37
Speaker 5: Out of the mature assets.
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Speaker 7: And that's been a big focus of Baker Hughes over
11:42
Speaker 7: the course of the last few years. And so as
11:44
Speaker 7: the intensity continues to increase on doing more with less,
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Speaker 7: it actually serves the aspect of our production side and
11:52
Speaker 7: focus that we have on the mature assets.
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Speaker 3: Yeah, I'm glad you brought that up, because that's kind
11:56
Speaker 3: of what my word was saying too, that like the
11:59
Speaker 3: technology just gets so much better that you can actually
12:01
Speaker 3: continue to get more oil, lower the cycle costs, and
12:05
Speaker 3: lower the cycle time. Switching to your IET business, so
12:09
Speaker 3: industrials and energy, a technology business, that's where you have
12:14
Speaker 3: sort of your LNG export facilities, it is, that's where
12:18
Speaker 3: the growth is going to come from. Your numbers for
12:20
Speaker 3: the first quarter and for all of this year are
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Speaker 3: just trouncing estimates. Who is your big customer for this.
12:27
Speaker 7: Well, we've got the large LNG players obviously within North America,
12:32
Speaker 7: and we're looking forward to a number of FIDS taking
12:35
Speaker 7: place in twenty twenty five. Overall globally for LNG again,
12:40
Speaker 7: we see one hundred mtpa of new projects between twenty
12:45
Speaker 7: four and twenty.
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Speaker 5: Six over the course of this year.
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Speaker 7: You know, there's still about eighty mtpa to go internationally
12:53
Speaker 7: as well as also in the US.
12:55
Speaker 5: But it's not just the LNG.
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Speaker 7: It's you know, when you look at gas infrastructure and
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Speaker 7: the associated infrastructure around pipelines being required compression to be
13:05
Speaker 7: able to move the molecule, the LNG players Venture Global
13:09
Speaker 7: which we announced yesterday as well. You've got Shineer, but
13:13
Speaker 7: you've got the majors when you think of Katar Gas
13:18
Speaker 7: as well as Exon Mobile with the projects.
13:21
Speaker 5: That they have.
13:21
Speaker 7: So we play across the portfolio with these key customers.
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Speaker 5: But it's not just LNG.
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Speaker 7: You know, seventy percent of the addressable market opportunity for
13:31
Speaker 7: us in IT over the course of the next few
13:33
Speaker 7: years is outside of LNG, and that's one hundred and
13:38
Speaker 7: forty billion dollar opportunity.
13:40
Speaker 3: Where is it outside of LNG And do you anticipate
13:43
Speaker 3: any acquisitions to even beat that up even more?
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Speaker 7: You know, we're benefiting from the fact that our equipment
13:50
Speaker 7: can be utilized in multiple end applications. So when you
13:54
Speaker 7: go onshore offshore production, when you look at FPSOs and
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Speaker 7: we consistent theme of seven to nine FPSOs on an
14:03
Speaker 7: annual basis. When you look at pipeline infrastructure, you look
14:07
Speaker 7: at downstream.
14:08
Speaker 5: You need pumps, you need valves, you.
14:10
Speaker 7: Need reciprocating compressors, you need turbines, and increasingly behind the
14:16
Speaker 7: meta solutions as well, distributed power generation and we've got
14:21
Speaker 7: a line of industrial gas turbans obviously below one hundred
14:24
Speaker 7: and fifty megawat and when you think of the data
14:27
Speaker 7: center growth that's going to be taking place, it's a
14:30
Speaker 7: large opportunity for us as we go forward.
14:32
Speaker 3: Does that mean that, Lorenzo, you're going to be able
14:34
Speaker 3: to play in the AI data center rush?
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Speaker 7: We already are playing in the aspect of providing behind
14:42
Speaker 7: the meta solutions and also distributed power generation with our
14:47
Speaker 7: Nova LT line and as we're working with a number
14:50
Speaker 7: of hyperscalers and AI is definitely a theme that we
14:55
Speaker 7: see growing and the need for data centers growing, and
14:59
Speaker 7: they're going to need short solutions forgetting.
15:01
Speaker 3: The power Before I let you go, because you know
15:03
Speaker 3: I'm going to ask it. You got those two huge
15:05
Speaker 3: business lines. Any any theories or feelings about a spin off.
15:10
Speaker 7: There is a tremendous amount of synergies between the two.
15:13
Speaker 7: And what's great about Baker Hughes is that we can
15:17
Speaker 7: navigate with less cyclicality, less volatility because it doesn't matter
15:22
Speaker 7: on the pace of the transition. We actually match with
15:26
Speaker 7: the capabilities of oil field services and equipment and the
15:29
Speaker 7: industrial energy technology, and we actually link the value chain together.
15:34
Speaker 7: And as you think of subsurface knowledge with then being
15:37
Speaker 7: able to move the molecule and do something with the
15:40
Speaker 7: molecule from a compression standpoint, liquefaction or moving it elsewhere.
15:46
Speaker 7: The two segments were hand in hand together, so we
15:49
Speaker 7: liked the portfolio of the way that is.
15:51
Speaker 3: I knew you were going to say that one, Lorenzo.
15:52
Speaker 4: It's great to chat with you.
15:53
Speaker 3: I love catching up with you. Lorenzo Saminelli, President, chairman
15:56
Speaker 3: and CEO of Baker Hughes. That' stock up over a
15:59
Speaker 3: six percent And today.
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16:17
Speaker 4: News came out today that surprised me, talking about the
16:21
Speaker 4: US Justice Department blocking HPE's acquisition of Juniper Networks. What
16:27
Speaker 4: happened to the animal spirits of a Republican white House,
16:30
Speaker 4: Republican Congress pulling back on regulation. This one kind of
16:33
Speaker 4: threw me for a curve. So we went to the
16:35
Speaker 4: expert u Jinhoe Senior technolog channels from Bloomberg Intelligence. Wooje
16:39
Speaker 4: was this expected, what's going on here.
16:42
Speaker 8: Hey, Paul, it wasn't expected. I think there were some
16:45
Speaker 8: rumblings going on earlier in the week that the DJ
16:48
Speaker 8: made blocked the deal for anti competitive reasons, and then
16:52
Speaker 8: when the deal was close, close to the finish line,
16:56
Speaker 8: Woomer was next week a DJ decided to step in.
16:59
Speaker 8: What's the problem, Well, it's all about Wi Fi and
17:04
Speaker 8: it's clear that HPE can't live without its Wi Fi either.
17:09
Speaker 8: You know, the combination of HPE and Juniper would create
17:12
Speaker 8: twenty percent Wi Fi market share in the United States
17:15
Speaker 8: in the North America, and if you combine that with Cisco,
17:20
Speaker 8: it would have over seventy percent. So the DOJ is
17:23
Speaker 8: essentially saying that it would create an anti competitive environment
17:26
Speaker 8: in the wireless landspace.
17:28
Speaker 4: Both stocks are kind of flat to a little bit
17:31
Speaker 4: up here today. So what's the market telling us here, Well.
17:36
Speaker 8: The market is telling us for a Juniper standpoint, there
17:40
Speaker 8: might be a we're getting closer to evaluation floor if
17:44
Speaker 8: HPE needs to walk away. What we did right this
17:47
Speaker 8: morning was that we think that there is a nine
17:49
Speaker 8: to ten billion dollar valuation on a standalone Juniper. That
17:53
Speaker 8: gets us to about a twenty eight to thirty two
17:57
Speaker 8: dollars share price. It slight discount where it's trading right now.
18:00
Speaker 8: Now from an HPE standpoint, you know, it's something a
18:04
Speaker 8: different signal. One of the reasons why they wanted to
18:07
Speaker 8: acquire Juniper as a whole is for a margin perspective.
18:11
Speaker 8: So the stock is down about ten percent and some
18:13
Speaker 8: of the margin decretion related Juniper might be falling off.
18:17
Speaker 4: What could they do to save this deal?
18:19
Speaker 3: Is there anything that they could offer?
18:22
Speaker 8: Yeah, so look at the end of the day, there's
18:25
Speaker 8: one particular product that Juniper has called missed and that
18:31
Speaker 8: was automated the Wi Fi functionality as well as delivered
18:37
Speaker 8: some AI functionality. You know, HP doesn't want to walk
18:41
Speaker 8: away from that, but if they walk away from that
18:43
Speaker 8: portion of the deal, that could possibly preserve the deal.
18:47
Speaker 8: But you know, with Antonio trying to do to keep
18:51
Speaker 8: to go through with the lawsuit, they really want Missed
18:55
Speaker 8: and quite frankly, I think it's one of the crown
18:57
Speaker 8: jewels of the deal.
18:58
Speaker 4: So which I know you probably speak to Jenrie at
19:01
Speaker 4: Bloomberg Intelligence. She does all this anti trust stuff. How
19:04
Speaker 4: are you guys thinking about this? What are you telling
19:06
Speaker 4: your clients? Is it still going to get done? Is
19:07
Speaker 4: it not gonna get done? Are they going to walk away?
19:09
Speaker 4: What do you think is gonna happen?
19:11
Speaker 8: Yeah, you know, I've been going back and forth with
19:14
Speaker 8: with Jen, and you know what Jen is telling us
19:17
Speaker 8: as well as Bloomberg Bloomberg clients is that the DJ
19:21
Speaker 8: actually may have a strong case. Quite quite frankly, I
19:25
Speaker 8: think it's kind of a bunk from from a DJ standpoint.
19:29
Speaker 8: You know, Hpe is getting penalized for Cisco having fifty
19:32
Speaker 8: percent market share, right and one of the arguments that
19:36
Speaker 8: the DJ is making is that there might be an
19:40
Speaker 8: increase in price. But you know, the historical trend has
19:43
Speaker 8: been Hpe actually has been a price leader in terms
19:47
Speaker 8: of having lower price for their wireless land products versus
19:50
Speaker 8: where Cisco is a price you know, is a price
19:54
Speaker 8: leader where they have the highest price. So, you know,
19:58
Speaker 8: I don't know where it'll be. But if uh, Jens
20:01
Speaker 8: generally says that DJ has a case, HPE may need
20:05
Speaker 8: to find alternatives.
20:06
Speaker 3: So let's pretend that deodee h does have a case.
20:09
Speaker 3: What's a plan B or I guess what does Juniper
20:11
Speaker 3: and HPE look without a deal?
20:14
Speaker 4: Yeah?
20:14
Speaker 8: So, uh, the way I look at it right now
20:17
Speaker 8: is that the there actually is still a lot of synergies.
20:20
Speaker 8: You know, Juniper has a data center networking UH data
20:24
Speaker 8: center uh A as well as cloud routing.
20:27
Speaker 5: UH.
20:27
Speaker 8: These are two areas that HPE does not have, and
20:30
Speaker 8: it actually would fit well UH with HPE's portfolio. From
20:34
Speaker 8: a valuation standpoint, you know, we think that UH the
20:37
Speaker 8: standalone missed piece would be about two point seven to
20:41
Speaker 8: three point five billion dollars if you back that out
20:45
Speaker 8: of the original UH fourteen billion dollar price, we're talking
20:48
Speaker 8: about a ten two eleven billion dollar deal. UH, Juniper
20:53
Speaker 8: valuation X missed. So you know it it it'll still
20:57
Speaker 8: work out, and and there are still UH areas of synergies,
21:01
Speaker 8: but you are missing out about a billion plus in
21:04
Speaker 8: revenue if you carve out missed.
21:07
Speaker 4: Which about thirty seconds left. What's your favorite name here
21:10
Speaker 4: in your space these days?
21:12
Speaker 8: Ironically, it's HPA Okay, and the quick AI. It's the
21:18
Speaker 8: AI story. It's the I think they're going to start
21:20
Speaker 8: gaining some AI sent them in the quarter.
21:22
Speaker 4: All right, great stuff with Jinho Senior Technology. Channleal for
21:25
Speaker 4: Bloomberg Intelligence joining us via the Zoom from Princeton, New Jersey.
21:30
Speaker 4: Appreciate that so again, Hpe, Juniper do oj blocking kind
21:36
Speaker 4: of surprised. I think a lot of us who were
21:38
Speaker 4: expecting these animal spirits from a regulatory standpoint to take
21:42
Speaker 4: over and be kind of the wild West out there
21:44
Speaker 4: for M and A.
21:44
Speaker 6: But MAK you not.
21:46
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Speaker 8: M