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Apple Weighs Using Intel, Samsung to Build Device Processors · 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: That Apple is really that Charlie was just reporting really
• 0:26
  Speaker 2: got my attention. Apples held exploratory discussions with Intel and
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  Speaker 2: Samsung about producing main processors sports devices in the US.
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  Speaker 2: That's US a secondary option beyond Taiwan semikentuckty manufacturing.
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  Speaker 3: That's pretty interesting. That's a pretty big change here. Look
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  Speaker 3: at it.
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  Speaker 2: Intel stocks up another thirteen percent today, fifty two week high.
• 0:47
  Speaker 2: I'm going to say an all time high, and I'm
• 0:48
  Speaker 2: old enough to remember when the last time it hit
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  Speaker 2: an all time Hi, my boy Frank Yeary, who's a
• 0:53
  Speaker 2: chairman of board Intel, one of my palmon Brother's runn buddies.
• 0:56
  Speaker 2: He just announced he's stepping down from the chairmanship. So
• 0:59
  Speaker 2: a good day for my boyfriend.
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  Speaker 3: Ranks are good for him going out on a high note. There.
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  Speaker 2: Carolin Hydoints is here be tech co anchor along with
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  Speaker 2: some dude named Ed Ludlow.
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  Speaker 3: This Apple News. It seems kind of interesting, Caroline, because
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  Speaker 3: I mean, Taiwan semi.
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  Speaker 2: Conductor is such a huge supplier for all of the
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  Speaker 2: technology space.
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  Speaker 3: What's Apple doing here?
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  Speaker 4: It's almost going back to it's partners of old. Remember
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  Speaker 4: Apple didn't always design its own chips. It used to
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  Speaker 4: rely upon Intel and Samsung. And Samsung it still depends
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  Speaker 4: upon a lot for other parts of the iPhone, remember
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  Speaker 4: the screens for example. But this is about the dominance
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  Speaker 4: of Taiwan. TSMC obviously has most of its manufacturing out
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  Speaker 4: of Taiwan, about ninety percent of all chips in the world.
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  Speaker 5: Made in Taiwan.
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  Speaker 4: That is a huge potential choke point bottleneck concern, particularly
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  Speaker 4: when Taiwan is in the eye of the storm not
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  Speaker 4: only weather storms, but also in terms of geopolitics and
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  Speaker 4: what if China was to start making any sort of
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  Speaker 4: aggressive moves.
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  Speaker 5: This just means that for Tim Cook, the supply.
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  Speaker 4: Chain god over at Apple, who's now moving to the
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  Speaker 4: chairman role, he's always try and think ahead of how
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  Speaker 4: he can be less dependent. So remember TSMC is manufacturing
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  Speaker 4: in the US more, they're likely to be committing ever
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  Speaker 4: more billions into Arizona. That is something President Trump wants,
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  Speaker 4: but Samsung too is investing in the United States and Texas.
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  Speaker 4: We understand that people who have been from Apple to
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  Speaker 4: go and look around those fabs over in Texas.
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  Speaker 5: And then what about Intel, a company.
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  Speaker 4: That the US administration has skin in the game in
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  Speaker 4: And this would also be a political movement in many ways.
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  Speaker 6: So this is Apple's way of sort of insulating itself
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  Speaker 6: best it can. And one of the last major things
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  Speaker 6: I guess Tim Cook will do during his tenure a
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  Speaker 6: CEO before he passes the rains what about supply shortages.
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  Speaker 6: We know there's a lot of demand for the for
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  Speaker 6: the Mac. How are they doing with that? And also
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  Speaker 6: would this deal with an Intel or a Samsung for
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  Speaker 6: these microprocesses processors help with that?
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  Speaker 5: Well?
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  Speaker 4: I think that was what was surprised many was the
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  Speaker 4: admission that maybe the memory chip issue wasn't so much
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  Speaker 4: Apple's problem this time. It was more the sheer desire
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  Speaker 4: to buy max trying to buy basically the Apple products,
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  Speaker 4: to run your own open claw, run your own agents overnight,
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  Speaker 4: and suddenly they see Mac mini's fly off the shells.
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  Speaker 4: They just cannot get the equipment fast enough. And so yes,
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  Speaker 4: that has been a bit of a blocker for Tim Cook. Basically,
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  Speaker 4: they've got a lot of demand and it's the supply
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  Speaker 4: that's the issue in terms of their previous quarter.
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  Speaker 5: How quickly this can get off the ground, that's a
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  Speaker 5: question Alexis.
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  Speaker 4: And so whether or not we'll see Tim Cook make
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  Speaker 4: any moves while his CEO to fix that is still
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  Speaker 4: an open book because look, they're still building fabrication points
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  Speaker 4: for Intel. This is a long term play coming from
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  Speaker 4: Lip Bhutan, But we know that the CEO of Intel
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  Speaker 4: has in many ways been the issue.
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  Speaker 5: Of look, I will build it if they come.
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  Speaker 4: So if Apple is coming, they will start to build
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  Speaker 4: out the Ohio presence, for example, be able to become
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  Speaker 4: the fabrication partner of choice. Samsung already is building out
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  Speaker 4: in Texas. How quickly they can start running off But
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  Speaker 4: you're right, the supply chain issue has been what chips
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  Speaker 4: are getting into their Mac and their hardware products.
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  Speaker 2: More broadly, Apple is also preparing a new creative Pass
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  Speaker 2: feature for its next major iPhone software upgrading, allowing you
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  Speaker 2: users to build and customize their own digital tickets and
• 4:02
  Speaker 2: gift cards within the wallet app.
• 4:04
  Speaker 3: That seems pretty.
• 4:05
  Speaker 5: Funny, it also seems pretty confusing.
• 4:07
  Speaker 3: What does that mean for this stuff in my wallet?
• 4:09
  Speaker 3: I mean that digital wallet. I'm putting more. It's still
• 4:12
  Speaker 3: more stuff in there.
• 4:13
  Speaker 4: Right, yeah, yeah, And that's with even certain events that
• 4:16
  Speaker 4: you go to, certain gift cards, you might get not
• 4:20
  Speaker 4: actually having the ability to put it on Apple Wallet.
• 4:23
  Speaker 5: So this is the instead.
• 4:24
  Speaker 4: Say you get a one off event down at Jones Beach,
• 4:27
  Speaker 4: You're going in New Jersey and you're spending your summer
• 4:29
  Speaker 4: by the shore there.
• 4:30
  Speaker 6: Carolina knows you.
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  Speaker 5: I love working and I get to know the New
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  Speaker 5: Jersey love.
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  Speaker 4: But say that particular event doesn't have the feasibility of
• 4:41
  Speaker 4: a relationship with iOS. You can take a QR code
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  Speaker 4: that they send you and just load it into your wallet.
• 4:46
  Speaker 4: So there it is, so you kind of have all
• 4:47
  Speaker 4: things in one place. They're trying to become more of
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  Speaker 4: a hub in that respect. So this is a nice
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  Speaker 4: lot upgrade that we're going to see to the software
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  Speaker 4: operating system.
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  Speaker 5: Stay with us more from Boomberg Intelligence coming up after this.
• 5:03
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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• 5:13
  Speaker 1: you get your podcasts or watch us live on YouTube.
• 5:17
  Speaker 2: Paramount Skuiddance reported first quarter sales and earnings that beat
• 5:21
  Speaker 2: animal's expectations as the company moves closer to.
• 5:24
  Speaker 3: Acquiring Warner Brothers Discovery. Investors underwhelmed.
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  Speaker 2: I would say, stocks off six and a half percent today,
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  Speaker 2: off twenty two percent year to date. So there's a
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  Speaker 2: lot of moving pieces at Paramount Skuidance. Let's break it
• 5:38
  Speaker 2: down with Etha rong Andath and she is the media
• 5:40
  Speaker 2: analyst for Bloomberg Intelligency's down there in Princeton.
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  Speaker 3: Hey, KEITHA.
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  Speaker 2: First of all, let's just kind of go to the
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  Speaker 2: earnings here. How's the Paramount Skiddance we're managing under new management.
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  Speaker 7: They actually did a really good job, Paul. So you know,
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  Speaker 7: just from the results that they reported yesterday for the
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  Speaker 7: first quarter, it was really strong. Revenue as well as
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  Speaker 7: just ibadah came in well above consensus estimates. And you know,
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  Speaker 7: the really encouraging thing and what investors look at quatern
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  Speaker 7: and quarter out is how well they are progressing on
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  Speaker 7: the streaming front. And they had pretty good subscriber growth.
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  Speaker 7: A lot of this has been driven by their new
• 6:18
  Speaker 7: UFC deal, but more importantly, they actually reported profits. Remember
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  Speaker 7: this is a service that has been a very you know,
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  Speaker 7: has been racking up loss after loss, quarter after quarter.
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  Speaker 7: But for the first time, you know, there was an inflection.
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  Speaker 7: They reported about two hundred and fifty million dollars in
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  Speaker 7: a justitybadah and they are actually going to sustain momentum
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  Speaker 7: when it comes to that profitability. So across the board,
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  Speaker 7: actually pretty good numbers. But then, as you said, there's
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  Speaker 7: just a lot of different moving pieces and a lot
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  Speaker 7: of investor anxiety about those moving pieces.
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  Speaker 6: And I want to pick at some of those moving
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  Speaker 6: pieces right now, Githa. Because revenue from Paramount's film studios
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  Speaker 6: grew eleven percent. There was a strong theatrical performance from
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  Speaker 6: the horror movie Scream seven, so I guess lots of
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  Speaker 6: fans out there. But sales and Paramount's TV unit fell
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  Speaker 6: six percent. Was that driven by just lost business or
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  Speaker 6: is there a fall off and advertising or maybe a
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  Speaker 6: little bit of both.
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  Speaker 7: Yeah, there was definitely you know, advertising, so remember Paramount
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  Speaker 7: derives about thirty three percent off its revenue from advertising,
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  Speaker 7: so huge, you know, very very critical part of the business.
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  Speaker 7: And yes, you know, across the ecosystem, Alexis, we are
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  Speaker 7: seeing a weakness in TV linear advertising, and of course
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  Speaker 7: no exception there at Paramount as well. They're obviously going
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  Speaker 7: to have a little bit more weakness for the second quarter.
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  Speaker 7: That's what they guided. They did not have the March
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  Speaker 7: Madness Final four which they had the previous year, so
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  Speaker 7: you know, we're seeing tough comps and this and just
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  Speaker 7: general core ad weakness.
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  Speaker 2: So Keitha, what are the companies saying here? I'm thinking
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  Speaker 2: about the big companies that own broadcast and cable networks.
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  Speaker 2: What are they that's a declining business. It's inn a
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  Speaker 2: secular decline. It kind of kind of feels like newspapers
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  Speaker 2: thirty years ago, radio twenty years ago.
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  Speaker 3: What do they plan to do that structurally wise?
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  Speaker 7: So structury, Paul, what all of them are doing really
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  Speaker 7: is moving to digital. So you know, it's the big
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  Speaker 7: shift from linear TV to what they're calling connected TV.
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  Speaker 7: That shift couldn't happen any faster. You know, they're all
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  Speaker 7: trying their best. It's a sixty fifty five to sixty
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  Speaker 7: billion dollar linear market, but there really still remains this
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  Speaker 7: huge gap between eyeballs and monetization. Because we've seen all
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  Speaker 7: of the eyeballs move from linear TV to streaming. We
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  Speaker 7: haven't seen an equally fast or an equally rapid shift
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  Speaker 7: of that monetization from linear to to streaming. And that's
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  Speaker 7: really what all of these companies are trying to capitalize on.
• 8:45
  Speaker 7: You know, Netflix of course made it's big move into advertising,
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  Speaker 7: but then all of the linear companies already have advertising relationships,
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  Speaker 7: you know, whether that's a Disney Plus or a Paramount,
• 8:54
  Speaker 7: you know, but again it's about how fast they can
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  Speaker 7: get there. But they're all trying.
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  Speaker 6: We know that Paramount, you know, clinched the one hundred
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  Speaker 6: and ten billion dollar deal for Netflix. It hopes to
• 9:04
  Speaker 6: close on that deal in the third quarter. But Paramount
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  Speaker 6: has asked the FCC GITHA to sign off on a
• 9:10
  Speaker 6: funding structure that includes more than a third of the
• 9:13
  Speaker 6: company's equity coming from Middle East government entities. Are they
• 9:18
  Speaker 6: going to get that FCC approval? And I'm wondering if
• 9:20
  Speaker 6: the war in Iran is you know, putting any of
• 9:22
  Speaker 6: that in jeopardy.
• 9:24
  Speaker 7: I think they will get the FCC approval. I think
• 9:26
  Speaker 7: so far, all the indications that we've gotten on the
• 9:29
  Speaker 7: regulatory front seem to indicate that, you know, the administration
• 9:32
  Speaker 7: is definitely going to give them the go ahead. I
• 9:34
  Speaker 7: think if at all they have any problems, it'll probably
• 9:37
  Speaker 7: be in California. The California AG has on numerous occasions
• 9:41
  Speaker 7: stated that this is not a done deal, that you know,
• 9:44
  Speaker 7: he thinks that this is actually going to be bad
• 9:45
  Speaker 7: for Hollywood. So I think there's definitely a little bit
• 9:48
  Speaker 7: of you know, regulatory nervousness when it comes to the
• 9:51
  Speaker 7: California AG. But I think on the FCC front, they
• 9:53
  Speaker 7: should be fine. I think the reason why we're seeing
• 9:56
  Speaker 7: so much of weakness in the stock today is really
• 9:58
  Speaker 7: worries around post deal execution. You know, this is a
• 10:01
  Speaker 7: tall order. This is a company pro format that's going
• 10:03
  Speaker 7: to have about eighty billion dollars in debt that's about
• 10:06
  Speaker 7: seven times EBITDA, so highly leveraged company. You have only
• 10:10
  Speaker 7: about twelve billion dollars in EBITDA. Their goal is to
• 10:13
  Speaker 7: get to above twenty billion because they need to get
• 10:16
  Speaker 7: to a three times leverage ratio. But that's going to
• 10:18
  Speaker 7: be possible only if they achieve about six billion dollars
• 10:20
  Speaker 7: in synergies and really bump up that EBITDA. So there's
• 10:23
  Speaker 7: really a lot for them to do Paul and Alexis
• 10:26
  Speaker 7: and I think, you know so execution regulatory. And then
• 10:29
  Speaker 7: there's the issue of dilution from a sharecount perspective, because
• 10:33
  Speaker 7: right now they have about one point one billion shares
• 10:36
  Speaker 7: with paramount. When they get the WBD deal, that that's
• 10:39
  Speaker 7: going to go to about five billion. So we are
• 10:41
  Speaker 7: expecting massive share dilution there. And so that's another big reason.
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  Speaker 3: Thirty seconds left, Githa.
• 10:47
  Speaker 2: When you put all these companies together, this Paramount, sky Dance,
• 10:50
  Speaker 2: Warner Brothers, Discovery, is that going to be a streaming
• 10:53
  Speaker 2: service of scale that can compete against Netflix and maybe
• 10:56
  Speaker 2: even Disney?
• 10:57
  Speaker 7: It can it can fallen. I think that's what invests
• 11:00
  Speaker 7: the pulls are definitely betting on that. I mean, this
• 11:02
  Speaker 7: is a service that's going to have over about two
• 11:04
  Speaker 7: hundred and twenty two hundred and thirty million subscribers. Definitely
• 11:07
  Speaker 7: puts in with it within striking distance of both Netflix
• 11:10
  Speaker 7: and Disney. And I think what we're really kind of
• 11:12
  Speaker 7: betting on with this new management team is how they
• 11:14
  Speaker 7: leverage technology. I mean, this is David Ellison we're talking about.
• 11:18
  Speaker 7: He's a tech kid.
• 11:19
  Speaker 8: You know.
• 11:20
  Speaker 7: Can they leverage AI to get all of those efficiencies.
• 11:23
  Speaker 1: Stay with us.
• 11:24
  Speaker 3: More from Bloomberg Intelligence coming up after this.
• 11:30
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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• 11:40
  Speaker 1: wherever you get your podcasts, or watch us live on YouTube.
• 11:45
  Speaker 2: Coinbase cutting fourteen percent of its workforce, citing Volta markets
• 11:49
  Speaker 2: and AI. Let's break it down with Paul Goldberg, Bloomberg
• 11:52
  Speaker 2: Intelligence Senior equity analyst. Paul talk to us about what's
• 11:55
  Speaker 2: going on with our forensic coinbase warningful.
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  Speaker 9: I think there is a change of heart. Obviously, when
• 12:02
  Speaker 9: they reported EARNIS in February and guide it for the
• 12:04
  Speaker 9: first quarter, they were guiding for their expenses to be
• 12:07
  Speaker 9: roughly flat, which kind of raised the eyebrows a little
• 12:10
  Speaker 9: bit because the activity levels were trained in down and
• 12:15
  Speaker 9: there were some concern But going back to December when
• 12:18
  Speaker 9: they announced the build out of everything exchanged, there are a
• 12:21
  Speaker 9: lot of investments that they have been making, so they
• 12:25
  Speaker 9: basically wanted to maintain those investments going forward. But clearly
• 12:29
  Speaker 9: three months later we do get some change of heart here.
• 12:33
  Speaker 6: So they were talking about fourteen percent of coinbases workforce
• 12:37
  Speaker 6: being cut, I guess that amounts to about seven hundred jobs.
• 12:42
  Speaker 6: Is AI behind this cut?
• 12:47
  Speaker 9: I would think that AI is probably part of the equation,
• 12:50
  Speaker 9: but not necessarily the driver. They did in Brian Armstrong's
• 12:54
  Speaker 9: post one X they did mention the volatility as being
• 12:58
  Speaker 9: the biggest issue. Even we've seen a bitcoin price dropping
• 13:02
  Speaker 9: from two one hundred and twenty five thousand to sixty
• 13:04
  Speaker 9: five thousand and it's probably what eighty one thousand today,
• 13:07
  Speaker 9: so it's coming back in the second quarter, but there's
• 13:09
  Speaker 9: a lot of uncertainty, so they trying to adjust to
• 13:12
  Speaker 9: that mainly. They're also as part of the transition, they're
• 13:15
  Speaker 9: cutting out some management levels, so they're trying to optimize
• 13:18
  Speaker 9: the business, and maybe AI is the helper there where
• 13:22
  Speaker 9: the managers can actually be individual contributors as well.
• 13:26
  Speaker 2: So, Paul, you know, I think a lot of people
• 13:28
  Speaker 2: know coinbase as simply a platform to buy and sell cryptocurrencies.
• 13:34
  Speaker 2: So is this stock primarily entirely partially driven by the
• 13:39
  Speaker 2: price of bitcoin?
• 13:42
  Speaker 9: If you look at the stock chart, part of that
• 13:44
  Speaker 9: reaction is kind of similar to what the bitcoin is doing.
• 13:48
  Speaker 9: But if you look at the businesses that are in
• 13:51
  Speaker 9: the subscription and services businesses, the stake in the payments
• 13:55
  Speaker 9: and all those other things that they're building. There's really
• 13:58
  Speaker 9: a lot of other things happening across the entire ecosystem,
• 14:02
  Speaker 9: including the toganization and getting even into more traditional markets
• 14:06
  Speaker 9: like equities.
• 14:08
  Speaker 6: And certainly coinbase is not alone, right, I mean, you've
• 14:10
  Speaker 6: got a number of companies in this space announcing job
• 14:13
  Speaker 6: cuts recently, block Gemini space Station comes to mind, I
• 14:17
  Speaker 6: think Crypto dot com. What are the reasons why that
• 14:22
  Speaker 6: these companies are offering for why they are tightening their belts?
• 14:27
  Speaker 9: I think so. I don't think it's necessarily a long
• 14:31
  Speaker 9: term problem. I think it's more of a cyclical problem.
• 14:34
  Speaker 9: And because the cycles are so short in those businesses,
• 14:38
  Speaker 9: the technology developed so fast, they really have to adapt
• 14:42
  Speaker 9: and adjust almost on an annial basis or every few
• 14:45
  Speaker 9: years when things change very dramatically, so they do have
• 14:48
  Speaker 9: to refresh their workforce.
• 14:51
  Speaker 2: So, Paul, what's what's the next step for Coinbase here?
• 14:55
  Speaker 2: What's kind of the bowl case for this stock?
• 14:57
  Speaker 8: Here?
• 15:00
  Speaker 9: Bookcases the ecosystem on the blockchain and tokenization, the base
• 15:06
  Speaker 9: layer program in that the building that can allow their
• 15:10
  Speaker 9: users to build on that blockchain, the tokenization of different
• 15:14
  Speaker 9: kinds of assets. So we're just having a lot of
• 15:17
  Speaker 9: things in terms of payments, market structure and things like
• 15:20
  Speaker 9: that shifting very dramatically onto usage of blockchain. So I
• 15:25
  Speaker 9: think that's where the opportunity is for them.
• 15:28
  Speaker 5: Stay with us. More from Bloomberg Intelligence coming up after this.
• 15:35
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 15:38
  Speaker 1: weekdays at ten am Eastern on Apple, Coarclay, and Android
• 15:41
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• 15:45
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 15:49
  Speaker 2: We also get some earnings out of PayPal, and the
• 15:54
  Speaker 2: earnings I'm looking at just at the earnings PayPal reporter.
• 15:56
  Speaker 2: First corn it adjusted earnings about a dollar thirty four,
• 15:59
  Speaker 2: beating the average analyst estimate of the dollar twenty seven,
• 16:02
  Speaker 2: and the company it reiterated its full year guidance. PayPal did,
• 16:06
  Speaker 2: but they are also cutting costs here and cutting some
• 16:09
  Speaker 2: jobs here. So let's break down what's happening at PayPal.
• 16:13
  Speaker 2: Diction gera senior fintech and payments analysts, joined us. She's
• 16:17
  Speaker 2: a Bloomberg Intelligence She's based out there in San Francisco.
• 16:19
  Speaker 2: Dick show what you learned from PayPal with their earnings results.
• 16:24
  Speaker 7: Yeah.
• 16:24
  Speaker 8: Hi, As you can see, Paul, revenue was up about
• 16:28
  Speaker 8: seven percent. It was a decent beat, about six percent
• 16:31
  Speaker 8: EPs beat and just a DPS was a head of consensus.
• 16:34
  Speaker 8: Volume was up eleven percent when more volume accelerated to
• 16:38
  Speaker 8: fourteenth operationally, it wasn't really a bad quarter, but the
• 16:41
  Speaker 8: stocks are still down. So how i'd frame it is
• 16:45
  Speaker 8: that this is a decent show me result, but the
• 16:48
  Speaker 8: bigger issue here is around credibility, and I think the
• 16:53
  Speaker 8: market basically wants to see can new leadership really demonstrate
• 16:58
  Speaker 8: some stabilization and execution. So not a blowout quarter, especially
• 17:02
  Speaker 8: given you know, the tough environment, but was better than
• 17:06
  Speaker 8: what we feared.
• 17:08
  Speaker 6: Was more street happy, though with guidance for the current
• 17:11
  Speaker 6: quarter because I'm sort of reading some mixed things here
• 17:14
  Speaker 6: on the Bloomberg terminal, and also saw them guide toward
• 17:17
  Speaker 6: a decline in earnings per share in the second quarter.
• 17:21
  Speaker 8: Yeah, you're right right, See, this is what we had
• 17:24
  Speaker 8: flagged in our react as well. I think there is
• 17:27
  Speaker 8: a lot to prove yet, Like so, this was a
• 17:29
  Speaker 8: great quarter, but on one point, one data point does
• 17:33
  Speaker 8: not make a trend. We are still yet to see
• 17:37
  Speaker 8: whether branded checkout growth can increase sustainably, ideally grow above
• 17:42
  Speaker 8: slow single digits. The second thing is whether transaction margin
• 17:46
  Speaker 8: dollars return to growth after the second quarter dip, So
• 17:50
  Speaker 8: guidance to that is also signaling weakness, you know, like
• 17:54
  Speaker 8: it doesn't really inspired confidence in that sense. And thirdly,
• 17:59
  Speaker 8: I think the market also wants to see whether the
• 18:02
  Speaker 8: new CEO can convert this whole one point five dollars
• 18:05
  Speaker 8: cost program into product velocity rather than just like some
• 18:08
  Speaker 8: EPs support.
• 18:10
  Speaker 2: What's the what's the bare case here for paypalt Fintech
• 18:14
  Speaker 2: is a A it's an exciting growth segment, but boy,
• 18:18
  Speaker 2: it just feels like competition is everywhere.
• 18:21
  Speaker 8: You're right, well, I think see the barecase. Investors have
• 18:25
  Speaker 8: heard several turnaround stories before with PayPal, and there is
• 18:30
  Speaker 8: that fatigue setting in the second cut quota guidance does
• 18:34
  Speaker 8: not suggest that the reset is still ongoing. So the
• 18:37
  Speaker 8: bare case is evidence stocks something. What I'd argue is
• 18:40
  Speaker 8: that is there a bully caase here, especially like just
• 18:44
  Speaker 8: looking at the valuation and the capital situation with PayPal,
• 18:48
  Speaker 8: like they have targeted six billion plus dollars of free
• 18:51
  Speaker 8: cash flow this year and they plan to buy back
• 18:54
  Speaker 8: as much of stock, So that is definitely very interesting
• 18:58
  Speaker 8: for value investor. It's a very cheap, highly profitable company,
• 19:03
  Speaker 8: but I think there is still nervousness around can new
• 19:07
  Speaker 8: management turn it around?
• 19:09
  Speaker 6: And it really was considered a pioneer, wasn't it in
• 19:11
  Speaker 6: the payment space? And would you say that it just
• 19:15
  Speaker 6: was too late to sort of change with the times
• 19:18
  Speaker 6: and other companies in that space started to eat its lunch.
• 19:23
  Speaker 8: I think it's I mean, definitely there are a lot
• 19:25
  Speaker 8: of new players that are coming in, Stripe being one
• 19:28
  Speaker 8: of them at in coming in, but the more non
• 19:32
  Speaker 8: branded kind of offering, So there are lapses, particularly the
• 19:37
  Speaker 8: challenges around the branded business for PayPal, But I wouldn't
• 19:41
  Speaker 8: say the battle is lost right. Just the scale and
• 19:44
  Speaker 8: the size of this company and the two sided network,
• 19:47
  Speaker 8: these are very enviable attributes and I think there's still
• 19:51
  Speaker 8: room for that. One thing I would kind of allude
• 19:54
  Speaker 8: to is the whole job gut situation as well. We've
• 19:57
  Speaker 8: been getting a lot of questions around that.
• 20:02
  Speaker 6: It's an unspecified number of job cuts, right or did
• 20:04
  Speaker 6: they say how many they're looking to let go?
• 20:07
  Speaker 8: So I saw a news line saying twenty percent job
• 20:10
  Speaker 8: cuts wow, and PayPal is like twenty four thousand plus
• 20:13
  Speaker 8: employees at the end of last year, and that could
• 20:16
  Speaker 8: mean around four and a half thousand jobs being culled.
• 20:20
  Speaker 8: And I mean the job cuts technically are a double
• 20:23
  Speaker 8: edged signal. Right, on one hand, they show that management is
• 20:26
  Speaker 8: serious about taking costs and complexity out of their business.
• 20:29
  Speaker 8: But on the other hand, when a company is cutting
• 20:32
  Speaker 8: this deeply, investors tend to ask whether this is just
• 20:35
  Speaker 8: margin repair or whether it actually fixes the growth problem. Like, basically,
• 20:41
  Speaker 8: PayPal does not need to be smaller just for the
• 20:43
  Speaker 8: sake of being smaller, right, It needs to be faster,
• 20:46
  Speaker 8: more focused, and more competitive at checkout. So that's the question,
• 20:50
  Speaker 8: Like will they be able to deliver on that.
• 20:52
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