Latest / Bloomberg Intelligence / Lululemon Shares Sink to eight Year Low on Disappointing Outlook

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Lululemon Shares Sink to eight Year Low on Disappointing Outlook · Bloomberg Intelligence

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  Speaker 2: You mentioned Lululemon and the Big Fan. Are you yes?
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  Speaker 2: What have you brought from Lula?
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  Speaker 3: No, it's not that I wear them. I appreciate them
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  Speaker 3: among other people.
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  Speaker 4: Oh I see, okay, so you happen a buyer, probably
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  Speaker 4: as gifts.
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  Speaker 3: Uh yeah, but when I talk to buyers or prospective
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  Speaker 3: buyers like you or Lisa Mitteo or Lexus christoffers, the
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  Speaker 3: theme is really good products. Befoy they're expensive.
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  Speaker 4: Yeah, they were kind of the first mover on really
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  Speaker 4: good products. But then a lot of copycats came around,
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  Speaker 4: and guess what, they've all figured out how to do
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  Speaker 4: it pretty well too, for a lower price. Put On
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  Speaker 4: goyelis our senior US e commerce and retail analysts here
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  Speaker 4: Bloomberg Intelligence, and she joins us now with more on
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  Speaker 4: Lulu Lemon. And this has been kind of the challenge
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  Speaker 4: for Lulu Lemon for a while. Now this is not
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  Speaker 4: a new problem, that there's so much competition out there
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  Speaker 4: and that the quality that Lulu Lemon is known for,
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  Speaker 4: you're now seeing it at other companies. What has been
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  Speaker 4: the response, because I feel like they haven't figured that
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  Speaker 4: out yet.
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  Speaker 5: No, they haven't. You know, the problem continues to linger.
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  Speaker 5: But the problem is more than just competition. Competition is
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  Speaker 5: one thing. Lul Lemon's had competition for years. The issue
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  Speaker 5: is really the product at its core, and the product
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  Speaker 5: in North America, especially across the women's business, they don't
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  Speaker 5: have a good lineup of product. The product that they're
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  Speaker 5: introducing isn't fully resonating with shoppers. It's a hit or miss.
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  Speaker 5: In most cases. The pipeline to bring new product to
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  Speaker 5: market is very long and they need to shorten that.
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  Speaker 5: So this is more in my eyes, a product execution
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  Speaker 5: miss than competition. Competition does play a part in it,
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  Speaker 5: but I think, you know, not having the right product
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  Speaker 5: just adds more to the tension and the downside.
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  Speaker 3: And put them you've covered retail for years and years
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  Speaker 3: and years and you've seen companies struggle with product and
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  Speaker 3: product innovation. How do you fix that kind of thing?
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  Speaker 3: Is it just hiring the right person? Or is it
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  Speaker 3: changing your process? How do you do that right?
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  Speaker 5: So I think there's two ways to think about it.
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  Speaker 5: When a company like Lululemon or even a Nike, they
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  Speaker 5: have such great brand equity and heat that they can
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  Speaker 5: use that to their advantage. What they need is a
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  Speaker 5: product led person. They need innovation and products, so they
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  Speaker 5: need the execution on the product side. And once they
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  Speaker 5: have that, because they have the brand heat, because they
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  Speaker 5: have the brand loyalty, people do come back. So I
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  Speaker 5: don't think it's women are not wanting to shop lul Lemon.
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  Speaker 5: They don't have what they want there. It's no longer
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  Speaker 5: providing it innovation fast enough, and others are coming into
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  Speaker 5: the picture. So I do think when Heidi comes on
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  Speaker 5: board in September, you know there's a lot of I
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  Speaker 5: guess there are a lot of people who are critical
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  Speaker 5: of her appointment, But I think the one thing that
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  Speaker 5: she does come with is a product led background, and
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  Speaker 5: should she be able to improve just speed to market
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  Speaker 5: and the product lineup. I think that's a step forward
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  Speaker 5: for Lulu Lemon. The rest of it is still uncertain,
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  Speaker 5: but I think that will give them a leg up.
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  Speaker 5: But I don't expect to see that until you know
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  Speaker 5: mid twenty twenty seven. She comes in in September and
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  Speaker 5: things are sliding as we speak into the year, with
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  Speaker 5: sales expected to be down at the midpoint.
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  Speaker 2: So it's going to take time.
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  Speaker 4: And you mentioned that the selection, the product selection is
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  Speaker 4: a challenge here in North America, but we've seen that
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  Speaker 4: Lula Lemon does fairly well overseas. Why is that? Is
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  Speaker 4: it because the competition is just isn't there. There's still
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  Speaker 4: a freshness factor with the brand over there.
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  Speaker 5: So the brand is much smaller internationally, right, so that
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  Speaker 5: makes the difference. Also the competition, Yes, you could argue that,
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  Speaker 5: we know you're talking about the Aloes of the World
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  Speaker 5: and others. It's probably more competitive here than it is
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  Speaker 5: in China for them, But it really comes down to
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  Speaker 5: the base. Lula Lemon's biggest business is in North America,
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  Speaker 5: and while China is still up in thirty percent, it's
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  Speaker 5: off a much smaller base.
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  Speaker 3: What are they saying about China here because they're one
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  Speaker 3: of the companies that you covered that are one of
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  Speaker 3: the many companies you cover that do have exposure there.
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  Speaker 5: So Lula Lemon is actually doing better than the other
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  Speaker 5: at leisure competitors in China. However, in the quarter there
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  Speaker 5: was a little hiccup given the negative backlash that they
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  Speaker 5: had in the news. China sales did trail a little
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  Speaker 5: in the quarter, but since have recovered, so we think
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  Speaker 5: China will be okay. But China is also sensitive to
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  Speaker 5: product quality news and other news that lul Lemon has
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  Speaker 5: to face from consumers.
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  Speaker 2: What about the role of Chip Wilson.
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  Speaker 4: He's the founder of Lululemon, and he's been agitating for changes.
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  Speaker 2: It feels like he's.
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  Speaker 4: In conflict with the current management and they're kind of
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  Speaker 4: trying to work with him because obviously he has hit
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  Speaker 4: upon some soft points for the company and they recognize
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  Speaker 4: that his criticism is valid. Is there path forward for
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  Speaker 4: them to work together.
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  Speaker 5: It's already in place. The last announcement we heard from
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  Speaker 5: Chip Wilson was that the members, some of the members
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  Speaker 5: he is appointing to the board are of his choice.
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  Speaker 5: So that should help attentions resolve between Lula Lemon and
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  Speaker 5: Chip Wilson. And he will have access to Heidi when
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  Speaker 5: she joins in September, so there will be dialogue and
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  Speaker 5: how to move Lulua Lemon forward and really get it
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  Speaker 5: out of the stump that it's in, and hopefully as
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  Speaker 5: they work together. He is the founder, he is a
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  Speaker 5: visionary behind Lululemon, so I do think he'll have a
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  Speaker 5: lot to add to the conversation, and as they take
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  Speaker 5: his input bring their own input into place, they could
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  Speaker 5: start to lead a turnaround. But once again, it's all
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  Speaker 5: about the execution, and we won't know more until the
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  Speaker 5: end of this year until we hear from Heidi, hear
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  Speaker 5: her plans, hear her vision, and then to execute that
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  Speaker 5: is another six to twelve months.
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  Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 3: Let's get back to the world of technology. Technology taking
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  Speaker 3: it on the chin here today the Philly Semi Index
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  Speaker 3: down about five percent, bringing down the overall Nasdaq down
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  Speaker 3: about two point two percent here, but let's be honest,
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  Speaker 3: these things have been just ripping forever. Here. Let's check
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  Speaker 3: in when somebody does this stuff for a living. Matthew Bloxham.
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  Speaker 3: He covers all the TMT stuff for Bloomberg Intelligencies based
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  Speaker 3: in London here, so rough day for the semis here,
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  Speaker 3: Matt's what's going on out there in the world of
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  Speaker 3: technology when you talk to tech investors, because this AI
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  Speaker 3: trade just seems like it's got so much legs left
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  Speaker 3: in it.
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  Speaker 6: Yeah, and you know how a great run for the
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  Speaker 6: last few weeks and months. We've been talking about that
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  Speaker 6: a little bit here. It's actually at the desk, and
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  Speaker 6: you know, I think at least to some degree, you
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  Speaker 6: have to think that people are making a little bit
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  Speaker 6: of room for the SpaceX IPO and what they hope
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  Speaker 6: will be a location, you know, because you kind of feel,
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  Speaker 6: I mean, who knows where people are going to get
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  Speaker 6: the money from, but you would think that it's going
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  Speaker 6: to come from from some of the other big tech holdings. Yeah,
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  Speaker 6: we should arguably probably bigger holdings and more liquid So
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  Speaker 6: that that's our sense that, you know, at least to
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  Speaker 6: some degree, it's a little bit of liquidity for that.
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  Speaker 7: Yeah.
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  Speaker 6: Well.
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  Speaker 2: Now, of course broad Com in the.
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  Speaker 8: News this week because even though it was a solid
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  Speaker 8: set of results, it was still disappointing because such high
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  Speaker 8: expectations for all of these are companies here. But you know,
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  Speaker 8: one of the details that we've got is that the
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  Speaker 8: CEO saying AIR growth is so strong they're not even
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  Speaker 8: looking at acquisitions.
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  Speaker 2: They're thinking that it's a distraction.
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  Speaker 8: Where does that tell you where are in terms of
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  Speaker 8: the AI infrastructure spending cycle at recent in the early inning,
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  Speaker 8: So you're given that view.
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  Speaker 6: Yeah, I think so. I think it also talks to
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  Speaker 6: the fact that that they feel like they're executing well
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  Speaker 6: against their plan. And actually when you when you look
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  Speaker 6: at the numbers, the numbers will tell you they are
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  Speaker 6: because you'll see that the big part of the plan
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  Speaker 6: is to pivot towards AI. In the quarter, they reported
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  Speaker 6: that AI sales were up one hundred and forty three percent,
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  Speaker 6: and if I've remembered it correctly, you know for the
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  Speaker 6: forward quarter guide they're talking about a more than two
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  Speaker 6: hundred percent increase in AI revenue. So yeah, you know
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  Speaker 6: that that board guide was a little bit shy of
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  Speaker 6: where the market was. Your sixteen billion dollars of revenue
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  Speaker 6: versus seventeen, but you know, that's a huge, huge growth rate,
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  Speaker 6: and so I think it tells you that they're comfortable
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  Speaker 6: that they've got all the assets and capables they need
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  Speaker 6: to deliver on the plan.
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  Speaker 3: Matt, you mentioned SpaceX, and of course it's They started
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  Speaker 3: their room show yesterday and I think they're in New
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  Speaker 3: York today and maybe a couple more dates here in
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  Speaker 3: the US. Do you know if SpaceX is coming to London?
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  Speaker 6: I don't know actually for sure. I mean, I guess
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  Speaker 6: it's certainly a possibility, but I've not seen any specific plans.
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  Speaker 3: What's the when you talk to folks, what's the feeling
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  Speaker 3: about SpaceX, Because obviously it's if you're looking for a
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  Speaker 3: pure play kind of on Elon musk in it, which
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  Speaker 3: has got a space component to it, you know, a
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  Speaker 3: kind of a telecoms component to it and as well
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  Speaker 3: as an AI component. What are the discussions you're having
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  Speaker 3: with your clients.
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  Speaker 6: You know, it's incredibly polarized. Maybe not that surprisingly, you know,
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  Speaker 6: I mean, I think the opportunity and ambition they set
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  Speaker 6: out in the S one filing is almost overwhelming. There's
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  Speaker 6: so many parts to it, and it's so big. You know,
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  Speaker 6: there's twenty eight and a half trillion dollar mark opportunity
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  Speaker 6: they talk about, and when you see some of the
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  Speaker 6: components that go into that, particularly things like the orbital
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  Speaker 6: data center strategy, you know, the the ambition they have
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  Speaker 6: for the Starship rocket launch platform. I think some people
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  Speaker 6: kind of find it a little bit hard to grasp.
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  Speaker 6: But you know, at the other other end, you know,
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  Speaker 6: some of these things could be really quite profound in
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  Speaker 6: how they shake up, you know, existing markets, you know,
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  Speaker 6: the data infrastructure, the data center infrastructure market that the
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  Speaker 6: big AI players like Anthropic and Open Eyes Open Eyes.
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  Speaker 6: So this has really quite significant implications for all the
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  Speaker 6: big parts of the market. And yeah, it's really really
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  Speaker 6: spilling people right down the middle. You know, some people
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  Speaker 6: are just kind of very much brought into the Elon
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  Speaker 6: masterrink in that chool aid And at the other end,
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  Speaker 6: you just cout people thinking, you know this, you know,
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  Speaker 6: this isn't going to play out the way the market thinks.
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  Speaker 6: And you know, I think certainly obviously we've seen some
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  Speaker 6: numbers today in terms of what the lead banks are
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  Speaker 6: pitching in terms of the revenue growth opportunity. You know,
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  Speaker 6: we're talking about adding four hundred billion dollars of revenue
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  Speaker 6: and in five years and continuing to grow beyond that,
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  Speaker 6: a four fifty to five hundred billion dollar revenue number.
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  Speaker 6: We put them in the top ten listed companies by
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  Speaker 6: sales in the world. Is there's only really Amazon and
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  Speaker 6: Walmart that would be substantially bigger than that. So it's
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  Speaker 6: an enormous task to kind of scale your business quite
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  Speaker 6: that quickly, and to do that you need a huge
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  Speaker 6: amount of infrastructure. And I guess one of the questions
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  Speaker 6: would be, can they really deploy enough infrastructure even if
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  Speaker 6: the market is there? Can they deploy the infrastructure quickly
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  Speaker 6: enough to kind of get the revenue flywheel going so quickly?
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  Speaker 2: Stay with us more from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence. Catch us live weekdays
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  Speaker 1: at ten am Eastern on Applecarplay and Android Auto with
• 12:05
  Speaker 1: the Bloomberg Business App. Listen on demand wherever you get
• 12:08
  Speaker 1: your podcasts, or watch us live on YouTube.
• 12:12
  Speaker 3: SpaceX is on the road. They started their road show yesterday.
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  Speaker 3: Their scheduled to price this ipo, the seventy five billion
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  Speaker 3: dollar IPO, next Thursday, after the close to trade on Friday.
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  Speaker 3: So that is the schedule. Let's get the latest reporting there.
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  Speaker 3: Billy Lipschultz, Senior Equities reporter for Bloomberg News joints is here,
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  Speaker 3: So Billy, it looks like so they kicked it off yesterday.
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  Speaker 3: What did we know? What did we hear? Anything new?
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  Speaker 9: Not much new we did have yesterday evening Jamie Diamond
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  Speaker 9: interviewed Elon Musk for about a half hour that was
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  Speaker 9: streamed on x that was broadcast to I believe about
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  Speaker 9: ninety JP Morgan Branch's number of high networth individuals attended
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  Speaker 9: here in New York attended around the country. Not really
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  Speaker 9: anything groundbreaking from Elon from that conversation, but certainly got
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  Speaker 9: people pretty jacked up that the man himself was kind
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  Speaker 9: of participating in this coinsation with Jamie Diamond.
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  Speaker 3: But we did break about an hour ago.
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  Speaker 9: I believe that they have officially over called the book
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  Speaker 9: over subscribed, so they've officially had more than seventy five
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  Speaker 9: billion dollars of orders placed, which is a pretty quick turn,
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  Speaker 9: though not completely unsurprising just given how these deals are
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  Speaker 9: going to go.
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  Speaker 8: Yeah, well, what's the word industry, I mean mega mega IPO,
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  Speaker 8: big size. But any concerns at all that the market
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  Speaker 8: is not going to be able to handle this in
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  Speaker 8: terms of digesting it or really everyone's just let's go buy.
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  Speaker 3: In well, I think that the debate is do you
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  Speaker 3: believe in Elon Musk? Yes or no?
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  Speaker 9: Is kind of the first start. I think when you
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  Speaker 9: talk to investors, yes, there are a number of caveats
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  Speaker 9: around the deal in particular, but like Google able to
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  Speaker 9: raise about eighty billion dollars, north of eighty billion dollars
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  Speaker 9: kind of assured a lot of people that there's plenty
• 13:47
  Speaker 9: of cash either on the sideline or can be pulled
• 13:49
  Speaker 9: out of things like bitcoin other assets. So it doesn't
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  Speaker 9: seem like there's any concern about the ability to have
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  Speaker 9: investors show up in size for seventy five billion dollars
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  Speaker 9: you had on the green shoe, north of eighty billion dollars.
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  Speaker 9: I think the big question will be A how does
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  Speaker 9: it trade after that? And B how are these bankers
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  Speaker 9: thinking about allocation? Are we going to see, you know,
• 14:05
  Speaker 9: the PIFs of the world, these big funds showing up
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  Speaker 9: in size for five, ten, fifteen billion dollar orders, or
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  Speaker 9: is retail actually going to take down thirty percent of
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  Speaker 9: this deal like we had reported, was kind of the
• 14:16
  Speaker 9: ceiling Because you do the math, that's north of twenty
• 14:18
  Speaker 9: billion dollars going just to individual investors, which is something
• 14:21
  Speaker 9: we have never seen before.
• 14:24
  Speaker 3: We were talking to Matthew Blocks, some TNT analyso Bloomberg
• 14:26
  Speaker 3: Intelligence in London. He was saying that, you know, he's
• 14:29
  Speaker 3: talked to some clients and about the today's saw off
• 14:31
  Speaker 3: in the NASDAC and the Philly stock in Stock Exchange
• 14:36
  Speaker 3: semi indexes down about six percent today. Maybe that's a
• 14:38
  Speaker 3: little selling to raise some capital to invest in SpaceX
• 14:43
  Speaker 3: coming up, and maybe even some of the other ai
• 14:45
  Speaker 3: ones coming around. Is that something you're hearing?
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  Speaker 9: Yes, and now I think when I talked to people
• 14:52
  Speaker 9: who manage a lot of money, this has been the
• 14:54
  Speaker 9: worst kept secret of all time. They've been meeting with
• 14:56
  Speaker 9: SpaceX management since January right in taking these trips. This
• 15:01
  Speaker 9: targeted range, in targeted size has been discussed.
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  Speaker 3: For six months.
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  Speaker 9: At this point, I just want to call out, Yes,
• 15:07
  Speaker 9: that's a good point. The socks is down six percent,
• 15:09
  Speaker 9: it's up eighty one percent a year. Yeah, So I
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  Speaker 9: don't think, at least from my conversations, anyone is saying
• 15:15
  Speaker 9: weakness on Thursday and Friday is because people need clear capacity.
• 15:18
  Speaker 3: One other interesting news point for SpaceX. I guess some
• 15:21
  Speaker 3: of the other ai I tast coming is the s
• 15:24
  Speaker 3: and P has said they've been a fast track entrance
• 15:27
  Speaker 3: into the index. What does that mean?
• 15:28
  Speaker 9: So SMP was reviewing a rule change that would add
• 15:33
  Speaker 9: some of these companies in six months instead of twelve months.
• 15:35
  Speaker 9: We saw Nasdaq cut their timeline down to fifteen days.
• 15:38
  Speaker 9: Some of the footsies kind of exchanges are now like
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  Speaker 9: five days, so even shorter. I think the bigger news
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  Speaker 9: point in that lack of a change from the S
• 15:48
  Speaker 9: and B five hundred is not the shorter timeline six
• 15:50
  Speaker 9: months twelve months. When I talk to people who cares,
• 15:53
  Speaker 9: they were considering waving that you needed to be net
• 15:56
  Speaker 9: income positive for twelve months. So you say, what does
• 15:59
  Speaker 9: that mean for SpaceX, Well, they were negative. They wouldn't
• 16:02
  Speaker 9: be eligible anyway if this rule change doesn't happen. And
• 16:04
  Speaker 9: the bigger question from there is Anthropic and Open AI.
• 16:08
  Speaker 9: They can pull some accounting levers, but these are two
• 16:10
  Speaker 9: companies that people do not expect to be netting compositive
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  Speaker 9: for quite some time. Does that mean Anthropical IPOs later
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  Speaker 9: this year? But it's not in the S and P
• 16:18
  Speaker 9: five hundred until twenty thirty one. I mean that's a
• 16:21
  Speaker 9: pure speculation. But when you look at SMP at least
• 16:24
  Speaker 9: for now, sticking from to those rules, these are companies
• 16:27
  Speaker 9: that are not going to be the SMP five hundred.
• 16:29
  Speaker 9: They will be in the NASZAQ one hundred if they
• 16:30
  Speaker 9: choose a list on NASAK much more quickly. How does
• 16:33
  Speaker 9: that change how we market watch and how does that evolve,
• 16:36
  Speaker 9: especially when you think about micro Strategy being in NAZAQ
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  Speaker 9: one hundred. But SMP saying no thanks, Michael Saylor stated,
• 16:43
  Speaker 9: whatever you're.
• 16:43
  Speaker 8: Doing, yeah, yeah, And what do you think is a
• 16:45
  Speaker 8: driver for that decision? Is it kind of the sb
• 16:48
  Speaker 8: prioritizing market stability over the hype that some of these
• 16:51
  Speaker 8: IPOs bring.
• 16:52
  Speaker 9: We haven't heard firmly there is a committee that makes
• 16:56
  Speaker 9: this decision. When I've talked to people around kind of
• 16:59
  Speaker 9: their view and again just their speculation, their reading of
• 17:01
  Speaker 9: the teele uses. SMP has an objective that they want
• 17:05
  Speaker 9: to reach, and that is making sure the s and
• 17:07
  Speaker 9: P five hundred has companies that are liquid, companies that
• 17:10
  Speaker 9: have a fair amount of free float, and companies that
• 17:13
  Speaker 9: kind of meet their bar. They didn't want to change
• 17:16
  Speaker 9: that right now. Again, is this something that is reviewed
• 17:20
  Speaker 9: in six months?
• 17:20
  Speaker 3: Again? I do not know.
• 17:21
  Speaker 9: I don't think anyone knows, but for this kind of
• 17:24
  Speaker 9: point in time, they are sticking to their hurdles, their
• 17:28
  Speaker 9: thresholds that they want to be met, and we're not
• 17:31
  Speaker 9: kind of at least reconsidering. Similar to what we saw
• 17:34
  Speaker 9: with Nasdaq one hundred. They're in exchange. They benefit from
• 17:37
  Speaker 9: having spacexlists on their exchange.
• 17:39
  Speaker 3: They make money from that.
• 17:42
  Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
• 17:49
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 17:53
  Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
• 17:56
  Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
• 17:59
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• 18:03
  Speaker 3: Let's get to the big take story here. We like
• 18:05
  Speaker 3: to focus on the big take stories on the Bloomberg terminal.
• 18:08
  Speaker 3: These are the stories that are just really important stories.
• 18:12
  Speaker 3: A lot of resources get invested in these stories, deep
• 18:16
  Speaker 3: deep reporting, deep deep sourcing. Oftentimes some really cool graphics,
• 18:20
  Speaker 3: which makes it good for me, that helps me understand
• 18:23
  Speaker 3: a lot of stuff. Today's no different talks about Ebola.
• 18:27
  Speaker 3: The Ebola exposes how AID cuts hollowed out global disease defense.
• 18:32
  Speaker 3: Is a strain with no known treatment or vaccine is
• 18:34
  Speaker 3: spreading fast and the international system built to contained outbreaks
• 18:38
  Speaker 3: is in crisis. Let's learn more about this with one
• 18:41
  Speaker 3: of the writers and one of the reporters on the story,
• 18:43
  Speaker 3: Jessica and Nick Bloomberg, Health reporter. What you find here, Jessic,
• 18:48
  Speaker 3: Because this is ebola case over in Africa, it seems
• 18:50
  Speaker 3: far away. It seems a little bit back burner for
• 18:53
  Speaker 3: a lot of us here in the US because we
• 18:54
  Speaker 3: have the war with a brand, we have lots of
• 18:55
  Speaker 3: other issues. What did your reporting find out.
• 18:58
  Speaker 7: Well, there's a lot going on with this particular ebola outbreak.
• 19:01
  Speaker 7: This is the first time we've seen this strain really
• 19:04
  Speaker 7: explode like it has because there's no vaccine, there's no treatment,
• 19:08
  Speaker 7: and then compounded on top of that, the US is
• 19:10
  Speaker 7: largely left a lot of our Global Health partners and
• 19:13
  Speaker 7: some other G seven countries, including the UK and Germany
• 19:17
  Speaker 7: have also pulled back on some of their global health
• 19:19
  Speaker 7: funding as well. So because of a lot of these
• 19:22
  Speaker 7: countries pulling back, this virus has been able to spread
• 19:25
  Speaker 7: a lot of the people on the ground and the
• 19:27
  Speaker 7: NGO partners, mutual aid partners, a lot of those formal
• 19:30
  Speaker 7: and even informal networks that would be doing contract tracing
• 19:33
  Speaker 7: or surveillance. A lot of that has been dismantled as well,
• 19:35
  Speaker 7: so that's why it's been exploding in this area now.
• 19:38
  Speaker 8: The story paints Eastern Congo is one of the hardest
• 19:41
  Speaker 8: places in the world to contain an outbreak. What about
• 19:44
  Speaker 8: that region is makes the response to this outbreak uniquely challenging.
• 19:49
  Speaker 7: There's a lot of unique challenges to this one. The
• 19:51
  Speaker 7: geography is very interesting, but also it is an area
• 19:54
  Speaker 7: that's riddled with conflict right now, so that makes it
• 19:56
  Speaker 7: even harder for some of these AID workers to be
• 19:58
  Speaker 7: able to go into the area and talk to people
• 20:00
  Speaker 7: about the dangers of this virus, about safe burial practices
• 20:04
  Speaker 7: as well. Ebola is at its highest infection peak after
• 20:08
  Speaker 7: a person has already died, and so in this area,
• 20:11
  Speaker 7: people are in their burial practices really interact with dead
• 20:15
  Speaker 7: bodies and so that's why we're seeing it spread a
• 20:17
  Speaker 7: lot too, because they just don't know how to handle
• 20:20
  Speaker 7: these bodies, which is really sad.
• 20:22
  Speaker 3: Well, we've seen President Trump and Elon Musk with those
• 20:25
  Speaker 3: cut back on us AID. How much has that impacted
• 20:28
  Speaker 3: this situation or is it is this an area where
• 20:30
  Speaker 3: maybe we didn't have a presence.
• 20:32
  Speaker 7: Well, former health officials from the US say that this
• 20:35
  Speaker 7: has had a huge impact in terms of how we
• 20:38
  Speaker 7: are responding to this outbreak, because again, those formal and
• 20:42
  Speaker 7: informal networks are no longer there. USAID was cut back
• 20:46
  Speaker 7: by eighty three percent last year under DOGE. A lot
• 20:49
  Speaker 7: of that's been moved under the State Department. State Department officials, though, say,
• 20:53
  Speaker 7: you know, this has had no impact in terms of
• 20:55
  Speaker 7: our response, and that within twenty four hours of being
• 20:57
  Speaker 7: notified of this outbreak that they were able to deploy resources.
• 21:01
  Speaker 7: The State Department has mobilized about one hundred and sixty
• 21:03
  Speaker 7: two million dollars to the outbreak area, specifically to eastern
• 21:07
  Speaker 7: Congo and to Uganda as well.
• 21:10
  Speaker 8: No, that we've seen kind of more of an outbreak
• 21:12
  Speaker 8: hatching focus. Once again, is there a sense that some
• 21:17
  Speaker 8: of the countries that have pulled back funding in communing
• 21:20
  Speaker 8: the US would reverse list positions.
• 21:23
  Speaker 7: There isn't a sense of that yet. They are pulling
• 21:25
  Speaker 7: a lot of resources into the balla response now, but
• 21:28
  Speaker 7: there's no indication that the US, for example, would rejoin
• 21:31
  Speaker 7: the World Health Organization that's really leading the global coordination
• 21:34
  Speaker 7: on this response.
• 21:35
  Speaker 3: So the US did withdraw from the World Health Organization
• 21:39
  Speaker 3: in early twenty twenty five. I would think that that
• 21:44
  Speaker 3: would be pretty impactful because I'm sure we were funding
• 21:46
  Speaker 3: most of it, a lot or a lot of it, Oh,
• 21:49
  Speaker 3: very impactful.
• 21:50
  Speaker 7: The US was the biggest donor to the World Health Organization,
• 21:54
  Speaker 7: so by pulling out of the World Health Organization, their
• 21:55
  Speaker 7: budgets are completely decimated.
• 21:57
  Speaker 3: So it raises a question, like a lot of other things,
• 21:59
  Speaker 3: is US pools back the mends? For example, it's time
• 22:03
  Speaker 3: for you guys to step up. Have we seen Europe?
• 22:05
  Speaker 3: Have we seen other parts of the world step up
• 22:07
  Speaker 3: to maybe fund what the US was funding?
• 22:10
  Speaker 7: Actually, no, we've actually seen the opposite. Some of these
• 22:13
  Speaker 7: countries have pulled back on their funding.
• 22:16
  Speaker 8: Wow ending Yeah, that doesn't seem very promising at all.
• 22:22
  Speaker 8: I mean, prior to kind of the big outbreak, were
• 22:25
  Speaker 8: there any kind of early signs that response capabilities and
• 22:29
  Speaker 8: surveills were already deteriorating.
• 22:32
  Speaker 7: There were some early signs just because this virus was
• 22:35
  Speaker 7: spreading for a while, there were rumors about this type
• 22:38
  Speaker 7: of fever going around, but because this type of strain
• 22:42
  Speaker 7: is a little bit rarer, no testing was able to
• 22:45
  Speaker 7: pick it up. And then it also makes it more
• 22:47
  Speaker 7: difficult because, like I said, this is a conflict area.
• 22:49
  Speaker 7: So when we're transporting these specimens to go towards laboratory testing,
• 22:53
  Speaker 7: a lot of that was destroyed in transit because they
• 22:57
  Speaker 7: weren't cooled properly, so we weren't able to pick up Oh,
• 22:59
  Speaker 7: this is actually a different type of strain that's more
• 23:01
  Speaker 7: dangerous and has no vaccine.
• 23:03
  Speaker 3: All right, bet thirty seconds left. What are the experts saying?
• 23:06
  Speaker 3: How is this play out? Do you think? I mean
• 23:07
  Speaker 3: there's no known cure for the vaccine that kind of thing.
• 23:10
  Speaker 7: Experts are very concerned. There is a rush right now
• 23:13
  Speaker 7: to be able to work on treatments and work on vaccines.
• 23:16
  Speaker 7: There's no expectation that this is going to become the
• 23:18
  Speaker 7: next COVID or the next pandemic. That's just not how
• 23:20
  Speaker 7: ebolo works. But it's very worrying to be able to
• 23:23
  Speaker 7: look at an area like this and see a virus
• 23:25
  Speaker 7: this deadly.
• 23:26
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• 23:35
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