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HPE Earnings, Mnuchin Chases Wall Street Glory · Bloomberg Intelligence

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  Speaker 4: Alex Steele.
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  Speaker 2: Today, we'll look at why the athletic perrol retailer Lululemon
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  Speaker 2: raised his profit outlook for the full year.
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  Speaker 4: Plus, We're going to discuss where we are in the
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  Speaker 4: US with developing the carbon market, but.
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  Speaker 2: First we dive into information technology. HPE reported better than
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  Speaker 2: expected second quarter revenue this week.
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  Speaker 4: The results were fueled by sales of servers built for
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  Speaker 4: artificial intelligence work for more.
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  Speaker 2: Co hosts Alex Steele and I were joined by wou Jinho,
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  Speaker 2: Bloomberg Intelligence senior technology analysts. We first asked him for
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  Speaker 2: his key takeaways from HPE's earnings.
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  Speaker 5: I will tell you I don't think many people gave
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  Speaker 5: heughlet Packard the benefit of the doubt in terms of
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  Speaker 5: the AI server story. We saw that in the multiple
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  Speaker 5: relative to Dell, HPE had a multiple less than eight. Dell,
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  Speaker 5: even with the pullback, was at seventeen. So you know
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  Speaker 5: they delivered on the story. AI servers doubled on a
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  Speaker 5: sequential basis, and it seems as if the momentum could
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  Speaker 5: be carried through into the second half of the year.
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  Speaker 6: And Woods reading your react note, which is a great
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  Speaker 6: part of BI folks, You know of a big piece
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  Speaker 6: of news hits, you want to know what the bi
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  Speaker 6: analysts are thinking, and they get out with what they
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  Speaker 6: call or react a quick thought on a big piece
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  Speaker 6: of news. And your react Wood in your research note said,
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  Speaker 6: maybe they didn't take this revenue beat far enough in
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  Speaker 6: their in their guidance going forward, tell us about that.
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  Speaker 5: Yeah, so if we think about the magnitude of the beat,
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  Speaker 5: it was about four hundred million dollars in the quarter.
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  Speaker 5: They only raise the guidance for about by about three
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  Speaker 5: hundred million, So something doesn't tie here. A couple of
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  Speaker 5: things I think may have happened was probably networking maybe
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  Speaker 5: coming in a little bit lighter in the second half,
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  Speaker 5: which is becoming a drag on the second half growth,
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  Speaker 5: and that was somewhat to be expected. The one thing
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  Speaker 5: I will say, and similar to what I said in Dell,
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  Speaker 5: is that there might be still some conservatism as it
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  Speaker 5: relates to the AI server sales going into the second
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  Speaker 5: half of the year. Part of it. They addressed it
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  Speaker 5: on the call. There's some constraints in terms of the
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  Speaker 5: data centers where they can put start putting these AI servers.
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  Speaker 5: And this is something new, and I think this is
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  Speaker 5: going to be a bigger thing, a bigger deal going
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  Speaker 5: into twenty twenty five. Are there enough data centers that
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  Speaker 5: can really support these AI service going forward?
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  Speaker 3: Will there be?
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  Speaker 5: I say yes, the cloud guys as well as enterprise
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  Speaker 5: guys will will eventually figure it out, but it takes
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  Speaker 5: time to build these out.
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  Speaker 2: Where do you think HPE should trade relative to Dell?
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  Speaker 5: You know going forward, Well, there is a leverage issue
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  Speaker 5: here in terms of the debt that they're taking on
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  Speaker 5: the pending Juniper deal, they are going to be taking
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  Speaker 5: on more debt, which is going to anchor the valuation
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  Speaker 5: just a bit. Dell has a more favorable capital structure
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  Speaker 5: which helps quite a bit. But I will tell you
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  Speaker 5: if the AI story really starts to take off relative
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  Speaker 5: to someone like a Delaware, a super Micro, we could
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  Speaker 5: start seeing multiples rise a little bit more.
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  Speaker 3: This might be a super silly question, but as someone
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  Speaker 3: who has to like input all of these earnings for
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  Speaker 3: software and for services and enterprise when it comes to AI,
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  Speaker 3: who is a legit competitor with Hpe? Is it just Dell?
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  Speaker 3: Are there smaller guys out there that do something similar?
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  Speaker 5: I'll tell you that that's an excellent question. Right. So
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  Speaker 5: the three pulicly trade names that compete hut to head
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  Speaker 5: with Dell are super Micro, Dell, Hpe, and Lenovo. Right,
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  Speaker 5: But what we heard from a copy text out of
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  Speaker 5: Taiwan and video striking deals with these white box manufacturers,
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  Speaker 5: like like a fox cod or a Quanta to directly
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  Speaker 5: build these AI servers for these clouds. So you are
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  Speaker 5: going to start seeing heightened competition in the landscape.
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  Speaker 2: So you know, HPE is this it? I mean in
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  Speaker 2: the sense that can we sit back and say, I
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  Speaker 2: think these guys have it. They have an AI product
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  Speaker 2: in their product lineup, and these guys can, in fact,
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  Speaker 2: in the long term be players in this business.
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  Speaker 5: So I think there's just been a The narrative on
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  Speaker 5: HPE has been a little bit off for quite some
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  Speaker 5: time now. We have to keep in mind that they've
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  Speaker 5: been in a super computing game for quite a few years.
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  Speaker 5: After the acquisition of Kray, now a couple of things
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  Speaker 5: on the traditional service side, they didn't have the product
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  Speaker 5: lineup to compete against like a super Micro and Dell.
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  Speaker 5: But we're still in the early innings. And one thing
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  Speaker 5: that I will tell you they are going to have
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  Speaker 5: their discovered conference and schedule to be on stage is
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  Speaker 5: the CEO of Nvidia, and that should really help prop
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  Speaker 5: up the product narrative on the AI server side. Look,
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  Speaker 5: we're still in the early innings, second, third, fourth, fifth inning.
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  Speaker 5: HPE is going to be in the center of this.
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  Speaker 3: I am curious how does the first mover advantage thing
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  Speaker 3: play out? Like, if I'm a company, am I married
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  Speaker 3: to Dell? How easy is it for me to switch
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  Speaker 3: when Hpe kind of comes roaring?
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  Speaker 5: So I want to take it in a different way. Right,
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  Speaker 5: at the end of the day, it's a hardware, please.
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  Speaker 5: You know a laptop is a laptop is a laptop, right,
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  Speaker 5: you know my HP laptop is similar to a Dell laptop,
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  Speaker 5: and you know it depends on the bells and whistles.
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  Speaker 5: AI is actually going to be a different animal, especially
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  Speaker 5: for the corporate enterprise, and you're going to have to
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  Speaker 5: start wrapping around services around with the hardware itself. There
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  Speaker 5: are probably three companies that can actually do that, Lenovo, Dell,
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  Speaker 5: and Hpe, And you'll need the extensive services that can
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  Speaker 5: help not only supply the hardware, not only supply the
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  Speaker 5: maintenance and repair, but AI will need ex software expertise
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  Speaker 5: to help build out these AI models for these corporations.
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  Speaker 5: And you know there aren't many IT services companies that
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  Speaker 5: can do that.
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  Speaker 4: Hpe is one of them thanks to Wouji and Hull
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  Speaker 4: Bloomberg Intelligence Senior Technology Analyst.
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  Speaker 2: We next take a look at the Swedish Swiss company a.
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  Speaker 4: B b ABB is a technology leader in electrification and automation,
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  Speaker 4: enabling a more sustainable and resource efficient future.
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  Speaker 2: Guest host Jessman and I were joined by ABB chairman
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  Speaker 2: Peter Vasser. We first asked Peter where the focus this
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  Speaker 2: company is these days.
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  Speaker 7: It's clearly it's the energy transition, which is not only
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  Speaker 7: the hard to abate tech betas, it's in general the
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  Speaker 7: move from a more fossile driven energy system into electric
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  Speaker 7: energy system and there we obviously contribute with our products
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  Speaker 7: and systems, which gives us energy savings between twenty and
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  Speaker 7: forty or even fifty percent. So that's one angle.
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  Speaker 1: The other one is.
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  Speaker 7: All linked to new technologies around automation and robotics, because
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  Speaker 7: we are world leading company in both areas, and that
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  Speaker 7: has to do with the reshuring, bringing things closer home
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  Speaker 7: again where the markets are, but also in some countries,
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  Speaker 7: dealing with the demographics because we have less and less
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  Speaker 7: people working in the working age, and therefore robotics and
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  Speaker 7: the automation becomes very important. And the last one is AI,
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  Speaker 7: which will revolutionize obviously all what's related to automation in
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  Speaker 7: the future.
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  Speaker 8: We'll talk to us more about what you think is
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  Speaker 8: the best way to try to scale manufacturing when it
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  Speaker 8: comes to the EVE charging space.
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  Speaker 7: Think what we really need on the e moobility side.
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  Speaker 7: Let me put it this way, is really work on
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  Speaker 7: two fronts. One is a technical side on the charging side,
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  Speaker 7: but the other one is also on the user friendliness side,
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  Speaker 7: so that they become actually more reliable, they are much
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  Speaker 7: more modern. On the manufacturing side, I think we have
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  Speaker 7: had clearly in some countries and regions there was some
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  Speaker 7: scarcity of manufacturing capacity which I think have been sold.
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  Speaker 7: Was not an issue for ABB in that sense, but
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  Speaker 7: it's the product evolution which is.
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  Speaker 1: Very key now.
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  Speaker 7: On the other side, I think one that should not
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  Speaker 7: forget that the whole network of electrification needs to be
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  Speaker 7: up to speed. You cannot just actually consume much more energy.
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  Speaker 7: You also need to build the transmission lines that the
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  Speaker 7: power actually comes in. Where we have got let's say
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  Speaker 7: the charge is installed either for a private passenger cars
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  Speaker 7: or for busses, ships, trains, whatever you want to call it.
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  Speaker 7: So I think we need much more infrastructure investments on
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  Speaker 7: the one side, and really really to actually get to
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  Speaker 7: EV charging and the passenger cars based on electrification much
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  Speaker 7: more developed in the future.
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  Speaker 2: Peter, who are some of your bigger customers that you're
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  Speaker 2: working with these days.
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  Speaker 7: We are here in the United States, so we have
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  Speaker 7: all kinds of our manufacturing companies in that sense. But
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  Speaker 7: on the industrial side, any any company you can think of,
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  Speaker 7: which are they are in manufacturing space. For example, they
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  Speaker 7: use our actification products, they use our automation products. So
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  Speaker 7: you have all the industrial companies and that's where we
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  Speaker 7: make the difference. The other side, utilities are very key.
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  Speaker 7: As I just said, they need to make sure we
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  Speaker 7: have an off supply.
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  Speaker 2: And I know I'm just looking at our PGeo function
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  Speaker 2: where I can see where your revenue comes by geography,
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  Speaker 2: you're everywhere. You see certain parts of the world that
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  Speaker 2: are more in front of you know, kind of making
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  Speaker 2: the transition then some others.
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  Speaker 7: Yeah, I think I would say that Europe has started
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  Speaker 7: this rather early with the new Green Deal in Europe,
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  Speaker 7: but also moving into a very different energy systems paid
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  Speaker 7: some price with the wars in Russia, so energy prices
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  Speaker 7: have gone up and that some rethinking has taken place.
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  Speaker 7: I think here in the US you quite clearly see
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  Speaker 7: the demand is there in all industries now supported by
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  Speaker 7: the various acts you have here, either the Inflation Act
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  Speaker 7: or then also the Industrial Act, and that is driving
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  Speaker 7: investments now. It's much earlier days than in Europe for example.
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  Speaker 7: Aha is a little bit of mixed back, I have
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  Speaker 7: to say. So you see some countries at the leading edge,
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  Speaker 7: like smaller company countries like Singapore. In China, which is
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  Speaker 7: our second biggest market after the US, you see actually
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  Speaker 7: a lot of efforts now being put in place to
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  Speaker 7: change the electric system in in China, a lot of
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  Speaker 7: EV cards are coming in and you can see that
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  Speaker 7: those really are now generating the growth in China by
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  Speaker 7: city subdued compared to the US at this stage. So indeed,
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  Speaker 7: we are operating across the world in more than one
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  Speaker 7: hundred countries. We get good insights. At the moment, the
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  Speaker 7: driving forces are really the US and Europe, with let's
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  Speaker 7: say Asia apart from India are lacking somewhat.
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  Speaker 8: So where else do you go to expand from here?
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  Speaker 8: When you already are in so many places?
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  Speaker 7: It's quite clearly US is our key number one market
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  Speaker 7: and that's where we have a developing We have over
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  Speaker 7: the last ten years, we have put more than fourteen
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  Speaker 7: billion dollars into the US in terms of investments. We
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  Speaker 7: have got forty manufacturing sites in twenty states. We're operating
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  Speaker 7: in all states with our services, et cetera. So that's
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  Speaker 7: a key market. We see the electrification market in the
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  Speaker 7: US as key, but the industrial one which has a
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  Speaker 7: lot to do with bringing home let's say, manufacturing capabilities
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  Speaker 7: and capacity. And then the second one is clearly India,
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  Speaker 7: which at the moment is in terms of growth outstripping
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  Speaker 7: all other countries in a big way. They are very
• 12:17
  Speaker 7: low in manufacturing capacity and that's where a lot of
• 12:21
  Speaker 7: investments now for the high end manufacturing goes in. And
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  Speaker 7: then the third one will be Europe quite clearly as
• 12:28
  Speaker 7: the European change Indian energy system, but also the demographic
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  Speaker 7: issues which we have in Europe which will take out
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  Speaker 7: about fifty million kind of working people over the next
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  Speaker 7: ten years and that needs to be replaced by automation
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  Speaker 7: and robotics. So there's a lot of investments on going there.
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  Speaker 2: Thanks to Peter Vassar, chairman of ABB, coming.
• 12:50
  Speaker 4: Up a look at new carbon offset guidelines from the US.
• 12:54
  Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
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  Speaker 4: Oh, Paul Sweeney Ant, I'm John Tucker, filling in for
• 13:28
  Speaker 4: Alex Steele.
• 13:29
  Speaker 2: We look next at the Canadian athletic apparel retailer Lululemon Athletica.
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  Speaker 4: Lulu Lemon raised its profit outlook for the full year
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  Speaker 4: while also beating market expectations for earnings in the first quarter,
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  Speaker 4: and this came despite investor concerns over the company's slowing
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  Speaker 4: sales growth.
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  Speaker 2: For more, guest host John Tucker and I were joined
• 13:45
  Speaker 2: by Punham Goyle, senior US retail analyst at Bloomberg Intelligence.
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  Speaker 4: We first danced Poonham for her key takeaways from Lululemon's
• 13:52
  Speaker 4: earnings report.
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  Speaker 9: So, I think the earnings are better than expected because
• 13:55
  Speaker 9: while we do see slowing growth at Lululemon, where it's
• 13:57
  Speaker 9: accelerating from the mid teams to low double digits near
• 14:02
  Speaker 9: ten percent. There was concern that is that because of
• 14:06
  Speaker 9: a slower macro and the fact that lul Lemon is
• 14:09
  Speaker 9: losing out to competition Aloyoga, et cetera. We discovered that
• 14:13
  Speaker 9: part of that is true, but part of that is
• 14:15
  Speaker 9: not true, and I think that's why investors have a
• 14:17
  Speaker 9: little more confidence.
• 14:19
  Speaker 4: How big is the US market for them? And are
• 14:22
  Speaker 4: they selling overseas and how much?
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  Speaker 9: Yeah, so the US market the America is eighty percent
• 14:27
  Speaker 9: of their business. International is twenty percent, with China half
• 14:31
  Speaker 9: of that.
• 14:32
  Speaker 4: And is demand picking up or slowing in China or
• 14:34
  Speaker 4: is it new to the Lulu Lemon market.
• 14:37
  Speaker 9: So international was a bright spot this quarter. International sales
• 14:41
  Speaker 9: grew about thirty five percent, and within that, China was
• 14:45
  Speaker 9: up Mainland China was up forty five percent, So a
• 14:48
  Speaker 9: lot of growth there. It's a bright spot for lul Lemon.
• 14:51
  Speaker 9: International is part of their three pronged strategy to double
• 14:54
  Speaker 9: sales into twenty twenty seven. It's been doing very, very
• 14:58
  Speaker 9: well and we expect that to cont.
• 15:00
  Speaker 2: And I'm looking at your research here, Poonam. You're talking
• 15:02
  Speaker 2: about you know when you talk about that doubling sales
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  Speaker 2: to twelve and a half billion, you know by twenty
• 15:07
  Speaker 2: twenty six the company and you're saying strong international growth. Okay,
• 15:11
  Speaker 2: I get that men's growth. Talk thus about Lululemon and
• 15:14
  Speaker 2: Men's I mean, it's just not John and I don't
• 15:16
  Speaker 2: know where to go with this.
• 15:17
  Speaker 4: Do real men go to Lululemon?
• 15:20
  Speaker 9: Is what it's Real men are going to Lululemon. You know,
• 15:24
  Speaker 9: it's one of their bright spots right now. And they
• 15:26
  Speaker 9: actually think that Men's could become overtime. I think you'll say,
• 15:29
  Speaker 9: take some time fifty percent of the business. So there's
• 15:32
  Speaker 9: a lot of opportunity in men's. And you know when
• 15:35
  Speaker 9: you walk those stores and I looked at the men's inventory,
• 15:37
  Speaker 9: it actually looks great. It's not just about outfitting the
• 15:40
  Speaker 9: men to go to the gym. It's about outfitting the
• 15:43
  Speaker 9: men to go into work with casual, comfortable where that
• 15:47
  Speaker 9: they can.
• 15:49
  Speaker 4: Everybody who listens to this program of views is on
• 15:52
  Speaker 4: YouTube knows Paul is the company fashion place. Yes, if
• 15:56
  Speaker 4: you saw somebody in like Lululemon come into the office,
• 16:00
  Speaker 4: might be a film.
• 16:00
  Speaker 2: It might be a problem. But I'm going to refer
• 16:02
  Speaker 2: to to Punum because she knows fashion here and she
• 16:05
  Speaker 2: knows what works. So if I'm Lulu Lemon, talk to
• 16:08
  Speaker 2: us just about what they're saying about the consumer out there, Punham.
• 16:12
  Speaker 9: So the consumer, We've been talking about this for a
• 16:15
  Speaker 9: while now. The consumer is selective. They're choosing where to shop,
• 16:18
  Speaker 9: when to shop, how to shop, and if they see
• 16:21
  Speaker 9: the right product, they are still purchasing it. The one
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  Speaker 9: thing that struck out during the call was that traffic
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  Speaker 9: was up in the quarter, which means people are still
• 16:29
  Speaker 9: going to lul Lemon. They still have purchase intent. But
• 16:32
  Speaker 9: there were some product missteps which they're working to correct
• 16:35
  Speaker 9: into the second half of the year, where they didn't
• 16:38
  Speaker 9: have the right colors, or they didn't have enough colors
• 16:40
  Speaker 9: I should say, they didn't have enough depth and sizes.
• 16:43
  Speaker 9: They were running out of the small sizes. So these
• 16:45
  Speaker 9: are problems that I would think are execution related and
• 16:47
  Speaker 9: are being fixed and can be fixed into the back half.
• 16:50
  Speaker 9: So while there is still part of a macro problem,
• 16:53
  Speaker 9: the story isn't that Little Lemon people are not going
• 16:56
  Speaker 9: to shop there. People still are interested in the apparel.
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  Speaker 9: They just have to fix the product a little and
• 17:01
  Speaker 9: really improve our execution into the back half.
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  Speaker 4: They're known for form fitting, but just to get back
• 17:07
  Speaker 4: to the men's fashion, they have anything for old fat guys.
• 17:11
  Speaker 9: Well. Their ABC men's franchise is really popular and it's
• 17:15
  Speaker 9: not form fitting. It's about the casual flare and they
• 17:19
  Speaker 9: have done very well there. And you don't need to
• 17:22
  Speaker 9: wear a tight leggings for men's that's not the appeal there.
• 17:25
  Speaker 9: That's for the women. But I'd say even for the woman,
• 17:27
  Speaker 9: you know what worked really well in the corner where
• 17:30
  Speaker 9: they're loose fitting pants and their biker shorts. So yes,
• 17:33
  Speaker 9: leggings is a big business for them, but they are
• 17:36
  Speaker 9: broadening that. Eight.
• 17:37
  Speaker 2: Let's switch gears just a little bit. I saw it
• 17:39
  Speaker 2: yesterday reporting in the Wall Street Journal Punium Dollar Tree
• 17:43
  Speaker 2: is among the potential sales spin off of Family Dollar.
• 17:46
  Speaker 2: What is going on with the dollar stores here? I
• 17:49
  Speaker 2: would have thought that if a part of the consumer
• 17:52
  Speaker 2: market is weak and the lower end economically, that perhaps
• 17:56
  Speaker 2: that would be good for the dollar stores. But what's
• 17:59
  Speaker 2: going on there?
• 18:00
  Speaker 9: So they're really two very different types of dollar stories.
• 18:04
  Speaker 9: Gen Bartashus covers the space, but from my coverage every
• 18:08
  Speaker 9: years ago, I can tell you that dollar Tree targets everyone, right.
• 18:11
  Speaker 9: I would shop at Dollar Tree, Paul, You would shop
• 18:13
  Speaker 9: a Dollar Tree. You buy that one twenty five item
• 18:15
  Speaker 9: there and you go treasure hunt. But a family Dollar customer,
• 18:19
  Speaker 9: that's their principal discount store. That is where they buy
• 18:22
  Speaker 9: their groceries, that is where they buy their day to
• 18:25
  Speaker 9: day needs. So as that customer's wallet is being stretched,
• 18:28
  Speaker 9: that business does come into more pressure.
• 18:31
  Speaker 4: Thanks to Pootamgoyle, senior US e commerce and retail analysts
• 18:34
  Speaker 4: at Bloomberg Intelligence, we have.
• 18:36
  Speaker 2: Something here at Bloomberg called Bloomberg New Energy Finance. The
• 18:39
  Speaker 2: idea behind it is to provide data on commodities, power, transport, industries,
• 18:44
  Speaker 2: building and agriculture and new technology.
• 18:46
  Speaker 4: And this week we looked at new carbon offset guidelines
• 18:49
  Speaker 4: for the US. US government recently outlined seven key principles
• 18:53
  Speaker 4: that US buyers and sellers should follow to responsibly take
• 18:57
  Speaker 4: part in the voluntary carbon market.
• 18:59
  Speaker 2: For more on what they this means, guest host Jess
• 19:01
  Speaker 2: Mettin and I we're joined by Kyle Harrison, head of
• 19:03
  Speaker 2: sustainability research at bloomerk n EF. We first asked Kyle
• 19:07
  Speaker 2: to talk to us about where we are in the
• 19:09
  Speaker 2: developing carbon market.
• 19:11
  Speaker 10: So for several decades now, we've had what's called a
• 19:13
  Speaker 10: voluntary carbon market. This is where companies can go and
• 19:16
  Speaker 10: they can buy verified emission reduction certificates in order to
• 19:20
  Speaker 10: achieve a for example, carbon neutrality goal where they're neutralizing
• 19:23
  Speaker 10: their emissions, and so they'll go out and they'll buy
• 19:25
  Speaker 10: these carbon credits. But the market has gotten a lot
• 19:28
  Speaker 10: of criticism over the past couple of years for low
• 19:30
  Speaker 10: integrity projects.
• 19:32
  Speaker 2: So when a Hollywood sled flies on their private jet
• 19:35
  Speaker 2: and say, oh, but I offset it with a carbon footprint,
• 19:38
  Speaker 2: what does that mean.
• 19:39
  Speaker 10: So they're going out and they're buying these carbon credits,
• 19:41
  Speaker 10: and they're investing in a project somewhere else in the
• 19:44
  Speaker 10: world that is reducing or removing or avoiding carbon emissions.
• 19:48
  Speaker 10: But the challenge has always been the integrity of those investments, right,
• 19:51
  Speaker 10: It's been in projects that aren't necessarily leading to decarbonization.
• 19:55
  Speaker 10: And so this market has gotten a lot of criticism.
• 19:57
  Speaker 10: But there's been a lot of efforts from the privates
• 20:00
  Speaker 10: actor specifically over the past couple of years to boost
• 20:02
  Speaker 10: that integrity, and now they have support from the US
• 20:04
  Speaker 10: government with this announcement last week.
• 20:06
  Speaker 8: So what happens next.
• 20:08
  Speaker 10: So, as you guys mentioned, it's a big ringing endorsement
• 20:11
  Speaker 10: for this market. What the US government did is it
• 20:14
  Speaker 10: publicly supported a couple of initiatives, such as the Integrity
• 20:17
  Speaker 10: Council on Voluntary Carbon Markets. This is a group of
• 20:20
  Speaker 10: non governmental organizations as well as financial institutions and corporations
• 20:25
  Speaker 10: that are working and creating their own standards for what
• 20:27
  Speaker 10: a good quality carbon credit looks like if you follow
• 20:30
  Speaker 10: that Integrity Council principle or that framework. As a corporate buyer,
• 20:34
  Speaker 10: I know I can buy those credits and I'm not
• 20:36
  Speaker 10: going to get accused of greenwashing, so I can fly
• 20:39
  Speaker 10: those flights or I can continue to do business, but
• 20:41
  Speaker 10: I can be relying on a tangible, impactful investment into decarbonization.
• 20:46
  Speaker 2: You know, folks, the work coming out of BENF I
• 20:49
  Speaker 2: think is absolutely the gold plate for this entire industry,
• 20:53
  Speaker 2: and we rely upon these folks pretty heavily. Here's just
• 20:56
  Speaker 2: some crazy numbers. Every company in the world will need
• 20:59
  Speaker 2: carbon credits to achieve net zero goals, and you guys
• 21:02
  Speaker 2: benef estimate annual carbon offset demand could reach five point
• 21:06
  Speaker 2: nine billion tons of carbon equivalent annually in twenty fifty.
• 21:10
  Speaker 2: That's some from one hundred and sixty four million today.
• 21:13
  Speaker 2: What industries are going to be getting us there?
• 21:16
  Speaker 10: For lack of a better word, as you mentioned, it's
• 21:18
  Speaker 10: really every single industry. But really you can look at
• 21:20
  Speaker 10: the heaviest emitting sectors as the biggest potential demand sources
• 21:24
  Speaker 10: oil and gas companies, metals, and mining industrials. These are
• 21:28
  Speaker 10: heavy emitting sectors that can't easily decarbonize. You mentioned airlines before.
• 21:33
  Speaker 10: As an airline, how do you reduce your emissions? Do
• 21:35
  Speaker 10: you stop flying planes? That's the most tangible way to
• 21:38
  Speaker 10: go ahead and do that, right, And so carbon credits
• 21:41
  Speaker 10: will be an important part of their decarbonization strategy long term.
• 21:45
  Speaker 10: And as you mentioned, demand could reach six billion tons
• 21:48
  Speaker 10: to give you a sense of scale, that's around ten
• 21:50
  Speaker 10: percent of global carbon dioxide emissions today. So this will
• 21:54
  Speaker 10: play a huge role in the global climate change or
• 21:57
  Speaker 10: the global fight against climate change in the future.
• 22:00
  Speaker 8: So then every company in the world would need carbon
• 22:03
  Speaker 8: credits to achieve net zero goals.
• 22:05
  Speaker 10: This is how it works exactly, and so you can
• 22:08
  Speaker 10: use this analogy with any company, but carbon credits typically
• 22:11
  Speaker 10: should only be used as for those emissions or that
• 22:14
  Speaker 10: itch that a company can't scratch. Once it's done everything
• 22:17
  Speaker 10: it can to reduce what it physically emits as a company,
• 22:20
  Speaker 10: it'll have what we call residual emissions somewhere along its
• 22:23
  Speaker 10: value chain. That is your perfect universe for carbon credits.
• 22:26
  Speaker 10: And the US government was very vocal about this in
• 22:28
  Speaker 10: their announcement last week, is that companies shouldn't abandon their
• 22:32
  Speaker 10: decarbonization efforts. They should prioritize those efforts, and then they
• 22:36
  Speaker 10: should use carbon credits. But those must be reliable carbon credits.
• 22:40
  Speaker 10: And so that's kind of where these credits play a
• 22:42
  Speaker 10: role towards the end of that value chain.
• 22:44
  Speaker 2: All right, I'll tell you why this gets my attention,
• 22:46
  Speaker 2: because it's got the intention of Michael R. Bloomberg, the
• 22:49
  Speaker 2: founder of Bloomberg LP and this little radio TV station
• 22:52
  Speaker 2: thing we got going here. He's out with an editorial
• 22:54
  Speaker 2: really kind of calling out the Biden administration saying that
• 22:57
  Speaker 2: this new plan might work and it's something we need
• 22:59
  Speaker 2: to pay attention to. I mean, is this something that's
• 23:02
  Speaker 2: at the whim of whatever administrations in the White House
• 23:05
  Speaker 2: at the moment? Not necessarily.
• 23:07
  Speaker 10: As I mentioned, right, the private sector is going to
• 23:10
  Speaker 10: be the biggest leader and kind of moving this forward
• 23:12
  Speaker 10: and spearheading it. It has been financial institutions and corporations
• 23:17
  Speaker 10: that have taken the reins and they will continue to
• 23:18
  Speaker 10: do so. They will be the biggest demand source, but
• 23:21
  Speaker 10: they need to be complemented by strong government support, right,
• 23:24
  Speaker 10: and so this endorsement is hugely important, and it's you know,
• 23:28
  Speaker 10: obviously it's the Department of Treasury, but it's also the
• 23:30
  Speaker 10: Department of Energy. The Department of Energy will be subsidizing
• 23:34
  Speaker 10: and investing in early stage carbon removal projects through this initiative.
• 23:38
  Speaker 10: And then the Department of Agriculture was also involved and
• 23:41
  Speaker 10: they're going to be going ahead and catalyzing and providing
• 23:44
  Speaker 10: farmers with subsidies in order to pivot to low carbon farming.
• 23:47
  Speaker 10: So it's really a kind of a combined effort that's
• 23:51
  Speaker 10: going to be needed both from the government and the
• 23:52
  Speaker 10: private sector. But even with an administration change, for example,
• 23:56
  Speaker 10: if you still have corporations and financials focused, it'll still
• 23:59
  Speaker 10: move this market.
• 24:00
  Speaker 8: We really have about a minute left, but talk to
• 24:02
  Speaker 8: us about tech companies like Microsoft and their plans when
• 24:06
  Speaker 8: it comes to being more active in carbon offsetting today
• 24:09
  Speaker 8: and how they really think of where it could continue
• 24:11
  Speaker 8: going into twenty fifty.
• 24:13
  Speaker 10: Technology companies have always prided themselves on their ability to
• 24:16
  Speaker 10: lead in the icebreakers when it comes to decarbonization. So
• 24:20
  Speaker 10: tech companies like Microsoft and Google and Amazon, they were
• 24:23
  Speaker 10: the first large scale corporations to buy clean energy from
• 24:26
  Speaker 10: solar and wind projects for example, it's only natural that
• 24:29
  Speaker 10: they're kind of the icebreakers when it comes to voluntary
• 24:31
  Speaker 10: carbon markets. You're seeing companies like Microsoft announce huge carbon
• 24:35
  Speaker 10: removal deals for these nascent technologies that maybe aren't necessarily
• 24:39
  Speaker 10: at scale today, and they're also not competitive from a
• 24:42
  Speaker 10: cost standpoint. What those investments will do is that they'll
• 24:45
  Speaker 10: bring the cost down and it'll make it more attractive
• 24:48
  Speaker 10: and competitive for all those other companies that are out
• 24:50
  Speaker 10: there to invest in carbon removal and therefore this voluntary
• 24:53
  Speaker 10: carbon market.
• 24:54
  Speaker 2: Thanks tot Kyle Harrison, head of Sustainability research at Bloomberg
• 24:58
  Speaker 2: an ef.
• 24:58
  Speaker 4: Coming up of a program we're going to look at
• 25:00
  Speaker 4: how former US Treasury Secretary Steve Manosan is chasing Wall
• 25:05
  Speaker 4: Street glory.
• 25:06
  Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing research
• 25:09
  Speaker 2: and data on two thousand companies in one hundred and
• 25:11
  Speaker 2: thirty industries. You can access Bloomberg Intelligence via b I
• 25:14
  Speaker 2: go on the terminal. I'm Paul Sweeney.
• 25:16
  Speaker 4: MAA don John Tucker. This is Bloomberg.
• 25:23
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• 25:27
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• 25:30
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• 25:33
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• 25:37
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• 25:40
  Speaker 2: Hey there, I'm Paul.
• 25:40
  Speaker 4: Sweeney and I'm John Tucker filling in for Alex Steele.
• 25:43
  Speaker 2: We move now to energy and Trafagora. Traffagora is one
• 25:47
  Speaker 2: of the world's largest suppliers of commodities.
• 25:50
  Speaker 4: And this week the company posted the first half profits
• 25:53
  Speaker 4: down seventy three percent from a year earlier. This comes
• 25:56
  Speaker 4: as the commodity giant adjusted calmer conditions across it's key
• 26:00
  Speaker 4: energy and metals Marcus For.
• 26:02
  Speaker 2: More on this guest host John Tucker and I were
• 26:04
  Speaker 2: joined by Archie Hunter, Bloomberg Commodities reporter. We first asked
• 26:07
  Speaker 2: Archie for his take on this week's earnings report.
• 26:10
  Speaker 11: It's a big drop off, It's still a huge profit
• 26:13
  Speaker 11: as far as the sector goes. Look the commodity trading
• 26:16
  Speaker 11: industry is coming out of, and perhaps what the signals
• 26:20
  Speaker 11: is the trading industry is coming out of like a
• 26:22
  Speaker 11: real real boom time where COVID nineteen and then the
• 26:27
  Speaker 11: sort of Russian invasion of Ukraine's really sort of super
• 26:30
  Speaker 11: sized volatility, especially in the energy space, that's starting to
• 26:34
  Speaker 11: peter out. You know, we're still getting big moves. I
• 26:36
  Speaker 11: think you've seen some big moves on gas, but you know,
• 26:39
  Speaker 11: it's really not as extreme as it was over the
• 26:42
  Speaker 11: past few years. And as a result, you know, whilst
• 26:45
  Speaker 11: this is a still really big number historically for a
• 26:48
  Speaker 11: company like traffic Eura, you know, there's been a big
• 26:51
  Speaker 11: drop off since this time last year.
• 26:53
  Speaker 4: So I don't need to cry for commodities traders at
• 26:56
  Speaker 4: this point.
• 26:58
  Speaker 11: I don't know about that. Look, these companies have made
• 27:01
  Speaker 11: extraordinary amounts of money over the past few years, especially
• 27:05
  Speaker 11: the biggest companies, and and look, you know, one of
• 27:08
  Speaker 11: the interesting things about them is that they're owned by
• 27:11
  Speaker 11: the top executives who either trade or are part of
• 27:15
  Speaker 11: middle office or back office.
• 27:17
  Speaker 4: By the employees essentially, right.
• 27:19
  Speaker 11: Yeah, exactly. So, Look, these companies have paid out big dividends,
• 27:23
  Speaker 11: big share buybacks, to those shareholders over the past few years.
• 27:28
  Speaker 11: They're still doing that, right. Look, traffic Eurer paid out
• 27:31
  Speaker 11: I think was over six hundred million in the way
• 27:33
  Speaker 11: that it reimburses its shareholders over the first half. So
• 27:37
  Speaker 11: that's still a lot of a lot of money for
• 27:39
  Speaker 11: the roughly one four hundred people, so relatively few people
• 27:43
  Speaker 11: who hold stock in the company.
• 27:44
  Speaker 4: So if I'm one of the executives there and I've
• 27:46
  Speaker 4: really cleaned up, I'm just going to pack up and
• 27:48
  Speaker 4: go go live on an island somewhere, right.
• 27:52
  Speaker 11: Yeah, I mean you and I might think that, but look,
• 27:56
  Speaker 11: there's definitely some movement happening in the sector. At the
• 27:58
  Speaker 11: same time. Look, view owned shares in these companies that
• 28:02
  Speaker 11: seem to be doing really well every single year. I think,
• 28:05
  Speaker 11: you know, from what we see, a lot of people
• 28:07
  Speaker 11: seem to be sticking around as well, right, And look,
• 28:09
  Speaker 11: it's still really interesting time to be trading commodities. I
• 28:12
  Speaker 11: think what these results show is that, you know, whilst
• 28:14
  Speaker 11: it's a big drop off from the last couple of years,
• 28:18
  Speaker 11: like historically, you know, Trafficker would make in some of
• 28:21
  Speaker 11: its best years before the pandemic, it would make maybe
• 28:25
  Speaker 11: a billion a billion dollars would have been an absolutely
• 28:28
  Speaker 11: mammoth year, some of its best years, and so you know,
• 28:31
  Speaker 11: the company made that in half a year, which just
• 28:34
  Speaker 11: goes to show, you know, you know, whilst it's not
• 28:36
  Speaker 11: absolutely mammoth as we have seen, it's still very big
• 28:40
  Speaker 11: and people are still making a lot of money.
• 28:42
  Speaker 2: Archie, I don't know anything about this company, traffic Aer,
• 28:45
  Speaker 2: primarily because it's a private company. A. Where is it based?
• 28:48
  Speaker 2: And b why is it public?
• 28:49
  Speaker 11: So Traffiicura is headquartered in Switzerland, but it's domstald in Singapore.
• 28:56
  Speaker 11: A lot of these commodity trading companies are very global
• 28:59
  Speaker 11: in their re but can be domiciled in various different jurisdictions.
• 29:04
  Speaker 11: Why isn't it public? I think you know that that's
• 29:07
  Speaker 11: been a question over the past few years. One is
• 29:10
  Speaker 11: that you have to open yourself up to a bit
• 29:12
  Speaker 11: more scrutiny. Like Trafficer has a bond, so it does
• 29:16
  Speaker 11: publish it's you know, its numbers to the market. But
• 29:19
  Speaker 11: I think you know, these these people have been doing
• 29:22
  Speaker 11: very well only in the company themselves. Why would they
• 29:25
  Speaker 11: need to raise more equity potentially? You know, they're still
• 29:28
  Speaker 11: getting huge amounts of money in financing from banks, which
• 29:32
  Speaker 11: is really the lifeblood of the trading industry, right. You know,
• 29:35
  Speaker 11: companies can buy and sell huge cargoes of oil or
• 29:39
  Speaker 11: copper on their own equity, but you know most of
• 29:42
  Speaker 11: the time they do it through tapping major banks for
• 29:45
  Speaker 11: financing lines.
• 29:46
  Speaker 4: Now, who are their customers? Are their customers also the
• 29:50
  Speaker 4: end users of these products, and certainly with the boom
• 29:53
  Speaker 4: and commodity prices, I would imagine that they've been heard.
• 29:57
  Speaker 11: So look, Trafficer noted in it in its results that
• 30:00
  Speaker 11: it had some clients that were struggling to deal with
• 30:02
  Speaker 11: the higher the normal commodity prices. I think you've got
• 30:05
  Speaker 11: to bear in mind that we might look on the
• 30:07
  Speaker 11: on the Bloemoe terminal, we might see commodity prices denominated
• 30:11
  Speaker 11: in dollars. Look, a lot of buyers, for example, of
• 30:14
  Speaker 11: like oil products in emerging markets, aren't buying those commodities
• 30:18
  Speaker 11: and dollars. They're buying them in their local currency. And
• 30:20
  Speaker 11: the dollar is appreciated, as we know, quite a bit
• 30:23
  Speaker 11: over the past a year or so, so you know,
• 30:25
  Speaker 11: that's even more expensive, and I think that's what they're
• 30:28
  Speaker 11: alluding to there. But look on the whole you can
• 30:31
  Speaker 11: see that high prices have started to have an impact
• 30:35
  Speaker 11: on demand in some commodities, or perhaps prices of as
• 30:39
  Speaker 11: traffic Gura said, and its results, prices for copper overran fundamentals.
• 30:43
  Speaker 11: So that's why I know you guys were talking a
• 30:45
  Speaker 11: little bit about the becom. You know, copper has retreated
• 30:49
  Speaker 11: a little bit over the past couple of weeks, in
• 30:51
  Speaker 11: part because I think market analysts feel that it's sort
• 30:55
  Speaker 11: of overrun the actual supply and demand dynamics.
• 30:58
  Speaker 4: All right. Thanks to Archie Hunter, Commodities Reporter, we.
• 31:01
  Speaker 2: Now take a look at one of the Bloomberg Big
• 31:03
  Speaker 2: Takes stories featured this week on Bloomberg Intelligence. It focuses
• 31:07
  Speaker 2: on former Treasury Secretary Steveh Nuchin, who now leads the
• 31:10
  Speaker 2: private equity firm Liberty Strategic Capital.
• 31:13
  Speaker 4: The Big Take piece is titled MANUSI Chases Wall Street
• 31:17
  Speaker 4: Glory with war chest of foreign money.
• 31:19
  Speaker 2: For more, guest host Jess Men and I were joined
• 31:21
  Speaker 2: by the story's author, Max Abelson, Bloomberg News Finance reporter.
• 31:25
  Speaker 2: We first asked Max for more context on his story.
• 31:28
  Speaker 12: This is a story I think at its heart, it's
• 31:30
  Speaker 12: really about ambition and what we write about in the story.
• 31:34
  Speaker 12: Although I should say, I should say, mess my servant
• 31:37
  Speaker 12: I write about it in this story is that you
• 31:39
  Speaker 12: know what we saw eight years ago when when Zachmeider
• 31:43
  Speaker 12: and I wrote that BusinessWeek profile of Mnuchins as Trump's moneyman,
• 31:47
  Speaker 12: you were able to kind of get a snapshot of
• 31:49
  Speaker 12: what it looks like when someone tries to take their
• 31:51
  Speaker 12: Wall Street wealth and turn it into Washington power.
• 31:54
  Speaker 2: And he did that. He was successful.
• 31:56
  Speaker 12: You know, people I think look down their nose at it.
• 31:57
  Speaker 12: They thought they thought Trump's campaign was ridiculous when he
• 32:00
  Speaker 12: when he agreed to do it, they were wrong. Manutia
• 32:02
  Speaker 12: really saw something that other people missed, and Trump won,
• 32:05
  Speaker 12: he became Treasury secretary. You kind of forget this, But
• 32:08
  Speaker 12: people went in and out those four years. Manucha stayed.
• 32:11
  Speaker 12: He kept his head down. And what this story is
• 32:14
  Speaker 12: about is capturing him as he takes that Washington power
• 32:18
  Speaker 12: that he accumulated and he turns it into even more money.
• 32:22
  Speaker 12: And it's a story about scale. I mean, this guy
• 32:25
  Speaker 12: was an investor beforehand. Now he's a big investor. He's
• 32:28
  Speaker 12: got this big war chest of Middle East money. He's
• 32:31
  Speaker 12: going for deals that could be kind of like, I
• 32:33
  Speaker 12: don't know, it's a little silly to say world historic.
• 32:35
  Speaker 12: But if this guy can pull off a deal for TikTok,
• 32:38
  Speaker 12: it's going to send him into this echelon of You're
• 32:41
  Speaker 12: gonna have to read the story to understand this, but
• 32:43
  Speaker 12: you know, not just gorillas, but the senior gorillas of
• 32:45
  Speaker 12: global finance.
• 32:46
  Speaker 8: TikTok walk us through this about how that's associated with
• 32:51
  Speaker 8: how when it comes to this war chest of wealth
• 32:54
  Speaker 8: that he's been building.
• 32:55
  Speaker 12: Yep, So let me take you back in time. So
• 32:57
  Speaker 12: I think you and I spoke back in March, and
• 33:00
  Speaker 12: New York Community Bank was I mean, it was mayhem.
• 33:03
  Speaker 12: There was news that leaked that New York Community Bank
• 33:05
  Speaker 12: really needed capital, and that is not good. If you're
• 33:07
  Speaker 12: a bank, you do not want news out saying, you know,
• 33:10
  Speaker 12: it'd be a nice to ray some cash. Unbeknownst to
• 33:14
  Speaker 12: us at the time when that headline hit, Mnuchin and
• 33:16
  Speaker 12: some partners were like basically a day away from investing
• 33:19
  Speaker 12: in New York Community Bank, and they decided, you we
• 33:21
  Speaker 12: still go forward, and they did. Of course that actually
• 33:25
  Speaker 12: on paper, you know what their profits on that New
• 33:27
  Speaker 12: York Community Bank deal, they have made a pretty penny
• 33:29
  Speaker 12: at least on paper, Like basically doubling their money. But
• 33:33
  Speaker 12: a few days after that deal closed, he goes on
• 33:37
  Speaker 12: TV and he says, you know what, I'm putting together
• 33:41
  Speaker 12: a deal to buy TikTok. I've got a plan. And
• 33:43
  Speaker 12: it was weird for a couple of reasons. One because
• 33:46
  Speaker 12: New York Community Bank made a lot of sense for
• 33:48
  Speaker 12: Steven Mnuchin because he bought do you remember remember One West,
• 33:51
  Speaker 12: Remember that bank deal he did. New York Community Bank
• 33:54
  Speaker 12: makes sense in that like TikTok. On the other hand,
• 33:57
  Speaker 12: you know, the guy invested in Hollywood. People forget about
• 33:59
  Speaker 12: that muchin find out some serious blockbusters, including Avatar if
• 34:02
  Speaker 12: you saw it. But you know, it's like why TikTok?
• 34:06
  Speaker 12: And I think the way he sees it is according
• 34:09
  Speaker 12: to interviews with people who aren't working on that deal
• 34:12
  Speaker 12: with him, but no him, well, it's like he's got
• 34:14
  Speaker 12: an edge and when it comes to national security matters,
• 34:16
  Speaker 12: and don't forget TikTok is now by law, the Chinese
• 34:19
  Speaker 12: parent companies essentially gonna have to sell it. So he
• 34:22
  Speaker 12: thinks he's got an edge with national security and then
• 34:24
  Speaker 12: also with deal making. On the other hand, his fund
• 34:27
  Speaker 12: is like maybe three billion dollars or so it is
• 34:29
  Speaker 12: going to take a lot more than that to buy
• 34:31
  Speaker 12: TikTok here in the States. We're going to be watching
• 34:33
  Speaker 12: to see if what kind of partners he can bring
• 34:35
  Speaker 12: together and if he buys his first ever you know,
• 34:38
  Speaker 12: social media empire.
• 34:39
  Speaker 2: All right, I senior reporting Max, Mister Mnutchen made about
• 34:42
  Speaker 2: thirty visits to the Middle Eastern nations while in office.
• 34:46
  Speaker 2: That's around as many as is European and Asian visits combined.
• 34:49
  Speaker 2: So we spent a lot of time there when in office.
• 34:52
  Speaker 2: Is that getting translating into some investors in his fund?
• 34:54
  Speaker 12: I think I think that's really a key question. So
• 34:56
  Speaker 12: out of fairness, I just want to cite his spokesperson,
• 34:59
  Speaker 12: a guy by the of Devon O'Malley, who liked to
• 35:02
  Speaker 12: say to me while I was reporting the story that
• 35:04
  Speaker 12: those thirty visits, according to him, are like different legs
• 35:08
  Speaker 12: of just nine trips to a region that he describes
• 35:11
  Speaker 12: as is like, you know, highly strategically important. O'Malley would
• 35:13
  Speaker 12: say that Nusian was advancing US foreign policy economic interests,
• 35:17
  Speaker 12: not going to collect money. But I think as a
• 35:19
  Speaker 12: matter of historical record, you can see Mnusian going to
• 35:23
  Speaker 12: the United Arab Emirates. You could see him going to Cutter,
• 35:25
  Speaker 12: you can see him going to Saudi Arabia. And you know,
• 35:29
  Speaker 12: I'm talking about not just at his time at when
• 35:31
  Speaker 12: he was Treasury secretary, but certainly in the months after that.
• 35:34
  Speaker 12: And what does he end up with. He ends up
• 35:36
  Speaker 12: with a fund, as I say, about three billion dollars,
• 35:38
  Speaker 12: and a lot of that money is coming from the
• 35:40
  Speaker 12: Middle East. These are essentially the deepest pockets in the world,
• 35:43
  Speaker 12: the sovereign wealth funds essentially. And you know, if you're
• 35:47
  Speaker 12: an investor, that means that you get to play with
• 35:50
  Speaker 12: some pretty fun money. He's gonna need some more money
• 35:53
  Speaker 12: than that if he wants to do TikTok, but it
• 35:55
  Speaker 12: means that it's turned him into a essentially a private
• 35:58
  Speaker 12: equity investor on a really big scale.
• 36:00
  Speaker 8: Where else does he have his eyes on next beyond TikTok?
• 36:04
  Speaker 5: Well?
• 36:04
  Speaker 12: I had some fun reporting on the story. Not as
• 36:07
  Speaker 12: much fun as that famous picture of him holding up
• 36:09
  Speaker 12: the cash.
• 36:09
  Speaker 8: I feel like we all remember that photo of the
• 36:11
  Speaker 8: cash that it.
• 36:12
  Speaker 12: Was more fun. But I had fun looking at cybersecurity.
• 36:16
  Speaker 12: Not only did Liberty take over an entire cybersecurity company. Rather,
• 36:20
  Speaker 12: it's a mobile security platform. It's called Simperium. I don't
• 36:22
  Speaker 12: know if you've heard of that. But he has plowed
• 36:25
  Speaker 12: money into cyber Reason, Contrast Security, Blue Voyant, and these
• 36:28
  Speaker 12: are some interesting cybersecurity startups, and I want to tell
• 36:31
  Speaker 12: you not all of them have been a pretty picture.
• 36:34
  Speaker 12: Liberty about twenty million shares of satell Logic for like
• 36:36
  Speaker 12: seven fifty each. You know, back in twenty twenty two
• 36:39
  Speaker 12: was below a dollar twenty the last time I checked.
• 36:41
  Speaker 12: And then there's cyber Reason that was supposed to be
• 36:44
  Speaker 12: worth like billions of dollars when he made his investment.
• 36:48
  Speaker 12: The valuation now is said to be like three hundred
• 36:50
  Speaker 12: million dollars. You do not want that order, you know,
• 36:53
  Speaker 12: you're supposed to invest when it's worth three hundred million
• 36:55
  Speaker 12: dollars and then sell when it's worth billions. So manuchen
• 36:58
  Speaker 12: is you know, it's been really fun sort of take
• 37:00
  Speaker 12: me a snapshot of ambition.
• 37:02
  Speaker 4: But I want to be clear with you.
• 37:03
  Speaker 12: It's not a story of like these waltzing into becoming
• 37:06
  Speaker 12: a multi billionaire. It's going to be much more interesting
• 37:09
  Speaker 12: and a little bit more up and down than that.
• 37:11
  Speaker 2: Is he in it just for the money, or does
• 37:14
  Speaker 2: he want to be thought of in the same sense
• 37:15
  Speaker 2: as Julian Robertson at George Soros as some of those
• 37:18
  Speaker 2: big legendary names.
• 37:20
  Speaker 12: Thank you for asking that, you know his old boss
• 37:22
  Speaker 12: at Omen Sachs. John Corzine said to me, look, Max,
• 37:24
  Speaker 12: money's nice. I get it, I get it, but it's
• 37:26
  Speaker 12: more than that. I was actually kind of moved by
• 37:29
  Speaker 12: something John Corzin said to me, because don't forget Corsin
• 37:31
  Speaker 12: after running Goldman. Yeah, I mean I think I believe
• 37:34
  Speaker 12: you're a New Jersey or one one of you two
• 37:35
  Speaker 12: live in New Jersey. They're both right. You know, Corzine
• 37:39
  Speaker 12: managed to do the same thing. He went from finance
• 37:42
  Speaker 12: into government and he was successful. He was a senator,
• 37:44
  Speaker 12: he's a governor. Corzine said that there's this feeling of
• 37:47
  Speaker 12: being important and being at that table. Once you're at
• 37:50
  Speaker 12: that table of global influence, it is really hard to
• 37:52
  Speaker 12: leave it. Corsiin said to me, you know, this whole
• 37:54
  Speaker 12: quote didn't make it into the story, but he said,
• 37:55
  Speaker 12: you know, some people are programmed that they leave that
• 37:59
  Speaker 12: table of global importance and global influence and they're able
• 38:02
  Speaker 12: to go do something else. You know, It's like I
• 38:04
  Speaker 12: like gardening on weekends. You know and some people some
• 38:07
  Speaker 12: people want more influence and want more opportunity and want
• 38:11
  Speaker 12: to be more engaged and can't disengage. And I think
• 38:14
  Speaker 12: that helps explain Stephen MANUCI.
• 38:16
  Speaker 2: Thanks to Max Abelson, Bloomberg News Financial Reporter.
• 38:18
  Speaker 8: This is the.
• 38:19
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