Taiwan's Earthquake and Disney's Proxy Battle | Bloomberg Technology
ANNOUNCER: FROM WHERE THE HEART OF INNOVATION, MONEY AND POWER COLLIDE IN SILICON VALLEY AND BEYOND. THIS IS "BLOOMBERG TECHNOLOGY" WITH CAROLINE HYDE AND ED LUDLOW. ♪ CAROLINE: I AM CAROLINE HYDE IN NEW YORK. ED: THIS IS BLOOMBERG TECHNOLOGY.
CAROLINE: THE LATEST UPDATES ON THE EARTHQUAKE IN TAIWAN AS THE ISLAND FACES ITS WORST SEISMIC EVENT IN 25 YEARS. FULL COVERAGE AHEAD. A LOOK AT THE BROADER IMPLICATIONS OF THIS HUMAN TRAGEDY FOR THE GLOBAL ECONOMY. ED: DISNEY'S PROXY BATTLE NEARS ITS END. THE SHAREHOLDERS PLACE THEIR FINAL VOTES IN THE BATTLE BETWEEN THE MOUSE HOUSE AND TRION.
WE WILL SHARE IT --SIT DOWN WITH A SHAREHOLDER, ROSS GERBER. CAROLINE: SPOTIFY RAISING PRICES FOR THE SECOND TIME IN A YEAR. WE WILL DISCUSS THAT AND SO MUCH MORE THROUGH IT -- THROUGHOUT THE HOUR.
WE HAVE A STRONG SET OF DATA WHEN IT COMES TO ADP NUMBERS AND THE LABOR FORCE IN THE U.S.. MAYBE A PULLBACK IN THE SERVICES AREA THAT BREATHES LIFE INTO THE EQUITY MARKET AFTER THE BIGGEST SELLOFF IN A MONTH YESTERDAY. WE ARE UP ON THE NASDAQ. TEN-YEAR YIELD CRESCENDOS HIGHER AT THE MOMENT. BORROWING COST MOVING WITH THE
IDEA THE MARKET THINKS MAYBE WE WILL NOT GET THE THREE RATE CUTS THE FED RESERVE HAS SIGNALED FOR THIS YEAR. AND LOOKING AT TAIWAN TRADING. LOOK AT WHAT'S HAPPENING IN THE WORLD OF CRYPTO BRIEFLY. CURRENTLY UP 1.4%, SPIKING A LITTLE BIT IN THE LAST COUPLE
OF HOURS OF TRADING. WE ARE STILL AT THE $66,000 LEVEL. THE ETF FLOWS HAVE SLOWED SOMEWHAT, THAT MEANS FOR VOLATILE TRADING OVER IN ASIA. PARTICULARLY WHEN IT COMES TO THE ALGORITHMS THAT SELL BITCOIN WHEN WE GET THE INFLOW AND OUTFLOW DATA FROM ETFS. ED: THESE ARE THE U.S.
LISTED SHARES OF THE TECHNOLOGY COMPANIES IMPACTED IN TAIWAN. TSMC, THE BIGGEST CONTRACT MANAGER FOR CHIPS FRONT AND CENTER. ADR HAS RISEN BECAUSE OF POP -- POSITIVE OPERATIONAL UPDATE. MACRON HAS A BIG PRESENCE. IT IS EVALUATING THE SITUATION ON THE GROUND IN TAIWAN BUT ALL OF ITS STAFF WERE SAFE. BRING OUR AUDIENCE THE ABSOLUTE LATEST DETAILS OF WHAT HAPPENED IN TAIWAN. CAROLINE: IT OCCURRED LAST NIGHT , A
SEVEN POINT FOUR MAGNITUDE EARTHQUAKE STRUCK M TAIWAN, THE BIGGEST BY MAGNITUDE TO HIT THE ISLAND SINCE 1999. THE DEATH TOLL HAS REACHED NINE. INJURING CLOSE TO 1000 PEOPLE AND LEVELED DOZENS OF BUILDINGS ON THE EASTERN SIDE OF THE ISLAND. SHOCKS WERE FELT AS FAR AWAY AS
JAPAN AND CHINA. ANY DAMAGE FROM THE QUAKE IS BEING CLOSELY WATCHED FOR POTENTIAL EFFECTS ON THE GLOBAL ECONOMY GIVEN ITS TECHNOLOGY OUTPUT. THE ISLAND IS DOMINANT IN CHIP MANUFACTURING.
IT ACCOUNTS FOR MORE THAN HALF OF GLOBAL MARKET FOR LAPTOPS AND MOTHERBOARDS AND NETWORK DEVICES. WE HAVE TO GO INTO THE APPLICATIONS FOR COMPANIES RIGHT NOW. ED: HONING IN ON THE COMPANIES THAT OPERATE IN TAIWAN, THE TECH FIRMS ARE ASSESSING IMPACT FROM THE EARTHQUAKE. TSMC, NUMBER ONE CHIP CONTRACT MANUFACTURER HAD HALTED SOME CHIPMAKING EQUIPMENT AND PLANTS AND EVACUATED THEM. THESE ARE THE LATEST HEADLINES FROM TSMC.
THE COMPANY SANK IN THE LAST HALF AN HOUR THEY DON'T SEE DAMAGE TO CRITICAL TOOLS, INCLUDING ALL THE EUV GEAR AND THEY ARE EXPECTING TO RESUME PRODUCTION OVERNIGHT. LET'S BRING IN IAN KING WHO LEADS COVERAGE AT BLOOMBERG TECHNOLOGY. WHAT IS THE LATEST FOR TSMC. -- TSMC? IAN: THEY HAVE REASSURED PEOPLE THAT YES, THIS IS NOT GREAT. THERE'S BEEN AN IMPACT BUT IT IS STILL WITHIN THE BOUNDS OF WHAT WE CAN FIX AND FIX QUICKLY GIVEN OUR CONTINGENCY PLANS. THERE WILL BE SOME WAFERS LOST
IN A BIT OF MANUFACTURING LOST BUT NOT THE KIND OF MONTH OF DISRUPTIONS THAT WE HAVE SEEN IN THE DISTANT PAST WITH OTHER SUPPLY CHAIN DISRUPTIONS WE SAW DURING THE PANDEMIC. CAROLINE: GIVE US THE CONTEXT OF HOW INTEGRAL TAIWAN TSMC, PLAYERS LIKE FOXCONN'S WEALTH WHEN IT COMES TO PHONES AND LAPTOPS ARE TO THE GLOBAL ECONOMY. IAN: EVERYTHING GOES THROUGH TSMC. IT'S A PROCESSOR IN YOUR IPHONE DESIGNED BY APPLE, IS MADE BY TSMC. IF IT IS THE SUPERCOMPUTER IN A DATA CENTER BASED ON A CHAIR FROM NVIDIA, THAT IS GOING THROUGH TSMC. IF IT IS A MODEM ALLOWING YOUR PHONE TO CONNECT TO THEM AT WORK, THAT'S QUALCOMM AND GOING THROUGH TSMC.
THE LIST GOES ON AND ON. EVERYONE DEPENDS ON THEM. ED: LET'S TALK ABOUT WHAT IS OPERATION ON THE GROUND IN TAIWAN. I WAS INTERESTED TO READ ABOUT MICRON'S FOOTPRINT. THERE IS A LOT THAT HAPPENS THERE. WE ARE TALKING ABOUT SEMICONDUCTOR MANUFACTURING. IT'S ALSO AT THE CIRCUITBOARD LEVEL, BUT CONTEXT OF LAPTOPS AND PCS. WHAT NAMES ARE IMPACTED AND WHAT AREAS OF TECHNOLOGY ECONOMY SHOULD WE BE LOOKING UP FOR? IAN: HISTORICALLY, TIME ONE WAS AN ABSOLUTE CENTER OF EFFECTIVELY ASSEMBLY OF ELECTRONIC DEVICES.
A LOT OF THAT HAS MOVED TO MAINLAND CHINA. IT IS NOT AS CRUCIAL AS IT USED TO BE IN THAT AREA. THERE IS STILL A LOT OF TECHNOLOGY COMPANIES THAT WORK FOR THE BETTER WELL-KNOWN NAMES LIKE DELL, LIKE HP THAT OPERATE IN TAIWAN. AS YOU MENTIONED MICRON, MEMORY CHIPS ARE IMPORTANT FOR UPC FOR YOUR SMARTPHONE. CAROLINE: THERE IS NOTABLE REACTION ACROSS COMPETITORS RIGHT NOW.
WHEN YOU'RE LOOKING AT THE REST OF THE CHIP STOCKS IN THE PHILADELPHIA SEMICONDUCTOR INDEX MOST ARE IN THE GREEN. MICRON LEADING. THERE'S AN INTERESTING EXCEPTION AND YOU WOULD'VE THOUGHT INTEL WOULD HAVE DONE WELL OUT OF THE BACK OF ANY SUPPLY-CHAIN HEADACHES FOR RIVALS BUT NOT SO TODAY. IAN: YEAH. THIS IS AN UNFORTUNATE CONSEQUENCE THAT ANY BAD NEWS FOR TSMC SHOULD BE GOOD NEWS FOR WHAT INTEL IS TRYING TO DO, EFFECTIVELY BECOME A COMPETITOR FOR TSMC. IT SHOULD HAVE PEOPLE SAYING WE NEED TO DIVERSIFY GEOGRAPHICALLY. CAN WE DO THAT WITH INTEL?
BECAUSE OF THE FINANCIAL DISCLOSURES LAST NIGHT THAT IS NOT THE CASE. ED: THE STORY WITH INTEL IS THAT IT HAS DIFFERENT BUSINESSES. WE ARE TALKING ABOUT THE FOUNDRY BUSINESS. INTEL WANTS TO DO IT TSMC ALREADY DOES, BE A CONTRACT MANUFACTURER FOR THIRD PARTIES. WHEN I WAS LOOKING THROUGH THE FINANCIAL DISCLOSURES THEY MADE IT IS NOT JUST THEY ARE BOOKING LESS REVENUE ON FOUNDRY, NOT JUST THE LOSSES ARE WIDENING, BUT THEIR PROJECTIONS TO THE END OF THE DECADE MAKE YOU LITTLE CONCERNED THAT ACTUALLY WILL GET BACK TO THE ERA WHERE INTEL HAD NORTH OF 60% MARGINS AND THEY WERE THE TECHNOLOGY LEADER.
THAT IS THE STORY THAT THE CEO HAS BEEN TRYING TO TELL ALL THREE OF US ARE QUITE A LONG TIME. EXPLAIN THE SHIFT IN TIMELINE INTEL DISCLOSED LAST NIGHT. IAN: THERE WAS NOT A SHOCK FOR THOSE WHO WERE STUDYING IT CLOSELY BUT IT WAS ARGUABLY A REMINDER THAT THIS IS AN EXTREMELY EXPENSIVE TURNAROUND. YOU COULD ARGUE GALE SENIOR WAS UPFRONT ABOUT THINGS AND PEOPLE REALLY SHOULD HAVE BEEN PAYING ATTENTION. SOME OF THEM WEREN'T. IF YOU'RE CASUAL INVESTOR, IF YOU HAVE OTHER OPTIONS WHY WOULD YOU BE INVESTING IN NVIDIA, QUALCOMM, TSMC? WHAT INTEL DID WAS REMIND PEOPLE THEY ARE ON A TOUGH ROAD AND THEY STILL HAVE A WAYS TO GO. ED: THE STOCK IS DOWN 620%, INTEL.
THEY HAVE A NEW CFO. IAN: A NEW CFO FOR THEIR FOUNDRY DIVISION. THE MAIN CFO IS STILL THERE. ED: GOT IT. CAROLINE: IAN TAKING US AROUND THE WORLD WITH THE CHIP INDUSTRY TODAY. COMING UP, WE ARE GOING BACK TO
DISNEY'S PROXY BATTLE WITH TRIAN 'S NELSON PELTZ. TODAY'S THE DAY WE GET THE SHAREHOLDER MEETING. WE WILL DISCUSS IT NEXT WITH ONE KEY SHARE HERBERT -- KEY SHAREHOLDER ROSS GERBER. CAROLINE: TODAY IS THE DAY. DISNEY'S SHAREHOLDER MEETING
WILL DETERMINE THE FUTURE OF THE BOARDROOM. A WINTER WILL EMERGE FROM A LENGTHY PROXY BATTLE BETWEEN THE COMPANY AND THE ACTIVISTS INVESTOR THAT IS NELSON PELTZ. SOURCES SAY DISNEY IS CLOSE TO CLINCHING A WIN OVER PELTZ AND TRIAN. LET'S TURN TO ROSS GERBER. IT LOOKS AS THOUGH MOST OF THE
INVESTOR BASE RETAIL AND THE BIG SHAREHOLDERS ARE DOING THE SAME. ROSS: YEAH. IGER IS A PHENOMENAL EXECUTIVE. NELSON PELTZ HAS WASTED SO MUCH TIME AND MONEY. HE HAS MADE A TON OF MONEY NOW ON THIS ACTIVISTS CAMPAIGN. I THINK DISNEY WILL WIN THIS SOLIDLY WITH THE BACKING OF THE INSTITUTIONAL SHAREHOLDERS AS WHOLE AS MANY RETAIL SHAREHOLDERS LIKE WE ARE. THE BOTTOM LINE IS THIS IS HOW
IS NELSON PELTZ GOING TO DO ANYTHING BETTER FOR DISNEY OTHER THAN CUT COSTS? THAT HAS ALREADY HAPPENED. ED: MR. GERBER, WHETHER MR. PELTZ IS ABSURD OR NOT HE SET OUT IN A MANIFESTO A LOT OF GRIEVANCES FOCUSING ON THE STREAMING BUSINESS. LET'S SAY WHATEVER HAPPENS, SAY
IGER IS SUCCESSFUL, THE QUESTION MR. PELTZ RAISED WAS HOW YOU GET THAT STREAMING BUSINESS TO PROFITABILITY WITHOUT DEPENDING ON A STRATEGY THAT IS RAISING PRICES FOR CONSUMERS WHILE CUTTING THE COST OF CONTENT PRODUCTION? DO YOU HAVE FIRM IN YOUR MIND AN ANSWER TO THAT QUESTION? ROSS: SHOGUN. THAT IS THE ANSWER. WHEN YOU HAVE SHOWS AND CONTENT PEOPLE WANT TO SEE THEY WILL PAY FOR SUBSCRIPTIONS. IT IS WHAT IS HAPPENING IN STREAMING. WE ARE SEEING IT IN SPORTS
SUBSCRIPTIONS WERE PEOPLE ARE SIGNING UP TO WATCH A GAME ON PARAMOUNT PLUS AND STICKING 60% OR 70% TIME AFTER THE GAME IS OVER. THE HIT SHOWS, THE TALENT, THE IP THAT BRING VIEWERS IN IS WHAT MAKES THESE STREAMERS PROFITABLE. LIKE NETFLIX EVERY WEEK NETFLIX AS SOMETHING GOOD ON. FINALLY HULU AND DISNEY PLUS ARE STEPPING UP THEIR GAME. THEY HAVE CONFINED THE APPS AND BUILT IT ONE PLATFORM NOW. THERE IS A TECH SIDE OF THIS.
IT'S A BIG THINK DISNEY HAS SENT A CUT COSTS AND MAKE THEIR LIBRARY EVEN MORE ACCESSIBLE TO MANY DIFFERENT PLATFORMS. THE BOTTOM LINE IS THE SHOWS DRIVE DISNEY'S SUCCESS AND THEY HAVE HIT SHOWS RIGHT NOW ON THEIR PLATFORMS. THAT IS THE IGER MAGIC THAT PELTZ CAN NEVER DO. ED: YOU ARE FIRM, 131,000 DISNEY SHARES OR SO. WHAT IS YOUR FIRM'S POSITION ON
IGER'S SUCCESSION? ROSS: BEING A SHAREHOLDER MY WHOLE LIFE AND GOING THROUGH THE PAST WITH EISNER AND THE TRIALS AND SHOULD RELATIONS, IGER IS A YOUNG CEO BASED OFF THE AVERAGE AGE OF A PRESIDENTIAL CANDIDATE. I AM NOT SURE WHAT WILL HAPPEN NEXT. THERE IS SOME CONFIDENT EXECUTIVES HE CAN PICK TO TAKE OVER ARE HOPEFULLY MORE DIGITALLY FOCUSED. HE'S GOT SOME OF THE SAME TEAM
MEMBERS AROUND HIM FROM BUILDING DISNEY PLUS IN THE PAST. I'M NOT SURE WHERE HE GOES WITH THIS. WE WOULD LIKE TO SEE AN INTERNAL SUCCESSION AS DISNEY TYPICALLY DOES THAT. IT WILL BE HARD TO FIND EVERY PLACEMENT FOR IGER. IT'S ALWAYS BEEN A BIG
CHALLENGE FOR DISNEY OVER ITS LONG HISTORY. ED: THE ARGUMENT MADE BEFORE HIS OF JOE BIDEN CAN RUN FOR YOUR ELECTION AS PRESIDENT THAN BOB IGER CAN DO ANOTHER 10 YEARS AT DISNEY. I WANTED TO MAKE IT SIMPLE FOR THE AUDIENCE. SORRY. ROSS:
IGER IS IN GREAT SHAPE. HE IS MENTALLY AND PHYSICALLY FIT. HE IS WRITING HIS BIKE ON SUNDAY MORNINGS AT 6:00 A.M. LIKE 20 MILES. CAROLINE: HE HAS SHOWN HE WANTED TO EXIT
ANY HAD TO COME BACK. I THINK ULTIMATELY THE NEW BOARD HAS REALLY BEEN FOCUSED ON TRYING TO UNDERSTAND WHERE THE PATH OF THE FUTURE IS, WHO ARE THE CANDIDATES -- INTERNAL CANDIDATES AND EXTERNAL CANDIDATES. DISNEY IS A BEHEMOTH. IT IS NOT JUST AS EXPOSURE TO DIGITAL.
IT'S PARKS, EXPERIENCES, CRUISES, TO VACATE SHOWS THAT GO TO YOUR MOVIE THEATERS. HOW CAN WE FIND SOMEONE WHO CAN BE BASICALLY THE CONSOLIDATED LEADER OF A BUSINESS LIKE THIS? ROSS: YOU BROUGHT UP ONE OF THE CHALLENGING ISSUES. RUNNING PARKS AND RESORTS IS NOTHING LIKE RUNNING STREAMING. TO FIND SOMEONE WHO HAS THE SKILL TO DO IT ALL IS A BIG ASK. THAT IS WHY IGER AND JAMES
GORMAN ON THE BOARD TO HELP SUCCESSION. IT'S A CHALLENGE TO FIND SOMEBODY WITH THAT TYPE OF OPERATIONAL EXPERTISE, PERIOD. WHEN YOU LOOK AT THE ESPN PIECE THAT THEY ARE CARVING INTO ITS OWN BUSINESS AND PARKS AND RESORTS AND EXPERIENCE AND THE REST OF THE BUSINESS, THE STREAMING AND STUDIOS, THEY NEED THREE STRONG LEADERS THAT SORT OF HAVE A CEO THAT IS GREAT AT RUNNING THOSE THREE LEADERS. EACH LEADER WILL HAVE TO BE DIFFERENT. THIS IS THE PROBLEM A LOT OF MASSIVE COMPANIES, WHETHER IT IS APPLE OR MICROSOFT OR WHATEVER, THEY BECOME SO BIG AND PROFITABLE CAN ONE PERSON RUN ALL THIS? THIS IS A CHALLENGE FOR A LOT OF BIG COMPANIES INCLUDING DISNEY. WHERE DID WE GO FROM HERE WITH
SUCCESSION PLANNING? FINDING ANOTHER IGER IS OBVIOUS HE NOT GOING TO HAPPEN. CAROLINE: ONE REASON IGER MIGHT WANT TO HAND OVER THE BATOIN SOONER IS HE'S DONE WITH MUDSLINGING FROM PEOPLE LIKE ELON MUSK. MUSK SAID HE WOULD SUPPORT PELTZ JOINING THE BOARD. HE HAS AN AX TO GRIND AGAINST
BOB IGER. WHAT DO YOU MAKE OF THAT? ROSS: HOPEFULLY ELON CAN KEEP HIS JOB AS CEO OF TESLA LED A LOW MAKE A RECOMMENDATION. PELTZ WILL BY TEXEL NEXT -- BUY TESLA NEXT BECAUSE OPPORTUNITY IS ARISING FOR AN ACTIVIST IN TESLA THAT LOOKS AMAZING. THE BEST ELON CAN DO IS GET HIS BUTT BACK TO TESLA AND WORK ON GETTING THE CARS OUT. HE HAS TO GET CYBER TRUCK OUT, FULL SELF-DRIVING WORKING, DEAL WITH COMPETITION.
INSTEAD HE'S TWEETING A BUNCH OF GARBAGE. LOOK AT THE PERFORMANCE OF DISNEY VERSUS -- SOMEBODY TWEETED DISNEY VERSUS TESLA OVER THE LAST SIX MONTHS. DISNEY IS THE TOP HOLDING IN MY FUND. OUR CLIENTS HAVE CLOSE
RELATIONSHIPS. THEY LOVE THESE COMPANIES. SOMETIMES THINGS CHANGE AND WE HAD TO DEAL WITH THE CHANGES THAT TESLA FOR THE NEGATIVE AND FOR THE POSITIVE WE ARE SEEING POSITIVE CHANGES FOR DISNEY. IT HAS BECOME A GOOD RETURN INVESTMENT FOR OUR CLIENTS. CAROLINE: GIVE US THE CONTEXT ON ELON MUSK RUNNING TESLA, THE ENVIRONMENT WITH WHICH HE IS RUNNING AT THE MOMENT. BASICALLY CALLING OUT CERTAIN INDIVIDUALS, CALLING THEM IDIOTS BECAUSE THE EB LANDSCAPE ITSELF -- EV LANDSCAPE IS CONTRACTING . WE SAW A PULLBACK IN TERMS OF
DELIVERIES FROM TESLA YESTERDAY. IT RECLAIMED ITS SPOT AS AN M1 PROVIDER OF EV'S GLOBALLY. CAN YOU RESPOND TO THE CRITICISM ELON MUSK HAS OF YOUR TWEET AND CALL YOU BASICALLY AN IDIOT? ROSS: I HAVE BEEN CALLED THAT MANY TIMES. SOMETIMES A -- SOMEHOW I HAVE
SURVIVED. I THINK IF YOU LOOK AT GLOBAL SALES OF EV'S IT IS UP 35% YEAR-OVER-YEAR. TESLA IS LOSING SHARE. BYD SALES WERE UP, TOTAL SALES. IT IS EASY TO CHERRY PICK
NUMBERS. THE EV MARKET IS GROWING. ONLY 9% OF U.S. CONSUMERS ARE BUYING EV'S. WE CAN ALL CALL NAMES AND LOOK AROUND AND MAKE EXCUSES. THE ECONOMY IS VERY STRONG IN THE UNITED STATES.
THE ECONOMY IN EUROPE IS OK. CHINA IS DEFINITELY AN ISSUE THAT AFFECTS TESLA. WHEN YOU LOOK AT THE GAP BETWEEN PRODUCTION AND SALES, THAT'S NOT AN ECONOMIC ISSUE.
THAT IS A SALES ISSUE. LIKE I THROWING OUT NAMES AND ALL THIS KIND OF STUFF BECAUSE HE DOESN'T LIKE WHAT PEOPLE ARE SAYING ABOUT HIM, MR. FREE SPEECH, THE FACT OF THE MATTER IS HIS FREE SPEECH HAS COST TESLA SHAREHOLDERS $600 BILLION IN LOSSES. TESLA CAR OWNERS HAVE LOST $50 BILLION OF EQUITY IN THEIR VEHICLES.
HE'S EVEN FORCED THE HERTZ CEO TO LOSE HIS JOB. LET'S BE REAL. IT IS TIME FOR YOU TO GROW UP AND ACCEPT REALITY. YOU ARE CAUSING ENORMOUS DAMAGE TO ONE OF THE MOST CONSEQUENTIAL COMPANIES IN THE WORLD BECAUSE OF YOUR BEHAVIOR ON TWITTER. NOBODY WAS TO HEAR IT.
THAT'S A FACT. ED: I HAVE INVITED ELON ONTO THIS PROGRAM MANY TIMES. IN THIS CASE I WILL SAY ROSS RESPONDED TO YOUR POST ON X. HE HAS OBVIOUSLY DECLINED TO DO THAT. CAROLINE: THROW IN THE U PENN THING. ROSS: HE DOESN'T WANT TO DEBATE ME.
I'M NOT SCARED OF HIM ANY SO USED TO BULLYING EVERYBODY OUT OF THE BUSINESS HE WITHOUT BULLY ME. THE REALITY IS HE'S GOT TO GET HIS FOCUS BACK ON WHAT'S IMPORTANT WHICH IS SOLVING CLIMATE. IT IS NOT FREE SPEECH. I'M SORRY. CAROLINE: DON'T APOLOGIZE. GREAT TO HAVE YOU ON. SURVIVING ANOTHER DAY OF
MUDSLINGING ON TWITTER OR X AND TALKING US TO DISNEY AS WELL. THIS IS "BLOOMBERG TECHNOLOGY." ED: TIME FOR TALKING TECH. CHIPMAKER -- HAS PICKED CITIGROUP AS THE LIEN BANK ON THE INITIAL PUBLIC OFFERING. THE COMPANY CHOSE THE LENDER OF THE HOLDING DISCUSSIONS WITH POTENTIAL ADVISORS ON A U.S. LISTING.
CEREBRAS IS TARGETING THAT IN THE SECOND HALF OF THE YEAR. EVALUATION OVER $4 BILLION. DURING THE PHONE CALL BETWEEN PRESIDENT BIDEN AND PRESIDENT XI THEY ARE SAID TO HAVE DISCUSSED TIKTOK. JOHN KIRBY TOLD REPORTERS BIDEN
REITERATED TO XI CONCERNS ABOUT CHINESE OWNERSHIP OF THE POPULAR VIDEO SHARING APP. HE SAID IT WAS NOT ABOUT A BAN OF THE APPLICATION BUT RATHER U.S. INTERESTS AND DIVESTITURE. CAROLINE: LET'S TALK ABOUT A PREVIOUS PRESIDENT DONALD TRUMP WHO IS SUING TWO COFOUNDERS OF TRUMP MEDIA AND TECHNOLOGY SAYING THEY SAID IF THE COMPANY IMPROPERLY ISSUED NOT GET ANY STOCK IN IT.
THIS COMES AMID WILD SWINGS IN SHARES OF THE RECENTLY PUBLIC COMPANY. THEY WENT THERE A SPAC. WE WILL TALK ABOUT IT WITH BAILEY LIPSCHULTZ. TALK ABOUT THE ISSUES THE CO-FOUNDER HAVE OF TRUE SOCIAL WITH TRUMP. BAILEY: THERE WAS AN INITIAL LAWSUIT FROM THE TWO CO-FOUNDER SAYING THEY WERE GOING TO BE DILUTED OUT OF THEIR 8.6% STAKE IN TRUMP MEDIA AND TECHNOLOGY GROUP. THIS IS A COUNTER LAWSUIT FROM DONALD TRUMP SAYING THEY DESERVE NOTHING. THIS IS A DEAL THAT HAD A
NUMBER OF LAWSUITS FROM THE TWO COFOUNDERS TO THE FOUNDER OF THE ACTUAL SPAC THAT BROUGHT TRUMP MEDIA PUBLIC AND ABOUT HIS STAKE. THERE. ARE A NUMBER OF LAWSUITS IT IS MIND-BOGGLING TO PUT INTO PERSPECTIVE WHO IS ARGUING WHAT AT THIS POINT. AS FAR AS WE KNOW AT THIS POINT THE INVESTMENT GROUP BEHIND THOSE TWO COFOUNDERS CURRENTLY HAVE A NORTH OF 5% STAKE AN DONALD TRUMP HAS A 57% STAKE. ED: A STAKE IN WHAT EXACTLY? WE LEARN THE REALITY OF WHAT THE COMPANY IS, DOES, ITS FINANCES AND SCALE.
THERE IS NOT A LOT THERE. BAILEY: NOT A LOT THERE. THE FLAGSHIP PRODUCT IS TRUE SOCIAL. THE COMPANY DECLINES TO PROVIDE TYPICAL METRICS, AVERAGE USERS, MONTHLY AVERAGE USERS, ANY REAL DATA POINT BEHIND THAT. THEY DID IN THEIR 2023 FILING UPDATE THEY LOST MORE THAN $50 MILLION AND GENERATED $4 MILLION IN REVENUE. IT REALLY HAS SEEN -- WE HAVE BEEN TRACKING THE TECHNOLOGY COMPANY THAT TRADES UNDER DJT, IT'S MORE OF A MEME STOCK, AND INVESTMENT PEOPLE ARE BUYING BECAUSE IT HAS THE POTENTIAL TO BE SOLD TO SOMEONE ELSE AT A HIGHER VALUATION AS OPPOSED TO THE ACTUAL UNDERLYING BUSINESS AS IT IS FIT RIGHT NOW. ED:
BAILEY LIPSCHULTZ HAS BEEN KEPT BUSY BY THE LATEST SPAC AND WHAT A STORY IT IS. COMING UP, SPOTIFY RAISING PRICES FOR THE SECOND TIME IN A YEAR. THIS IS ONE THAT WAS IMMEDIATE REACTION TO A DIFFERENT SOCIAL MEDIA PLATFORMS. INVESTORS LIKE IT. THE SHARES ARE UP.
IF YOU'RE A CONSUMER AND HAVE ANOTHER SUBSCRIPTION WITH THE COST IS GOING UP, MAYBE YOU THINK AGAIN. WE WILL. HAVE THOSE DETAILS NEXT FROM NEW YORK CITY SIDE-BY-SIDE, THIS IS "BLOOMBERG TECHNOLOGY." ED: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." CAROLINE: WE ARE ACTUALLY SINK A BIT OF A REPRIEVE AFTER YESTERDAY'S SELLOFF. A BOUNCE BACK ON THE NASDAQ 100. YESTERDAY THEY FELL THE MOST IN
A MONTH. WE ARE WORRIED ABOUT MACRO POLICY, FED POLICY AND IF WE WILL SEE THREE RATE CUTS OVER THE COURSE OF THE REST OF THIS YEAR. THE MARKET HAS STARTED TO DOUBT THAT BECAUSE OF SOME ROBUST DATA. ADP COMES IN TODAY. THEY MANAGED TO SHAKE OFF THE
LOSSES. BITCOIN, ALONGSIDE SOME OF THE OTHER TECH RISK ASSETS UP .9%. STILL AT $66,000, WELL OFF THE PREVIOUS HIGHS. THERE IS A HUMAN COST DISASTER
WE ARE TALKING ABOUT IN TAIWAN FOLLOWING AN EARTHQUAKE. THE RAMIFICATIONS ON THE GLOBAL ECONOMY IS SOMETHING WE HAVE TRIED TO DEBATE AND THINK ABOUT. TSMC IS UP 1.8%. THE IMPACT OPERATIONS FROM THIS EARTHQUAKE SHOULD BE MANAGEABLE ACCORDING TO CITIGROUP. SPOT ASSAD -- SPOTIFY UP 5.7%. LET'S LOOK AT DISNEY, DOWN A QUARTER OF A PERCENT.
WE ARE ALL ANTICIPATING THE IMPORTANT SHAREHOLDER MEETING. THE PROXY BATTLE GOING ON FOR MONTHS. THE DELUGE OF ADS WE HAVE BEEN SERVED TO GET OUT THERE AND VOTE IF YOUR RETAIL INVESTOR. PELTZ VERSUS IGER. WHO WILL WIN? ED: MORE FROM BLOOMBERG INTELLIGENCE AND OF JUST -- ANALYSTS GITA. YOU DID RESEARCH EARLIER IN THE WEEK PUBLISHED ON THE TERMINAL THAT WITH DISNEY PULLING AHEAD IT SEEMS LIKE THAT IS THE CASE. LOOK AT CASH FLOW AND FUNDAMENTALS.
WHY WAS THAT YOUR THESIS? >> THANK YOU SO MUCH. WHAT PELTZ HAS BEEN AGITATING FOR, DISNEY HAS MORE THAN DELIVERED. PELTZ HAS BEEN SPEAKING AND HIS RAILING CRY HAS BEEN ON THE STOCK PRICE PERFORMANCE, POOR FINANCIAL PERFORMANCE AND BOB IGER SINCE HE HAS QUEBEC HAS TAKEN CONTROL OF THE NARRATIVE HERE -- HE HAS TAKEN CONTROL OF THE NARRATIVE. THE MOST CRITICAL IS THE COST CUTS. WE HAVE SEEN COST CUTS ACROSS THE BOARD. WE HAVE SEEN THE CONTENT BUDGET
SLASHED DRAMATICALLY. THAT'S IMPROVING EARNINGS POWER AND ITS IMPROVING FREE CASH FLOW. WE WILL SEE A 70% SURGEON DISNEY'S FREE CASH FLOW. WE ARE ALMOST BACK TO PRE-PANDEMIC LEVELS. THEY WERE GENERATING ABOUT $10
BILLION IN CASH FLOW. THAT WENT DOWN READY DRAMATICALLY THROUGH COVID, THROUGH THE FOX ACQUISITION, WITH THE STREAMING LUNCH. WE WERE DOWN TO CLOSE TO $5 BILLION IN 2023. WE WILL BE UP TO $8 BILLION IN 2024 AND PROBABLY $10 BILLION NEXT YEAR. CAROLINE: IF NELSON PELTZ -- OF THE PREVIOUS CEO DOES NOT GET BOARD SEATS MAYBE THEY END UP WINNING IF THEY PUSHED ULTIMATELY THESE FOCUS ON COSTS, THE FOCUS ON PROFITABILITY TO GO HAND-IN-HAND. HOW MUCH DO YOU THINK VANGUARD
AND BLACKROCK HAS SUPPORTED BOB IGER THEY ARE SAYING WE HAVE TO STAND BY THIS AND YOU HAVE TO ENACT SOME OF THESE CHANGES WE NEED TO SEE? GEETHA: DISNEY DEFINITELY HAS THE EDGE AS YOU POINTED OUT AS THEY GO INTO THIS HOME STRETCH THIS MEETING. I THINK TO A GREAT EXTENT PELTZ HAS BEEN A CLEAR WINNER. THE STOCK PRICE SINCE HE STARTED AGITATING IN OCTOBER OF LAST YEAR IS UP 45%.
IT IS DEFINITELY ADDED -- IGER HAS COMPLAINED HAVING THESE ACTIVIST INVESTORS BREATHING DOWN HIS NECK HAS BEEN A CONSTANT DISTRACTION FOR HIM. TO SOME EXTENT I THINK THAT IS JUSTIFIED. AT THE SAME TIME, HAVING THEM LIGHT A FIRE WAS IMPORTANT FOR HIM TO REALLY ACCELERATE THE CHANGE. WE HAVE HAD HIM DO SOME PRETTY TRANSFORMATIVE STUFF, WHETHER IT IS CHARTING ESPN'S DIGITAL FUTURE OR PUTTING DISNEY ON FIRM FINANCIAL PUTTING, OR THE $60 BILLION INVESTMENT IN PARKS. PELTZ HAS ALSO WON EVEN IF HE
DOES NOT WHEN THE ACTUAL VOTE. CAROLINE: ALWAYS GREAT TO GET YOUR PERSPECTIVE. WE THANK YOU. MORE NEWS COMING OUT OF THE ENTERTAINMENT INDUSTRY. SPOTIFY WILL BE RAISING THE PRICE OF ITS STREAMING SERVICES FOR THE SECOND TIME THIS YEAR. IT'S A STEP TO KEEP ON MOVING TOWARDS LONG-TERM PROFITABILITY. JOINING US FOR MORE IS FELIX GILLETTE.
HOW BIG A PERSPECTIVE IS THIS THAT THEY WILL HAVE TO START CHARGING FOR AUDIOBOOKS? FELIX: IT'S A BIG MOVE BECAUSE ARE SO LONG SPOTIFY CAP THE PRICE THE SAME. -- HAS KEPT THE PRICE THE SAME ANNOUNCED TWICE IN A YEAR. -- AND NOW THEY HAVE RAISED IT TWICE IN YOUR. PART OF THIS WAS THE
INTRODUCTION OF AUDIOBOOKS LAST FALL. YOU GET 15 HOURS WITH YOUR PREMIUM PLAN. YOU ONLY PAID IF YOU WANT ABOUT THE 15 HOURS. SPOTIFY HAS BEEN PAYING BOOK PUBLISHERS WERE NOT COLLECTING MONEY. WHAT WILL HAPPEN IS IF YOU WANT TO KEEP LISTENING TO THE AUDIOBOOKS YOU WILL PAY A DOLLAR OR TWO DOLLARS A MONTH DEPENDING ON YOUR PLAN. THEY WILL INTRODUCE A BASIC
PLAN BUT JUST MUSIC AND PODCASTS. ED: THE SHARES ARE UP 6%ISH, THE BIGGEST JUMP SINCE THE FIRST WEEK OF DECEMBER. THERE IS THE THING INVESTORS LIKE WHICH IS MOVING TOWARDS PROFITABILITY. THE CONSUMER WILL GO IT'S ANOTHER THING TO HAVE TO PAY MORE FOR. WHAT ARE THEY GETTING IN RETURN? WHAT IS THE ACCESS THAT COMES WITH IT? FELIX: THEY ARE NOT GETTING MUCH BECAUSE THEY ALREADY HAD FREE ALREADY A BOOKS -- AUDIOBOOKS. YOU WANT TO PAY FOR AUDIOBOOKS OR JUST LISTEN TO MUSIC AND PODCASTS? IT'S A LITTLE MORE CHOICE. CAROLINE:
LET'S STAY IN THE WORLD OF ENTERTAINMENT AND THOSE THAT REPRESENT THOSE. ENDEAVOR. WE HAVE LONG HEARD FROM ARI EMANUEL AT EVENTS WE HAVE LIKE SCREEN TIME, HE DID NOT LIKE BEING A PUBLIC COMPANY OR WHERE THE SHARE PRICE WAS AND NOW THEY ARE GOING BACK PRIVATE. FELIX: THERE WAS ALWAYS A FRUSTRATION ON HIS PART THAT THE MARKET WAS NOT COLLECTING THE SAME -- LIKING ASSETS THE SAME WIAY THEY SAW THEM. TALENT AGENCIES, SPORTS AGENCIES, THE SPINNING OFF OF USC AND MERGING WITH WWE. THIS WILL GIVE THE COMPANY MORE FLEX ABILITY TO MAKE SENSE OF THOSE ASSETS.
MAYBE SELL OFF SOME OF THE PIECES THERE WITHOUT QUITE AS MUCH HURT FROM INVESTORS WHO DID NOT GET THE VISION. ED:ED: SHARES MOVED ON THIS. I THINK WE KNEW IT WOULD BE DONE. INTERESTING PARAGRAPH IN THE STORY WHICH IS INCLUDING THE ELEMENT, SILVERLIGHT GAVE A $25 BILLION EQUITY TAKEOVER. WHY DO WE CARE ABOUT THIS MANEUVERING? FELIX: IT WILL BE INTERESTING. IT GIVES LESS VISIBILITY TO WHAT'S HAPPENING IN HOLLYWOOD, FROM MY PERSPECTIVE.
YOU CAN SEE WME AND WHAT WAS HAPPENING WITH THE STREAMING AND THE PEAK TV, WE WILL GET LESS VISIBILITY INTO THAT. WE WILL STILL SEE WHAT'S HAPPENING IN THE UFC AND WQWE. I THINK YOU WILL GIVE HIM MORE FLEX ABILITY TO MAKE SOME MOVES. HE'S BEEN A BIG PLAYER IN
HOLLYWOOD. I THINK THAT WILL BE FUN TO WATCH. ED: FELIX GILLETTE, YOUR WORLD IS VERY BUSINESS AT THE MOMENT. COMING UP, WE WILL BE JOINED BY RASHA KATABI ON THE COMPANY'S BRAND-NEW SERIES C ROUND. THAT'S COMING UP ON "BLOOMBERG TECHNOLOGY."
STANFORD BUSINESS SCHOOL EVENT. WATCH OUT FOR THOSE COMMENTS. THIS IS BLOOMBERG. ♪ ED: FINTECH COMPANY R.I.M. FINANCIAL ANNOUNCING $85 MILLION SERIES C FUNDING RENT ON THE BACK OF STRONG REVENUE GROWTH. THE COMEY PROVIDES CREDIT PLATFORM PROGRAMS TO BANKS AND LARGE ENTERPRISES AND SAYS IT IS RAPIDLY INCREASING ITS MARKET SHARE. LET'S BREAK IT DOWN WITH BRIM FINANCIAL CEO RASHA KATABI. GOOD MORNING TO YOU FROM NEW
YORK CITY. WHAT ARE YOU GOING TO USE THE MONEY FOR? RASHA: WE ARE FOCUSING ON OUR EXPANSION AND THE ROBUSTNESS OF OUR CREDIT CARD PLATFORMS. WE ARE REALLY EXCITED ABOUT THIS. THANK YOU FOR HAVING ME ON. CAROLINE: INTERESTING, YOU ARE BUILDING THE BUSINESS IN CANADA AND PENETRATION INTO THE U.S.
AND YOU WILL BE REDEFINING THE CREDIT CARD PAYMENT INFRASTRUCTURE LANDSCAPE. FOR THOSE NOT STEEPED IN THE WORLD OF FINTECH, WHAT DOES THAT LOOK LIKE? RASHA: WE ARE SEEING A LOT OF CHANGES IN THE MARKET WITH JUST THE CAPPING OF THE FEES THAT WAS JUST ANNOUNCED IN THE U.S., WHICH WE THINK IS REALLY POSITIVE ALL AROUND. IT WILL HAVE A NUMBER THAN I WILL -- AN UNDENIABLE IMPACT ON CREDIT CARD ISSUERS AND HIGHLIGHT THE IMPORTANCE OF THE PRODUCT CONSTRUCT, THE STRENGTH OF THE PLATFORM CAPABILITIES. THAT WILL DRIVE, WE FEEL, POSITIONING AND COMPETITIVE LANDSCAPE AS OPPOSED TO LEANING IN TOO MUCH IN INTERCHANGE REVENUE THE WEIGHT VALUE PROPOSITIONS -- WAY VALUE PROPOSITIONS USED TO BE FRONT AND CENTER. CAROLINE:
HELPING FINANCIAL COMPANIES MAKE THEIR MARK STAND OUT, OFFER THINGS. WHEN YOU SAY MASTERCARD AND VISA CAP SOME OF THEIR FEES, THEY WERE GETTING FEES AND OTHER WAYS. THERE IS GREAT STORY FROM A REPORTER HERE SAYING MASTERCARD PLANS TO INCREASE CERTAIN CREDIT CARD FEES BEGINNING APRIL 15. THESE WILL BE MORE NETWORK ASSESSMENT FEES.
DO THESE CARD COMPANIES END UP MAKING MONEY NO MATTER WHAT? RASHA: WHEN YOU HAVE KEYS TO THE CASTLE YOU CAN PROTECT YOUR SHARE OF REVENUE. UNDENIABLY, MASTERCARD AND VISA ARE GREAT COMPANIES THAT PLAY KEY ROLE IN THE ECOSYSTEM. UNDOUBTEDLY, I DON'T THINK THIS IS GOING TO IMPACT THE REVENUES OR THEIR STOCK PRICE, CAROLINE. ED: TODAY'S TECH DAILY NEWSLETTER IS A LOOK AT THE FUNDING ENVIRONMENT FOR STARTUPS. WHAT OUR COLLEAGUE OUTLINED IS IT'S BEEN A ROUGH START TO THE YEAR.
IF YOU'RE NOT NEI COMPANY -- AN AI COMPANY YOU WILL NOT BE ABLE TO RAISE FUNDS. THAT IS THE THESIS OUTLINED IN THE TECH DAILY, BUT YOU DID RAISE FUNDS AND YOU ARE NOT AN AI COMPANY ON THE FACE OF IT. HOW DIFFICULT WAS IT AND HOW DID YOU GO ABOUT IT? RASHA: IT WAS CERTAINLY -- IT IS A SIGNIFICANT HARDER ENVIRONMENT, A MORE CHALLENGED ENVIRONMENT IN A FEW YEARS AGO. THE ENTIRE PROCESS OF RAISING FUNDS IS MUCH MORE RIGOROUS. LUCKILY FOR US AT BRIM WE HAVE 10X'D OUR REVENUE. WE HAVE ALSO SIGNED THEM ALL SOME PARTNERSHIPS THAT ARE KEY IN FUELING THE GLOBAL EXPANSION. I REFER TO THE MASTERCARD
PARTNERSHIP WE ANNOUNCED IN DECEMBER OF 2023. MASTERCARD SELECTED BRIM TO BE THEIR CREDIT CARD PLATFORM AS A SERVICE STRATEGIC PARTNER TO HELP THEIR OWN CUSTOMERS BE COMPETITIVE, OFFER INNOVATIVE PRODUCT AND PAYMENT SOLUTIONS, AND BETTER SERVE THEIR OWN CUSTOMERS, WHETHER THEY BE CONSUMERS, SMALL BUSINESSES OR LARGE COMPANIES. ED: ONE WORD I DON'T THINK YOU HEARD YOU USE YET WHICH IS PROFIT. DID YOUR INVESTORS IN THIS
SERIES C ROUTE 1 TO SEE PROFIT? -- ROUND WANT TO SEE PROFIT? RASHA: IT'S A TESTAMENT FOR WHAT WE HAVE BEEN DOING FOR THE PAST THREE YEARS. THE MASSIVE GROWTH. VERY MUCH THE MARKET IS REACTING TO THAT. WE ARE THRILLED ABOUT IT. ON AI, AND ON THE FACE OF IT WE ARE NOT AN AI COMPANY OF COURSE. HOWEVER, AI UNDENIABLY IS BEING ROLLED OUT ACROSS THE BRIM PLATFORMS. COMBINING IT WITH OPEN BANKING CAPABILITIES THAT WE ARE ROLLING OUT IS GOING TO ENABLE OUR CLIENTS TO UNLOCK KEY NEW OPPORTUNITIES. CAROLINE: SEVEN INTERESTING YOUR
BACKGROUNDS. TWO DECADES IN THE CAPITAL MARKETS. YOU HAVE SEEN THE PROBLEM AND FIXED IT AND NOW YOU'RE LOOKING TO THE U.S. IS IT TALENT YOU NEED, MARKETING SPEND TO HIT THE AUDIENCE? 40 DEPLOY THE MONEY RAISED? -- WHERE DO YOU DEPLOY THE MONEY RAISED? RASHA: WE ARE FOCUSING ON THE HIRING.
OUR COMPANY IS HALF U.S., HALF CANADA MORE OR LESS FROM A STAFFING PERSPECTIVE. WE WILL DEFINITELY BE INCREASING OUR FOOTPRINT AS WELL AS FOLKS THAT ARE GOING TO BE JOINING BRIM THAT ALL U.S.-BASED. CURRENTLY WE HAVE OUR CEO IN MY -- CO IN MIAMI AND CFO WHEN THE BAY AREA AND THAT TREND CONTINUES. CAROLINE: RASHA KATABI, PRAY TO HAVE SOME TIME WITH YOU TODAY.
WE WILL BE JOINED BY JAMES REINHART ASSESSING THREAD UP'S STRENGTHENING OF AI. ED: I WILL CONTINUE KEEPING AN EYE ON WHAT'S HAPPENING IN TAIWAN. THE WORST SEISMIC EVENT EARTHQUAKE IN 25 YEARS. SADLY, NINE WERE KILLED. THESE ARE THE U.S. LISTED SHARES OF TSMC, THE BIGGEST CONTRACT CHIP MANUFACTURER IN THE WORLD.
THEY ARE NEAR SESSION HIGHS. UP 1.5%. IF YOU LOOK AT THE SELL SIDE REACTION, EVERYONE IS SANGUINE THAT THIS WILL NOT HAVE A BIG IMPACT. CITI CALLING THE SITUATION ON THE PLANTS MANAGEABLE. WE WILL CONTINUE TO TRACK THE LATEST THAT IS COMING OUT OF TAIWAN. THIS IS "BLOOMBERG TECHNOLOGY." ♪ CAROLINE: LET'S TALK ABOUT THE RESALE MARKET IF YOU ARE APPAREL. THE SECONDHAND APPAREL MARKET IS GROWING 11% ANNUALLY ON AVERAGE IN THE U.S.
THAT'S ACCORDING TO THREADUP'S LATEST REPORT. THAT WILL REACH $73 BILLION BY 2028. LET'S GET TO THE PERSON BEHIND THIS REPORT, JAMES REINHART. WE HAVE SEEN MANY WAYS PEOPLE WANT ENVIRONMENTAL REASONS OR FINANCIAL REASONS TO BASICALLY BE MORE THRIFTY, RIGHT? JAMES: ABSOLUTELY THAT IS THE TREND THESE DAYS.
PEOPLE ARE LOOKING FOR VALUE AND TO BE UNIQUE. THAT IS WHERE RESALE REALLY HITS THE BID. ED: THE MARKETPLACE. TECHNOLOGY MUST BE INVOLVED TO ASSIGN A VALUE TO ANY SPECIFIC GARMENT AS MUCH AS THE PARTICIPATION OF THE SELLER AND BUYER. EXPLAIN THE PROCESS TO US. JAMES:
THRIFTY SECONDHAND HAS BEEN AROUND A LONG TIME. EBAY, CRAIGSLIST REALLY INVENTED THIS MARKET OVER 30 YEARS AGO. WHAT HAS CHANGED IN THE LAST 10 YEARS IS COMPANIES LIKE THREADUP THAT HAVE COME ONTO THE SCENE AND BROUGHT TECHNOLOGY INTO THE FOREFRONT. WE RUN FOUR DISTRIBUTION CENTERS WHERE CONSUMERS SEND US THEIR GOODS THEY ARE NO LONGER WEARING. WE PROCESS THOSE GOODS.
WE PROCESS MORE THAN 100,000 UNIQUE ITEMS EVERY DAY. NEARLY 60,000 BRANDS IN THE SYSTEM. THE PROCESS PUTS THEM ONLINE FOR RESALE AND THEN WE ALLOW BUYERS TO SHOP LIKE THEY ARE SHOPPING ON AMAZON OR NORDSTROM. WE HAVE BUILT A CONSUMER EXPERIENCE THAT I THINK MEETS THE CONSUMER WHERE THEY ARE AND IS TECHNOLOGY DRIVEN. CAROLINE:
DEMOGRAPHICS, JAMES. I HAVE COME TO THREADUP FOR CHILDREN'S CLOTHES. YOU WANT TO BE ENSURING YOU ARE BEING ENVIRONMENT OF THE FROM THE END THRIFTY. WHO IS GENERALLY YOUR BUYER RIGHT NOW? JAMES: WHAT IS SO REMARKABLE ABOUT THE INDUSTRY IS YOUR EXPERIENCE IS A CLASSIC ONE. OUR ORIGINAL TAGLINE WAS
CLOTHES DON'T GROW, KIDS DO. WHETHER IT IS GEN Z OR MILLENNIALS, GEN X, BOOMERS, EVERYONE IS APPROACHING THRIFT IN A MORE MAINSTREAM WAY BECAUSE OF VALUE CERTAINLY IS SOMETHING THE CONSUMER CARES ABOUT TODAY. ONE OF THE THINGS THAT THRIFT PROVIDES FOR FOLKS NOBODY YOUR AGE IS THE ABILITY TO FIND SOMETHING THAT IS UNIQUE. IT IS NOT ON THE STORE AT YOUR FAVORITE HIGH STREET STORE. IT MIGHT BE FROM A FEW YEARS AGO. THE COMBINATION OF UNIQUENESS ON TOP OF VALUE IS SOMETHING THAT TRANSCENDS GENERATIONS. JUST BECAUSE WE GET OLDER DOES
NOT MEAN WE DON'T WANT TO FIND GREAT DEALS AND WANT TO BE UNIQUE EXPRESSION OF OURSELVES. THAT IS WHAT IS DRIVING IT. ED: YOU HAVE LET US THE COMPETITION. YOU MENTIONED THE HISTORY OF THRIFT, PARTICULARLY THE DIGITAL MARKETPLACE. CRAIGSLIST WAS MY FIRST INTRODUCTION TO THAT.
WHO IS NOW YOUR BIGGEST COMPETITION? DO THEY HAVE THE SOPHISTICATION OF LIVE DATA MARKETPLACE THAT YOU DO? JAMES: I THINK WHERE THE INDUSTRY HAS EVOLVED -- FIVE OR SIX OR SEVEN YEARS AGO YOU WOULD SIT AT A ROOM WITH PEOPLE AND SAY I USE THREADUP ARE ONE OF THE OTHER PEER TO PEER MARKETPLACES. WHAT IS FASCINATING IS THAT YOU ARE IN A CONVERSATION WITH HALF A DOZEN PEOPLE. EVERY SINGLE PERSON IS USING ONE OF THE THRIFT COMPANIES. I THINK IT IS A RISING TIDE
LIFTS ALL BOATS. GENERALLY SPEAKING, THRIFT AND RESALE AS A CATEGORY IS TAKING SHARE FROM MAINSTREAM HIGH STREET APPAREL BRANDS. THE DATA SHOWS THAT CONSUMERS ARE THRIFT INC. MORE AND MORE EACH YEAR.
-- THRIFTING MORE AND MORE EACH YEAR. WE PERSONALLY WORRY A LITTLE LESS ABOUT THE COMPETITION AND ULTIMATELY ABOUT THE SIZE OF THE OPPORTUNITY. I THINK THE OPPORTUNITY IS LARGE AND WE WILL TAKE OUR CHANCES ON THE FIELD. CAROLINE: WHEN IT COMES TO PREACHING TO THE NON-CONVERTED THERE HAS GOT TO BE INFLUENCERS. HOW ARE YOU MARKETING IN A DIGITALLY SAVVY MANNER? JAMES: WE WORK WITH A LOT OF INFLUENCERS. WE ARE IN THE AD MARKETS. WE DO A LOT OF DIRECT MAIL AND TV.
GENERALLY SPEAKING, THE FASTEST WAY THE RESALE BUSINESS HAS GROWN IS THROUGH WORD-OF-MOUTH AND THROUGH TASTE MAKERS AND INFLUENCERS TALKING ABOUT THE DE-STIGMATIZATION OF SECONDHAND. IT WASN'T COOL NECESSARILY TO SHOP SECONDHAND. I THINK THREADUP DESERVES A LOT OF CREDIT FOR CREATING MOMENTUM IN AN INDUSTRY WHERE NOW IT IS ONE OF THE COOLEST THINGS TO DO.
YOU TALK TO YOUNG PEOPLE AND CELEBRITIES, IT IS VINTAGE, UNIQUE, RESALE. ALL THE STIGMA HAS GONE AWAY AND THAT IS WHAT WILL DRIVE MOMENTUM IN THE CATEGORY IN THE NEXT 10 YEARS. CAROLINE: THREADUP CEO JAMES REINHART, PRAY TO HAVE YOU TALK US TO THE INDUSTRY AND THE WAY YOU'RE NAVIGATING IT. WE HAVE TO GO BACK TO WHAT IS GOING TO BE A BIG EVENT FOR THE TECHNOLOGY INVESTORS AND MEDIA INVESTORS COMING UP LATER IN THE SHOW, THE DISNEY SHAREHOLDER MEETING. ED: DIZZY SHARES ARE OFF .6%. STILL PROBABLY TREADING WATER AT THAT LEVEL.
BOB IGER HAS THE SUPPORT OF THE BIG INSTITUTIONALS, LACQUA ROCK -- BLACKROCK, VANGUARD. THE WILDCARD IS THE RETAIL GROUP. CAROLINE: ULTIMATELY, RETAIL INVESTORS TEND TO GO WITH THE BOARD IN PLACE. IF YOU HAVE BEEN A RETAIL
INVESTOR YOU HAVE BEEN BOMBARDED WITH A NUMBER OF ADS ASKING YOU TO DO THAT. AS WE WERE DISCUSSING, MAYBE TRIAN HAS KIND OF WON HERE. ED: THERE IS A WEBCAST. I WONDER IF IT IS THE MOST-WATCHED OF ALL TIME. CAROLINE: ORACLE OF OMAHA MIGHT HAVE SOMETHING TO SAY ABOUT THAT. THIS IS THE LATEST EDITION OF
"BLOOMBERG TECHNOLOGY." ED: THIS IS BLOOMBERG TECHNOLOGY.
2024-04-06 19:56
