Transcripts For BLOOMBERG Bloomberg 20240627 : vimarsana.com

BLOOMBERG Bloomberg June 27, 2024

We will discuss with david lee and just a bit. Im Katie Greifeld in new york. We have hovering near alltime highs. At the stock level, things are much more exciting. Take a look at the nasdaq 100 we have that bond market rally continue. About five basis points right now. It could change tomorrow when we have those pce numbers, but for right now, one stock we are watching is walgreens. It cut its profit forecast for the full year. Joining us now with more is fiona rutherford. This is the second time they have lowered their guidance. It shows how tough the landscape is right now. Less people going into retail pharmacies. Walgreens is having we think their footprint. It is brutal. At least taking a look, at least wall street does not have a lot of faith in the turnaround plan. I think that they feel that the plan is solid. An analyst from Bloomberg Intelligence said earlier today that the excitement around the new ceo has probably dissipated now. You can definitely see that in the share price right now. I know you have a very busy morning, so we appreciate you taking a moment for us. It joining us is rebecca patterson. Forming the bridgewater chief. 20 joining is the bridgewater chief. It feels like every day, we are talking about quiet moves in the market. How much legs left does this rally have . What happens to the highend consumer . There has been a big bifurcation when we know that consumption is key. The lower end is increasing on relying on credit cards. The higherend consumer has a greater share of wealth. They have more ability to spend and more confidence. As long as they keep ticking along, it will hold up stocks. If the highend consumer steps back, i think you have a greater risk that the slowdown will happen more quickly and the fed will ease. We will learn the support for earnings. Katie the lower and consumer is tapped out. Talk to me a little bit more about the fed. Potentially the first rate cut. Even with those expectations pushed out. It is the discount rates. I think the risk i think the risk is asymmetric. If the inflation tix higher again, than they have to raise rates and that is the last thing that they everyone to face. Still, Unemployment Rate is ticking up a little bit. It is something to watch. Still a large labor market. They need to be cautious about that. As long as the highend consumer measures up. Katie i am curious about your thoughts to cut inflation that they should cut rates. Think about the effect from cash. You can earn just about 5 . It has certainly made people feel a bit wealthier with what is going on with their money market funds. How much does that narrative hold water with you . I have so much respect for rick rieder. It is going to translate immediately into a wealth of fact. Pushing up prices, it helps us kill the inflation bud. Katie this is not often something that we talk about, but it has been weakening. What will stop it . It is really the dollar. The dollar is the global currency. If we get u. S. Growth moderating , the u. S. Is doing lots of business with japan but inflation can come down. If we get that beautiful scenario, the fed can start easing. Help and to get off the lows. They intervened at the end of april. The government is incredibly unpopular and they have to be careful of raising Interest Rates because of debt payments. The economy is still fragile. The only thing the government can do to show businesses and households that they are trying is to intervene. It sends a message but at the end of the day, it will give you a better level to sell yen. Katie it seems it would be easy to raise Interest Rates, but it is not an easy thing to do, if you are japan. We saw what happened in the u. K. When liz truss tried to increase spending. The are seeing that in france now. The first round this weekend. The filing parties in cutting taxes and increasing spending. Tonight with the debate, im sure we will get into debt and deficits. Debt to gdp is going to get over to 120 in the next decade. If we raise Interest Rates, Debt Service Payments take up more and more of the fiscal pie. There are less things for defense, research and Development People want those things. It limits you. Katie we appreciate you stopping by. We do want to bring you some breaking news from the Supreme Court rejecting purdues opioid pack. It leaves the family exposed to more lawsuits. The bankrupt drugmaker purdue pharma. We will keep an eye on any headlines. Lets take a look at what is moving beyond the markets. Looking at levi strauss shares. Nassau that stock is falling. First estimates of about 1. 5 billion. They reaffirmed their year forecast. They still seeing that revenue up 1 to 3 . Overwhelming, nonetheless. Although levis growth looks ok, wall street was expecting more, given the current popularity of denim. I did not know it ever went out of style. Levis was up when the sale shrunk. Most on record. Katie it was popular before. But tell me about blackberry, another blast from the past. Most people knew it from before everyone had phones. It has now transferred into a Software Company out of canada. The stock is up by more than 14 . The revenue was at 144 million. It was versus estimates of 135 million. Blackberry had a solid start to the new financial year. We also saw an upgrade to perform outperform from neutral. Overall, a turnaround story on this blast from the past. It is incredible how high the expectations are for so many of these chip stocks. We see the stock moving down so much. As much as 6 after the Sales Forecast fell short. Adjusted revenue. The estimate was about seven point 6 billion. The guidance came in above average aniline analyst estimate. The bar is still high. We are seeing a weakness. Just off the back. The earnings and the outlook both beat expectations. Clearly elevated. They have a more optimistic tone. The upturned thesis remains intact. Katie we appreciate that roundup. We want to get to more breaking news from the Supreme Court. It is curvy curbing the use of inhouse judges in fraud cases. This is for some defendants. Joining us with more is kailey leinz. This certainly seems like a blow to the sec. Now that power is going to be pulled back. The Supreme Court has decided that those defendants have a right to a jury trial rather than being tried by inhouse judges. This will very much change the way in which the sec conducts force in and cases. We reached the end of the term here and not only does it affect the power to deal a blow in that case, but we are awaiting a verdict on the chevron doctrine. It gives agency to the likes of the epa. If they pull that back, it would restrict the ability of the agencies to do so. We are awaiting that decision, but it is not the only one. The Supreme Court has rejected what was in control of purdue pharma. They said they would give up control of the company to pay a fine. Finding that it improperly we still have about 10. Yet to be released final opinion. A lot of news from the high court in washington today. Katie a lot of news and a lot more to come. Coming up, a packaged deal. A deal to become pressure. We will be speaking to howard coker, next. This is bloomberg. Relax into a caribbean state of mind. Visit sandals. Com or call 1800 sandals. Katie the industrial and consumer package announced it will i the kingmaker for nearly 4 billion. Joining us on the news, howard coker. He is the president and ceo. Lets talk about the logic of this deal. Howard sunoco is not a household name, but we exist in almost every household in america. 7 billion of turnover. We are we have very big plans. One is the paper plant business. We did in acquisition about three years ago with our position. We are the largest producer. The acquisition in food and aerosol space. It has gone extremely well. Most importantly, the Market Reaction has been fantastic in terms of customers. With that background, the opportunity came to us. It was a perfect fit. Every way we look at things from a culture and technology perspective. Layer onto that the financial opportunities. The largest producer of steel and containers. Katie taking that position is the biggest maker of paper cans. I do want to talk about the mixed reaction from wall street. Seems to be a lot more than what they paid. Why that premium . Howard the premium is that they did a fantastic job. The capital invested into the business. The valuation of three years ago versus today is an extremely fair valuation. Look at the synergy opportunity. We are in the sometimes multiple range. The bulk in the first year and second year of ownership. What is not captured is the commercial opportunities. Hard to put a value on that. With the reception we received, there is a strategic and extremely interested, leaning into this business that has a reputation of partnerships and taking care of customers. Those are not quantified. It is the real upside to this as we go forward. Katie some of those pulling into the valuation. What are your plans to avoid a downgrade there . Howard we have a clear path to deleveraging over the course of the next two years. Starting with the fact that we have pretty highvalue assets that are very clear that we intend to sell some businesses. They just are not a good fit for us strategically. Katie you are coming forward with this acquisition. There is a flurry of dealmaking. And of course, International Paper itself drying of takeover interest. What is going on in the Packaging Industry right now . Howard i focus on what is important to our team and investors. We look at this market and we will have the largest position. It will carry tremendous opportunities in terms of how we are able to take advantage of this large market. Yes. A lot going on in this space, but we are focused on sunoco and our team members and seeing this through as an acquisition. Katie we appreciate your time today. Time for social climbers, a look at the social stocks making waves. First up, reporting a 6 slump. Blaming bad weather that kept shoppers at home. Changes are underfoot at the house of mouse. Visitors at disney world will be able to reserve a space for shorter lines up to seven days in advance. Many waking up at the crack of dawn. Some disney fans not loving the changes, calling the new system confusing and exclusionary. It is three times the size of the lounge. The delta one lounge features spot treatments and soundproofed work pods. Access to the clubs exclusive. We do want to bring you more breaking news. Allowing emergency abortions in idaho for now. We had a preview of this the other day. It was posted on the website. Now we have confirmation that the Supreme Court formalizes the ruling when it comes to emergency abortions in idaho. Lets take a look at these markets right now. We have been talking about how quiet it is. Currently higher by about. 1 . A little more action when it comes to the nasdaq 100. Higher by. 3 . That rally continuing with yields lower. We are below 430. Coming up, the largest web comic platform. It will be speaking to david lee, next. This is bloomberg. Feel more confident with stock ratings from j. P. Morgan analysts in the chase app. When youve got a decision to make. The answer is j. P. Morgan wealth management. Gotcha. Take that. Whoa bruh im fine. That smack looked bad. Not compared to the smack down im giving you. You sure youre, ok . You know youre down 200 points, right . Lucky, she convinced me to get help. I had a concussion that couldve been game over. In actual reality, youve only got one life. Dont mess with your melon. If you hit it, get it checked. Katie it is one of the years highest profile ipos. Webtoon debuting on the nasdaq today. Shares are indicated open it 23. 25, about the ipo price of 21 per share. Lets talk about this with david lee, the coo and cfo. We will get into the fundamentals of the business but lets talk about this ipo raising 315 million. What will you use the money for . David already we see Global Consumers love the stories we generate from the 24 million creatures globally. We will speed up and deepen the tools we give any creator to be a global hit. Many of the stories you have come to see on amazon prime or netflix is powered by our platform. You will see is continue to delight more and more consumers in the United States and the rest of the world and invest behind are created using technology as well as data to inform what stories they bring to us. Katie im curious to talk to recent ipos. We have not seen a lot of them. Theres been a dearth of ipos. Im wondering why now for this u. S. Listing . David power global flywheel took 20 years to create. If you look at the last quarter results, we are growing on a Constant Currency basis 14 . We are driving profitability. The business is poised to really grow in leaps and bounds and creatively and globally. Many folks here in the u. S. Love our content but they dont know we are the ones behind it. For us it is not just about capital formation. Its about playing at the global stage and being backed by the best investors so we can operate globally. Katie you can see some the content on the screen now. It might not be familiar to our audience when we talk about webtoons. It feels like m a and anime and manga have become popular and high engagement in the u. S. What specifically are we talking about when we talk about webtoon s . David 75 of consumers in north america are below the age of 25. They are the venerated gen z. Imagine a digital universe with every genre and a few genres are 24 million creators that crated ourselves. From this weekly flow of fresh stories we use data and ai to know which ones can resonate. Instead of having to use our judgment on what the world wants to see, we use the world to create content are creators are excited to have consumers explore. It is a great genre. We have countless other genres that update every week. In some ways i think of a web comic not as a digital form of a comic but as a digital storyboard. Something powered 100 rich film adaptations. The current number one hit on netflix will bleed today all powered number one globally today is all powered. Katie im glad you brought a creators. When it comes to the content and the content creators on your platform, how do you keep them there . David we have a very unique Business Model. We can see before anyone. We have 170 million users strong base across every major language that we offer. We can give a creator the ability to see they are ahead while they are a fulltime professional. A kindergarten teacher, a Graphic Designer who does not realize on our platform they have stories the world wants to see. When they have that story we share with them as a fundamental part of the Business Model all of the future revenue they can have as a publisher of their own story. We have given 2. 8 billion over the last six years to creators. They know we are aligned and the number one way for them to go from being an amateur to having a global voice. Katie it is not just network effects. They actually get some compensation in some form as well. Im curious what the pitch to Institutional Investors is. If you look at your filings with the sec, you have blackrock purchasing up to 50 million worth of shares. When it comes to investors outside of blackrock how do you ask planus to them . Explain this to them . David for 30 years i worked in public tech companies. I struggled with the idea talking to investors how to justify being a hit driven business. How to explain a human judgment by one of us on a Management Team knows what this been hundreds of millions of dollars on a future hit. Instead when i talked institutions they love that data and ai and empowering a global base of creators anyone with a wifi connection on our platform can be the next hit. That source of evergreen content, many of us believe it is what the world needs. What the Media Entertainment is looking for is a novel approach the storytelling and one that he think investors are interested in exploring and supporting with us. Katie i want to talk a little about the path of profitability. You have a net loss of 145 million last year on revenue. 1. 3 billion. When will you be profitable . David if you look at our Class Quarter last quarter, we posted positive data. Positive gap profit. We grew 14 on a Constant Currency basis. We have the most interesting and creative large Global Markets to continue to grow into. Our growth is accelerating here in north america. Places like japan and europe. For us to continue to drive positive cash flow, which we intend to every quarter going forward, its about executing in the largest market which is i think why large Institutional Investors are beginning to recognize the future growth is accretive with us. It starts with our ipo today for katie congratulations on that listing. We hope to speak to you again soon. That is david lee of webtoon. Lets check on the markets. We will do that with abigail doolittle. Abigail we are looking at a small gain for the s p 500 at this point before in the premarket a small loss. Investors making up their minds. Over the last several days, three down days and two up days. This will be an even split. The vix, the complacency really is strongly here at a 12 handle. What is interesting, in october and november the futures go sharply higher ahead of the election. Some investors gauging for the on ce the uncertainty. Another measure ahead of the election using tonights president ial debate as a proxy. Take a look at bonds. They are higher. Overall treasure etf index over the last two months higher, suggesting a little bit of a haven. There are other factors that could be applied. If we go into the movers, lots going on beneath that benign surface. Coinbase of 3. 4 . Thats helped a by Bitcoin Trading higher. Amazon up 1 . The company yesterday moving above a 2 trillion market cap. Micron, not so much. Down 5. 7 . They put up a great quarter but their fiscal fourthquarter guidance, the midpoint hits but some analysts are above the high end of their range. Given the fact t

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