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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Weekdaily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Stenebeck on Bloomberg Radio.
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Speaker 2: While the most watched sports showdown on Earth, we're talking about not the next game, but we'll get to that. We're talking about the FIFA World Cup, starting today in Mexico City. This year's games hosted in three countries. You know that US, Mexico, and Canada, across sixteen cities, forty eight teams competing. Tim Nut's the most ever.
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Speaker 3: It comes as the event is being overshadowed by political tensions, conflicts between the US and Iran, driving a fuel prices, creating economic strain for fans. We've got a great duo joining us that knows a thing or two when it comes to the business of sports.
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Speaker 2: They know everything about sports with us is Redel Williams. He's Bloomberg New senior reporter. He's right here in our new York studio Vanessa Perdomo magleone. She's a Bloomberg New Sports business reporter as well in the Bloomberg News Princeton bureau out there.
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Speaker 4: Hello.
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Speaker 5: Hello, both by the way, co hosts.
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Speaker 2: Of the Business of Sports podcast, which if you're not listening to, shame on you download it because it's really good.
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Speaker 3: Thanks.
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Speaker 5: All right, you're welcome, Randall. I'm going to start with you.
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Speaker 2: You're right here in studio, tell us about this is a big deal, and we've been talking about it.
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Speaker 5: I feel like forever it's getting underway.
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Speaker 6: It has been a large conversation for many months and years, and now we're finally here. We are as it sits right now, eighteen minutes away from not tip off, but kickoff. I was tip off is yesterday. But it's tremendous. I think that things will really come into effect. We'll feel it on Saturday when on Saturday when the matches really begin and there's a match at MetLife and I think the Team USA plays on Friday, right, Vanessa.
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Speaker 3: Do I have that right?
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Speaker 2: Yeah?
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Speaker 7: Oh, they play Friday in Sofi Stadium in La so when.
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Speaker 6: Team USA plays, I expect a large crowd. I expect the excitement to kick up.
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Speaker 3: But Vanessa, how good is Team USA? I mean, help set expectations here. I mean, this is the thing, you know, soccer. It's globally, it's huge here in the US, it is growing, it is big. But we're not even close to the best.
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Speaker 7: We're definitely not close to the best him, that's definitely correct. But we are better than I think people might think that we are. You know, I think that the US is going to do well. I think they're going to definitely get out of their group. They might have the potential to win the group. And I think if they really you know, I was talking to Alexei Lalls recently and he played in the nineteen ninety four World Cup, and he really was iterating to me that how important a home World Cup really is. And the US aren't expected to go very far, but I think if they're able to really capture the audience is the way that we've seen, you know, in past World Cups, I think that it might be able to do something special and get to the quarterfinals or something like that, or some further further than we've ever seen before. I think they can capture the magic. That's really what's important. They have to feel it.
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Speaker 2: I gotta say, I want to talk more about the games itself and who's playing all that, but the cost of the World Cup, like all the things like transportation.
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Speaker 3: In nineteen ninety four, it was only twenty five or sixty five bucks a ticket.
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Speaker 6: Now that's not even going to get you onto the New Jersey transit.
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Speaker 8: To get all I know combined.
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Speaker 2: By the way, I got to say that Dan hunt Cohene or president of the Dallas Football Club, he waited on FIFA World Cup ticketing prices.
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Speaker 5: Just listen up, guys.
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Speaker 9: The rollout is a little bit non traditional how we would do it in American sports. But FIFA has their way of doing it, and they've gotten some criticism over the prices, and they went back and repriced some cheaper tickets.
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Speaker 3: And what I would say, you.
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Speaker 9: Know, is there's a market demand for this, and the revenue they generate from the World Cup supports occer globally. Their initiatives from grassroots to growing the men's game, growing the women's game, all the money associated with prize money, player money to clubs, and just in developing nations and helping the game along. And this is really their pinnacle you know, tent pole moment that they have every four years, and so I know there's a it's a delicate balance, right. You want it affordable for fans because fans make the game, but you also need to be able to have, you know, the money to help support the game for the next four years.
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Speaker 2: I got to say, you could hear that in so many different marketplaces. That's Dan Hunt Cohener and president of Dallas Football Club, Vanessa.
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Speaker 5: Let me just get you to weigh in on that.
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Speaker 10: Is he right?
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Speaker 2: Like this supports a lot of stuff out there.
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Speaker 5: Doesn't have to be so expensively, no.
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Speaker 7: I mean, it doesn't have to be so expensive. It really doesn't. And obviously it hasn't been so expensive in the past World Cups. I mean, yes, nineteen ninety four was a very different time, so we can't really note to those ticket prices. But just even in twenty twenty two, ticket prices were you know, six to seven times cheaper than this or ticket prices now for group sage matches that we weren't even seeing for last for twenty twenty two is final, you know, so it doesn't have to be this way, but people wanted to take advantage of the US ticket market. That's exactly what you know. Me and Rydell have been having these conversations. That's what they say. They knew resale was going to be a problem and they wanted to get in on the game as well.
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Speaker 3: Is reseale randall a problem right now? I mean I've talked to friends who are going. A friend, like I've said before, he's went a five games Seattle, New York, LA, and he has money.
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Speaker 8: He is.
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Speaker 3: He told me in nineteen ninety four I was seven years old, I couldn't go to any games. I vowed then, and he's literally been saving out for years. He says the LA game is much cheaper because they didn't they didn't price it right.
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Speaker 6: Well, I think in terms of what is the right price for these things is if you think of what is the normal first sport the kids play, it is soccer because it is so cheap. However, think about the kids who, let's say are pre k to high school. They're going to be relying on their parents. So if it costs you eight hundred dollars for family of four one individual ticket each, that's thirty two hundred dollars. How many families of four are going to be able to pay that. And this isn't This isn't just group stage, This isn't just quarterfinals. These are group stage matches. These are matches that feature countries that we might not know or might not know players who are playing for them. Now, just imagine what it's going to cost to see Lionel Messi play.
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Speaker 5: So are the tickets selling They are.
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Speaker 6: But it remains to be seen what the audience looks like in these stadiums. There are tickets that are being sold in all these places, and the prices are slowly but surely coming down. And there's a possibility that, you know, shortly before I match, FIFA could slash the prices and then people flock to the stadiums. That's also something that could happen. But you're talking about FIFA, which is projected to net over ten billion dollars in revenue. That's a lot of money over the course of like less than sixty days. However, at what cost?
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Speaker 5: I have to say.
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Speaker 2: The Bloomberg Business Week Daily team has its own soccer expert. It is known as Sebastian Escobar, and he say, Club World Cup last year had many empty seats.
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Speaker 3: Community.
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Speaker 2: Yeah, hey, we're gonna switch gears. We got to talk about the next game last night, if we can. We are all in soccer, but we got to talk about it. Vanessa, come on in man, what a game. If you went to sleep early, you might have missed and not would have been surprised by the outcome.
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Speaker 5: I don't know how you thinking about where we go from here.
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Speaker 6: She's about to do.
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Speaker 7: First of all, if you you went to sleep early last name, you missed history. You missed history. Last night it was the biggest comeback, you know, in an NBA playoff history. It was absolutely incredible. You know, I was watching from a scene from a bar in Queens. It was electric at the end, you know, it was unbelievable. So I think from here the series is over. Randall, you were in the building.
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Speaker 3: You were there, Randall, I was.
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Speaker 1: I was.
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Speaker 6: That was the loudest arena that I've ever been in.
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Speaker 10: By far.
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Speaker 6: It was the concourse was shaking. I mean, Mike Brain said it on the broadcast, this building is shaking. No, it was legitimately shaking. And they and I mean, you have to think a tremendous comeback, because I believe it was seventy six to forty nine at halftime. Yeah, and at that point the Spurs scored thirty points the rest of the game a tremendous defensive effort. And I think in this aspect, I'm joking with Vanessa, but she's probably right. When you give up a twenty nine point lead and then you have to go home and play a team that you haven't beat in your own house, it's kind of over great.
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Speaker 7: One point lead is like, I mean, that is the most sole crushing thing ever.
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Speaker 3: Maybe if you're not a New Yorker.
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Speaker 5: Exactly right, exactly, you guys are amazing.
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Speaker 2: They're the co hosts of the Business of Sports podcast Randall Williams and Vanessa Potomo Perdomo Maglio and both Bloomberg News senior reporter.
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Speaker 3: And stay with us more from Bloomberg Business Week Daily coming up after this.
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Speaker 1: You're listening to the Bloomberg Business Week Daily podcast. Catch us live weekday afternoons from two to five e's during Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us Live on YouTube.
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Speaker 3: The headlines were SpaceX, they just keep crossing. We just heard just an update SpaceX filing a free writing perspectives. It lists price to public as one hundred and thirty five dollars a share, shares offered five hundred and fifty five point five to six million, not a surprise if you've been paying attention those numbers. That is also the company's poised to make history with the biggest ever IPO, launching it into the top ranks the largest public companies, putting founder Elon Musk on the verge carol of becoming the world's first trillionaire.
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Speaker 5: It will trade on Nasdaq and Nasdaq Tech Texas. In case you were wondering, yes, you weren't sure.
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Speaker 2: I mean, we're getting all of these details. We want to get into it. There's a lot going on because there's so many different moving parts. We have so many bankers involved, twenty three firms putting the finishing touches on. They expected seventy five billion dollar IPO and again getting ready for this to kick off tomorrow.
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Speaker 3: We got ad Love though with us. He's the co host of Bloomberg Tech Bailey Lipscholtz too, he's Bloomberg News IPO reporter. They both join us here in the Bloomberg Interactive Brokers studio. You guys have both covered a lot of IPOs. Bailey, I want to start with you, is it is it fair to say demand for SpaceX is out of this world?
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Speaker 4: Out of this world? But is it better than Sarah Bros. Was a stock that is near to your heart? No, but not by definition as it relates to the actual sheer account available. But but ed it's one of those funny things where you go, Okay, it's more than four times over subscribe, but then you do the back of the envelope math and say.
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Speaker 11: Well, that's a lot of orders.
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Speaker 4: So in terms of sheer net demand, yes, But in terms of like over subscribe books, we've seen a number of deals like twenty thirty forty five times over subscribing.
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Speaker 3: That's normal. So what's so what's the signal here that this is sending us?
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Speaker 8: I mean people by buy into the story that you know the thing about the also, Bailey like, let's just be sort of boring and old fashioned about this for a minute. There's a lot that's unknown, the allocations on set, right. We put a lot of reporting into all of these big institutions placing orders and the billions of dollars it's great to place an order, doesn't mean you'll get it that gets decided in real time right now. And you know, I think what, without speaking on his behalf, what are reporting as a newsroom shows is that Elon Musk and the rest of space X management have been very in control of this process, dictating the terms literally, but also who's going to get access in the end the retail portion. Again, when it gets settled on a percentage basis or a dollar basis, there will be loads of people around the world that will be very disappointed. So that actually it's academic what happens tomorrow when it starts trading.
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Speaker 2: You know, Okay, there's the excitement around the IPO, and it's hard not to the largest ideade.
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Speaker 8: Whoever, I'm stalling, by the way, because he's trying to send messages to sources.
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Speaker 2: Okay, yeah, okay, but I guess what. Okay, so I'm going to start with you. I mean, there's the excitement over the IPO. Yay, we're going to get the first day of trading.
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Speaker 5: I get it. I get the importance of it.
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Speaker 2: But then there's the actual business. I mean, this is not a profitable business.
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Speaker 8: It's not. But you know, what's been very interesting in the last week let's say, speaking to a lot of existing investors and people that will participate in this IPO, they're actually probably even more bullish on the nearer term opportunity than SpaceX is set out in the prospectus. So, actually the idea of orbital data centers, these are data centers in the form of satellite going into deployment and then generating revenues. Actually, you know a lot of people I've spoken to very seriously believe that is more imminent than SpaceX has said it is. They've said as early as twenty twenty eight.
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Speaker 3: And Brett Wynton you had them on, Yeah, I mean from inverse.
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Speaker 8: Ark investors, very bullish said.
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Speaker 3: Anything three hundred billion dollar.
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Speaker 8: Yeah, So let me explain as sixty years I can his thesis.
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Speaker 3: Yeah.
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Speaker 2: Ark and Kathy Wood you know, I know some people find her controversial and there's people who, you know, buy what she says and there are others who don't. But having said that, she was with you on from the get go when everyone didn't. Was it really impressed with what he was doing at Tesla. And it did take a full you know, several years, and he didn't hit all his deadlines.
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Speaker 5: But here you are so.
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Speaker 8: You always start with Elon Musk often misses the timelines that he himself sets out, but gets there in the end. This is a question about valuation, right, so this stock will trade at one hundred times or ninety times current revenues and forward twelve month revenues as best we can calculate them. What Brett Winton and ARC's argument is is that, well, actually, we have a lot of data available to us about starlink, that is the business of internet and director sell based on satellites. We know the cost of those satellites, we know how many of them there are, we know the dollar basis it takes to put them there. And all he's doing is extrapolating out to the data center business and saying, I actually can model for how quickly they can book revenues on it with the big if they get starship their big rocket to work simples.
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Speaker 3: Okay, Bailey's been on the Bloomberg terminal.
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Speaker 11: App on the phone because Ed gets the computer.
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Speaker 3: Okay for people, Sorry, what what do you we're talking about? I'm just looking Aline reports the pricing of the IPO. Formally it won thirty five, so not a surprise though, no, not a surprise at all. Again, Elon kind of called a shot in terms of this being a seventy five billion dollar fundraise, this being a deal that comes to one hundred and thirty five dollars each.
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Speaker 4: But it's official according to what we're reporting on the terminal right now. And the reason that matters is now, to Ed's point, everyone on the buy side is going to figure out tonight early tomorrow morning what their allocation was, and they're going to have to think through what they want to do tomorrow.
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Speaker 3: Well tomorrow. You know, typically when when a company goes public and has its first day of trading, there's this price discovery moment. We don't know exactly what time shares will start trading. Do we expect that to happen tomorrow?
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Speaker 9: Bailey?
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Speaker 3: Is it? Sometimes price discovery can take a really long time.
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Speaker 11: It can take a really long time.
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Speaker 4: I mean, we'll go typical normally in the ten o'clock hour, we'll start getting indications from Nasdaq. The biggest thing to keep in mind, indications mean everything and nothing. No one is trading share soon. Remember that you can see an indication though that says seven hundred dollars one thousand dollars it means absolutely nothing. What matters is when we get closer to that call it one o'clock two o'clock window, when we get closer to the first trade that Morgan Stanley is going to execute, what does that look like? Because first trade actually does matter because someone bought and sold.
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Speaker 3: In that moment.
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Speaker 8: Sorry I'm typing, but I am listening.
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Speaker 2: No, no, no, no, it's just you know, listen again, this is aprilagat.
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Speaker 3: Who's buying, who's who can buy it, who can actually sell?
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Speaker 8: So I think what's going to be more interesting, right, is the retail allocation wherever it ends up. You know again, there will be lots of individuals around the world super disappointed. So the indication doesn't matter. It's it's largely a sentiment indicator, and it's based on humans talking to one another. But when the trade happens, you know what we heard on television most television stay but also on the phone, is okay, we open and it goes higher. Right, But even if it starts trading at one pm Eastern and there's three hours left in the session, it will be the first opportunity for a lot of people to buy at that start of trade, and they will want to try and this this life changing amounts of gains, right, so they'll want to sell it if it went to two hundred to two.
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Speaker 5: This is hypothetical, so the volume could be crazy tomorrow.
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Speaker 8: Yeah, I don't know the answer. Who's yeah?
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Speaker 4: I mean no, it's everyone's open market, but it's only people on the IPL. So there's seventy five billion dollars afloat is what trades tomorrow.
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Speaker 11: There's there's no insider, there's no.
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Speaker 3: Long term employee. Everything. Do we have details on the locker?
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Speaker 11: Lockup starts after second quarter earnings quarter ends in.
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Speaker 8: June, and it's even more severe on Elon's own shares, not that he you know, he it's academic because.
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Speaker 3: He'll just take out loans against his correct.
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Speaker 8: But also his economic ownership of the company is not the story here. It's his voting power in the company. And so you know, these are hypotheticals. The main point being that the thesis as presented by SpaceX management, or at least in our reporting and the existing shareholders, is the reason they'll do a larger shareholders allocation to retail investors is they believe that those retail investors believe the story well, it's.
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Speaker 4: Partly that, and it's also again going back to the reason that it is so fun, we're just hit holding off.
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Speaker 3: I tell you a story just crossed the Sorry sorry, sorry sorry. I had three point thirty one written by Bailey Lipschaltz and he's been sitting right here, So I don't know how to happen. But that's the that's the story. SpaceX's IPO raises seventy five billion dollars in biggest debut of altimate.
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Speaker 4: But the thing is, thirty to forty percent of Tesla is owned by individual investors writ large exactly selling even in the IPO, twenty five percent to retail is a small fraction when you think about what is going to be unlocked in the next year. So the big question in a lot of things investors are debating is how does retail ramp up buying to own thirty percent of a one point seven two trillion dollar company, Because thirty percent of seventy five billion is a big number, but it's still only twenty two billion dollars. That's trades like water Nvidio from a retail perspective.
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Speaker 8: Yeah, there's one interesting dynamic which I think tomorrow is going to be very interesting. So look at chairs of Tesla tomorrow, okay, And the reason being is that if you're a retail investor that did not get an allocation.
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Speaker 11: That's how you get into it.
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Speaker 8: What choice do you face if your entire net wealth is tied up in Tesla shares that you've held because you believe in the story long term, what do you do? Do you sell to give yourself some money to do that or going into this did you sell to Well?
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Speaker 4: The big thing though, is for a number of just to clarify on some points, each platform, each ebroker is different.
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Speaker 11: So some brokers, when you put it in an.
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Speaker 4: Order, hypothetically for one hundred thousand dollars of SpaceX shares, you either have to have that liquid or have assets pledges collateral. So it's not necessarily like we're going to see in real time tomorrow people selling to turn around and buy per se.
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Speaker 2: It's just kind of wild, right, And if you believe that these two companies are all going to end up being one at some point, like yeah, that's all again with.
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Speaker 3: Continue tomorrow with our special covery.
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Speaker 5: This is just the beginning.
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Speaker 2: The guys will be here, all right, That is Ed Lovelow, Bloomberg Tech co host Bally Lipshaltz, Bloomberg News IPO reporter.
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Speaker 3: Stay with us. More from Bloomberg Business Week Daily coming up after this.
00:19:23
Speaker 1: You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five eas during this listen on Applecarplay and Android Atto with the Bloomberg Business app, or watch us live on YouTube.
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Speaker 5: Well, the European scent Central Bank.
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Speaker 2: Speaking of things going on, the ECB raising interest rates for the first time in almost three years. We've got the FOMC meeting next week with Kevin Warsh cheering for the first time. Meantime, ECB President Christine Laguard warning inflation triggered by the Iran War is windening beyond just energy. Keep in mind you're definitely feeling the pain of two wars as the as the Rush of Ukraine wars now more than four years old in counting, and of course you have the US war in Iran. Even so, Europe seems to be shaking itself.
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Speaker 3: Awaits, the global order disintegrates, and China dives deeper into Europe's traditional markets. EU leaders say the block needs bigger and everything to protect itself. Bigger banks, bigger tech firms, bigger defense contractors, bigger investments. At of next week's G seven Leader sum at Bloomberg has been speaking to policymakers and investors about Europe's path ahead, as new Bloomberg Economics analysis underlines what major changes needed and yet, can the block Carol really evolve?
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Speaker 5: Yeah, it's a big question.
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Speaker 2: Our Brussels radio anchor Stephen Carroll, bureau chiefs to Zan Lynch and editor Corey Bennett have been speaking to figures at the heart of Europe's political and financial decision making, and Steven joins us right now. He's co host at Bloomberg Daybreak Europe, joining us from the Bloomberg News Brussels bureau. He's also host of the Here's Why podcast. Stephen, So good to have you here with Tim and myself. First of all, tell us about this mission that you and our Bloomberg colleagues have been on and the question specifically that you were trying to answer.
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Speaker 10: The question we're trying to answer is is whether Europe's actually finally going to do something about its economic decline. The warnings have been around for years when we've got big report from Mario Dragy nearly two years old now, saying that it was existential for Europe, that it made major reforms, integrated its markets more, ramped up investment massively to one point two trillion euros a year. And the sense that we've been getting from our reporters around the continent is there was a sense of a shift towards progress on this finally, and that perhaps we were moving because of the pressures that were coming on the EU from the United States. We know obviously the Trump administration has been particularly unfriendly to the European Union, but also the rising competition from China, questions around access to markets, putting pressure on manufacturers here, that perhaps things were starting to change, and we went looking for where those changes might come. Actually, although I know you'll think I'm crazy if I start talking about small details in European policy changes, there are signs out there, and they are small but significant, that things are really changing.
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Speaker 3: Now, what are some of those signs that things are changing? Is it more than just Europe doing more of its own defense spending?
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Speaker 5: Is it?
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Speaker 3: What is it?
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Speaker 10: Defense spending is a key one and an initially example for a model that could be used in other areas in the sorts of things that Mario Dragi wanted the opinion to spend more money on. But I will point to merger rules. This is an area the EU has had a huge influence globally over reviewing mergers anti trust law, and the EU said a couple of months ago they were going to start revising those merger rules, and we're already seeing signs of businesses taking notice of this, deals that in the past you thought might be flagged by regulators. We had a big telecoms announcement in France in the past week. We had a big banking merger announcement in Italy in the past week as well. And these are the sorts of deals that from a big picture point of view, you want bigger companies, more cross border investment, bigger banks in particular to help for financing across the continent. These are the sorts of deals that could have been a concern to regulators in the past, but it seems that executives have decided it's worth going ahead because they are sensing a changing attitude. The other issue, and it's something that we've covered for a very long time here at Bloomberg is questions around deeper capital markets in Europe, trying to encourage more of that cross border investment. Six europe six biggest economies have now said they're going to go ahead with this plan, even if they can't get an agreement at a twenty seven level. That's significant too, because it's considered now to perhaps be a model as to how things get done in this moment. Is look, you get a big group of countries together, they go ahead. The others can join if they want, but crucially you will start to provide those deeper markets that will hopefully stimulate investment and help to turn around the economic fortunes as well.
00:23:52
Speaker 2: You know, Stephen to be fair, right and at play as the EU figures its way forward and its position in the world. President Trump up ended so many longstanding global relationships. Some say that was long over do Others say, big mistake. These have been longtime allies and it impacts not just geopolitics, but it impacts business when it comes to the EU and the US relationship.
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Speaker 5: You had a perfect voice to talk with.
00:24:16
Speaker 2: Tell us about your conversation and check in with the former EU Commissioner for Competition.
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Speaker 10: Margaret Vestar is one of the U policymakers who's really been at the forefront of some of the most controversial ends of EU policy, competition now being one. She was also part of developing the new Digital rule Book, which we know the Trump administration doesn't like either. She was in one of the top positions at the EU Commission until twenty twenty four, and I asked her about this question as to whether actually, maybe Donald Trump had done the EU a favor by ofbending this relationship and spurring them into action. Let's take a listen to what she had to say.
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Speaker 12: I wouldn't express it that way because you know, I'm really sad about some of the very very negative effects of the Trump presidency, take the of USAID, the risk of offsetting a new AIDS epidemic, So I think one cannot see it like that. That being said, I think it was about time for Europe to realize we need to do better ourselves. The European social contract is at stake here because many people feel that that social contract is not being upheld.
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Speaker 10: That's Margaret Star, formerly of the European Commission, really putting in perspective the influence that the degradation of the transatlantic relationship has had and how that has spurred it appears European leaders into more action on this front, realizing that they have to rely on themselves more because they can't rely on one of their most important traditional partners. And she actually pointed to Donald Trump's comments around wanting to annex Greenland earlier this year is being a moment that really seemed to spur a change in attitude in a sense that actually, now Europe needs to tackle some of these long running under lying problems to be able to provide better protection for the social model, the wealthy influence that it's built up over time.
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Speaker 11: Now, I don't want to get.
00:26:08
Speaker 10: You too excited about this, because things happen slowly in Europe. At a European Union level. We're in the middle of the discussions on the next European budget, for example. That could be another area where there could be big changes. The ambitions that we've had an update on today don't look hugely different, so that might not be the level of excitement that we want. But the conversations are happening and there is a sense that we're moving towards something that will result in more European integration. And more as a result European's influence on the world. Bloomberg Economics was looking at the potential consequences of this as well. They say the path is going to be divergent even further. The European Union will fall further behind the US economically if there isn't big changes made, but if there are, that will arrest first of all the decline and actually could see the two economies converge as well. None of that, of course, mentioning AI, which could change everything.
00:27:00
Speaker 3: Well, let's talk a little bit about technology and also geopolitics here beyond the United States. You did mention China as another factor that is driving this. If we think about it from the perspective of evs, for example, you're not going to find Chinese evs here in the United States. Not the case for mainland Europe, where you could see, i don't know, Norway, Italy, Spain, in France you can see Chinese evs on the roads there. How much of this is about China and what is it about China specifically that has the block concerned.
00:27:33
Speaker 10: So there's a couple of issues here. One is that China is moving in on Europe's traditional industries, of strength, and the motor industry is a perfect example of that. It's true ice BYD cars around Brussels, you know, they are more present here in many parts of the continent as well. And it's a question of the EU has being to, you know, make this decision about whether or not there are industries that it's going to protect and support. Carmaking we know is extremely politically important in Germany, for example, so will thereby will that be an obstacle to try and support those industries rather than necessary or to protect you know, from Chinese imports in that area. The other question is also access to the Chinese market, because it's an important export market for a lot of big European companies as well, and they fear more barriers being put up which could cut off that very lucrative market for them at a time when obviously now we're going to have trade tariffs with the US as well, So some of those big export markets could actually be closed off to European exporters as well. And that's another way that we could see industries hurt by this complete shifting in the global order that we've seen.
00:28:39
Speaker 2: Speaking about the global order and the shifting, I keep thinking about the European Union. We've had a lot of stories I'm sure Steven you know on the Bloomberg about the UK. I'm looking at one that was done on June ninth, So just this week have the UK's options for rebuilding ties with Europe stack up this possibility of the UK coming back. But I do think about the composition of the European Union. Some have questioned some of the countries and the entities that are are part of that institution, how is that going.
00:29:07
Speaker 5: To move forward?
00:29:08
Speaker 2: How important is that in terms of who's in who's out, matters in terms of its place in the global world.
00:29:16
Speaker 10: Well, that's a really important question too, because of course we have a whole range of countries who've been lining up for years to try and join the European Union, across the Western Balkans, for example. But also there's been such a renewed focus on Ukraine's potential membership of the European Union too, And a lot of these questions are tied up with the fact that the way the EU works right now is already so cumbersome, and part of the fear of admitting new countries is you actually make the situation even more complex, and as you add divergent political views from different domains as well, is that there will be a need to give up, for example, the veto that exists in some areas of the European Union. Nobody's willing to have those sort of conversations because it's such a laborious and time consuming process when there are other big crises that need to be addressed now. I do think it's important to talk about what happened with Brexit, though, because obviously the UK leaving was a blow for the EU. They took a voice out of conversations on things like capital markets, for example, where Britain would have had a lot of influence, and the countries who would like to see greater integration or for in some cases might want to protect part of their own financial industries as well, have lost perhaps an ally around the table there too, so that those alliances have shifted over the past ten years. New bridges had to be built between countries too. I don't think the UK is going to be rejoining the EU anytime soon, but closer ties does seem to be on the cards.
00:30:37
Speaker 5: Hey, great to check in with you. I know it's later there, but so appreciate it.
00:30:40
Speaker 2: Of course, Stephen Carroll, co host to Bloomberg Daybreak Europe, joining us from the Bloomberg News Brussels Bureau, who's also host of the Here's Why podcast.
00:30:49
Speaker 3: Stay with us more from Bloomberg Business Week Daily coming up after this.
00:30:57
Speaker 1: You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five e's during Listen on Applecarplay and Android Auto with the Blowberk Business app, or watch us live on YouTube.
00:31:11
Speaker 3: I'm glued to the terminal all things SpaceX. The latest, the company raising seventy five billion dollars in the IPO. I'm surprised to anyone who's been paying attention. Five hundred and fifty five points six million shares at one hundred and thirty five dollars each. It's now official. It's a corner of statement on its website. Here's some context, Carol, SpaceX's IPO is more than double the size of Satdi Ramco's twenty nine point four billion dolllar listing back in twenty nineteen. I'm old enough to remember when Ali Baba was a big IPO.
00:31:40
Speaker 2: Yeah, I mean I remember when we were talking down and counting down to Sadi Ramko's listing, like these were massive, massive issues in something that the market really took notice of. I've got to say it's safe to say that we're asking everyone about this moment in time, including our next guest with us as doctor Sylvia Kwan, she CEO of the investment advisory for Elvest. They've got about one point one billion in assets under management, she joins us here in our Bloomberg.
00:32:05
Speaker 5: Interactive Broker studio. Welcome, Welcome, Nice to have you here.
00:32:08
Speaker 13: Great to be here.
00:32:09
Speaker 2: How do you think about someone who has watched the markets, I think about this moment in time, the SpaceX IPO.
00:32:15
Speaker 13: It is a historical moment. It's terribly exciting, regardless of what you think the valuation of SpaceX is. It's just an very exciting that this is actually happening now. At elas you know, we're focused on long term investment management and portfolios, and we're very focused on diversification. We don't pick individual stocks, and so this is the IPO is not something that we are specifically placing in client portfolios.
00:32:41
Speaker 3: You said it's exciting, You're not specifically placing it in client portfolios at this moment. Yet, if you are an investor in the entire stock market, then you're going to own SpaceX no matter what. After what could be maybe even five or six days, depending on how long it takes to be added to some of the indexes. A good thing.
00:33:00
Speaker 13: I don't think it's either a good thing necessarily or a bad thing, because you know it's going to be such a small part of the overall portfolio, so it's not like it's going to dominate somebody's portfolio. If they already own some of these ETFs and NX funds that space is going to be added to, they are going to own it, but it's at a very very small fraction.
00:33:20
Speaker 3: Are you hearing from clientele right now? We spoke to well Front CEO David Fortunado yesterday who said that last week the company put out a blog post about SpaceX's IPO and that within seconds they had customers getting in touch on both sides being like, I want in on this or I want nothing to do with us. I don't want this anywhere near my portfolio. And he said, we do direct indexing, so we can control even if somebody buys an index, we can control what they actually buy. Are you hearing from clients.
00:33:46
Speaker 13: We are, We are hearing the same thing.
00:33:48
Speaker 3: Really.
00:33:49
Speaker 13: There are some that are very excited about the prospects and they want in and we said, great, you can go ahead and do that and try to get some shares. And there are some that say, I want to avoid this at all, and we also have direct indency and allow them to take that out of the universe of possibilities.
00:34:05
Speaker 5: I think it's just interesting.
00:34:06
Speaker 2: If it was anybody other than Elon, would we be having these conversations.
00:34:10
Speaker 11: Probably not.
00:34:10
Speaker 13: Yeah, Yeah, it's very bifurcating.
00:34:13
Speaker 2: Yeah, it's really kind of fascinating to watch this, and it's something that listen, we're gonna have the first day of trading, we've had this lead up, but it's also then watching what we get in terms of trading in the following months right after the io, and what we hear from the company about the actual fundamentals that matter.
00:34:31
Speaker 13: That's right, and so I the way I think about it, you know, because this is such an exciting event, it's a huge story. There are a lot of people who are excited about the story and not really thinking about the fundamentals. But even if you are thinking about the fundamentals and you believe, hey, you know, the growth prospects of SpaceX are just incredible. You don't have to get in on day one or even day two. You know, this is a long term investment, and you think, hey, this is actually going to be amazing for the next ten years. You've got a lot of time.
00:35:02
Speaker 3: I mean, think about again, this is at this point ancient history. But if we go back to the company now known as Meta Platforms, but it was Facebook that was essentially a disastrous IPO back in twenty twelve.
00:35:15
Speaker 5: I remember that day actually really well too.
00:35:17
Speaker 3: Really shocked, right, and everybody's like, how did this get so messed up?
00:35:21
Speaker 7: Right?
00:35:23
Speaker 3: Yeah?
00:35:23
Speaker 7: Was that?
00:35:23
Speaker 3: That was twenty twelve. Yeah. So but if you but if you bought, and then even if you weather the early tumult, you're pretty happy camper, right now, that's right, because that was trading what you know, basically thirty five dollars a share now at five hundred and sixty eight dollars a share. So, Syllie, one thing.
00:35:39
Speaker 5: I wonder about, like, you know, you guys are dealing with.
00:35:42
Speaker 2: Wealth transfer, a lot more money coming into the hands of women. People thinking about longer term people are living longer. How they need to make sure that they're that they've got money to live on essentially, but what of the the long or what are the narratives that are out there right now, whether it's near shoring, unshoring, whether it's all of a sudden we're talking more about oil and kind of raw commodities, if you will. In terms of an investment play, the AI play, we see the money, we see the continuing demands, certainly when it comes to the semiconductor space. But there are some who are questioning what the fallout is.
00:36:20
Speaker 5: Is there an overbuild?
00:36:21
Speaker 10: Will we need it?
00:36:22
Speaker 2: You know, there's lots of questions out there. What are the positioning I'm also curious about alternatives. Is there still the wish to be in private credit or private equity? Where is it that they want.
00:36:34
Speaker 13: To be So at Elvest, we still believe that alternatives has a significant part to play in a client's portfolio. But not all alternatives are created equal, and so we're really looking for those private investments that have that low correlation to public markets because that's really what is going to get the diversification for your portfolio. So where very as you might know, we're also one hundred percent dedicated to impact investing and not only generating returns but also impact. So oil and gas is not typically something that we find in client portfolios. Will see more other infrastructure things like renewable energy and other real assets.
00:37:16
Speaker 3: Are there pre Again going back to the how we're thinking about the companies that are getting all the attention right now, care lost about alternative investments? Do you consider pre IPO shares of private companies right now, like an anthropic or like an open AI as part of or secondaries as part of an alternative.
00:37:43
Speaker 13: Asset portoitowhere they absolutely can be. We do have venture as part of our portfolios, and to the extent there are AI companies and other companies, you know with technology innovations, that is definitely part of.
00:37:55
Speaker 3: A Is there tension with ESG or or impact investing with the companies just because of the environmental impact and how we're thinking about power.
00:38:04
Speaker 13: There can be And really when you talk about values aligned, it's really a personal question, right and so somebody who's really focused on the environment will have a different portfolio than somebody who's really focused on you know, economic parity or something like that. So it's really a personal kind of thing, and that's where at all of us, we're really trying to craft something that is specific to that individual.
00:38:28
Speaker 2: You know, there used to be a moment in time. And it's interesting with this bacex Ipo. I think about you know, Elon Muskin is play on solar right and renewables, Like, it's just kind of interesting the different parts of our world that he touches. Having said that, I haven't looked at the return Let me just pull up the Investo Solar ETF, like what we have seen in terms of the trade, Like are the returns there? Because I have noticed too, and I think I feel, like you know, Tim, We've had guests on where people have said, listen, people are still.
00:38:56
Speaker 5: Investing in renewals. The movie is still on. We're just not talking about it. Is that true?
00:39:01
Speaker 13: I think that is true. And when you think about the energy that is required for all of this AI, it needs all forms of energy in order to meet this kind of demand. So I just don't think I.
00:39:13
Speaker 2: Think to sell the ETF is up twenty seven percent to date. That's a surprise too, Okay, anyway, forgive me. I interrupted, Oh, no worries.
00:39:22
Speaker 13: You know, I think soul or another kind of green energy has kind of gotten removed from some of the vocabulary. It's not in vogue anymore, but it is still something that our clients care about and that we care about, and that I think that demand will continue to in the coming years. They'll continue to grow.
00:39:41
Speaker 5: Are you surprised by no?
00:39:43
Speaker 3: I mean, one thing I am surprised about is the way that if we think about impact investing, and I use the terms ESG to be fair, but if we were talking to you five years ago, like that's probably how we would have led the interview. But people talking about their value is when it comes to investing right now. And our prediction at the time was like, it's all well and good in an upmarket and one where you know, you can pick and choose. But I wonder right now how much of it has to do with just a handful of companies that are driving so much performance versus just a way a change in tone in the way that the environment is politically right now, what is it?
00:40:25
Speaker 13: I think it's the latter you do. I think it's it's popularity has waned. It's not popular to talk about it. We have noticed some of the fund managers that we work with that, are impact managers having to change their language a bit.
00:40:39
Speaker 3: We've noticed that too. Yeah, they've told us. They've told us that they're changing their language, but they're not necessarily changing what they're doing. They're just changing the way they communicate about it exactly.
00:40:49
Speaker 11: That's exactly right.
00:40:50
Speaker 13: The strategy is the same, the impact is the same, but they need to change their language, especially when it comes to institutions.
00:40:57
Speaker 3: But you're still seeing the demand come from your clientele for that type of messaging or at least that type of value based investment.
00:41:03
Speaker 13: Absolutely, we're seeing that amongst not only women, but younger generations. And in fact, we have been talking to some of the beneficiaries of AI, whether it's employees and things like that that are coming. And it's interesting because we are hearing that they're coming into this great wealth that they never expected and they're really thinking about, like intentionally, how do I want to invest this wealth and use this wealth? And so we've been talking about sort of like, oh, now that I've had this wealth, it's not just about generating more wealth, it's about intentionally doing something good with that one.
00:41:42
Speaker 3: Do you remind me of Danielle Amide's comments at Bloomberg Technology last week talking to our own shream Gafari about how she's committed to giving away eighty percent of her net worth to charity.
00:41:52
Speaker 11: Yeah.
00:41:53
Speaker 3: She's one of the co founders of Anthropic.
00:41:55
Speaker 5: Yeah, exactly.
00:41:56
Speaker 2: It's certainly guiding how she does things in a big way.
00:42:00
Speaker 5: Come back soon. Thank you, we really thanks thanks for having me.
00:42:04
Speaker 2: Doctor Sylvia Quand, CEO of the Investment advisory for Melavest, joining us one point.
00:42:08
Speaker 5: One billion in AUM. Joining us right here in our Bloomberg Interactive Brokers studio.
00:42:13
Speaker 1: This is the Bloomberg Business Weekdaily podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal
Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Weekdaily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Stenebeck on Bloomberg Radio.
00:00:32
Speaker 2: While the most watched sports showdown on Earth, we're talking about not the next game, but we'll get to that. We're talking about the FIFA World Cup, starting today in Mexico City. This year's games hosted in three countries. You know that US, Mexico, and Canada, across sixteen cities, forty eight teams competing. Tim Nut's the most ever.
00:00:49
Speaker 3: It comes as the event is being overshadowed by political tensions, conflicts between the US and Iran, driving a fuel prices, creating economic strain for fans. We've got a great duo joining us that knows a thing or two when it comes to the business of sports.
00:01:03
Speaker 2: They know everything about sports with us is Redel Williams. He's Bloomberg New senior reporter. He's right here in our new York studio Vanessa Perdomo magleone. She's a Bloomberg New Sports business reporter as well in the Bloomberg News Princeton bureau out there.
00:01:15
Speaker 4: Hello.
00:01:16
Speaker 5: Hello, both by the way, co hosts.
00:01:18
Speaker 2: Of the Business of Sports podcast, which if you're not listening to, shame on you download it because it's really good.
00:01:23
Speaker 3: Thanks.
00:01:23
Speaker 5: All right, you're welcome, Randall. I'm going to start with you.
00:01:27
Speaker 2: You're right here in studio, tell us about this is a big deal, and we've been talking about it.
00:01:31
Speaker 5: I feel like forever it's getting underway.
00:01:34
Speaker 6: It has been a large conversation for many months and years, and now we're finally here. We are as it sits right now, eighteen minutes away from not tip off, but kickoff. I was tip off is yesterday. But it's tremendous. I think that things will really come into effect. We'll feel it on Saturday when on Saturday when the matches really begin and there's a match at MetLife and I think the Team USA plays on Friday, right, Vanessa.
00:02:00
Speaker 3: Do I have that right?
00:02:00
Speaker 2: Yeah?
00:02:01
Speaker 7: Oh, they play Friday in Sofi Stadium in La so when.
00:02:05
Speaker 6: Team USA plays, I expect a large crowd. I expect the excitement to kick up.
00:02:09
Speaker 3: But Vanessa, how good is Team USA? I mean, help set expectations here. I mean, this is the thing, you know, soccer. It's globally, it's huge here in the US, it is growing, it is big. But we're not even close to the best.
00:02:27
Speaker 7: We're definitely not close to the best him, that's definitely correct. But we are better than I think people might think that we are. You know, I think that the US is going to do well. I think they're going to definitely get out of their group. They might have the potential to win the group. And I think if they really you know, I was talking to Alexei Lalls recently and he played in the nineteen ninety four World Cup, and he really was iterating to me that how important a home World Cup really is. And the US aren't expected to go very far, but I think if they're able to really capture the audience is the way that we've seen, you know, in past World Cups, I think that it might be able to do something special and get to the quarterfinals or something like that, or some further further than we've ever seen before. I think they can capture the magic. That's really what's important. They have to feel it.
00:03:14
Speaker 2: I gotta say, I want to talk more about the games itself and who's playing all that, but the cost of the World Cup, like all the things like transportation.
00:03:22
Speaker 3: In nineteen ninety four, it was only twenty five or sixty five bucks a ticket.
00:03:24
Speaker 6: Now that's not even going to get you onto the New Jersey transit.
00:03:28
Speaker 8: To get all I know combined.
00:03:31
Speaker 2: By the way, I got to say that Dan hunt Cohene or president of the Dallas Football Club, he waited on FIFA World Cup ticketing prices.
00:03:39
Speaker 5: Just listen up, guys.
00:03:41
Speaker 9: The rollout is a little bit non traditional how we would do it in American sports. But FIFA has their way of doing it, and they've gotten some criticism over the prices, and they went back and repriced some cheaper tickets.
00:03:52
Speaker 3: And what I would say, you.
00:03:53
Speaker 9: Know, is there's a market demand for this, and the revenue they generate from the World Cup supports occer globally. Their initiatives from grassroots to growing the men's game, growing the women's game, all the money associated with prize money, player money to clubs, and just in developing nations and helping the game along. And this is really their pinnacle you know, tent pole moment that they have every four years, and so I know there's a it's a delicate balance, right. You want it affordable for fans because fans make the game, but you also need to be able to have, you know, the money to help support the game for the next four years.
00:04:28
Speaker 2: I got to say, you could hear that in so many different marketplaces. That's Dan Hunt Cohener and president of Dallas Football Club, Vanessa.
00:04:34
Speaker 5: Let me just get you to weigh in on that.
00:04:35
Speaker 10: Is he right?
00:04:36
Speaker 2: Like this supports a lot of stuff out there.
00:04:38
Speaker 5: Doesn't have to be so expensively, no.
00:04:43
Speaker 7: I mean, it doesn't have to be so expensive. It really doesn't. And obviously it hasn't been so expensive in the past World Cups. I mean, yes, nineteen ninety four was a very different time, so we can't really note to those ticket prices. But just even in twenty twenty two, ticket prices were you know, six to seven times cheaper than this or ticket prices now for group sage matches that we weren't even seeing for last for twenty twenty two is final, you know, so it doesn't have to be this way, but people wanted to take advantage of the US ticket market. That's exactly what you know. Me and Rydell have been having these conversations. That's what they say. They knew resale was going to be a problem and they wanted to get in on the game as well.
00:05:19
Speaker 3: Is reseale randall a problem right now? I mean I've talked to friends who are going. A friend, like I've said before, he's went a five games Seattle, New York, LA, and he has money.
00:05:30
Speaker 8: He is.
00:05:30
Speaker 3: He told me in nineteen ninety four I was seven years old, I couldn't go to any games. I vowed then, and he's literally been saving out for years. He says the LA game is much cheaper because they didn't they didn't price it right.
00:05:42
Speaker 6: Well, I think in terms of what is the right price for these things is if you think of what is the normal first sport the kids play, it is soccer because it is so cheap. However, think about the kids who, let's say are pre k to high school. They're going to be relying on their parents. So if it costs you eight hundred dollars for family of four one individual ticket each, that's thirty two hundred dollars. How many families of four are going to be able to pay that. And this isn't This isn't just group stage, This isn't just quarterfinals. These are group stage matches. These are matches that feature countries that we might not know or might not know players who are playing for them. Now, just imagine what it's going to cost to see Lionel Messi play.
00:06:19
Speaker 5: So are the tickets selling They are.
00:06:22
Speaker 6: But it remains to be seen what the audience looks like in these stadiums. There are tickets that are being sold in all these places, and the prices are slowly but surely coming down. And there's a possibility that, you know, shortly before I match, FIFA could slash the prices and then people flock to the stadiums. That's also something that could happen. But you're talking about FIFA, which is projected to net over ten billion dollars in revenue. That's a lot of money over the course of like less than sixty days. However, at what cost?
00:06:49
Speaker 5: I have to say.
00:06:50
Speaker 2: The Bloomberg Business Week Daily team has its own soccer expert. It is known as Sebastian Escobar, and he say, Club World Cup last year had many empty seats.
00:07:00
Speaker 3: Community.
00:07:01
Speaker 2: Yeah, hey, we're gonna switch gears. We got to talk about the next game last night, if we can. We are all in soccer, but we got to talk about it. Vanessa, come on in man, what a game. If you went to sleep early, you might have missed and not would have been surprised by the outcome.
00:07:19
Speaker 5: I don't know how you thinking about where we go from here.
00:07:21
Speaker 6: She's about to do.
00:07:22
Speaker 7: First of all, if you you went to sleep early last name, you missed history. You missed history. Last night it was the biggest comeback, you know, in an NBA playoff history. It was absolutely incredible. You know, I was watching from a scene from a bar in Queens. It was electric at the end, you know, it was unbelievable. So I think from here the series is over. Randall, you were in the building.
00:07:49
Speaker 3: You were there, Randall, I was.
00:07:52
Speaker 1: I was.
00:07:54
Speaker 6: That was the loudest arena that I've ever been in.
00:07:56
Speaker 10: By far.
00:07:58
Speaker 6: It was the concourse was shaking. I mean, Mike Brain said it on the broadcast, this building is shaking. No, it was legitimately shaking. And they and I mean, you have to think a tremendous comeback, because I believe it was seventy six to forty nine at halftime. Yeah, and at that point the Spurs scored thirty points the rest of the game a tremendous defensive effort. And I think in this aspect, I'm joking with Vanessa, but she's probably right. When you give up a twenty nine point lead and then you have to go home and play a team that you haven't beat in your own house, it's kind of over great.
00:08:30
Speaker 7: One point lead is like, I mean, that is the most sole crushing thing ever.
00:08:35
Speaker 3: Maybe if you're not a New Yorker.
00:08:36
Speaker 5: Exactly right, exactly, you guys are amazing.
00:08:40
Speaker 2: They're the co hosts of the Business of Sports podcast Randall Williams and Vanessa Potomo Perdomo Maglio and both Bloomberg News senior reporter.
00:08:48
Speaker 3: And stay with us more from Bloomberg Business Week Daily coming up after this.
00:08:58
Speaker 1: You're listening to the Bloomberg Business Week Daily podcast. Catch us live weekday afternoons from two to five e's during Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us Live on YouTube.
00:09:12
Speaker 3: The headlines were SpaceX, they just keep crossing. We just heard just an update SpaceX filing a free writing perspectives. It lists price to public as one hundred and thirty five dollars a share, shares offered five hundred and fifty five point five to six million, not a surprise if you've been paying attention those numbers. That is also the company's poised to make history with the biggest ever IPO, launching it into the top ranks the largest public companies, putting founder Elon Musk on the verge carol of becoming the world's first trillionaire.
00:09:39
Speaker 5: It will trade on Nasdaq and Nasdaq Tech Texas. In case you were wondering, yes, you weren't sure.
00:09:44
Speaker 2: I mean, we're getting all of these details. We want to get into it. There's a lot going on because there's so many different moving parts. We have so many bankers involved, twenty three firms putting the finishing touches on. They expected seventy five billion dollar IPO and again getting ready for this to kick off tomorrow.
00:10:00
Speaker 3: We got ad Love though with us. He's the co host of Bloomberg Tech Bailey Lipscholtz too, he's Bloomberg News IPO reporter. They both join us here in the Bloomberg Interactive Brokers studio. You guys have both covered a lot of IPOs. Bailey, I want to start with you, is it is it fair to say demand for SpaceX is out of this world?
00:10:16
Speaker 4: Out of this world? But is it better than Sarah Bros. Was a stock that is near to your heart? No, but not by definition as it relates to the actual sheer account available. But but ed it's one of those funny things where you go, Okay, it's more than four times over subscribe, but then you do the back of the envelope math and say.
00:10:32
Speaker 11: Well, that's a lot of orders.
00:10:34
Speaker 4: So in terms of sheer net demand, yes, But in terms of like over subscribe books, we've seen a number of deals like twenty thirty forty five times over subscribing.
00:10:43
Speaker 3: That's normal. So what's so what's the signal here that this is sending us?
00:10:47
Speaker 8: I mean people by buy into the story that you know the thing about the also, Bailey like, let's just be sort of boring and old fashioned about this for a minute. There's a lot that's unknown, the allocations on set, right. We put a lot of reporting into all of these big institutions placing orders and the billions of dollars it's great to place an order, doesn't mean you'll get it that gets decided in real time right now. And you know, I think what, without speaking on his behalf, what are reporting as a newsroom shows is that Elon Musk and the rest of space X management have been very in control of this process, dictating the terms literally, but also who's going to get access in the end the retail portion. Again, when it gets settled on a percentage basis or a dollar basis, there will be loads of people around the world that will be very disappointed. So that actually it's academic what happens tomorrow when it starts trading.
00:11:40
Speaker 2: You know, Okay, there's the excitement around the IPO, and it's hard not to the largest ideade.
00:11:44
Speaker 8: Whoever, I'm stalling, by the way, because he's trying to send messages to sources.
00:11:48
Speaker 2: Okay, yeah, okay, but I guess what. Okay, so I'm going to start with you. I mean, there's the excitement over the IPO. Yay, we're going to get the first day of trading.
00:11:56
Speaker 5: I get it. I get the importance of it.
00:11:58
Speaker 2: But then there's the actual business. I mean, this is not a profitable business.
00:12:03
Speaker 8: It's not. But you know, what's been very interesting in the last week let's say, speaking to a lot of existing investors and people that will participate in this IPO, they're actually probably even more bullish on the nearer term opportunity than SpaceX is set out in the prospectus. So, actually the idea of orbital data centers, these are data centers in the form of satellite going into deployment and then generating revenues. Actually, you know a lot of people I've spoken to very seriously believe that is more imminent than SpaceX has said it is. They've said as early as twenty twenty eight.
00:12:39
Speaker 3: And Brett Wynton you had them on, Yeah, I mean from inverse.
00:12:43
Speaker 8: Ark investors, very bullish said.
00:12:45
Speaker 3: Anything three hundred billion dollar.
00:12:47
Speaker 8: Yeah, So let me explain as sixty years I can his thesis.
00:12:51
Speaker 3: Yeah.
00:12:51
Speaker 2: Ark and Kathy Wood you know, I know some people find her controversial and there's people who, you know, buy what she says and there are others who don't. But having said that, she was with you on from the get go when everyone didn't. Was it really impressed with what he was doing at Tesla. And it did take a full you know, several years, and he didn't hit all his deadlines.
00:13:10
Speaker 5: But here you are so.
00:13:11
Speaker 8: You always start with Elon Musk often misses the timelines that he himself sets out, but gets there in the end. This is a question about valuation, right, so this stock will trade at one hundred times or ninety times current revenues and forward twelve month revenues as best we can calculate them. What Brett Winton and ARC's argument is is that, well, actually, we have a lot of data available to us about starlink, that is the business of internet and director sell based on satellites. We know the cost of those satellites, we know how many of them there are, we know the dollar basis it takes to put them there. And all he's doing is extrapolating out to the data center business and saying, I actually can model for how quickly they can book revenues on it with the big if they get starship their big rocket to work simples.
00:13:58
Speaker 3: Okay, Bailey's been on the Bloomberg terminal.
00:14:01
Speaker 11: App on the phone because Ed gets the computer.
00:14:04
Speaker 3: Okay for people, Sorry, what what do you we're talking about? I'm just looking Aline reports the pricing of the IPO. Formally it won thirty five, so not a surprise though, no, not a surprise at all. Again, Elon kind of called a shot in terms of this being a seventy five billion dollar fundraise, this being a deal that comes to one hundred and thirty five dollars each.
00:14:22
Speaker 4: But it's official according to what we're reporting on the terminal right now. And the reason that matters is now, to Ed's point, everyone on the buy side is going to figure out tonight early tomorrow morning what their allocation was, and they're going to have to think through what they want to do tomorrow.
00:14:36
Speaker 3: Well tomorrow. You know, typically when when a company goes public and has its first day of trading, there's this price discovery moment. We don't know exactly what time shares will start trading. Do we expect that to happen tomorrow?
00:14:50
Speaker 9: Bailey?
00:14:51
Speaker 3: Is it? Sometimes price discovery can take a really long time.
00:14:53
Speaker 11: It can take a really long time.
00:14:54
Speaker 4: I mean, we'll go typical normally in the ten o'clock hour, we'll start getting indications from Nasdaq. The biggest thing to keep in mind, indications mean everything and nothing. No one is trading share soon. Remember that you can see an indication though that says seven hundred dollars one thousand dollars it means absolutely nothing. What matters is when we get closer to that call it one o'clock two o'clock window, when we get closer to the first trade that Morgan Stanley is going to execute, what does that look like? Because first trade actually does matter because someone bought and sold.
00:15:23
Speaker 3: In that moment.
00:15:26
Speaker 8: Sorry I'm typing, but I am listening.
00:15:27
Speaker 2: No, no, no, no, it's just you know, listen again, this is aprilagat.
00:15:32
Speaker 3: Who's buying, who's who can buy it, who can actually sell?
00:15:36
Speaker 8: So I think what's going to be more interesting, right, is the retail allocation wherever it ends up. You know again, there will be lots of individuals around the world super disappointed. So the indication doesn't matter. It's it's largely a sentiment indicator, and it's based on humans talking to one another. But when the trade happens, you know what we heard on television most television stay but also on the phone, is okay, we open and it goes higher. Right, But even if it starts trading at one pm Eastern and there's three hours left in the session, it will be the first opportunity for a lot of people to buy at that start of trade, and they will want to try and this this life changing amounts of gains, right, so they'll want to sell it if it went to two hundred to two.
00:16:22
Speaker 5: This is hypothetical, so the volume could be crazy tomorrow.
00:16:26
Speaker 8: Yeah, I don't know the answer. Who's yeah?
00:16:29
Speaker 4: I mean no, it's everyone's open market, but it's only people on the IPL. So there's seventy five billion dollars afloat is what trades tomorrow.
00:16:35
Speaker 11: There's there's no insider, there's no.
00:16:37
Speaker 3: Long term employee. Everything. Do we have details on the locker?
00:16:41
Speaker 11: Lockup starts after second quarter earnings quarter ends in.
00:16:44
Speaker 8: June, and it's even more severe on Elon's own shares, not that he you know, he it's academic because.
00:16:49
Speaker 3: He'll just take out loans against his correct.
00:16:52
Speaker 8: But also his economic ownership of the company is not the story here. It's his voting power in the company. And so you know, these are hypotheticals. The main point being that the thesis as presented by SpaceX management, or at least in our reporting and the existing shareholders, is the reason they'll do a larger shareholders allocation to retail investors is they believe that those retail investors believe the story well, it's.
00:17:19
Speaker 4: Partly that, and it's also again going back to the reason that it is so fun, we're just hit holding off.
00:17:25
Speaker 3: I tell you a story just crossed the Sorry sorry, sorry sorry. I had three point thirty one written by Bailey Lipschaltz and he's been sitting right here, So I don't know how to happen. But that's the that's the story. SpaceX's IPO raises seventy five billion dollars in biggest debut of altimate.
00:17:38
Speaker 4: But the thing is, thirty to forty percent of Tesla is owned by individual investors writ large exactly selling even in the IPO, twenty five percent to retail is a small fraction when you think about what is going to be unlocked in the next year. So the big question in a lot of things investors are debating is how does retail ramp up buying to own thirty percent of a one point seven two trillion dollar company, Because thirty percent of seventy five billion is a big number, but it's still only twenty two billion dollars. That's trades like water Nvidio from a retail perspective.
00:18:11
Speaker 8: Yeah, there's one interesting dynamic which I think tomorrow is going to be very interesting. So look at chairs of Tesla tomorrow, okay, And the reason being is that if you're a retail investor that did not get an allocation.
00:18:23
Speaker 11: That's how you get into it.
00:18:25
Speaker 8: What choice do you face if your entire net wealth is tied up in Tesla shares that you've held because you believe in the story long term, what do you do? Do you sell to give yourself some money to do that or going into this did you sell to Well?
00:18:38
Speaker 4: The big thing though, is for a number of just to clarify on some points, each platform, each ebroker is different.
00:18:44
Speaker 11: So some brokers, when you put it in an.
00:18:46
Speaker 4: Order, hypothetically for one hundred thousand dollars of SpaceX shares, you either have to have that liquid or have assets pledges collateral. So it's not necessarily like we're going to see in real time tomorrow people selling to turn around and buy per se.
00:18:59
Speaker 2: It's just kind of wild, right, And if you believe that these two companies are all going to end up being one at some point, like yeah, that's all again with.
00:19:05
Speaker 3: Continue tomorrow with our special covery.
00:19:08
Speaker 5: This is just the beginning.
00:19:09
Speaker 2: The guys will be here, all right, That is Ed Lovelow, Bloomberg Tech co host Bally Lipshaltz, Bloomberg News IPO reporter.
00:19:15
Speaker 3: Stay with us. More from Bloomberg Business Week Daily coming up after this.
00:19:23
Speaker 1: You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five eas during this listen on Applecarplay and Android Atto with the Bloomberg Business app, or watch us live on YouTube.
00:19:38
Speaker 5: Well, the European scent Central Bank.
00:19:40
Speaker 2: Speaking of things going on, the ECB raising interest rates for the first time in almost three years. We've got the FOMC meeting next week with Kevin Warsh cheering for the first time. Meantime, ECB President Christine Laguard warning inflation triggered by the Iran War is windening beyond just energy. Keep in mind you're definitely feeling the pain of two wars as the as the Rush of Ukraine wars now more than four years old in counting, and of course you have the US war in Iran. Even so, Europe seems to be shaking itself.
00:20:09
Speaker 3: Awaits, the global order disintegrates, and China dives deeper into Europe's traditional markets. EU leaders say the block needs bigger and everything to protect itself. Bigger banks, bigger tech firms, bigger defense contractors, bigger investments. At of next week's G seven Leader sum at Bloomberg has been speaking to policymakers and investors about Europe's path ahead, as new Bloomberg Economics analysis underlines what major changes needed and yet, can the block Carol really evolve?
00:20:36
Speaker 5: Yeah, it's a big question.
00:20:37
Speaker 2: Our Brussels radio anchor Stephen Carroll, bureau chiefs to Zan Lynch and editor Corey Bennett have been speaking to figures at the heart of Europe's political and financial decision making, and Steven joins us right now. He's co host at Bloomberg Daybreak Europe, joining us from the Bloomberg News Brussels bureau. He's also host of the Here's Why podcast. Stephen, So good to have you here with Tim and myself. First of all, tell us about this mission that you and our Bloomberg colleagues have been on and the question specifically that you were trying to answer.
00:21:07
Speaker 10: The question we're trying to answer is is whether Europe's actually finally going to do something about its economic decline. The warnings have been around for years when we've got big report from Mario Dragy nearly two years old now, saying that it was existential for Europe, that it made major reforms, integrated its markets more, ramped up investment massively to one point two trillion euros a year. And the sense that we've been getting from our reporters around the continent is there was a sense of a shift towards progress on this finally, and that perhaps we were moving because of the pressures that were coming on the EU from the United States. We know obviously the Trump administration has been particularly unfriendly to the European Union, but also the rising competition from China, questions around access to markets, putting pressure on manufacturers here, that perhaps things were starting to change, and we went looking for where those changes might come. Actually, although I know you'll think I'm crazy if I start talking about small details in European policy changes, there are signs out there, and they are small but significant, that things are really changing.
00:22:11
Speaker 3: Now, what are some of those signs that things are changing? Is it more than just Europe doing more of its own defense spending?
00:22:18
Speaker 5: Is it?
00:22:18
Speaker 3: What is it?
00:22:21
Speaker 10: Defense spending is a key one and an initially example for a model that could be used in other areas in the sorts of things that Mario Dragi wanted the opinion to spend more money on. But I will point to merger rules. This is an area the EU has had a huge influence globally over reviewing mergers anti trust law, and the EU said a couple of months ago they were going to start revising those merger rules, and we're already seeing signs of businesses taking notice of this, deals that in the past you thought might be flagged by regulators. We had a big telecoms announcement in France in the past week. We had a big banking merger announcement in Italy in the past week as well. And these are the sorts of deals that from a big picture point of view, you want bigger companies, more cross border investment, bigger banks in particular to help for financing across the continent. These are the sorts of deals that could have been a concern to regulators in the past, but it seems that executives have decided it's worth going ahead because they are sensing a changing attitude. The other issue, and it's something that we've covered for a very long time here at Bloomberg is questions around deeper capital markets in Europe, trying to encourage more of that cross border investment. Six europe six biggest economies have now said they're going to go ahead with this plan, even if they can't get an agreement at a twenty seven level. That's significant too, because it's considered now to perhaps be a model as to how things get done in this moment. Is look, you get a big group of countries together, they go ahead. The others can join if they want, but crucially you will start to provide those deeper markets that will hopefully stimulate investment and help to turn around the economic fortunes as well.
00:23:52
Speaker 2: You know, Stephen to be fair, right and at play as the EU figures its way forward and its position in the world. President Trump up ended so many longstanding global relationships. Some say that was long over do Others say, big mistake. These have been longtime allies and it impacts not just geopolitics, but it impacts business when it comes to the EU and the US relationship.
00:24:14
Speaker 5: You had a perfect voice to talk with.
00:24:16
Speaker 2: Tell us about your conversation and check in with the former EU Commissioner for Competition.
00:24:23
Speaker 10: Margaret Vestar is one of the U policymakers who's really been at the forefront of some of the most controversial ends of EU policy, competition now being one. She was also part of developing the new Digital rule Book, which we know the Trump administration doesn't like either. She was in one of the top positions at the EU Commission until twenty twenty four, and I asked her about this question as to whether actually, maybe Donald Trump had done the EU a favor by ofbending this relationship and spurring them into action. Let's take a listen to what she had to say.
00:24:51
Speaker 12: I wouldn't express it that way because you know, I'm really sad about some of the very very negative effects of the Trump presidency, take the of USAID, the risk of offsetting a new AIDS epidemic, So I think one cannot see it like that. That being said, I think it was about time for Europe to realize we need to do better ourselves. The European social contract is at stake here because many people feel that that social contract is not being upheld.
00:25:25
Speaker 10: That's Margaret Star, formerly of the European Commission, really putting in perspective the influence that the degradation of the transatlantic relationship has had and how that has spurred it appears European leaders into more action on this front, realizing that they have to rely on themselves more because they can't rely on one of their most important traditional partners. And she actually pointed to Donald Trump's comments around wanting to annex Greenland earlier this year is being a moment that really seemed to spur a change in attitude in a sense that actually, now Europe needs to tackle some of these long running under lying problems to be able to provide better protection for the social model, the wealthy influence that it's built up over time.
00:26:07
Speaker 11: Now, I don't want to get.
00:26:08
Speaker 10: You too excited about this, because things happen slowly in Europe. At a European Union level. We're in the middle of the discussions on the next European budget, for example. That could be another area where there could be big changes. The ambitions that we've had an update on today don't look hugely different, so that might not be the level of excitement that we want. But the conversations are happening and there is a sense that we're moving towards something that will result in more European integration. And more as a result European's influence on the world. Bloomberg Economics was looking at the potential consequences of this as well. They say the path is going to be divergent even further. The European Union will fall further behind the US economically if there isn't big changes made, but if there are, that will arrest first of all the decline and actually could see the two economies converge as well. None of that, of course, mentioning AI, which could change everything.
00:27:00
Speaker 3: Well, let's talk a little bit about technology and also geopolitics here beyond the United States. You did mention China as another factor that is driving this. If we think about it from the perspective of evs, for example, you're not going to find Chinese evs here in the United States. Not the case for mainland Europe, where you could see, i don't know, Norway, Italy, Spain, in France you can see Chinese evs on the roads there. How much of this is about China and what is it about China specifically that has the block concerned.
00:27:33
Speaker 10: So there's a couple of issues here. One is that China is moving in on Europe's traditional industries, of strength, and the motor industry is a perfect example of that. It's true ice BYD cars around Brussels, you know, they are more present here in many parts of the continent as well. And it's a question of the EU has being to, you know, make this decision about whether or not there are industries that it's going to protect and support. Carmaking we know is extremely politically important in Germany, for example, so will thereby will that be an obstacle to try and support those industries rather than necessary or to protect you know, from Chinese imports in that area. The other question is also access to the Chinese market, because it's an important export market for a lot of big European companies as well, and they fear more barriers being put up which could cut off that very lucrative market for them at a time when obviously now we're going to have trade tariffs with the US as well, So some of those big export markets could actually be closed off to European exporters as well. And that's another way that we could see industries hurt by this complete shifting in the global order that we've seen.
00:28:39
Speaker 2: Speaking about the global order and the shifting, I keep thinking about the European Union. We've had a lot of stories I'm sure Steven you know on the Bloomberg about the UK. I'm looking at one that was done on June ninth, So just this week have the UK's options for rebuilding ties with Europe stack up this possibility of the UK coming back. But I do think about the composition of the European Union. Some have questioned some of the countries and the entities that are are part of that institution, how is that going.
00:29:07
Speaker 5: To move forward?
00:29:08
Speaker 2: How important is that in terms of who's in who's out, matters in terms of its place in the global world.
00:29:16
Speaker 10: Well, that's a really important question too, because of course we have a whole range of countries who've been lining up for years to try and join the European Union, across the Western Balkans, for example. But also there's been such a renewed focus on Ukraine's potential membership of the European Union too, And a lot of these questions are tied up with the fact that the way the EU works right now is already so cumbersome, and part of the fear of admitting new countries is you actually make the situation even more complex, and as you add divergent political views from different domains as well, is that there will be a need to give up, for example, the veto that exists in some areas of the European Union. Nobody's willing to have those sort of conversations because it's such a laborious and time consuming process when there are other big crises that need to be addressed now. I do think it's important to talk about what happened with Brexit, though, because obviously the UK leaving was a blow for the EU. They took a voice out of conversations on things like capital markets, for example, where Britain would have had a lot of influence, and the countries who would like to see greater integration or for in some cases might want to protect part of their own financial industries as well, have lost perhaps an ally around the table there too, so that those alliances have shifted over the past ten years. New bridges had to be built between countries too. I don't think the UK is going to be rejoining the EU anytime soon, but closer ties does seem to be on the cards.
00:30:37
Speaker 5: Hey, great to check in with you. I know it's later there, but so appreciate it.
00:30:40
Speaker 2: Of course, Stephen Carroll, co host to Bloomberg Daybreak Europe, joining us from the Bloomberg News Brussels Bureau, who's also host of the Here's Why podcast.
00:30:49
Speaker 3: Stay with us more from Bloomberg Business Week Daily coming up after this.
00:30:57
Speaker 1: You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five e's during Listen on Applecarplay and Android Auto with the Blowberk Business app, or watch us live on YouTube.
00:31:11
Speaker 3: I'm glued to the terminal all things SpaceX. The latest, the company raising seventy five billion dollars in the IPO. I'm surprised to anyone who's been paying attention. Five hundred and fifty five points six million shares at one hundred and thirty five dollars each. It's now official. It's a corner of statement on its website. Here's some context, Carol, SpaceX's IPO is more than double the size of Satdi Ramco's twenty nine point four billion dolllar listing back in twenty nineteen. I'm old enough to remember when Ali Baba was a big IPO.
00:31:40
Speaker 2: Yeah, I mean I remember when we were talking down and counting down to Sadi Ramko's listing, like these were massive, massive issues in something that the market really took notice of. I've got to say it's safe to say that we're asking everyone about this moment in time, including our next guest with us as doctor Sylvia Kwan, she CEO of the investment advisory for Elvest. They've got about one point one billion in assets under management, she joins us here in our Bloomberg.
00:32:05
Speaker 5: Interactive Broker studio. Welcome, Welcome, Nice to have you here.
00:32:08
Speaker 13: Great to be here.
00:32:09
Speaker 2: How do you think about someone who has watched the markets, I think about this moment in time, the SpaceX IPO.
00:32:15
Speaker 13: It is a historical moment. It's terribly exciting, regardless of what you think the valuation of SpaceX is. It's just an very exciting that this is actually happening now. At elas you know, we're focused on long term investment management and portfolios, and we're very focused on diversification. We don't pick individual stocks, and so this is the IPO is not something that we are specifically placing in client portfolios.
00:32:41
Speaker 3: You said it's exciting, You're not specifically placing it in client portfolios at this moment. Yet, if you are an investor in the entire stock market, then you're going to own SpaceX no matter what. After what could be maybe even five or six days, depending on how long it takes to be added to some of the indexes. A good thing.
00:33:00
Speaker 13: I don't think it's either a good thing necessarily or a bad thing, because you know it's going to be such a small part of the overall portfolio, so it's not like it's going to dominate somebody's portfolio. If they already own some of these ETFs and NX funds that space is going to be added to, they are going to own it, but it's at a very very small fraction.
00:33:20
Speaker 3: Are you hearing from clientele right now? We spoke to well Front CEO David Fortunado yesterday who said that last week the company put out a blog post about SpaceX's IPO and that within seconds they had customers getting in touch on both sides being like, I want in on this or I want nothing to do with us. I don't want this anywhere near my portfolio. And he said, we do direct indexing, so we can control even if somebody buys an index, we can control what they actually buy. Are you hearing from clients.
00:33:46
Speaker 13: We are, We are hearing the same thing.
00:33:48
Speaker 3: Really.
00:33:49
Speaker 13: There are some that are very excited about the prospects and they want in and we said, great, you can go ahead and do that and try to get some shares. And there are some that say, I want to avoid this at all, and we also have direct indency and allow them to take that out of the universe of possibilities.
00:34:05
Speaker 5: I think it's just interesting.
00:34:06
Speaker 2: If it was anybody other than Elon, would we be having these conversations.
00:34:10
Speaker 11: Probably not.
00:34:10
Speaker 13: Yeah, Yeah, it's very bifurcating.
00:34:13
Speaker 2: Yeah, it's really kind of fascinating to watch this, and it's something that listen, we're gonna have the first day of trading, we've had this lead up, but it's also then watching what we get in terms of trading in the following months right after the io, and what we hear from the company about the actual fundamentals that matter.
00:34:31
Speaker 13: That's right, and so I the way I think about it, you know, because this is such an exciting event, it's a huge story. There are a lot of people who are excited about the story and not really thinking about the fundamentals. But even if you are thinking about the fundamentals and you believe, hey, you know, the growth prospects of SpaceX are just incredible. You don't have to get in on day one or even day two. You know, this is a long term investment, and you think, hey, this is actually going to be amazing for the next ten years. You've got a lot of time.
00:35:02
Speaker 3: I mean, think about again, this is at this point ancient history. But if we go back to the company now known as Meta Platforms, but it was Facebook that was essentially a disastrous IPO back in twenty twelve.
00:35:15
Speaker 5: I remember that day actually really well too.
00:35:17
Speaker 3: Really shocked, right, and everybody's like, how did this get so messed up?
00:35:21
Speaker 7: Right?
00:35:23
Speaker 3: Yeah?
00:35:23
Speaker 7: Was that?
00:35:23
Speaker 3: That was twenty twelve. Yeah. So but if you but if you bought, and then even if you weather the early tumult, you're pretty happy camper, right now, that's right, because that was trading what you know, basically thirty five dollars a share now at five hundred and sixty eight dollars a share. So, Syllie, one thing.
00:35:39
Speaker 5: I wonder about, like, you know, you guys are dealing with.
00:35:42
Speaker 2: Wealth transfer, a lot more money coming into the hands of women. People thinking about longer term people are living longer. How they need to make sure that they're that they've got money to live on essentially, but what of the the long or what are the narratives that are out there right now, whether it's near shoring, unshoring, whether it's all of a sudden we're talking more about oil and kind of raw commodities, if you will. In terms of an investment play, the AI play, we see the money, we see the continuing demands, certainly when it comes to the semiconductor space. But there are some who are questioning what the fallout is.
00:36:20
Speaker 5: Is there an overbuild?
00:36:21
Speaker 10: Will we need it?
00:36:22
Speaker 2: You know, there's lots of questions out there. What are the positioning I'm also curious about alternatives. Is there still the wish to be in private credit or private equity? Where is it that they want.
00:36:34
Speaker 13: To be So at Elvest, we still believe that alternatives has a significant part to play in a client's portfolio. But not all alternatives are created equal, and so we're really looking for those private investments that have that low correlation to public markets because that's really what is going to get the diversification for your portfolio. So where very as you might know, we're also one hundred percent dedicated to impact investing and not only generating returns but also impact. So oil and gas is not typically something that we find in client portfolios. Will see more other infrastructure things like renewable energy and other real assets.
00:37:16
Speaker 3: Are there pre Again going back to the how we're thinking about the companies that are getting all the attention right now, care lost about alternative investments? Do you consider pre IPO shares of private companies right now, like an anthropic or like an open AI as part of or secondaries as part of an alternative.
00:37:43
Speaker 13: Asset portoitowhere they absolutely can be. We do have venture as part of our portfolios, and to the extent there are AI companies and other companies, you know with technology innovations, that is definitely part of.
00:37:55
Speaker 3: A Is there tension with ESG or or impact investing with the companies just because of the environmental impact and how we're thinking about power.
00:38:04
Speaker 13: There can be And really when you talk about values aligned, it's really a personal question, right and so somebody who's really focused on the environment will have a different portfolio than somebody who's really focused on you know, economic parity or something like that. So it's really a personal kind of thing, and that's where at all of us, we're really trying to craft something that is specific to that individual.
00:38:28
Speaker 2: You know, there used to be a moment in time. And it's interesting with this bacex Ipo. I think about you know, Elon Muskin is play on solar right and renewables, Like, it's just kind of interesting the different parts of our world that he touches. Having said that, I haven't looked at the return Let me just pull up the Investo Solar ETF, like what we have seen in terms of the trade, Like are the returns there? Because I have noticed too, and I think I feel, like you know, Tim, We've had guests on where people have said, listen, people are still.
00:38:56
Speaker 5: Investing in renewals. The movie is still on. We're just not talking about it. Is that true?
00:39:01
Speaker 13: I think that is true. And when you think about the energy that is required for all of this AI, it needs all forms of energy in order to meet this kind of demand. So I just don't think I.
00:39:13
Speaker 2: Think to sell the ETF is up twenty seven percent to date. That's a surprise too, Okay, anyway, forgive me. I interrupted, Oh, no worries.
00:39:22
Speaker 13: You know, I think soul or another kind of green energy has kind of gotten removed from some of the vocabulary. It's not in vogue anymore, but it is still something that our clients care about and that we care about, and that I think that demand will continue to in the coming years. They'll continue to grow.
00:39:41
Speaker 5: Are you surprised by no?
00:39:43
Speaker 3: I mean, one thing I am surprised about is the way that if we think about impact investing, and I use the terms ESG to be fair, but if we were talking to you five years ago, like that's probably how we would have led the interview. But people talking about their value is when it comes to investing right now. And our prediction at the time was like, it's all well and good in an upmarket and one where you know, you can pick and choose. But I wonder right now how much of it has to do with just a handful of companies that are driving so much performance versus just a way a change in tone in the way that the environment is politically right now, what is it?
00:40:25
Speaker 13: I think it's the latter you do. I think it's it's popularity has waned. It's not popular to talk about it. We have noticed some of the fund managers that we work with that, are impact managers having to change their language a bit.
00:40:39
Speaker 3: We've noticed that too. Yeah, they've told us. They've told us that they're changing their language, but they're not necessarily changing what they're doing. They're just changing the way they communicate about it exactly.
00:40:49
Speaker 11: That's exactly right.
00:40:50
Speaker 13: The strategy is the same, the impact is the same, but they need to change their language, especially when it comes to institutions.
00:40:57
Speaker 3: But you're still seeing the demand come from your clientele for that type of messaging or at least that type of value based investment.
00:41:03
Speaker 13: Absolutely, we're seeing that amongst not only women, but younger generations. And in fact, we have been talking to some of the beneficiaries of AI, whether it's employees and things like that that are coming. And it's interesting because we are hearing that they're coming into this great wealth that they never expected and they're really thinking about, like intentionally, how do I want to invest this wealth and use this wealth? And so we've been talking about sort of like, oh, now that I've had this wealth, it's not just about generating more wealth, it's about intentionally doing something good with that one.
00:41:42
Speaker 3: Do you remind me of Danielle Amide's comments at Bloomberg Technology last week talking to our own shream Gafari about how she's committed to giving away eighty percent of her net worth to charity.
00:41:52
Speaker 11: Yeah.
00:41:53
Speaker 3: She's one of the co founders of Anthropic.
00:41:55
Speaker 5: Yeah, exactly.
00:41:56
Speaker 2: It's certainly guiding how she does things in a big way.
00:42:00
Speaker 5: Come back soon. Thank you, we really thanks thanks for having me.
00:42:04
Speaker 2: Doctor Sylvia Quand, CEO of the Investment advisory for Melavest, joining us one point.
00:42:08
Speaker 5: One billion in AUM. Joining us right here in our Bloomberg Interactive Brokers studio.
00:42:13
Speaker 1: This is the Bloomberg Business Weekdaily podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal
