Bloomberg TechBloomberg's Caroline Hyde breaks down Oracle's earnings and its push into cloud computing as the company hits a record high. Plus, new research shows X has grown in popularity among conservative users since Elon Musk's purchase of the site in 2022, and Paramount walks away from a deal with Skydance.
From Mahart where Innovation, money and power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and Ed loved Love.
I'm Caroline heid Oft Bloomberg's Weld headquarters in New York and Ludlow is off.
This is Bloombag Technology coming up.
We break down Oracle's earnings and it's pushed into the cloud computing space as a company hits a record high, and we talk all things Elon Musk ahead of the vote on his fifty six billion dollar pay.
Package, plus Paramount.
Walks away from a deal with Skyharts as it heads back to square one to find a new bidder.
We discussed that and so much more throughout.
This hour, including record high after record high, and a new company back on top.
I focus in on what's happening with Apple.
Extraordinary move for a company lay at about a three trillion dollar market valuation to move twelve percent in two days, following, of course WWDC, following the integration of artificial intelligence and open AI, and of course it therefore starts to pip a company to the post in terms of its overall market valuation. Who now reign supreme Apple number one once again, take it versus Microsoft. Microsoft, of course had been the number one player for several months. Now we're back eclipsing it for Apple. Check out the white line suddenly crishendering to three point three trillion dollars. We've got also, though still gains for the likes of Microsoft, gains the likes and video also at about a three trillion dollar market capitalization. We are fueling some of these valuations across the board and also looking at what happened in for Oracle too, another new record high for this particular player after its actual earnings show real driving force when it comes to its focus on cloud computing.
How can it.
Compete versus some of the other players like a Microsoft. We're carrying up nine point eight percent on one day alone for Oracle after its earnings came out the bell yesterday.
Let's get straight to it. Body Ford joins us.
Now for more and a good day for one eleison at least, this one being Larry Ellison.
What did you make of the numbers?
Yeah? Absolutely, with Oracle, it is all about that cloud infrastructure number.
Right.
We've seen across software in recent weeks that it's been really difficult for those selling applications. Lucky for Oracle, their big growth bet is that infrastructure, right, and so we saw them sign a good number of deals. The bookings were higher than anticipated, and there was that really important partnership deal that Microsoft and open Ai said, Hey, we actually don't even have enough capacity. We're going to use Oracle's cloud to help train and work with open Ai, which that was a very validating point for a lot of investors who said that. Okay, I guess what Larry's been talking about, that Oracle is the best for AI workloads. There's got to be something there.
Yeah, Software Cat's coming out saying we've had record contract sizes being signed in the previous quarter. That's going to continue into the second half of the year. Brody, But I'm really interested in, well, where is the fly in the ointment? What about the focus on healthcare data because that is still not growing particularly.
Yeah, the whole healthcare bet was, for sure, kind of not a big part of the earnings.
Here are funny.
Worst You know, Oracle purchase Cerner twenty eight billion dollars tour or so years ago, so it's at the center of our company now.
It hasn't panned out too well.
Financially thus far. But investors are saying, hey, you know what, if you can clock ninety billion in bookings on cloud infrastructure, maybe Cerner doesn't matter so much.
Well, for sure, markets thinking that Cerner doesn't matter so much. At the moment, we're up thirty five billion dollars on the day for Oracle and having its well currently training at the highest on record brody Ford breaking down the numbers for us, we appreciate it turning into the broader markets and look, it is not just Oracle at a new record high.
We're across the.
Board seeing money flowing into equities, into bonds. We're seeing S and P five hundred more than a percent point a new record high. Fifty four thirty eight is where we trade. The NASDAC also powering up one point eight percent. Why this is a macro story of the fact that CPI print showing a three point four percent year on year growth. Infration pressure is therefore the slowest in three years. The two year yield absolutely plummets some fifteen basis points.
We're at four point six eight percent.
As people start to factor in that, yes, we will get that rate cup come November, maybe even come September. We all wait for the Federal Reserve decision later on this afternoon. Bitcoin on the up and up. We're up more than four percent, sixty one hundred and fifty six. This paints a picture of risk on Sylvia Jabronski CEO and CIO at Defiance ETFs to really talk as to whether this is a wise decision right now.
I hete Caroline, well, I think, you know, in terms of the Fed today and any potential cuts, I don't you know, I don't anticipate anything coming. I do think that the data was great, you know, you just kind of ran through it. Inflation is clearly on the downtrend. This is exactly what the FED wanted to see. It gives them that to certainly a breathe and to be a little bit less hawkish. But you know, if we take anything from fetshair pal, it's that he's looking for.
More data before they make a decision.
So I think, you know, the call will be a little bit of nine and won't crash the markets like it has in you know, a few months past, and so that's a good thing that we have some.
Stability there, stability enough to continue to think technology is what leads us higher.
I think that technology is going to continue to lead us higher. And you know the reason for that is that we're just in the beginning stages.
Of this AI, you know, the Fourth Industrial Revolution.
It's only now starting to play into the earnings of a lot of the you know mag five, six sevens that have been reporting this last quarter.
So I think it's just in its.
Infancy in terms of how it's going to impact revenues in the bottom line. And we haven't even started to talk about how AI is transforming healthcare, how it's going to transform you know, aerospace and defense, banking systems and things like this, and so the companies who are the key ingredients to that revolution are essentially the MAG seven So I think they keep going.
And also, you know, look at the balance sheets. They're earning their multiples.
Earnings projections are set to be about fourteen percent or higher for the next couple of years. So, you know, I think burning any major change in inflation, any geopolitical evvent, you know, politics, of course, I think tech is a safe place to play.
Apple's a weird one, though, because we're not expecting double digit growth in revenue. In fact, the market is anticipating a three percent increase in revenue for the next fiscal coll to Soviet and yet they eclipsed Microsoft back is.
The most valuable company and rallying an extraordinary twelve percent in the last couple of days.
Yeah, and so Apple hasn't done anything though for a couple of years. And it's really interesting because when the whole you know, everything was kind of falling apart a couple of years ago in twenty twenty two, all the tech stocks were kind of you know, down and crashing at standpoint, and Apple was the name that was holding up the market. This year that shifted to the video and you know, here we are in the video is still up there and Apple has kind of regained It's set on the throne here, you know, next to the top players. And I think the story of there is you know, pick up in China and then also some talks of the AI integration and things like this they're finding on the map with that. We just hadn't heard anything compelling from them in a long time about that. But you know, the big stories and if you start getting upgrades on phones because actually this time they are different and they have that AI play and then pick up in China. You know, Pray deserves a little bit of a stock increase there.
Can you talk us through some of the not just fundamentals, but technicals are gonna be at play. As we had head towards the end of the first half of the year and we get a rebalancing moment in June, we saw some big differences in shakeups in market capitalization.
Where will money move?
How will that continue to feed the biggest.
Yeah, I think you know, when you have about ninety percent of the growth of you know, S and P five hundred coming from four or five names, and then you know forty percent of the growth coming from the next two behind it, I don't think actually that the that the you know, the rebounds will put it into into kind of rebalance.
It'll it'll equalize it a little.
Bit better on the next rebalance, but it's probably not going to change because the top market cap names are going to remain the top market cab names and they're going to end up leading the index forward. But you know, around that that type of you know, around that type of trading, when you're selling off a little bit of this and taking up a little bit of that, you know, you do get some market movement, but I just think that they're all they're going to remain the top players and there's probably not going to be a huge amount of impact from the rebounds coming up.
Yeah, that all to do with perhaps the technology selects sector Spider much being written by boom Bag Intelligence, Sylvia.
What about your own MtFs? Where's that performed? Where have the bets been?
Right?
Yeah, so o ours are in line with the market. So our two biggest you know, ETF plays or a ticker called five G and one called quantum, And essentially what they do is they represent AI machine learning and then all of the you know, widgets that go into supporting that. So five G is the activity technology factor of it all.
You know, you need low.
Latency obviously to process the data to make driver lest cars work and all of that. And you know, we don't talk about five G as much as we probably should. I think pretty assuming will be talking about sixty actually, and quantum is just like it's just benefiting because it's all the AI sucks, it's navidea, it's you know, it's all the kind of kind of home runs there that are lead leading that revolution.
So that one's just been out of tear for us this year, and I believe they're not commodities too right.
We've got to uranium play out there, and when you think about things like uranium and copper and just energy in general, the need to you know, process to run the goods for AI, those names.
Play into cryptos. Att Yeah, I.
Still like crypto, you know, I think it's becoming further and further commercialized. I think that there are enough of institutional retail players out there that are willing to allocate a small percentage of their assets to cryptocurrency. You know, it's starting, it's it at some point started to diverge from tech. Now it's playing along with tech again this week, but it seems.
To be a forreholding and a lot of portfolios.
Looks the Billison dollars that flew into the ETFs just tell me, tells me that it's around.
It's around to stay ether and bitcoin in particular.
Sylvia, it's great to have you back on the show.
Thank you so much for spending some time with our CEO CEO at Defiance ETFs. Those on a tear in line with the market mean while coming up Musk's X platform gains among gop users.
We're on that next for our own Kirk Wagner.
Meanwhile, there is another company that is doing particularly well today. In fact, it has been for the last couple of days. This on a partnership with Apple. We understand a firm is extending its gains after that Apple Pay deal that by now pay later company said it's payment products were expected to be available in US Apple Pay.
Users this year. We're up almost nine percent. This is BLUEBG.
Technology time now for Talking Tech. First up, Paramount chair Sharry Redstone has walked away from a deal to sell her media empire to David Ellison, the son of The Oracle founder. Redstone rejected the latest proposal from Ellison's sky Dance on Tuesday after lengthy negotiations. Still there are other bidders waiting in the wings, including Apollo Global Management, Seagram's heir as Edgar Bronfman, and the independent film producer Stephen Paul. Plus a Byte Dance is calling about FO one hundred and fifty jobs in its Indonesian e.
Commerce arm now.
The move marks the first round of cuts since combining its TikTok shop with local rival Tocopedia in that was in January, according to people familiar with the matter of Bite Dancers reducing staff across its e commerce teams, including advertising and operations, and former President Donald Trump met with several bitcoin miners and is mar a Lago estate Tuesday night.
That's according to the executive chairman of Queensbark.
Trump told attendees that he loves script are currency, said it had been an advocate for miners if he retakes a White House. Now, staying in politics and with it, social media platform X formerly known as Twitter, of course, has now grown in popular popularity among conservative users now. According to a new PE research study, the number of Republican users have more than tripled since Elon Musk's purchase of the site back in October twenty twenty two, joining us now being mos Kurt Wagner and a surprise to.
You, No, I don't think so. I think you know when you look at what this report came out with, this idea that X is becoming much more popular with the political right, it sort of confirms what I think we've all seen anecdotally for the last couple of years, right, and that's led by the new owner, of course, Elon Musk, who has been very vocal that the company he bought he thought was very left of center politically and that he wanted to move it more to the center and to the right. And it's also been you know, his own actions right reinstating President Trump, building relationships with other right wing kind of leaders around the world in Argentina and Brazil in places like that. So he's sort of setting the stage and setting the example, I would say, or you know, what he wants X to be. And we're seeing this in the numbers now that it's becoming much more popular with that you know, political politically conservative, conservative group of people.
Therefore, are we seeing politically left of center exiting the platform.
Yeah, well some are exiting, but more than that, you know, they're saying that they don't feel welcome. There was a higher spike in liberal people who were saying that they were more likely to be harassed or bullied on the service than those who were conservative. So it's sort of switched where. You know, for years, Caroline, as you remember, conservatives said, hey, Twitter isn't a place where I'm welcome. Twitter isn't a place where I can say what I want to say. You know, they didn't feel like it was their home, and it seems like those roles have reversed now. It feels like, you know, the data sort of suggests the conservatives believe that X is the place for them and liberals are feeling less and less welcome there.
I just want to turn our attention to another one of you know, musk companies, SpaceX, and indeed his behavior there there's reporting is all coming from the Wall Street Journal Cut at the moment. I'm sure you've read the story Dan Elamsku has pursued women working at the company, apparently for sex, including a former intern, citing AffA David's signed by this woman and other interviews. What do you make of the reporting coming from the Wall Street Channel today.
Yeah, I mean it's a bombshell of a story, and these allegations are quite serious, right as you point out that that Elon, while running this company was seeking relationships, sometimes sexual relationships with women who were his subordinates.
And I think, you.
Know, it certainly creates these questions about the power dynamics of Elon's companies, and not just Space sex, but I think it raises questions about all the companies that he's running right now, and you know, is he abusing sort of his role as the leader, the executive, the person with the power to you know, create these relationships and you know, these are all again allegations at this point. Obviously the reporting looks like it's pretty solid, but I just think again, it raises these questions for his other companies and also for you know, Tesla right now they're about to have a big vote of course on his pay package and stuff. You wonder how much any of this type of negative press around him could have an impact on what happens to him in his other is other companies in the Elon universe.
Wow, you point us forward, Kirk Wagner. We thank you very much. Indeed, on all things Eno Muscular Time now for a weekly AI and Action segment. Today, we're looking at artificial intelligence in the workplace. Now, only seven percent of organizations have mature AI implementations.
Their employees are three times.
More likely to report productivity gains from using AI and work. That's one of the key highlights from a great new report coming from Asana. It's all about the impact of AI in the workplace, and we're going to bring in Asana's head of AI, Page Costello for more on the findings, and actually what took me by surprise is people are feeling more optimistic about using it in the workplace.
Absolutely, Executives are very excited, and all the individual contributors are also starting to use it quite a bit more. One of the biggest things we saw is that more than half of knowledge workers report that they're using Generative AI weekly.
That's up thirty six percent in just six months.
How productive is it making them? What sort of gains are those that are being early adopters seeing.
Yeah, well, we.
See that the people who use it daily report the highest productivity gains. Eighty nine percent of people who use it daily, so that they're seeing those gains, and only thirty nine percent of people who use it monthly see those games. So we know that the more you use it, the more value you get.
Out of it.
Now, there's perhaps some sort of nervousness still. Certainly, if you're a student, for example, using it, you're in many ways getting a pushback from those that teach you. What about in the workplace and people feeling that you're cutting corners all that, actually this is the way you should be working.
Yeah, it's up to organizations leaders to really improve AI literacy and create a norm and set of expectations about how to use AI. This is a big gap where a lot of people aren't receiving training or guidance. Most organizations don't have a rollout strategy for how to train their employees at onboarding, how to really set up their organizations to roll out which vendors and make selections about how to get the most.
Out of AI.
People want to know that they're using it the right way and that they're going to be supported and celebrated for using AI for good.
Why is that infrastructure perhaps not being built around the employee basis quickly? Is it nervousness on doing it right and with the right guard wails? Is it just a lack of knowledge from the top?
I think there's a bit of curiosity about like do we have safe and reliable AI? Is it going to give us the right decisions that we can make from the data that we're getting. But honestly, I believe that a good deal of this is purely uncertainty about what it takes to.
Be a newbie.
A lot of these organizations and leaders are themselves learning and trying to create a plan while learning. At the same time, when the terrain is changing so quickly, it's really challenging.
The reason Asana can do this sort of deep dive research is because you're a work management platform. You're helping companies Team Mobile for example Amazon, manage their own workflows and executives therein How are.
You using it? How are you using it for your clients too?
Yeah, well, I would say a few things.
One.
AI literacy is a priority for our organization. We want to make sure every employee knows how to use AI and how to get the most benefits for their teams. We have an AI council that thinks creatively about what are the tools that we need to use and how to deploy Asauana. So Asana is an enterprise work management platform used by eighty percent of the Fortune one hundred to drive clarity and accountability at scale. And what we see is that people are using Asauana's AI capabilities to create quickly create status reports across cross sections of goals and portfolios of work, but also work with our new at needs where they can delegate specific parts of the workflow and jobs to AI in the context of their process in order to have more confidence that there's a level of determinism that it will do the right thing.
Let's talk about how ducinations. Let's talk about doing the right thing. Have you seen any of that? Have you got the statistics of how your own offering teammates is working and performing and improving.
Absolutely, we're paying very close attention to the evaluations of different models and how they perform in the context of ASAUNA. What I'm most excited about is the way a sauna's data model works is there's a context around the people doing the work, who's doing what, by when, the timing of that work, and the ultimate goals they're laddering towards. And so what we see is the context of this work helps AI engage with more knowledge. So instead of surveying a vast amount of data and trying to surface some summary, AI is given a very specific s out of instructions. Here's how we work, Here's what we're trying to achieve. Here's exactly what I want you to do. I want you to triage this request. If there's enough information, send it to this team. If there's not enough information, put it over here. I know that I need data on this. Please do some initial discovery and answer me these three questions. These are those sorts of tasks that people can confidently ask AI and a SANA to do in the context.
Of where their teams already work.
ASANA has been thinking for a long time about the coordination of work across teams and complex organizations. That's a hard job, it's always complicated, but coordinating work with AI is the future and there needs to be a structured way to understand what have we asked AI to do, to do what we asked and see the impact of that work.
But we'll getting better.
There's prompts Asama's head of AI, Page Casteta, Thanks so much for spending some of my pleasity. Welcome back to roombag technology. I'm Karen Hide in New Yorker. Quick check on these markets which are macro fuel today we have record highs across the board, whether you're look at the S and P five hundred, whether you're looking at money pouring into technology stocks, pouring into the bond market as well. Why inflatory pressures they dial down three point four percent year on here for a CPI print. That is the coolest that we've seen in three years. What space does that give the federal reserve to cut rates later into the year. We have the FED, of course, announcing their decision in but a few hours time. We're currently seeing bitcoin getting a little bit of a move. Higher risk assets push higher three point eight percent.
Move on to the individual movers, because we've got a tussle at the top.
We've got market capitalizations that are eclipsing more than three trillion, and Apple eclipses Microsoft.
We're back as number one.
For Apple, We're up another five percent after moving seven percent yesterday. Extraordinary move for such a huge weighting of these indices. But Microsoft's also at one point two percent. It's more than three trillion dollars in terms of market cap. So two is Nvidia up almost four percent. It two is exceeding three trillion dollar and Tesla look about up four point three percent. Interesting calls coming from Kathy Word as to where we'll see this price target eventually. Remember the call for twenty six hundred is where they see it for twenty twenty nine for Arc invest But we've got more to digest when it comes to Tesla, and it's coming imminently because we've got a shareholder meeting tomorrow during which Elon Musk's fifty six billion dollar pay package will be debated, it'll be voted on and hearing now directly from an investor. Gerbert Kawasaki, CEO and President ros Gerber joins us along with our very own Max Chafkin, who is all in on Elon Inc. When it comes to the podcast around his various companies he controls Ross, I go to you first, Are you voting for or against?
Well, I voted against the pay package mostly because I feel like it's a continuation of the disaster of the board of directors of Tesla's created by doing the pay package wrong on the first time and just trying to reratify the same thing. I think is just creating a lot more issues and problems than if they would have just done a new pay package and done this correctly the first time. So you know, at this point, paying Elon fifty billion dollars when you've seen the performance of the company falter since it's purchase of Twitter and he's made really no effort to sell vehicles and a huge effort just to get as fifty billion dollars, it really is the wrong message to send to shareholders corporate governance. Basically, this is a you know case study and how boards of directors can be so horrible.
So horrible. Max your take and returns.
I want to go to Max Traffick in hair on the fact that the share price is still a lot higher than it was perhaps back in twenty eighteen, has come down from its heavy heights of twenty twenty one, when it's a click sing more than four hundred dollars. But your perspective here on him being distracted, as Ross talks.
To, Yeah, I think we're looking at a close vote here, because on one hand, you have historically Elon Musk has been able to basically get anything he wants from Tesla's investors, and there has been this feeling among investors and especially among the board, which of course includes a lot of Elon musk friends, loyalists, even his brother, that he can basically do whatever he wants, whatever he wants is good for Tesla. On the other hand, he has not performed well by any normal metric as CEO over the last year or so.
You know, the stock is down.
There are all these distractions, you know, you know, the Wall Street Journal story today is just the latest example.
Right, It's just been a series of kind of.
Misfires, difficulties with poor stock performance, and at the same time Musk is asking for fifty six billion dollars. Now, of course he'll say, well, this is an older pay package.
You look at the you know, five year trajectory. It's great. But again not every investor is going to be swayed by that.
Yeah, to be fat, I went from a price of about twenty and twenty eighteen RUSS all the way up to nearly four hundred and twenty twenty one. I'm interested therefore in your few of him as a leader right here, right now, He says, Look, if you don't give me more control of the company of Tesla, if you don't give me this money, I might walk. I might do more Ai stuff over XAI. Would that worry.
You, Well, I think he's already done that in fact, so that's why the performance of Tesla's been so poor since he purchased Twitter is because he's not working at Tesla. You know, he's been you know, we consider him the pigeons. CEO now flies in kind of craps on. Everybody flies out, and you know, it's just not running the company. Compared to twenty eighteen, when he was sleeping there and working twenty four to seven to build this wonderful company. So you know, I benefited greatly from the success of Tesla, but I also took enormous risk investing with with Elon over the last ten years, and many thought the company was going to go bankrupt five years ago, and I supported him through all this. And so the fact that I benefited greatly as a shareholder was a byproduct with a risk I was willing to take on Elon, and that it paid off.
It was great, But that doesn't change where we are today.
And that's the issue is what's going to happen in Tesla over the next five years.
Kathy Woods obviously wildly optimistic. But if he leaves the company because he doesn't get what he wants, well, where's Tesla going to be in five years? Right?
So the fact that he has so much money, He's got eighty ninety one hundred billion dollars in net worth in Tesla, but yet that's not incentive enough.
To work at Tesla.
I mean, he made over ninety billion dollars just in gains from the stock he owned already, So it's not like he hasn't benefited greatly from Tesla's success, and so this is why this whole thing is outrageous and ultimately going to cost shareholders twenty five billion dollars of tax that will have to pay for when he gets this award, if he gets it, because that's the taxable consequence that shareholders are going to have to pay.
So this is a tough situation for shareholders.
Interesting context there, Maxy, the shareholders you speak to, the way in which you do your reporting for elonin I mean, you said it's going to be a close call. Here have we heard from some of the big institutions as to whether they support him and why would they support him?
Yeah, Roley speaking, there are some exceptions to this, but you have a lot of institutional investors who are opposed to the pay package, and then you have a lot of retail investors. Basically many of these people are just you know, Tesla enthusiasts, people who are who really care about the band and really care about Elon Musk, and they are by and large supporting Elon Musk at least to talk about our reporting and what Elon Musk himself is saying, take that with a grain of salt. So you have those two things, kind of intention, and the question is who shows up to vote, and you know how many of them are there. Tesla has been campaigning really, really hard over the last couple of weeks. We talked about this on the podcast.
You have videos.
There's a video of optimists the Tesla robot talking to people saying, oh you should you know, vote your shares. And as we said on the podcast that dropped yesterday, you know, they've been calling Tesla employees. You've seen a lot of former Tesla employees show up on Twitter and support of this.
So there's a lot of activity.
It's almost like a political campaign.
Yes, yeah, way in hand of us.
No.
I mean I've gotten calls and emails and and all kinds of ads and and I was like so insulted that after a year of saying that Tesla needs PR and to Vasley needs ads to sell Model Wise and sales going down and down and down, then they pull out all the stops for Elon's pay. They have a PR team actually working they I mean, I can't even tell you how obnoxious it is that this is about his pay, the richest man in the world, while the company's languishing and can't sell model wise and save their lives, and they're discounting and left and right, and they won't run an ad. So I think this has become like a referendum on Elon, and you know, it really shouldn't have been and this is really.
Just, you know, a horrible situation for Tesla. Cherylders Ross.
Can I dig in on the PR team working double time because they are surely working double time today? And there is this Wall Street Journal report which we cited earlier in the show, where Elon Musk is being accused of having pursued women working over at SpaceX.
This is Wall Street Journal reporting.
But does this affect you as a shareholder of Tesla in your viewpoint of him as a leader.
I don't think he's pursuing women.
I think, you know, I don't know what he really does, but I wish he was spending more time with women, to be honest, I think that would help him greatly and if it was in a positive way. But I don't see him as that type of person. I think he's very very focused on his goals, which is getting off Earth, replacing the human race with robots, and living on Mars by himself.
So you know, I don't know. I don't know, but I don't take these.
Kind of claims personal claims as valid unless they're actual, you know, proof of this stuff.
Okay, So questioning some of the reporting there, Ross, I'm interested in Max and ultimately where we go after this vote, because if it's a referendum Moneyla musk himself and it doesn't go his way, well, it doesn't actually have or even if it does go away, it doesn't actually affect whether or not the money goes to him.
It's still all about a judge.
Right, Yeah, we talked about this earlier this week. This is not a binding vote.
It also doesn't it doesn't have any legal consequences. Tesla's hope here is that the vote is overwhelmingly in support, they take it back to the Delaware courts and this is part of their appeal and that is the plan kind of a novel legal strategy to save this pay package so they don't have to renegotiate it.
I think that the.
Challenge here, and what will be really difficult for shareholders probably Tesla employees as well, is if the vote does not go his way, where does it go? Because because we know from having followed Elon Musk. He is not going to be happy. He's already made threats, you know, as Ross is alluding to to to you know, sort of essentially take his talents elsewhere.
And you do wonder if he's faced with a smaller.
Pay package, well, how much smaller is it going to be?
And then it becomes this challenge of like keeping Elon Musk motivated, which again is funny because he's getting paid a lot of money one way or the other. And he's also said that Tesla, you know, is his life's work. On the other hand, Ai is very hot, he has XAI. You know, there is there is this threat, so you worry if you're an investor, that he's going to like take his ball and go home, and that could we too massive upheaval at Tesla if that were to.
Happen, well said, We thank you, Max. Just go and watch that, listen to that podcast, however you consume it dropping yesterday, all things elonning Meanwhile, or Gerbert Kawasaki CEO and President Ross Gerbert as always animated and thoughtful.
On the show. We thank you very much for contributing ahead of We're a vote.
You already said you said no to Meanwhile, coming up, we're going to be joined by Susan Lyme from BBG Ventures on.
The heels of its second annual Accelerate Summit all Things Private Companies.
That's next the Bluebog Technology.
Time for VC Spotlight. Let's talk early stage investing now.
Susan Lyne, co founder managing partner of BBG Ventures in town showing up of course with the annual Accelerate Summit, which is just taking place, bringing together hundreds of female, diverse founders across the country to come here to New York to talk about raising money, to talk about lessons learn as founders to help.
Steer each other. One of the key takeaways.
I mean was everyone on in on AI was that the topic digital.
You know, it was definitely a topic, but it was not the topic because I think every company is starting out right now is starting with some kind of AI basis, so they have that advantage. But the things that people talked about more were, for example, product market fit right. I mean, it's always a challenge, and one of the things we heard over and over again is that you think you know what this customer needs. Everybody builds what they think is needed.
In the market.
And yet what you have to do is constantly be making sure that you're getting feedback from that customer, because five times out of ten you're off. You're off by something right. It may not be completely wrong. But there were multiple founders who talked about it, including April co who's the CEO of Spring Health, now a multi billion dollar Unicorn wholefolio company, a portfolio company, but she talked about how they started out and this is a mental health company. They deliver precision mental health care right now to companies that they started out thinking they were going to do software for doctors to be able to figure out what kind of antidepressants.
To prescribe, and they hmitted.
They would go in, they would pitch, and they would get black stares, and they finally were told by someone, you should all meet with our HR department because there are so many doctors and nurses here who need mental health care.
But do these companies at this moment have the bandwidth when I mean bandwidth, the monetary bandwidth to be able to pivot to keep iterating, do they have that you allocating before they've got product market fit?
Yeah, we do allocate to companies before they have product market fit you have to at seed stage because that's what you're doing between seed and Series A. But we hope we pick the founders who have the right approach to it and who have some data backing up the fact that they're on the right track. So you know, it's it's not a perfect science, but we have a good track record.
Well, your track record is good, and we know you for media expertise for ABC News, we know well ABC TV. More broadly, we think of you for AOL, but we then think of you from office Stewart, We think of you across many a different landscape. Where are you allocating into industry groups are most tempting?
Hmm, it's a really good question. We really look at large areas of the economy that need transformation, right, so healthcare, work, financial inclusion, climate and underserved consumers all very large markets markets that need change.
They do.
But climate, and there I say it, backing diverse founders has been buffeted around some and political climate. Are you still seeing as much LP institutional and interest and allocating to solving those sorts of problems?
We are because I think that smart LPs understand that this is not about doing good, This is about looking at what the country looks like now, massive demographic shifts over the last couple of decades, And if you want to back people who are building new companies, you're probably going to have a competitive advantage if you are supporting people who actually have lived experience with these problems, these issues.
You had Martha Stewart talking of her lived experience at the event yesterday. The lived experience for most allocators right now is some pretty heavy valuations if they've got anything to do.
With AI in their name.
But about the rest of the space, what sort size checks are you having to write now for a seed stage company, for an early stage.
Company, Well, well, there are two different questions there. One is what size rounds are our seed founders going for? And that has gotten bigger.
Yeah.
You know, if you look back four or five years ago, people were raising for twelve months, eighteen months, so they were raising maybe two million dollars, two and a half million dollars. Now we see a lot of seed rounds that are four or five six million dollars. And that's because founders it's not because they're spending more on a monthly basis, it's because they know in this market they're going to have to prove more, so they need that runway. They need twenty four months or thirty months. So we're seeing a lot of that. We write checks anywhere from five hundred thousand dollars to two million.
Dollars, let's say.
And when you get a macro context like inflation starting to cool, the Federal Reserve maybe looking to cut rates, but record highs for stocks, what does that mean in terms of money coming in to bench capital.
You know, we haven't seen that happen yet, but my hope is that once interest rates begin to come down, that you will see more capital leaving the public markets and coming into the private markets again, well.
Come to us as and when you're starting to see that flow when you're allocating the checks. It's been great to see a little bit of the work at the event.
Yes, sir, we're so glad to have you. We appreciate it. Susan Lyne, co founder managing partner at BBG.
Ventures Parahm Mount Global. The chair Sherry Redstone has decided to end those long fought negotiations for a merger between the legendary media company and of course David Ellison's Skydance Media. That's all according to sources who wrote the story. But it mostly for sure, he joins us. Now, I mean a saga runs.
And runs, the Redstones never cease to amaze us, or they just don't take the easy option right. She pushed for this deal with David Ellison, She seemed to want to do a deal Skuide, and she had other options. She didn't engage seriously with Apollo, she didn't engage seriously with some of the people looking to buy the family holding company, and then at the last minute she decided she didn't want it. There are a lot of reasons that I've heard as to why.
Yeah, I mean, name like one or two of the most important.
Look one, David Elison and Skydams had to revise their deal because other shareholders felt like.
They were going to get stiff. Sherry Redstone was going.
To get a good deal, and that new deal would have paid her less. It's up for debate how much that influenced it. It had to be something of the factor. I think she was concerned about being caught up in a bunch of litigation, which happened when she put CBS and Viacom together. Then I think there's a part of her where just look her Famili's controlled this company for decades.
Is she really ready to give it up? She says she is, But she was at the altar and she she ran off.
It's a legacy question many feel, and ultimately whether she's increased or eroded value. And at the moment, sadly, some analysts out there saying this has just been a complete erosion of value for Paramount.
What the deal could have got for the business.
Yeah, look, there's no great deal for Paramount right now.
This is a business that was worth about thirty billion dollars when she puts CBS and Buyacom together. It's now less than ten depending on how you calculate it. Nobody's going to come and give them some huge deal that's going to make investors a ton of money. You have some investors that maybe just want it to be over with and be out of it. And Ellison represented a good option in that he was going to inject capital into the business, but a complicated option because he wanted to merge it with his company, and the valuation on his company some people see as being way too high.
What's interesting is now we wonder who are the players left in the game. We had Jeffrey Katzenberg on the show a little bit earlier in the week, and I asked him about the value of Paramount and he was like, look, it still get a good deal. And then you talked to some interesting people gathering a room for breakfast.
Just take a listen, because.
I will tell you I just so.
It went to an early breakfast, ran into Bob Iger, Jeffshell, and Brian Robbins all in one room at one time, the current president of Paramount, Jeff Shell, who's on Redbird, and Bob Iger, who's watching it all.
It's quite a morning.
So what do you think they were talking about or who What do we think ultimately will be deals that could be made for individual bits of streaming and other parts.
Of the asset.
Well, look, they're going to try to execute a strategy that a new owner would have done anyways, right, They're going to cut costs, They're going to look for some partnerships and streaming to build out the business. But it's not clear whether the three guys who are in charge right now are going to be there for that long. It seems like Sherry Redstone is still interested in maybe selling her family holding company, doing a cleaner, simpler deal.
That's not necessarily great news for the.
Other shareholders in Paramount, but it would be good for her and her family if that happens. You know, if she re engages with one of these other bidders, Edgar Bronfman with Baine Capital being one of them, their film producer Stephen Paul being another, you know, then we were signing up for several more weeks of negotiations and speculation and stories and all of that. If she decides to let the current leadership take a real run at it, you know, I think we'll see a painful but necessary change in terms of strategy at the company, which just can't figure out streaming right now.
I'm going to let the audience decide which version of events you're going to want to happen the most. But there's certainly several Netflix documentaries and various movies to be made of a saga. Luca Shaw, we appreciate him for it. That does it for this edition of Really Meg Technology. Do not forget to check out our own podcast. You can find it on the terminal, Go check it out in line.
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iHeart this is pl Meg Technology.
