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tv   Bloomberg Markets Americas  Bloomberg  May 13, 2022 10:00am-11:00am EDT

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>> from the financial centers of the world, this is bloomberg markets with alix steel and guy johnson. alix: it is 30 minutes into the u.s. trading day. happy friday the 13th. your other stories we are following for you. elon musk puts his deal on twitter on hold to examine fake accounts. shares down off the lows. bank of america says the mass
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exodus has begun as investors sold over $6 billion in equities this week, but now they rebound. and merck is up against inflation. the company sees as much is 9% sales growth this year. we are going to speak with the ceo. from new york, i'm alix steel. i cohost in london, i johnson. ockham, everyone. we are up now, friday the 13th, i will put nothing past the market. guy: happy friday the -- that doesn't go together in my mind. we will see what happens. my expectation for the show, pretty low. you mentioned breaking right now, and it doesn't look particularly clever. let me work you through the numbers to show you what is happening. headline number comes through at 59.1. that is down from 65.2. the economists were looking for 64. current conditions, down 63. market was looking for 69 .3.
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expectations down to 56.3. when you're inflation expectations actually quite stable, as are the five-year expectations. is the headline number that looks a bit scary the consumer may be starting to get a little frightened here? alix: i find interesting the inflation expectations are unchanged. they are still quite high. but unchanged. have we kind of peaked in consumer inflation expectations, and then does that soften the consumer sentiment going forward? i don't know that yet. guy: my two cents on that is that the market is going to be a little bit nervous about that number. we are going from this rate scare to this growth scare, and that would start to provide some more evidence in terms of numbers that maybe things are turning a little bit more difficult. it is friday the 13th. that is one of our big stories. the other one is a much more
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grain the -- granular story and one that everyone is obsessed with. our question of the day is, is elon musk really committed -- really committed -- to buying twitter? at what price and on what terms? joining us now to kick this around is alex webb of bloomberg quicktake and bloomberg technology correspondent ed ludlow. and, how would you answer that question? ed: the market thinks the probability is decreasing. as of the open the spread on this deal happening as a $13.80. that is a soft indication of sentiment, the spread being the gap between current share price and where elon musk offered, $54.20. this is a man who keeps us second-guessing, right? all we know is he went on stage at the car conference and basically cast doubt because he
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was asked, would you reinstate trump checkup he said, i would reinstate trump if i actually by twitter. it may not happen were his words. he comes out this morning saying that temporarily the deal is on hold because he doesn't trust a regulatory filing twitter put out that says less than 5% of users on the platform for bots. all we go to is the market reaction. alix: one part of that is saying he wants a cheaper price. the other part is he really did not do his due diligence and the tech selloff has hammered the shares so much he is like, i'm going to get it for cheaper, but i don't want a breakup fee. >> some of the theories are that he is tweeting this in order to test the market and see where twitter woodland if there was no deal in place. sometimes i wonder whether we are crediting him with too much 3d chess. if he is on the west coast at the moment, which is a big if, he tweeted this at 2:44 in the morning.
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it may be he just tweeted something as a joke. but he saw this story and said, sure, i'm going to cancel this deal because of this number. he meant that, perhaps, sarcastically. it is one of the problems of this communication by twitter. we don't get clarity, so anything about the ftc, that is why they like public statements and statements to the market. therefore surely they will end up examining this. guy: potentially other things happen at 3:00 in the morning, but we will park that thought for the time being. would it be reasonable to have cold feet, though? ed: sure. one of the big problems is twitter was already trading at a very generous multiple compared to its social media peers. was trading at about 56 time it -- 56 times its forward earnings. you could say that was because there was growth expectation built into the twitter share price. if that expectation is already built in, where you see it going from here?
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he says he does have a financial vision. don't know what that is. one of the things he said was something to do with spam bots. it begs one further question. is -- if he is carrying out a review based on pot data, is it because there are too many or too few? if there are more than expected that might be the problem, or if there are fewer than expected, that reduces his upside because that is a problem he is trying to solve. victoria: we are -- ed: we are also getting one key point -- musk waved the due diligence on this in the very early stages of this deal. he came together very quickly. he waved the due diligence, which was largely relating to his ability to look at the company's finances. he tweeted as well, i don't need to look at it anymore. to now second-guess the kind of quality of the platform is inconsistent, right? the only things he has been consistent about is he wants to remove bots from the platform. if you think about his public
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appearances at ted talks, the tweets he has made, other comments, we know about the changes he wants to make is he wants to deal with this bond issue. now he has come out and questioned the level of bots it seems inconsistent, right? . alix: we are ignoring tesla in this conversation, and i have to wonder how much of this is trying to put a floor under tesla shares. yesterday we were looking at preferred equity versus a margin loan that was going to be $12 billion that might be reduced to zero. i wonder how much that is playing into this? ed: for me this is key. according to bloomberg sources reported on thursday, he wants to boost the equity portion further by an additional $6 billion or so, in addition to the $7.1 billion of a financing that were added to the dealer week ago. that took the margin component from $12.5 billion to $6.2 billion. it gains a very hefty chunk of
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tesla stock. you see the belief in tesla shares this friday morning, but there is a bigger point. musk has already -- always borrowed money against the value of his tesla holdings. this twitter deal is not the only mechanism he has done that. he has already -- he is always said he is cash poor. now we don't know what the margin call number is. we don't know what it is on this particular deal, but the shares put up, we have data on those from a year ago, and since then the value of tesla has gone up. he seems to be sitting pretty. guy: one final question. what are regulators going to see in all of this? is there a problem for tesla in this? i'm sorry, twitter? is there a problem with elon musk in the way he is conducting himself? is there a regulatory problem here as well? alex: there are three things. if it is true he is reviewing it, then maybe he should not be announcing on twitter. so, regulators look at it.
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if it is not true he is reviewing it, why is he announcing it on twitter? regulators will be looking at it. the third thing is, he is trying to buy twitter ostensibly to empower free speech. if he ends up with speech being further throttled as a consequence of this effort because they crackdown on these tweets, it might achieve the opposite effect. alix: really great conversation, guys. we will be following this. ed ludlow and alex webb, thanks, guys. coming up, we will continue the conversation how the task world has changed dramatically. you're are going to talk with the president of bottom -- vital knowledge, adam crisafulli, coming up next. his bloomberg. ♪ -- this is bloomberg. ♪
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alix: it is our question of the day. is elon musk committed to buying twitter? at what price? you have equities in the green today. the nasdaq up by almost 3%. i want to bring in president of a vital knowledge, adam crisafulli. in the beginning when adam announced this deal you said $5,420 -- $54.20 was too high.
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what is he going to end up paying now? adam: the whole world has changed, but especially the tech world since he came up with that offer. you have seen a collapse in stocks, for a variety of reasons. you have had to back up in rates, the fed tightening, the shutdown situation in china. all of that contributes to a huge rewriting in tech valuations. perhaps not a permanent one, but one that will last for a long time. musk saw what occurred i think he saw what occurred with tesla also, it is a big foundation for the wealth that is going to fuel his bid. i think he is angling for a cheaper price. that is going to be the $60,000 question. what price gets the deal done? he certainly has a lot of negotiating leverage right now, given how there are few other buyers. you have also seen a lot of changes within twitter since the deal was announced. you had yesterday a couple of senior departures. the company is ready to be acquired. i think elon is attending to
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lower the price here. guy: we don't know what that price will be, but what we can do is try and work out what we think it is worth. what do you think twitter is worth right now? adam: it is hard to say. you have in the last couple of days, yesterday you saw some buying in the tech sector that had been really washed out and out-of-favor. obviously you have an extension of that rally today. if you see someone for a floor underneath the stock you were probably looking at something in the mid to high 30's. it would probably be a floor as far as a twin evaluation. but it is really up in the air. i think a lot of it will be dependent on the market. there is still a twitter shareholder vote that takes place when the offer is made, so he spoke earlier in the week at the financial times event, as your prior conversation noted. he sounded a bit ambivalent, and i think a lot of that has to do with how in flux tech markets are.
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a big concern was also what was happening with tesla shares. this can obviously really create somewhat of a relief as far as concerns about further sales on his part. alix: do you think this emboldens short-sellers here? in member research was already short despite musk's bid for twitter. do you think this ramps those positions up? adam: it is hard. we dealing with information that is getting tweeted out and all hours of the day, so it is a really, really difficult situation right now. i don't know if i would aggressively short it now at these levels, but i think $54 $.20 is looking increasingly unlikely to be the final bid, to the extent there is an acquisition. guy: carry on. adam: no, go ahead. guy: is twitter worth more with less than 5% spambots or more than 5% spambots?
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adam: presumably those bots are skewing, kind of, the impressions as far as advertisers are concerned, so i think from the market perspective if they were to come out with a much lower user figure that would probably spook some people, but advertisers will probably appreciate the greater transparency, and that could help advertisers to the platform. if the objective is to provide a really the review a few -- of who is using twitter to advertisers, i think you could probably see ad rates tick higher. marcus would be spooked on the headline about a drop in monthly average users, but i think advertisers would probably appreciate a more cleaned up platform. alix: twitter is down, tesla up, right? the nasdaq 100 is flying high here, up 2.8%. i'm wondering what your read is about the twitter and tesla dynamic into the broader market? adam: i think one of the
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contributors to the tech slump has been this concern that elong would have to sell a big chunk of tesla shares. you have a couple of other things as well. including some of the news out of shanghai overnight. like i said, the bombed out tech stocks have been acting well for the second straight session. which is somewhat encouraging as far as tech finding a floor here. in which case that could help twitter shareholders as far as the price cut elon is seeking being lower than feared. guy: ok, let's put you on the spot. does the deal get done just yes or no? adam: i think it gets done, but i know lower price. lower price than $54.20. guy: certainly lower than $54.20. in terms of that bombed-out, do you think we are bombed-out now?
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do you think we are getting near a floor in tech valuations? potentially we have a lot further to go. adam: i think for the near term you have had such aggressive selling that you are at a level where you are going to see some of these names find a floor. don't think you are going to return back to the levels where we were even a few months ago. i think you had a 1990's-like tech bubble that occurred during a pandemic that has popped. one of these stocks are going to be trading at these current valuations for a while. i thought interactivecorp, their earnings report, they put out an interesting letter talking about how you have seen a permanent resetting in tech valuations. this is something i welcome, because they are looking to possibly add to their portfolio of internet companies. i think for a firm like that that takes a real hard look at doing m&a, i thought it was an interesting comment that they think these valuations are going to be permanently reduced for
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the foreseeable future. guy: for the foreseeable future, and permit may not necessarily go in the same sentence, but i take your point. we could be down for a while. thank you very much, indeed. have a great weekend. adam crisafulli, vital knowledge media founder and president. still ahead, why market volatility is not going away. you're going to talk to the chief market strategist of crossmark, victoria fernandez. this is bloomberg. ♪
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alix: stocks are higher today, with the s&p up 2%, a capitulation was the talk this week. get another take on it with victoria fernandez, crossmark chief market strategist. you had michael harnett saying we could -- this was the start of the mass exodus from
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equities. $6 billion-plus from equity funds this week. what do you think? victoria: when you have excess money in the market, where does it go first? it goes into risk assets. when you have liquidity come out of the market that is the first place ec a come out of as well. i don't think it is surprising that we saw a lot of the volatility we saw this week, especially when you look at some of the crypto names or some of the more highflying tech names and high-valuation names. those riskier assets, it makes sense it would be the first to come down as liquidity starts to come down. but i think you have to watch. i'm not all in on the camp that we are having capitulation at this point in time or we have had a bottom. nobody calls that exactly, you look at the fix, the vix is at a 30, and typically you do not have that capitulation until you get the vix around 40. usually have around half the s&p trading below its 65-day averages. we are not at that number yet.
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i think there might be some more volatility, a little bit more to go on the give-and-take on a daily basis before we see true capitulation. guy: victoria, good morning. our last guest was raising the possibility that what we are seeing is a permanent reset lower for growth names and their valuations. do you buy that? is that an idea that has some credibility? victoria: i think there is credibility in the fact we are having a reset, that is for sure. i don't know what we would consider a new normal, but finally a reset from where we were during the pandemic, the heart of the pandemic. obviously we saw some of those growth names have tremendous moves higher. and they were unsustainable. we knew that was going to have to come back. we think you can use that as an opportunity if you are underweight some names. take this as their chance to start building a position back up a little bit. i'm not sure we stay at these
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levels for an extended period of time, but i do think you are getting a reset so use that when you are trying to build your portfolio as chances to make your shift. alix: does that mean you are going to be nibbling at some of the longer-term growth names, like the big guys? versus, say, value? victoria: we have been. we have an overweight to value for most of this year. we saw over the last few months that benefit of value versus growth start to diminish, so we are picking up a few growth names. microsoft and apple are names we hold. we continue to hold both of them. we nibbled at apple a little bit over this week, because we saw the name come down and we had become underweight in our portfolio. you know, we are doing what we are telling other people to do. we are seeing opportunities and nibbling at these names in order to build your position. guy: i was reading back through some of the notes you sent us over the past few months as we
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have interviewed you. i think it was in september you started raising the possibility of picking up more cash in the portfolio. how much cash do you have in the portfolio right now? how defensive are you positioned in terms of where you would normally expect to be? victoria: we have raised our cash position a little bit, but we are not -- we are not taking a huge bet on cash right now. i think for us it is more becoming a little bit more defensive in some of the names that we have in the portfolio. we have added some health-care names, which makes sense for us. when you look at our fixed income portfolios we have built a little bit more cash, which has been beneficial, even though we are still short-duration. not only does it help you be a little more defensive in volatility, gives you some arrows in your quiver so when you see a move that make sense to you, when you see a name that hits a valuation level and it is a name you wanted to put in your portfolio, then you have the
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ammunition to move on that. alix: we saw a consumer sentiment read from you miss quite low, decade-low. what do you do with consumer stocks now? victoria: it is interesting, because the consumer has really been the heart of this economy. it has been driving the growth we have seen over the past few years. so the consumer continues to be strong. i know sentiment comes down, but the sentiment numbers you get on some of these surveys are very different from someone sitting at home and spending their money. obviously inflation is taking a hit with some of that, but we are seeing credit card spending going up. we are seeing the loans at banks continue to do well. and balance sheets continue to be strong in this. even though sentiment is a little wobbly at this point, i still think you have to bet on the consumer and the strength they have to support the economy. guy: great to catch up. victoria, thank you very much.
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crossmark's chief market strategist, victoria fernandez. the s&p did not miss a beat on that university of michigan data. coming up, the outlook for retail and inflation. we are going to talk of the ceo of boxed, j wong -- chieh huang ,. this is bloomberg. ♪ cal: our confident forever plan is possible with a cfp® professional. a cfp® professional can help you build a complete financial plan. visit letsmakeaplan.org to find your cfp® professional. ♪♪
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alix: we are an hour into the u.s. session and no scary trading yet. stocks higher s&p the best day since may 4. abigail: we have a significant rally s&p 500 having the best day and true for nasdaq 100, best in more than a week big gains more than 2% for the s&p 500 and nasdaq better. golden dragon china best since the middle of march so we are seeing a little built of
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reversal of some tech stocks extending today. some had to do with apple because it was done arson 5% after 5% the finishing day finishing the low a rally of 2.5%. we look at a chart of apple and you will see this stock the heavyweight, biggest of all the indexes is holing critical support. this is a 10-year chart of anle on a weekly basis so in red or pink that is the 50 welcome moving average very important green the 100 welcome moving average you see yesterday apple hit it and is holding it like a glove. that's what happened in 2020 then the 200% rally off those levels. however other times when it didn't hold it went down to the 200 week. they are holing apple and the market up as well. but apple and other technique stocks are getting help from the fact that on the weeks they are doing something they have not done in a long time.
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we have the 10-year yield down 20 basis points up today but overall on week lower so tech stocks finally reacting. then finally because we have yields in we have the high beta stocks twitter up 5.2% and this may have something to do with the fact that as has been covered all morning tesla up 5.5%, having to do with elon musk's bid for twitter is on hold maybe taught more attention would go to tesla. look at the art innovation the best day back it 2014. that is the degree of animal spirit pushing stocks higher. rounding it out look at the meme stocks, game stop up 13 by 7 after rallying 10% yesterday and this up 19%. the risk buying is in full effect. alix: thank you, abigail.
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you had consumer sentiment to decade low and that is not affecting the equity markets but part of that we need to focus on rising inflation. yesterday the world agriculture supply and demand report and something interesting happened. global wheat stock smiles will decline to a six-year low. the war and russian invasion of ukraine is big an weather is but if food prices may have rolled over a touch but when you have this shortage it won't get fixed soon. corn planting may not be as good as we thought. usda calling that sooner normal all of that adding to inflation pressures that won't be necessarily temporary. guy: that is the issue that everybody is trying to figure out. how long will this last an how do i reposition to figure this out and what are my input costs going to look like and how
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strong will the consumer in terms of buying my stuff. food is front and center with a lot of articles in the u.k. about it the era of cheap food may be coming to an end. retailers have the supply issues and high inflation in four decades. how do you deal with that? let's talk to one person trying to do that chieh huang joining us. this is the issue. everything is very volatile right now. we don't know where the consumer is going or what the input story will look like. how are you managing it from your business as point of view? chieh: it is a pretty wild time. the good thing about the food industry is it is not discretionary. people have to have toilet paper and food on the table every day. with that said what you are saying is puts and takes. consumers trading up in terms of quantity potentially baghdad in
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bulk. also trading down to hard dip counters. that is what happened during recessionary times or inflationary times. alix: do you have a sense people are buying anything specifically differently? i understand bulk but on the cheap but what they are buying? chieh: we are seeing a shift toward private brand i guess that is industry wide. that private brand through might have skipped over when inflation wasn't so robust and when now you take a second look if it is a commodity can i save $5 this week why not. a lot of them we sell are much better in quality these days. guy: what do you actually see? what is the consumer doing right now? we had data at the top of the hour that suggested the consumer is feeling significantly less optimistic.
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is it a kind of idea for the future that people will trade down and do that as they react it the higher prices or doing it right now? chieh: i would say there's two data points i can give you. one is we announced earnings this past week where we showed a.o.b. or average order value up 16% on prices appear units so consolidate being and buying up and buying a bigger basket potentially save on the transportation cost. the second thing that we are seeing is how consumers are responding to i guess reengagement advertising or e-mails or reengagement applications. it goes up we the messaging is rate when you talk about inflation and gas. you are seeing that in that. alix: that is interesting. i wonder how you feel the changes these are.
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pretend that all of a sudden inflation comes down quickly or fed works in how quickly will they go back it spending habits? chieh: i can only speak on behalf of the data. what we have been seeing in the pandemic there was a huge pick in 2020 and 2021. 2022 we saw a regression back to the mean so folks were spending as pre-covid day because we have a sticky user base. what is interesting not the topic of today but people are spending more so that is something to keep an eye on. there are puts and takes of sometimes with inflation up but off the returning back to normal that was up over 65% last quarter. guy: do you think as people buy bigger baskets the delivery time is less important? for the last few years we have
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been progressing toward faster and faster delivery. does that now go in reverse? chieh: for seven categories you definitely want things if it is tiny pantry items you needed yesterday definitely you will see 20 minute delivery. that is a great service for a certain number of categories. i love that you asked that question because it is almost like you are in our room because we debate that. the reality is when we survey or customers 70% of home are in deep suburbs of rural america no one is saying i need a 48 pack of toilet paper in 10 minutes. these are folks that are planning and stocking up pan asterisk so there is -- pantries. alix: if be is in the big houses i cannot imagine storg that in my new york city amount. i have a question though about how you are running the business
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in terms of your visibility. there's so much uncertainty. they are under pressure from industries. how confident are you in your ability to make investment decisions right now? chieh: i would say i will put it in the sense of we know with we can control. there's a lot of things out of our control like execution on the factors we can control are important so talking about data and action items. one is definitely we just announced yesterday our brand-new partnership with fedex so being able to leverage their network and provide s day service and potentially margin gains is something we can control and the management team here executed on. the second thing is when you look at kind of overall service levels for the consumer and the product we sell keeping things on stock, in stock and making
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sure they are delivered in full is something well within our control so investing in more center capacity and fedex give us the confidence we are investing in the right way. guy: in terms whatever is happening with labor, within final quick question. how much are you investing in robotics right now? is the increasing wage story we are seeing encouraging you to do and if you want to is there capacity in the industrial side to build the robotics that you need? chieh: i love that you asked that question because i think it highlights the fact that away build our own robotics. so we sell toilet paper and oreo cookies but we sell software and end to end technology that powers our business so we have hardware engineers so the newest fulfillment center those robotics are engineered, built and manufactured by as you so we have -- by us. but a lot of third party
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providers there's a long back log. if you want to automate your fulfillment center you have to get in line and it could be years for the key technology. alix: thanks a lot. i send guy to your next management meeting. for more on how inflation is hitting consumers college out the paycheck podcast on apple podcast. it is a really great thing to listen to. we will have the latest on twitter next as elon musk is rethinking his bid. he is staying committed but the question is what surprise. this is bloomberg. ♪
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with the news from around the world. european union nations say it may be time to consider delaying a push to ban russian oil. the problem is they content get hungary to back the embargo they could proceed with a package. the senate looks to the package of a $40 billion ukraine package after republican senator rand paul refused to allow the vote. he demands they put an official with oversight powers. the senate is expected to vote on the matter next week. the wave of covid is making its way across the u.s. those who have evaded it are falling ill and others are catching covid for the second, third or fourth time. still the rise of it has made keeping accurate count of positive cases impossible.
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it is difficult to know what the next few months will bring. news on the air of bloomberg. this is bloomberg. alix: thank you, angel. nasdaq 100 up by almost 3% and twitter up by 9%. world wavers as elon phupbg says his deal to buy the company is on pause. i want to start with you. what are bankers telling you right now? you have a lot invested in this? >> they do. he had gone to a lot of parties not only for the margin loan which our own booing reporter reported. he is trying to find new financing so reduce the margin so a lot of people talking to musk to try to get this done but again let's look at the merger spread because that is where the
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money is to be made and lost. shares much lower than the offer price. a lot of questions about whether he is going to drop the bid entirely or renegotiate the offer price. there's a breakup in both directions. if he walks away it is a billion dollars, if twitter walks away it is a billion dollars. so the question is who stands to lose if it does not go through. guy: let's say it goes ahead but at a lower price. how does that change the funding requirement that musk needs to put in place? can he use what is already there? does he need to change that? how would the banks be thinking of a letter price in terms of the way it changes the arithmetic in terms of the monday needed and how much equity could be concluded. >> presumably the issue is if less money is needed either you are requiring less from the banks because you are going to take a bigger share or that will
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be supplying the same amount and maybe a greater amount. the odds are they don't want want to take, if they are tkpelgt equity or preferred equity from the latest reporting might be the case they may not want to be taking huge amount of dilution. we don't really know. the difficulty is would at the prefer the lower price? i'm sure. do twitter's investors and board want a lower price? that is different. the board was told that by investors they didn't think without the bid could $54.20 on its own soon. there are people had have price targets in the $60 it $70. ultimately it is more confusion which is something won't be liked. alix: the second will probably be all over this. it is not the first time they
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have gone after elon musk. i wonder what we will see. alex: no way the alexander will not look at this. if he had tweeted something as a joke which remains a possibility this will look at it. if he tweeted something because he is reevaluating the deal that is probably going to come through regulatory announcement and they will look at it. elon is supposed to have a lawyer who evaluates all of his tweets but i think i'm right in saying the s.e.c. stipulation imposed two years ago after the infamous fund secure tweet only pertains it tesla shares and it is to twitter shares. so there was a tesla lawyer evaluating his tweets it they have relevance to capital markets. this is about twitter. maybe it is wiggle room on that stipulation. guy: to come back on this how
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much the bank will want as a share of the deal if it is reduced what is your take? >> one part is equity not just the share of the deal which is reduced in the equity partners i think it is preferred equity financing we reported yesterday was interesting. 20-year maturity and paid in kind at 14%. this is apollo and sixth street in talks. the structured financing here is something we saw come to the fore in the middle of covid when people needed financing and now in a more aggressive way one of the largest l.b.o.'s. you're talking about what happens if a deal doesn't happen. if you look at what is estimated they are using a $30 down side for twitter if it does not go through. i think what is interesting here is how is phufpbg going to get that value out of twitter over that 20-year horizon over the scale of the preferred financing but also in the quick turnaround
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he told bankers he would potentially be able to accomplish if he could take twitter believe in a shorter time frame. alix: i have to wonder how unusual is it for bankers to deal with sort of this key man risk, a huge deal, big break-up fees in this volatility. they are not used to this. >> no. that's why when you look at how people are creating structure you are not seeing apollo come in with an the check, but preferred financing that prbgts themselves on the down side. when i speak to bankers they felt the same about the margin len protecting themselves but getting in on a exciting deal the way this is playing out. but remember, i think one thing that is interesting the amount of investors who said they would want to get in it. i had a discussion with a found outer and investor in spacex.
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he said if they could get in they would. there are investors who want to get in despite the risk bass they believe in elon which is how the banks have felt for a long time. guy: and they have been rewarded for that. saying the recent developments could turn into a circus show. thank you spwroefrpt. this is bloomberg.
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>> equities are rallying nasdaq up by 3% but we are looking at a weekly loss and consecutive six-weekly losses of the nasdaq 100 the worst since 2012. another poster child of that is the arc innovation e.t.f. caught
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in the sell off of technique shares. it is leading to say they are mispricing them. they phraeuplsed fed for hiking too much too fast but the co-founder of a.q.r. is not buying that response and defeated tweet he said if they don't get to use the word funnels and a.q.r. was right and wood was wrong and they have no sense of irony. sure, but let's be honest, guy. a.q.r. hadding in tough returns in five of the last six years. it was early to be throwing shade. i think his word is not on her performance but the methodology that he has an issue with and fundamental analysis. she is talking about, kathy woods talking about deep value here. i think that chris's point is that is not kind of what everybody else is seeing. the methodology that is used he
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is erroneous. i think he is being very clear he is not criticizing the form. he went through a very long period of time of underperformance so he is not having a month there but a pop at kind of the whole idea of fundamentals and evaluations. early in the hour we were talking to a guest who was talking about a permanent, a sustained period in which the evaluations of some of these big tech names will set lower and stay. that is the danger that cathy wood faces here. alix: i understand but deep value there's different. i feel like it is a potato or potato thing. guy: ok. we will part with that debate. we will continue with it but in the next hour. right now let me update with markets. we are a little off to the races
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friday may 13 but doesn't seem to be scaring the market. equities are up 1.9%, euro higher but a 103 handle. brent is up 110, nearly 110. we will talk with someone about that next.
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>> friday the 13th, but european stocks are higher and up on the wii, as well. "countdown to the close" starts now. >> the countdown is on in europe. this is bloomberg markets close european close with guy johnson and alix steel. ♪ guy: 30 minutes until the close. european stocks ar

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