October 23, 2025 • 42 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Basketball player Terry Rozier told a friend in 2023 that he planned to take himself out of a game early with a minor injury. The friend, Deniro Laster, used the tip to place more than $200,000 in bets predicting Rozier would fall short of his usual point total.
By the next morning, prosecutors say, the two men were counting their winnings together in Rozier’s home. The Charlotte Hornets guard at the time played just nine minutes against the New Orleans Pelicans and checked out.That incident, described in a federal indictment unsealed on Thursday in Brooklyn, now sits at the center of one of the most sweeping sports gambling cases ever brought by the US Justice Department — one that stretches from locker rooms to underground poker clubs controlled by New York’s biggest mafia families.
Rozier, now with the Miami Heat, and Portland Trail Blazers head coach Chauncey Billups were arrested Thursday morning and charged as part of two separate criminal schemes related to illegal sports betting, federal prosecutors said.
Soon after the arrests, Rozier and Billups were placed on immediate leave from their teams.FBI Director Kash Patel and Brooklyn federal prosecutors said at least 30 people were arrested across 11 states, including current and former National Basketball Association players and coaches.
Today's show features:
- Bloomberg News Senior Reporter Myles Miller and Global Business of Sports Reporter Ira Boudwayon the FBI’s sprawling sports gambling probe involving current and former NBA players and coaches
- Alli McCartney, Managing Director of Wealth Management with Alignment Partners at UBS, on whether the equities market can sustain recent gains
- Bloomberg Businessweek Senior Reporter Max Chafkin on Elon Musk continuing his $1 trillion pay package push
- Jay Goldberg, Senior Analyst, Semiconductors & Electronics with Seaport Research Partners, breaks down Intel’s latest earnings report
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:08):
This is Bloomberg Business Week Daily 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 Weekdaily
Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio, let's.
Speaker 3 (00:33):
Talk about some of the stories that are going on,
certainly out of the nation's capital. Transportation Secretary Sean Duffy
Warren that flight disruptions would continue across the US as
the government shutdown drags into its fourth week. More than
thirteen thousand air traffic controllers in fifty thousand Transportation Security
Administration agents are being forced to work during the shutdown
without pay. Just one important part of the government, as
(00:55):
you know, that is being impacted by this breakdown between
Republicans and Democrats, break down that we seem to see
over and over and over again.
Speaker 1 (01:03):
Bloomberg News correspondent and hosts of The Big Take podcast,
David Gurrow sat down for an interview with House Minority
Leader Hakim Jeffries to talk about the relationship between the
US and Russia, the upcoming New York City mayoral election,
and first and foremost, the ongoing government shutdown.
Speaker 4 (01:17):
Those Democrats. We continue to make clear to our Republican
colleagues that we will sit down with them anytime, any
place in order to reopen the government to negotiate a
bipartisan agreement that actually makes life better for the American
people in terms of spending and funding. But we also
have to decisively address the Republican healthcare crisis. We've maintained
(01:41):
that position from the very beginning before Republicans shut the
government down and during the entirety of this shutdown, because
it is a real crisis that has been created at
this moment, particularly as it relates to the urgent need
to extend the Affordable Care Act tax credits.
Speaker 5 (01:55):
As you and I are speaking, the House speakers doing
a press conference just down the hall. Is the level
of engagement? Do you pass one another? Are you speaking
with one another? Are Democrats talking to Republicans right now?
Speaker 4 (02:05):
The conversations have been very limited, unfortunately, because Donald Trump
has not given House Republican leaders or Senate Republican leaders
permission to negotiate. Reinforcing the principle from our view that
he made the decision to shut the government down. They
want to continue to inflict pain on federal employees. They've
done that from the very beginning of Donald Trump's presidency.
(02:26):
In fact, more than two hundred thousand federal employees had
been forced off the job prior to the government shutdown,
and this is something that we've continued to see them
build upon during the shutdown until Donald Trump gets serious
about reopening the government. Unfortunately, we're going to remain in
(02:48):
this situation and every day Americans are being hurt.
Speaker 5 (02:51):
He's getting ready to take a trip to Asia. Is
it appropriate for him to be doing that at this
moment when the government is shut down.
Speaker 4 (02:58):
I think that the president has a response onsibility both
domestically and throughout the world. However, what has been irresponsible
is that throughout this shutdown he's found more time to
golf than he has to engage with Democrats on Capitol Hill.
He's decided to try to steal two hundred and thirty
(03:18):
million dollars in taxpayer funds from the Department of Injustice.
Donald Trump and his administration have found forty billion dollars
to bail out a right wing want to be dictator
in Argentina and can't find a dime to extend the
Affordable Care Act tax credits to keep health care affordable
for tens of millions of Americans. And on top of
(03:40):
all of that, they are demolishing the East wing of
the White House in ways that have appropriately horrified the
American people.
Speaker 5 (03:50):
I want to ask you about potential off ramps, and
Tammy Baldwin the Center from Wisconsin Democrats said Trump is
the off ramp at this point. Do you agree with
that assessment and has there been any kind of outreach
a dialogue between you and the White House.
Speaker 4 (04:02):
Lady Schumer made Claire earlier this week that we have
reached out to the White House again to indicate that
prior to Trump's departure for Asia, he should sit down
with Democrats to find a path forward, to reopen the government,
to enter into a bipartisan spending agreement, and to address
the healthcare crisis that Marjorie Taylor Green acknowledges must be
(04:24):
addressed and that traditional conservatives who are in the toughest
seats in the country have now publicly acknowledged this week
needs to be addressed.
Speaker 5 (04:32):
Can I ask you a question of congressional mechanics, and
that is, can the Democratic leader pick up the phone
call the White House and reasonably expect the President's going
to take that phone call. Are you able to do that?
And if so, what's keeping you from having that?
Speaker 6 (04:45):
Doe?
Speaker 4 (04:45):
Well, traditionally that probably is the case, but in this
White House that's very much on Claire. Donald Trump didn't
have a meeting with House or Senate democratic leadership until
two days prior to the government shutting down.
Speaker 3 (05:00):
Was House Minority Leader Hakim Jeffries with Bloomberg's David Gore.
David joining us from the Bloomberg News Bureau and the
Nation's Capital. Hey, David, you know what I picked up
from there is, you know, we hear the President and
Republicans talk about the shutdown, then we hear Democrats separately
talk about it, but again, nothing about leaders coming together
to really work on the issues that separate them. And
I kind of got that from the House Minority leader
(05:22):
as well.
Speaker 5 (05:23):
Separately is the keyword there. Carol Swfie said, these two
parties are not speaking with one another. And I should
say at the Capitol Building today it was incredibly quiet.
You do have congressional leadership there holding press conferences, meeting
among themselves. But it is sleepy, isn't the right word?
Empty is perhaps a better word. And it was clear
(05:44):
from that conversation that the person who needs to be
at the table, or at least giving the blessing to
Republicans who are at the table, is President Trump. And
there is I think a level of resignation among Democratic
leadership that without that, this is just going to continue.
So we're poised for President Trump, as we talked about
that interview, to take this trip for about a week
to Asia. Again, there's a recognition there that with him absent,
(06:06):
this is unlikely to advance or develop here over the
coming days.
Speaker 1 (06:09):
Yes, I guess the big question on the Democrat and
Republican side is what can be done with the president
on this trip? What can be done out of the country.
Is there a chance that these two sides can come
together and end the government shutdown even if he's not around.
Speaker 5 (06:23):
Well, there is some hope for optimism, of course, but
there are a number of kind of pressure points that
are on the horizon. I think that's pretty notable. So
tomorrow is the first one October the twenty fourth, that's
when a lot of federal workers are not going to
receive their paychecks for the first time in this shutdown,
so the pain of the shutdown is going to be
more acutely felt by more people. And I think what's
kind of novel about this shutdown is you've had someone
(06:44):
who heads the Office of Management Budget at the White
House really moving things around, playing what he calls budgetary
twister to make sure that a number of government employees
are paid, certain programs are continued. All of that starts
to become more and more difficult here as the days
tick on. So tomorrow a big pressure point. The other
one is next week November the first, when some SNAP
benefits are scheduled to expire, and of course when open
(07:04):
enrollment begins for healthcare plans. That's the moment at which
Democrats believe Americans are going to look at the prospects
of their healthcare going up, becoming more and more expensive,
and they're going to perhaps recognize the fact as Democrats
would say that this is something that's real and important,
and that having the government shut down so that those
subseats can to be restored is worth doing.
Speaker 1 (07:22):
I will say I think that message is getting to
Americans outside of the Beltway. I was in Arizona last week.
The lead story on local news last weekend was about
premiums going up for that Obama for Obamacare.
Speaker 7 (07:34):
That is story.
Speaker 1 (07:34):
It seems to be getting out there, and people are
actually talking about that. David a lot in that interview.
One thing you also touched on was what's coming here
in New York in the next couple of weeks early November,
the mayoral election and the way that Leader Jefferies has
or has not yet communicated with Zoron Mamdani, the favorite
to win the election here in November. What did you
say about that?
Speaker 5 (07:56):
They have spoken a couple of times, and I was optimistic.
I had my fings crossed that he'd be willing to
make an endorsement today. During that interview he declined to
do so, but he has so that he's going to
speak with sore Mondani again today and tomorrow. As he
prepares to do that, he talked about the obligation of
doing that. I asked him, did he watch the debate
last night, the final mayoral debate or did he watch
(08:16):
the next season opener? He admitted he watched the last
few minutes of the basketball game and not the debate,
but he kept up with it and kept up with
what the conversation has been, and after he declined to
make an endorsement, I really pushed him on why what
the outstanding issues are, and what he emphasized to me
during our conversation is, look, he really applauds mister Mundonni
for his emphasis on affordability. He thinks that's a signal
(08:38):
issue in New York City and one that's a signal
issue across this country for Democrats, who really applauded him
for focusing so much on that. But he acknowledged the
fact that President Trump is likely to go after in
New York after this mayoral election takes place. Does Mondanni
have the capacity the experience to deal with the level
of pressure that the federal government is going to bring
to bear. So I personally a bit disappointed that we
(08:59):
didn't get that adorsement during my interview today, but it
does seem like that's likely. I mean, I think what
he said over and over again is he plans to
weigh in on this race before early voting begins, and
it's both of you know, early voting in New York
City schedule to start on Saturday of this week, so
time is nigh and he's going to do it soon.
I should say he was about like ninety eight percent there.
I think during the course of our conversation he really
applauded Mondani for saying that he planned to keep Jessica
(09:20):
Tish's the New York Police Department commissioner if he is elected.
He saw that as a positive step.
Speaker 3 (09:26):
All right. Last question though, because this also came up,
and I feel like people have said to me, why
aren't you guys talking about this? But it's all of
our social media active activity, and David, that is what's
happening at the White House. The actual physical demolishing of
a piece of the White House. I know, in the
grand scheme of things, maybe isn't as important as a
lot of other things that are going on in this world,
but it feels very symbolic, symbolic despite the actual physicality
(09:48):
of what's happening, and indicative of a president that can
kind of do whatever he wants. What did mister Jeffrey say.
Speaker 5 (09:56):
On that he expressed dismay over this happening. I think
a lot of people in this city have as well.
Of course, it's a very old building that has been
remodeled in the past, but this is pretty dramatic, and
in the past it would have gone through a lot
of reviews. That hasn't happened here. The President said initially
he planned to build this ballroom that was going to
have no effect on the existing building. Of course that's
not the case. We have seen images and video of
(10:17):
the demolition of the east wing of the White House
that are startling to a lot of people, as the
Minority leader said, And then there's just the notion of
what's being built there, this massive structure, this ninety thousand
square foot ballroom, which the President says is essential for
the leader of the United States to entertain foreign leaders
who come through Washington, d c. Organization of Architectural Historians
pointing out that just proportionality is wrong here that have
(10:39):
a building of that scale on the White House plan
is just huge. So a lot of people just expressing
dismay and stupefication over what's happening here. And I should
note as well, the price tag on this is it
has gotten larger over the course of this construction too.
It started out at two hundred million dollars. The President
said it'd be paid for by himself and private donors.
Now the price tag is three hundred million dollars. A
(11:00):
lot of people is kind of wondering how this is happening,
how it's happening so quickly, And I think that you
hitting on kind of the metaphorical side of this is
important to care. A lot of people kind of looking
at it as a way of the president here moving
with some reletvve impunity.
Speaker 3 (11:10):
Gotta say, I have an old house eighteen hundreds and
I can't even change a window with that like a
commission weighing, and so there's got to be something when
we're talking about the people's house.
Speaker 7 (11:18):
David, You're not the president, Carrol.
Speaker 3 (11:20):
That's what I'm saying. I'm nothing, and I think, but
you're not the person. I can't change a window without
stuff coming down on me, and I'm just thinking about
the historic significance of that building there on Pennsylvania Avenue.
All right, David, thank you, as always, Bloomberg News correspondent,
host of The Big Take podcast, David Gora.
Speaker 1 (11:37):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 2 (11:44):
You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
live weekday afternoons from two to five pm Eastern. Listen
on Apple CarPlay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 1 (11:59):
Miami Heat Terry Roser Rosier, excuse me, Portland Trailblazer's head
coach Chauncey Phillips were arrested Thursday morning. In charge is
part of a sprawling sports gambling federal prosecutor said. In
a press conference Thursday, FBI Director Cash Btel and Brooklyn
federal prosecutors said at least thirty people were arrested across
eleven states, including current and former NBA players and coaches,
(12:21):
as part of two separate criminal schemes related to illegal
sports betting. Here's FBI Director Cash Btel at a press
conference this morning in New York.
Speaker 7 (12:29):
Let's not you know, mince words.
Speaker 8 (12:31):
This is the inschider trading saga for the NBA. If
you're participating in the legal gambling industry, you got nothing
to worry about. If you're participating in illegal conduct, you
got everything to worry about. In this case shows it.
Speaker 1 (12:44):
That's FBI Director Cash Hotel. Earlier today, we got Miles
Miller with us. He's Bloomberg New senior reporter. He covers
Homeland Security and the FBI. He joins us here in
the Bloomberg Interactive Brokers studio. Miles also covers city government
here in New York City.
Speaker 7 (13:00):
Turn around, you know.
Speaker 1 (13:01):
So we're gonna get to this sports, the sports gambling
in the NBA stuff in justin manic. It's fascinating, and
we're going to bring an Arab duet a minute too.
But first, let's talk a little bit about what's going
on here in New York because New York City Mayor
Eric Adams has endorsed Governor Cuomo for the mayoral election.
Speaker 9 (13:21):
You'll remember Greasie Mansion, beautiful palatial mansion on the East
side of Manhattan. We thought Eric Adams was going to
drop out of the race and instead what do you say?
He said, Andrew Cuomo is a snake and a liar.
Asked today why he's endorsing Andrew Cuomo, he said, brothers fight,
but when families are attacked, brothers come together. He sees
(13:44):
this as essential to Cuomo having any shot of winning
the election against Mamdani. The cards are stacked against Cuomore,
stacked against Sliwa, and they were slacked, stacked against Adams,
and so this is the only way he sees that
Cuomo could win, and which would be by endorsing him.
He's going to go out around the city with Cuomo.
Speaker 3 (14:05):
Will help, you know, it remains.
Speaker 9 (14:07):
To be seen. He's gonna go to He's gonna go
to areas where he had support, which you would probably
say are in south Southeast Queens probably Wakefield, in the Bronx,
those places, but those are places that Cuomo probably has
support already. Ye will it help unclear? But this is
a New York second black mayor who is going to
stand up, going to go to church with Cuomo and
(14:28):
say this is the person who is going to best
support you, not Mum Donnie uh. And that is going
to be you know, critical in the last couple of
days of this election, and it shows how desperate the
Cuomo campaign is.
Speaker 1 (14:41):
What's Mayor Adam's going to do next? There's been a
lot of speculation about would he take a job? I
mean there was there were some there was some reporting
that said, okay, maybe he's being offered a job in
the Trump administration. What's what's going on there?
Speaker 9 (14:53):
I was told many many years ago never to predict
what Eric Adams is going to do because you know,
he can sit right in front of you on Business Week,
Bloomberg business Week and tell you no matter what, he
is not going anywhere, and then sure enough drop out
of the race.
Speaker 7 (15:09):
You yeah, right, you know when you want my birthday?
Speaker 9 (15:11):
He tells me. He tells me he's not leaving the race,
and then straight up leaves the race. He says he
wants to get his pH D. You know what he
really wants to do if he stays in government is
have this A source told me this is have any
any position where he can bring staff, have a detail
and do important things.
Speaker 3 (15:27):
All right, So tell us about what happened earlier this morning.
A couple of indictments coming down. I'm switching gears.
Speaker 1 (15:32):
What I would like a staff and have a detail.
Speaker 7 (15:35):
You know, I'm going eric a long time.
Speaker 9 (15:37):
I'm just let's just be honest about what he what
he's told people.
Speaker 7 (15:40):
Go ahead.
Speaker 3 (15:40):
You know have staffs in details, sometimes our NBA players.
So let's go to what happened this morning? What do
we find out?
Speaker 9 (15:47):
So you've got two different scandals here involving the MTA.
You've got one NBA. Sorry, So what I say? Up
since four this morning. Okay, you've got two different, two
separate scandals. You got the first one involving which is
basically insider trading at the at the NBA basketball player
(16:08):
Terry Rozier telling a friend that he planned to take
himself out of a game. That friend then places a
bunch of bets worth more than two hundred thousand dollars
on that game, which would be fishy to anyone, and
so it tipped off federal prosecutors and so they knew
that something was wrong there and it exposed this big issue,
including four players who were trading on things that was
(16:32):
trading on private information so they could make money off
of things that were not public.
Speaker 7 (16:37):
So that's the first case.
Speaker 3 (16:38):
So knowing a player is in and out kend terming
the outcome exactly.
Speaker 9 (16:42):
And Lebron James a victim of this, you know, second
indict exactly. Second indictment. You've got the mafia. You've got
the four of the five New York crime families running
rigged games on Lexington Avenue and running rig games on
Washington Place. They had a table set up where they
could see live the card that was face down, and
(17:06):
so the games are rigged. They use NBA players in
order to get people to get enticed into the game.
But the players, they believe, prosecutors believe, were in on it.
They thought that they believed that Chauncey Billups, a coach
of the Trailblazers and an MVP, was part of this
conspiracy to steal people's money and he got a cut
of it.
Speaker 3 (17:25):
They say, not nice, No, not nice again. Indictments stuff
to be known, right, and things exactly will carry out. Miles,
thank you for breaking that down. A lot going on,
Miles Miller, Bloomberg New senior reporter covering homeland security and
the FBI.
Speaker 1 (17:39):
I want to bring in Ara Buduay, he's Global Business
of Sports reporter for Bloomberg News. I want to just
set the poker stuff aside for a second. That the
prop bets about the players is really what I want
to talk about, because he wrote in August for Bloomberg
Business Week that sports leagues are struggling to deal with
so called player props for bets. Big focus of your
story was the MLB, I recall correctly, but this is
(18:02):
exactly what materialized here.
Speaker 10 (18:04):
Yeah, I mean it's a known problem, as you say, so,
there were these cases earlier this year. In July, MLB
announced in investigations involving two Cleveland Guardians pitchers, and they
were alleged to have been throwing a ball on purpose.
And you can bet just on the first pitch, right,
That's how small some prop bets get.
Speaker 7 (18:22):
There had been a previous.
Speaker 10 (18:23):
NBA case, John tay Porter, actually the same federal investigation
that brought the charges today involved. Actually it was how
John tay Porter wound up pleading guilty to taking himself
out of games early, saying he was sick, and having
co conspirators bet the under on a prop. So this
is really the vulnerability for leagues.
Speaker 3 (18:46):
I want to say, are we surprised? I mean, the
the mixing meshing of gambling and sports, which was considered
a no no for so long rose exactly right, like no,
don't do it, don't do it, don't do it. Here
we are and then this is happening.
Speaker 7 (19:03):
Yeah, I mean, it's really interesting.
Speaker 10 (19:04):
The question that is really hard to get to the
bottom of is whether it's better or worse to have legal,
regulated sports betting, right, because clearly it's more widespread now
it's on your phone, it's advertised at you all the time, right,
So there's just more people.
Speaker 7 (19:19):
Involved different ways.
Speaker 10 (19:21):
It's also much more closely monitored when it's legal, because
you can see every bet and there, and there are
these organizations that actually are watching for suspicious betting activity,
which is how in many cases, including these cases, investigators
get tipped off. They see unusual betting activity and they
follow up.
Speaker 3 (19:40):
All the gaming ops apps on your phone, those are
all regulated people are monitoring or no.
Speaker 10 (19:46):
Yes, so if you're betting on Fandel DraftKings, other legal
sports books, yes, those bets are being monitored by these
independent groups that have access to the data and whose
job it is to on behalf of the leagues and
the sports book who you know, if you listen to
Federal prosecutors are the victims in these cases because people
are using inside of information to take out bets that
(20:07):
then win and the sportsbooks have to pay out. So
they participate in these monitoring systems that are set up
to catch suspicious activity where often is a lot of
action suddenly, a lot of bets very suddenly on a
player to underperform, you know, in very large bets from
maybe betters who've never bet before. Those are the things
(20:28):
that get flagged.
Speaker 1 (20:28):
It does seem like ira there could be a happy
medium here where maybe the government comes out and says, Okay, well,
maybe we let the cat out of the bag a
little too much a few years ago with the Supreme
Court decision. Maybe the Supreme Court let the cat out
of the bag. I don't know if they can do
this legally, but what if there were a way to say, Okay,
we can allow you to bet on some stuff, the
outcomes of games, but the granular prop bets that are
(20:52):
one hundred percent in the control of one single player
that just isn't working.
Speaker 7 (20:57):
Yeah, is that possible. We're seeing this happen.
Speaker 10 (20:59):
Bets on college players in some states are not allowed.
The NBA, after the John tay Porter case convinced major
US sports books to no longer offer under prop bets
on the lowest paid players in the league, and.
Speaker 1 (21:14):
With the idea that the lowest paid players would be
more incentivized most vulnerable.
Speaker 10 (21:17):
So John tay Porter was what's called a two way
player on a four hundred and fifteen thousand dollars contract.
What's interesting about the accusations today, the indictment today is
that Terry Rosier, who's accused of doing this making twenty
six million dollars this year, So it may not be
just a case of going after the most vulnerable players.
Adam Silver, the NBA Commissioner, has recently hinted that they're
(21:39):
looking at other things they might be able to do
to restrict prop betting. And you know, after the cases
in Cleveland with the Guardians Pitchers, the governor there Dwine
asked their state gaming regulators to get rid of all
prop bets, and so Ohio is looking into that. So
there is movement to try to limit prop bets, but
it's not clear kind of how that will shake out.
(22:00):
And actually, I think one of the other things that
this might lead to is more pressure to have a
federally regulated system, which is what Adam Silver has always
been asking for.
Speaker 1 (22:08):
You were part of a group of reporters the few
years ago who did a big Bloomberg Business Week special
on gambling in sports, and I'm just wondering, if what
we knew at then, or now we knew then, would
it have turned out this way? Or in other words,
has this how is this gone? Has this gone? Okay?
Speaker 11 (22:26):
Yeah?
Speaker 10 (22:26):
I think the experiment there's two big vulnerabilities, right. There's
the erosion of trust and the corruption issue. Right whether
if you keep having cases like this, fans will no
longer really believe in what they're watching on TV. That's
a big problem. I think it grows today. We will
see how persistent that is and how.
Speaker 11 (22:44):
Big it gets.
Speaker 10 (22:45):
The other thing that I think is just more broadly
and sort of the experiment of sports, of legal sports
betting in this country. I think once you've had legalization
and it's now on phones and mobile, what we're finding
out is that it's addiction is a real problem, and
it's damaging the personal finances of a lot of particularly
young men who get into this. So I think those
are two things that it's not like we didn't know
(23:07):
that problem gambling and manipulation existed, and it's not like
those two things don't exist when you do this in
black markets, but there is I think a real case
to be made that opening it up this way has
exacerbated those problems.
Speaker 3 (23:21):
Yeah, I know. And then you've got the other story
that's out there. Arkat Dougherty wrote, I think you are
part of that two DraftKings acquiring a federally regulated trading venue,
marking its most aggressive move yet into the contested world
of prediction market. So this just melding of stuff is interesting.
Come back soon so we can continue this. Ira Budua,
Global Business of Sports reporter at Bloomberg News, joining us
(23:41):
here in our Bloomberg Interactive Brokers studio.
Speaker 2 (23:45):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting a two pm Eastern on applecar Play
and Android Auto with the Bloomberg Business App. You can
also listen live on Amazon Alexa from our flagship New
York station. Just Say played Bloomberg eleven.
Speaker 3 (24:01):
Thirty Tesla shares. If you check them out, they have
been bouncing all around twenty.
Speaker 1 (24:08):
Four percent right now. They turned positive later in the session,
but for most of the day they were lower.
Speaker 3 (24:12):
Yeah, down almost six percent at their lows today right listen.
The company came out. They posted earnings late yesterday, results
largely disappointing, profit missing estimates despite record vehicle deliveries and
operating income plunging forty percent in the third quarter.
Speaker 1 (24:26):
Tim meantime, the head of the company, the world's richest
man we're talking about, Elon Musk. He hijacked the earnings call,
pleading with investors to approve his one trillion dollar pay
package and blasting the shareholder advisory firms that have come
out against the proposal.
Speaker 6 (24:40):
The point is, I just like then screen enough voting
control to give a strong influence, but not so much
that I can't be fired if I go insane.
Speaker 7 (24:49):
That's it.
Speaker 3 (24:49):
That's a classic. That's just in case I got it insane.
Speaker 7 (24:52):
Hey, hey, just those two things. I guess that's the barometer.
Speaker 3 (24:56):
That's what we're doing.
Speaker 7 (24:57):
I guess. So I don't know.
Speaker 3 (24:58):
All right, that's Elon Musk apparently making the case last
night for that paid package on the earnings clomb. Really,
I guess his position at the company. Let's talk all
things Elon and Tesla with us his Bloomberg BusinessWeek senior
reporter Max Chafkin, co host of the Everybody's Business podcast,
author of the Contrarian Peter Thiel, and silkon Valley's Pursuit
of Power right here in studio. All right, we got
a lot to talk about. That's classic Elon.
Speaker 7 (25:20):
It is.
Speaker 12 (25:21):
I mean, there's probably no figure in modern life who
so openly flirts with the idea of his own insanity
as Elon Musk.
Speaker 7 (25:29):
And but of course what he's talking about ponsibility.
Speaker 12 (25:34):
Uh, of course, what he's saying essentially is you gotta
let me cook. And and the only reason I should
be fired is if I am going you know, going crazy,
and that would be crazier than he normally is, because
of course he's he's pretty out there on a normal day.
And and for for believers, that's that's kind of part
of the appeal.
Speaker 1 (25:52):
Dare I say, Max, A lot of people would say,
even though they would could be critical of a trillion
dollar pay package, they say, well, what would test be
without Elon Musk?
Speaker 12 (26:01):
Yeah, And that's kind of the difficult position that investors
find themselves in this company, where, yeah, there's some opposition
to this pay package, and we've seen some of the
shareholder advisory firms come out against it. But I think
for most investors you're kind of in a position where
if you put if you say no to this package
and Elon Musk threatens to leave or even does leave,
(26:23):
the stock falls, right, it doesn't, it doesn't go up
because so much of this company's value is about the future,
and that future is all about Elon Musk. The other
thing I'll say about this pay package, big as it is,
it's mostly it's requiring the company to get even bigger,
to hit milestones that seem almost cartoonish at this point.
(26:43):
So if you're an investor, you're saying, well, I mean,
you know, let's hope it works out. He's been effective before, why.
Speaker 7 (26:51):
Not this time?
Speaker 3 (26:52):
Well, I got to say one investor. We're talking about
New York State, and the comptroller, Thomas DiNapoli did say
that Tesla pay package for Elon is overly generous, lacks
clear performance metrics to justify the one trillion dollars that
he could earn under this proposal. He plans to vote
against the compensation package and test the directors up for
reelection on November sixth. He spoke with Bloomberg Surveillance on
(27:13):
TV earlier today.
Speaker 6 (27:15):
When you see the excessive compensation package, I mean, you know,
credit to mister Musk, He's already one of the richest
men in the world.
Speaker 11 (27:24):
How much more rich does one person have to be?
Speaker 3 (27:27):
I don't know. I'm not that rich, but so I
think it's I don't know if I don't know.
Speaker 1 (27:32):
I know that we joke about that, but I don't
know if that's the right question to be asking Max.
Is it about wealth? Or is it about control. I
think it's about both.
Speaker 12 (27:39):
I mean, you know, people always say and and you
always hear things like while Elon must doesn't care, he's
so rich he has hundreds of fourth hundreds billion dollars,
what's another couple of hundred billion dollars? But I think,
I think when you're talking about this level of wealth,
you do, like the amount of money he stands to
make on this package, would you know, double his wealth potentially,
so like that that is a big difference. And the
other thing, tim, as you said, Musk says, this is
(28:02):
about control. It's about being able to maintain his position,
to essentially be able to operate without any kind of
shareholder activism.
Speaker 7 (28:13):
A critic might say, without constraint.
Speaker 3 (28:15):
You know, having said that, you go to the core business, right,
And EV's like, listen, for a long time, he and
Tesla did not really face much competition here in the US,
and he and Tesla for a long time promised promise, promise,
didn't deliver it, and then they started to deliver. But
the environment is changing, but so too is the evolution
continuing for Tesla as a company, right, whether it's battery
(28:37):
storage and other businesses. But I don't know what is
the business and does that business would be able to
hit some of these metrics to justify this pay package.
Speaker 7 (28:47):
I mean, that is what's so difficult.
Speaker 12 (28:49):
And to the point that Thomas Napoli is making in there,
you know, Tesla has not done that great over the
last couple of years.
Speaker 7 (28:57):
The stock price has been has been phenomenal.
Speaker 12 (29:00):
Investors and particularly like the kind of retail investors who
follow what Elon Musk says and buy his stock like
they they are in love with this thing. There is
a boom and AI. Elon Musk is talking a lot
about AI. But you know, car sales have not been great.
And even in this quarter which was good right where
sales went way up, margins went down. And there is
(29:21):
a sense among investors, and you've even heard this from
the company itself, that this is gonna be a bit
of an operation. Because what happened is the tax credit,
the seventy five hundred bucks is effectively making electric cars cheaper.
It went away as part of the big beautiful bill
that you know that Trump passed.
Speaker 7 (29:37):
So so this is kind of.
Speaker 12 (29:39):
Like a one time thing where you have a bunch
of people basically moving purchases forward. At the same time,
lots of competition from lots of automakers.
Speaker 7 (29:47):
Now, now we talked about.
Speaker 12 (29:48):
This really for years, for almost a decade, like you know,
GM and others are gonna come, Well they're here.
Speaker 5 (29:53):
Now.
Speaker 7 (29:54):
There are a bunch of really great.
Speaker 12 (29:55):
Electric cars that cost the same amount of money or
in some markets US than a Tesla. You know, BYD
has cars in Europe that are very very competitive with
Tesla and are cheaper. GM has cars now that are
about the same price as the cheapest car and then
are competitive.
Speaker 7 (30:11):
So that's a challenge.
Speaker 12 (30:12):
And then on the other hand, you have Musks kind
of fantastic promises around humanoid robots, around autonomy, and that
stuff is hard to value.
Speaker 7 (30:20):
You basically either value that at zero.
Speaker 12 (30:23):
Or you value it at like twenty trillion dollars, And
so it's kind of created, yeah, in the discourse around
this company.
Speaker 1 (30:31):
So look, obviously none of us know the answer about
how to value that business. But if increasingly these autos
are becoming commodity and outside of the US, especially with
competition BYD and shout me, then it looks like a
more insular market for Tesla, at least for autos here
in the US, if they don't lean into optimists, if
they don't lean into other technology.
Speaker 12 (30:52):
Yeah, I think, well, I think there're two things. So
one is optimists humanoid robot. Elon Musk says, you know,
very soon, like a matter of years, we're gonna have
these things in our homes. They're going to be like friends.
You're like not even gonna be able to tell. I
think you said on the earnings call, You're not gonna
like barely be able to tell it's a robot.
Speaker 7 (31:09):
Like, if that's true, obviously that's great.
Speaker 12 (31:11):
The other thing, the other thing is is sort of
robotaxis unsupervised self driving, which Tesla.
Speaker 7 (31:18):
Has yet to do, but it is trying to do.
Speaker 12 (31:21):
There is a question on how you value that because
Elon Musk has said for years and years and years,
you know, basically that is.
Speaker 7 (31:28):
Worth an unlimited amount of money.
Speaker 12 (31:29):
Your cars will increase in value because of this thing.
But you're seeing Chinese companies essentially give this stuff away.
So that's why I say, like, we don't really know
how valuable this is yet. Even though the idea of
not having to drive your car and be able to
take a nap that obviously sounds great, it's just unclear
how much people will pay for that and how much
(31:52):
they will be asked to pay for that, giving that
a bunch of other automakers are giving away very similar technology.
Speaker 3 (31:57):
Also not quite quite doable, right Like like listen, we've
talked about Weimo, how much we love it, but I
mean it's still tricky and the infrastructure doesn't necessarily support
it everywhere.
Speaker 12 (32:08):
No, do not take a nap in your Tesla today,
despite what you say on Twitter. Yeah, I mean there
there are huge question marks here, and I think when
you look at Waimo, it's a big success, but it's
a success in a very narrow way, like a defined
number of markets operating at slow speed. You know, they
don't drive on highways yet you know, there's tons of supervision,
(32:28):
there's remote supervision. We've talked about this same thing with Tesla,
and Waimo has been very deliberate, you know, rolling this
out in just in a handful of markets moving very slowly.
Speaker 7 (32:38):
I think Tesla, and.
Speaker 12 (32:39):
I think most people who cover the autonomy space closely
believe that there is no way Tesla gets anywhere near
the timelines that Elon Musk is talking about. You know
what we kind of expect is that it follows more
like the WEIMO path now now, of course, and if
it does that, it's worth a lot less money.
Speaker 8 (32:55):
Now.
Speaker 12 (32:55):
Of course, Elon Musk is telling a different story where
where one day he's going to just basically flip the
swing and you're going to see this deploy everywhere.
Speaker 1 (33:01):
We had an interesting conversation with Ross Gerbrann with that
love though yesterday and the academic differences between the radar
light our side of things with Waymo and the vision
only stuff with Tesla. Where do you fall on that,
max is that do you believe that? I mean, Ross
Gerbert doesn't think it's possible to have vision only self driving.
Speaker 12 (33:16):
There are a lot of a lot of experts who
I've talked to who are very skeptical of the technical approach,
which I think is a problem. The great thing about
light are is it's like an additional safety feature. I
also think again, there are so many reasons to think
that the timeline is going to take much longer than
(33:37):
what we're talking about that it's almost not worth parsing
the technical differences.
Speaker 7 (33:41):
This is something that is going to.
Speaker 12 (33:42):
Take decades to pull off in the way that Elon
Musk wants it to pull off.
Speaker 3 (33:47):
Relevant when you've got a company that trades with a
pe of three hundred and twenty or forward peve about
two sixty two, right, because these are things that aren't
going to happen so quickly. Got to run, Love, Love Love.
Max Chafkin, Senior reporter, a Bloomberg BusinessWeek, co host of
The Everybody's Business podcast and author of The Contrarian Peter
Tiel and Silicon Valley's Pursuit of Power.
Speaker 1 (34:07):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 2 (34:14):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five pm Eastern.
Listen on Apple CarPlay and Android Auto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 1 (34:29):
We're watching a lot of different companies, but I want
to home in on one, and that would be Intel
share surging in the after.
Speaker 3 (34:34):
Hours, building the momentum to the upside.
Speaker 1 (34:37):
Yeah, seven percent to the upside of right now in
the after hours, a little bit at the beginning trepidation
I think for shareholders. But I could have to do
also with some corrected numbers that we're coming back and
forth over the terminal for the results. The most recent results,
as you mentioned shares, what of ninety percent going into
the print this year?
Speaker 3 (34:55):
Well, yeah, we know, like there was the US taking
that position, Intel specific an equity position, and it is
now the third largest investor in INTELSA. That certainly has
given it a jolt if you will, this year. But again,
I think what's interesting is the company's CFO speaking in
an interview. You can check out our Ian King's right
through on this, but Intel saying the third quarter was
(35:17):
stronger than it thought across the board. So yeah, server
demand was a surprise positive. It feels like there's a
lot of things that feel like the changes, the moves
by Lip Bhutan, the CEO, maybe some of it's starting
to pay off.
Speaker 1 (35:32):
Well, I want to see what Jake Goldberg has to
say about all this. He's semiconductors and an electronics senior
analyst at Seaport Research Partners. He joins us from San Francisco. Jay,
good to have you. You cover a lot of these companies,
including Intel. You've got a neutral rating on Intel. Just
give us your first reaction to this report that shows
(35:52):
an encouraging forecast after a rebound in the PC chip market.
Speaker 11 (35:57):
Yeah.
Speaker 6 (35:57):
I think it's an encouraging step forward for the company.
They've been through some rough times, and I think the
driver of this quarter's results are their new products coming
on stream using their eighteen A, their new manufacturing process,
as well as some help from TSMC, so a bunch
of new products starting to ramp into production and volume.
(36:18):
I think that's helping a lot. And I'm most encouraged
by sort of the gross margin outlook for next quarter.
I haven't run through all my numbers, but it looks
like it's much better than expected, which is important not
just for the financial weight of that, but also it's
a good indicator into how their manufacturing process is tracking.
Speaker 1 (36:34):
I don't well, oh sorry, go ahead, I don't want
to get you in trouble with compliance, but can you
are you going to change your outlook? You're rating on
the stock, so.
Speaker 6 (36:45):
I just upgraded it about a month ago from sell
to neutral. And my concern here is more of that
big picture question you all were talking about earlier. As
much as this quarter is good progress and we're seeing
sort of tactically their move in the right direction, the
looming question over the company.
Speaker 11 (37:03):
Is what are they going to do with the fabs.
Speaker 6 (37:05):
Last quarter, CEO of Bhutan said, if they don't get
a customer for Intel Foundry, an external customer for Foundry,
they're going to stop doing advanced manufacturing. And I think
that's one of these tough analyst calls because in the
near term, if they stop doing that, it's it removes
a lot of expense numbers go way up, stock goes up.
It's a near term easy thing to do, but long
(37:26):
term it's probably really bad for the company. And it's
just hard to square that sort of long term forecast,
multi year forecast.
Speaker 11 (37:33):
So I'm still on the fence.
Speaker 2 (37:35):
Hey.
Speaker 3 (37:35):
One thing I want to just point out, Jay, is
that it looks like they're talking about seeing a fourth
quarter adjusted gross margin of thirty six point five percent.
Third quarter adjusted gross margin was forty percent against an
estimate of thirty six point one percent. Is that the
number you were looking for?
Speaker 11 (37:53):
Yeah, but there's a lot of adjustments in there, so
I haven't worked into them all.
Speaker 3 (37:56):
Okay, okay, Hey listen, listen. This is a company that's
been around for a long time. You know, you're entrenched
in how you were, what you were different executives coming
in to try and write this ship. You know, it's
a big ship to turn while also facing lots of
growing competition. Do you feel like it is in the
(38:18):
right direction.
Speaker 6 (38:20):
I think it's too soon to tell. I really hope
it's in the movement in the right direction, but it's
too soon to tell. Like, what are they going to
do with those fabs?
Speaker 8 (38:27):
Right?
Speaker 6 (38:28):
And you know, I've been saying for years that Intel's
biggest challenge is not external competitors or customers. It's their
biggest challenge is internal and fixing their culture. So that
on that mark, I think this is a step forward.
Lepoo who's put a you know, he has a plan
and he's chipping away at this sort of internal problem.
But they really have to readjust their worldview internally and
(38:49):
understand that they're not the dominant player that they were
for twenty years. They're they're the upstart now and they
got to act like it.
Speaker 1 (38:56):
Jay, we spent a good portion of our program earlier
talking about economic state craft and the new role of
the US government is taking in companies, the reporting around
potentially investing in some of these quantum companies. We of
course have the Intel among the US government being among
the biggest shareholders in Intel, US Steel the golden share
(39:17):
there the critical minerals and mining companies that have taken
investment or had interest expressed in them. From an Intel perspective,
how does the US government investment change Intel?
Speaker 6 (39:31):
I think it is going to encourage other US chip
companies to consider working with Intel Foundry, right, because you know,
in Nvidia has already invested in it, SoftBank's invested in Intel.
Now do we see Apple or Amazon or Google or
one of these other potential Intel customers sign up to
work with Intel Foundry take that risk? But because it
(39:52):
could be seen as patriotic.
Speaker 1 (39:54):
Well, that's okay, I'm glad you said that. Do they
do it because it's the right thing for their business,
because it's the best option for a foundry or is
it because it shows the Trump administration that they're supporting
a business that the administration has invested in.
Speaker 6 (40:08):
So I think it can be both, right. My view
is that these companies need to work with Intel. They
need to see Intel boundaries succeed because if they abandon
Intel Foundry today and Intel abandons it, you know entirely
what happens in five years when they're you know, TSMC
has it effective monopoly today. Right in five years they'll
have a true, actual monopoly. And that's that's going to
(40:31):
be really challenging for all these all these companies. And
so it's hard, you know, the way that companies work,
they've you know, they're thinking on ninety day cycles. Somebody
needs to be thinking of sort of the five ten
year time horizon. And maybe the government is the sort
of the forcing function that gets us there.
Speaker 3 (40:46):
You know who thinks in more than five or ten
year cycles. A little country named China, they're pretty good
about those long term plannings. Just having some fun with
you Jay Well. Having said that though, you know, on
the other hand, and are there companies who are saying,
I don't want to get involved with anybody who's involved
in the government, because just like the way the US
(41:07):
government for a long time has been or you know,
US investors have been critical of you know, sovereign held
entities you know in other countries. So is there some
you know, justification in that as well, or should we
just assume that Intel now has a massive you know
backup called the US government.
Speaker 6 (41:29):
So I think everybody's a little bit uncomfortable with the
US government taking stakes in companies. Everyone I know on
Wall Street, everyone I know in the valley just a
little bit uncomfortable about it, sort of ideologically, it's not
something we're used to. It's clear that, you know, the
US is moving towards some kind of national industrial policy.
(41:50):
This is one way to achieve that. I'm not sure
taking a stake in it is quite the right way
to do it, but you know, there are merits for
being a little bit more somewhere in between the government
controlling everything and the government doing nothing.
Speaker 11 (42:03):
Maybe there's a happy medium we can find.
Speaker 3 (42:05):
Hey, thirty seconds on the call, you're sitting down with
Intel execs. What do you want to ask them?
Speaker 11 (42:09):
Just quickly, what are you doing with Foundry?
Speaker 3 (42:13):
Okay, that was Craig, so appreciate it. Jay Goldberg, thanks,
have a good evening. Senior Analyst Semiconductors and Electronics at
Seaport Research Partners.
Speaker 2 (42:22):
This is the Bloomberg Business Week Daily 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
(42:43):
and always on the Bloomberg Terminal
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:08):
This is Bloomberg Business Week Daily 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 Weekdaily
Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio, let's.
Speaker 3 (00:33):
Talk about some of the stories that are going on,
certainly out of the nation's capital. Transportation Secretary Sean Duffy
Warren that flight disruptions would continue across the US as
the government shutdown drags into its fourth week. More than
thirteen thousand air traffic controllers in fifty thousand Transportation Security
Administration agents are being forced to work during the shutdown
without pay. Just one important part of the government, as
(00:55):
you know, that is being impacted by this breakdown between
Republicans and Democrats, break down that we seem to see
over and over and over again.
Speaker 1 (01:03):
Bloomberg News correspondent and hosts of The Big Take podcast,
David Gurrow sat down for an interview with House Minority
Leader Hakim Jeffries to talk about the relationship between the
US and Russia, the upcoming New York City mayoral election,
and first and foremost, the ongoing government shutdown.
Speaker 4 (01:17):
Those Democrats. We continue to make clear to our Republican
colleagues that we will sit down with them anytime, any
place in order to reopen the government to negotiate a
bipartisan agreement that actually makes life better for the American
people in terms of spending and funding. But we also
have to decisively address the Republican healthcare crisis. We've maintained
(01:41):
that position from the very beginning before Republicans shut the
government down and during the entirety of this shutdown, because
it is a real crisis that has been created at
this moment, particularly as it relates to the urgent need
to extend the Affordable Care Act tax credits.
Speaker 5 (01:55):
As you and I are speaking, the House speakers doing
a press conference just down the hall. Is the level
of engagement? Do you pass one another? Are you speaking
with one another? Are Democrats talking to Republicans right now?
Speaker 4 (02:05):
The conversations have been very limited, unfortunately, because Donald Trump
has not given House Republican leaders or Senate Republican leaders
permission to negotiate. Reinforcing the principle from our view that
he made the decision to shut the government down. They
want to continue to inflict pain on federal employees. They've
done that from the very beginning of Donald Trump's presidency.
(02:26):
In fact, more than two hundred thousand federal employees had
been forced off the job prior to the government shutdown,
and this is something that we've continued to see them
build upon during the shutdown until Donald Trump gets serious
about reopening the government. Unfortunately, we're going to remain in
(02:48):
this situation and every day Americans are being hurt.
Speaker 5 (02:51):
He's getting ready to take a trip to Asia. Is
it appropriate for him to be doing that at this
moment when the government is shut down.
Speaker 4 (02:58):
I think that the president has a response onsibility both
domestically and throughout the world. However, what has been irresponsible
is that throughout this shutdown he's found more time to
golf than he has to engage with Democrats on Capitol Hill.
He's decided to try to steal two hundred and thirty
(03:18):
million dollars in taxpayer funds from the Department of Injustice.
Donald Trump and his administration have found forty billion dollars
to bail out a right wing want to be dictator
in Argentina and can't find a dime to extend the
Affordable Care Act tax credits to keep health care affordable
for tens of millions of Americans. And on top of
(03:40):
all of that, they are demolishing the East wing of
the White House in ways that have appropriately horrified the
American people.
Speaker 5 (03:50):
I want to ask you about potential off ramps, and
Tammy Baldwin the Center from Wisconsin Democrats said Trump is
the off ramp at this point. Do you agree with
that assessment and has there been any kind of outreach
a dialogue between you and the White House.
Speaker 4 (04:02):
Lady Schumer made Claire earlier this week that we have
reached out to the White House again to indicate that
prior to Trump's departure for Asia, he should sit down
with Democrats to find a path forward, to reopen the government,
to enter into a bipartisan spending agreement, and to address
the healthcare crisis that Marjorie Taylor Green acknowledges must be
(04:24):
addressed and that traditional conservatives who are in the toughest
seats in the country have now publicly acknowledged this week
needs to be addressed.
Speaker 5 (04:32):
Can I ask you a question of congressional mechanics, and
that is, can the Democratic leader pick up the phone
call the White House and reasonably expect the President's going
to take that phone call. Are you able to do that?
And if so, what's keeping you from having that?
Speaker 6 (04:45):
Doe?
Speaker 4 (04:45):
Well, traditionally that probably is the case, but in this
White House that's very much on Claire. Donald Trump didn't
have a meeting with House or Senate democratic leadership until
two days prior to the government shutting down.
Speaker 3 (05:00):
Was House Minority Leader Hakim Jeffries with Bloomberg's David Gore.
David joining us from the Bloomberg News Bureau and the
Nation's Capital. Hey, David, you know what I picked up
from there is, you know, we hear the President and
Republicans talk about the shutdown, then we hear Democrats separately
talk about it, but again, nothing about leaders coming together
to really work on the issues that separate them. And
I kind of got that from the House Minority leader
(05:22):
as well.
Speaker 5 (05:23):
Separately is the keyword there. Carol Swfie said, these two
parties are not speaking with one another. And I should
say at the Capitol Building today it was incredibly quiet.
You do have congressional leadership there holding press conferences, meeting
among themselves. But it is sleepy, isn't the right word?
Empty is perhaps a better word. And it was clear
(05:44):
from that conversation that the person who needs to be
at the table, or at least giving the blessing to
Republicans who are at the table, is President Trump. And
there is I think a level of resignation among Democratic
leadership that without that, this is just going to continue.
So we're poised for President Trump, as we talked about
that interview, to take this trip for about a week
to Asia. Again, there's a recognition there that with him absent,
(06:06):
this is unlikely to advance or develop here over the
coming days.
Speaker 1 (06:09):
Yes, I guess the big question on the Democrat and
Republican side is what can be done with the president
on this trip? What can be done out of the country.
Is there a chance that these two sides can come
together and end the government shutdown even if he's not around.
Speaker 5 (06:23):
Well, there is some hope for optimism, of course, but
there are a number of kind of pressure points that
are on the horizon. I think that's pretty notable. So
tomorrow is the first one October the twenty fourth, that's
when a lot of federal workers are not going to
receive their paychecks for the first time in this shutdown,
so the pain of the shutdown is going to be
more acutely felt by more people. And I think what's
kind of novel about this shutdown is you've had someone
(06:44):
who heads the Office of Management Budget at the White
House really moving things around, playing what he calls budgetary
twister to make sure that a number of government employees
are paid, certain programs are continued. All of that starts
to become more and more difficult here as the days
tick on. So tomorrow a big pressure point. The other
one is next week November the first, when some SNAP
benefits are scheduled to expire, and of course when open
(07:04):
enrollment begins for healthcare plans. That's the moment at which
Democrats believe Americans are going to look at the prospects
of their healthcare going up, becoming more and more expensive,
and they're going to perhaps recognize the fact as Democrats
would say that this is something that's real and important,
and that having the government shut down so that those
subseats can to be restored is worth doing.
Speaker 1 (07:22):
I will say I think that message is getting to
Americans outside of the Beltway. I was in Arizona last week.
The lead story on local news last weekend was about
premiums going up for that Obama for Obamacare.
Speaker 7 (07:34):
That is story.
Speaker 1 (07:34):
It seems to be getting out there, and people are
actually talking about that. David a lot in that interview.
One thing you also touched on was what's coming here
in New York in the next couple of weeks early November,
the mayoral election and the way that Leader Jefferies has
or has not yet communicated with Zoron Mamdani, the favorite
to win the election here in November. What did you
say about that?
Speaker 5 (07:56):
They have spoken a couple of times, and I was optimistic.
I had my fings crossed that he'd be willing to
make an endorsement today. During that interview he declined to
do so, but he has so that he's going to
speak with sore Mondani again today and tomorrow. As he
prepares to do that, he talked about the obligation of
doing that. I asked him, did he watch the debate
last night, the final mayoral debate or did he watch
(08:16):
the next season opener? He admitted he watched the last
few minutes of the basketball game and not the debate,
but he kept up with it and kept up with
what the conversation has been, and after he declined to
make an endorsement, I really pushed him on why what
the outstanding issues are, and what he emphasized to me
during our conversation is, look, he really applauds mister Mundonni
for his emphasis on affordability. He thinks that's a signal
(08:38):
issue in New York City and one that's a signal
issue across this country for Democrats, who really applauded him
for focusing so much on that. But he acknowledged the
fact that President Trump is likely to go after in
New York after this mayoral election takes place. Does Mondanni
have the capacity the experience to deal with the level
of pressure that the federal government is going to bring
to bear. So I personally a bit disappointed that we
(08:59):
didn't get that adorsement during my interview today, but it
does seem like that's likely. I mean, I think what
he said over and over again is he plans to
weigh in on this race before early voting begins, and
it's both of you know, early voting in New York
City schedule to start on Saturday of this week, so
time is nigh and he's going to do it soon.
I should say he was about like ninety eight percent there.
I think during the course of our conversation he really
applauded Mondani for saying that he planned to keep Jessica
(09:20):
Tish's the New York Police Department commissioner if he is elected.
He saw that as a positive step.
Speaker 3 (09:26):
All right. Last question though, because this also came up,
and I feel like people have said to me, why
aren't you guys talking about this? But it's all of
our social media active activity, and David, that is what's
happening at the White House. The actual physical demolishing of
a piece of the White House. I know, in the
grand scheme of things, maybe isn't as important as a
lot of other things that are going on in this world,
but it feels very symbolic, symbolic despite the actual physicality
(09:48):
of what's happening, and indicative of a president that can
kind of do whatever he wants. What did mister Jeffrey say.
Speaker 5 (09:56):
On that he expressed dismay over this happening. I think
a lot of people in this city have as well.
Of course, it's a very old building that has been
remodeled in the past, but this is pretty dramatic, and
in the past it would have gone through a lot
of reviews. That hasn't happened here. The President said initially
he planned to build this ballroom that was going to
have no effect on the existing building. Of course that's
not the case. We have seen images and video of
(10:17):
the demolition of the east wing of the White House
that are startling to a lot of people, as the
Minority leader said, And then there's just the notion of
what's being built there, this massive structure, this ninety thousand
square foot ballroom, which the President says is essential for
the leader of the United States to entertain foreign leaders
who come through Washington, d c. Organization of Architectural Historians
pointing out that just proportionality is wrong here that have
(10:39):
a building of that scale on the White House plan
is just huge. So a lot of people just expressing
dismay and stupefication over what's happening here. And I should
note as well, the price tag on this is it
has gotten larger over the course of this construction too.
It started out at two hundred million dollars. The President
said it'd be paid for by himself and private donors.
Now the price tag is three hundred million dollars. A
(11:00):
lot of people is kind of wondering how this is happening,
how it's happening so quickly, And I think that you
hitting on kind of the metaphorical side of this is
important to care. A lot of people kind of looking
at it as a way of the president here moving
with some reletvve impunity.
Speaker 3 (11:10):
Gotta say, I have an old house eighteen hundreds and
I can't even change a window with that like a
commission weighing, and so there's got to be something when
we're talking about the people's house.
Speaker 7 (11:18):
David, You're not the president, Carrol.
Speaker 3 (11:20):
That's what I'm saying. I'm nothing, and I think, but
you're not the person. I can't change a window without
stuff coming down on me, and I'm just thinking about
the historic significance of that building there on Pennsylvania Avenue.
All right, David, thank you, as always, Bloomberg News correspondent,
host of The Big Take podcast, David Gora.
Speaker 1 (11:37):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 2 (11:44):
You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
live weekday afternoons from two to five pm Eastern. Listen
on Apple CarPlay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 1 (11:59):
Miami Heat Terry Roser Rosier, excuse me, Portland Trailblazer's head
coach Chauncey Phillips were arrested Thursday morning. In charge is
part of a sprawling sports gambling federal prosecutor said. In
a press conference Thursday, FBI Director Cash Btel and Brooklyn
federal prosecutors said at least thirty people were arrested across
eleven states, including current and former NBA players and coaches,
(12:21):
as part of two separate criminal schemes related to illegal
sports betting. Here's FBI Director Cash Btel at a press
conference this morning in New York.
Speaker 7 (12:29):
Let's not you know, mince words.
Speaker 8 (12:31):
This is the inschider trading saga for the NBA. If
you're participating in the legal gambling industry, you got nothing
to worry about. If you're participating in illegal conduct, you
got everything to worry about. In this case shows it.
Speaker 1 (12:44):
That's FBI Director Cash Hotel. Earlier today, we got Miles
Miller with us. He's Bloomberg New senior reporter. He covers
Homeland Security and the FBI. He joins us here in
the Bloomberg Interactive Brokers studio. Miles also covers city government
here in New York City.
Speaker 7 (13:00):
Turn around, you know.
Speaker 1 (13:01):
So we're gonna get to this sports, the sports gambling
in the NBA stuff in justin manic. It's fascinating, and
we're going to bring an Arab duet a minute too.
But first, let's talk a little bit about what's going
on here in New York because New York City Mayor
Eric Adams has endorsed Governor Cuomo for the mayoral election.
Speaker 9 (13:21):
You'll remember Greasie Mansion, beautiful palatial mansion on the East
side of Manhattan. We thought Eric Adams was going to
drop out of the race and instead what do you say?
He said, Andrew Cuomo is a snake and a liar.
Asked today why he's endorsing Andrew Cuomo, he said, brothers fight,
but when families are attacked, brothers come together. He sees
(13:44):
this as essential to Cuomo having any shot of winning
the election against Mamdani. The cards are stacked against Cuomore,
stacked against Sliwa, and they were slacked, stacked against Adams,
and so this is the only way he sees that
Cuomo could win, and which would be by endorsing him.
He's going to go out around the city with Cuomo.
Speaker 3 (14:05):
Will help, you know, it remains.
Speaker 9 (14:07):
To be seen. He's gonna go to He's gonna go
to areas where he had support, which you would probably
say are in south Southeast Queens probably Wakefield, in the Bronx,
those places, but those are places that Cuomo probably has
support already. Ye will it help unclear? But this is
a New York second black mayor who is going to
stand up, going to go to church with Cuomo and
(14:28):
say this is the person who is going to best
support you, not Mum Donnie uh. And that is going
to be you know, critical in the last couple of
days of this election, and it shows how desperate the
Cuomo campaign is.
Speaker 1 (14:41):
What's Mayor Adam's going to do next? There's been a
lot of speculation about would he take a job? I
mean there was there were some there was some reporting
that said, okay, maybe he's being offered a job in
the Trump administration. What's what's going on there?
Speaker 9 (14:53):
I was told many many years ago never to predict
what Eric Adams is going to do because you know,
he can sit right in front of you on Business Week,
Bloomberg business Week and tell you no matter what, he
is not going anywhere, and then sure enough drop out
of the race.
Speaker 7 (15:09):
You yeah, right, you know when you want my birthday?
Speaker 9 (15:11):
He tells me. He tells me he's not leaving the race,
and then straight up leaves the race. He says he
wants to get his pH D. You know what he
really wants to do if he stays in government is
have this A source told me this is have any
any position where he can bring staff, have a detail
and do important things.
Speaker 3 (15:27):
All right, So tell us about what happened earlier this morning.
A couple of indictments coming down. I'm switching gears.
Speaker 1 (15:32):
What I would like a staff and have a detail.
Speaker 7 (15:35):
You know, I'm going eric a long time.
Speaker 9 (15:37):
I'm just let's just be honest about what he what
he's told people.
Speaker 7 (15:40):
Go ahead.
Speaker 3 (15:40):
You know have staffs in details, sometimes our NBA players.
So let's go to what happened this morning? What do
we find out?
Speaker 9 (15:47):
So you've got two different scandals here involving the MTA.
You've got one NBA. Sorry, So what I say? Up
since four this morning. Okay, you've got two different, two
separate scandals. You got the first one involving which is
basically insider trading at the at the NBA basketball player
(16:08):
Terry Rozier telling a friend that he planned to take
himself out of a game. That friend then places a
bunch of bets worth more than two hundred thousand dollars
on that game, which would be fishy to anyone, and
so it tipped off federal prosecutors and so they knew
that something was wrong there and it exposed this big issue,
including four players who were trading on things that was
(16:32):
trading on private information so they could make money off
of things that were not public.
Speaker 7 (16:37):
So that's the first case.
Speaker 3 (16:38):
So knowing a player is in and out kend terming
the outcome exactly.
Speaker 9 (16:42):
And Lebron James a victim of this, you know, second
indict exactly. Second indictment. You've got the mafia. You've got
the four of the five New York crime families running
rigged games on Lexington Avenue and running rig games on
Washington Place. They had a table set up where they
could see live the card that was face down, and
(17:06):
so the games are rigged. They use NBA players in
order to get people to get enticed into the game.
But the players, they believe, prosecutors believe, were in on it.
They thought that they believed that Chauncey Billups, a coach
of the Trailblazers and an MVP, was part of this
conspiracy to steal people's money and he got a cut
of it.
Speaker 3 (17:25):
They say, not nice, No, not nice again. Indictments stuff
to be known, right, and things exactly will carry out. Miles,
thank you for breaking that down. A lot going on,
Miles Miller, Bloomberg New senior reporter covering homeland security and
the FBI.
Speaker 1 (17:39):
I want to bring in Ara Buduay, he's Global Business
of Sports reporter for Bloomberg News. I want to just
set the poker stuff aside for a second. That the
prop bets about the players is really what I want
to talk about, because he wrote in August for Bloomberg
Business Week that sports leagues are struggling to deal with
so called player props for bets. Big focus of your
story was the MLB, I recall correctly, but this is
(18:02):
exactly what materialized here.
Speaker 10 (18:04):
Yeah, I mean it's a known problem, as you say, so,
there were these cases earlier this year. In July, MLB
announced in investigations involving two Cleveland Guardians pitchers, and they
were alleged to have been throwing a ball on purpose.
And you can bet just on the first pitch, right,
That's how small some prop bets get.
Speaker 7 (18:22):
There had been a previous.
Speaker 10 (18:23):
NBA case, John tay Porter, actually the same federal investigation
that brought the charges today involved. Actually it was how
John tay Porter wound up pleading guilty to taking himself
out of games early, saying he was sick, and having
co conspirators bet the under on a prop. So this
is really the vulnerability for leagues.
Speaker 3 (18:46):
I want to say, are we surprised? I mean, the
the mixing meshing of gambling and sports, which was considered
a no no for so long rose exactly right, like no,
don't do it, don't do it, don't do it. Here
we are and then this is happening.
Speaker 7 (19:03):
Yeah, I mean, it's really interesting.
Speaker 10 (19:04):
The question that is really hard to get to the
bottom of is whether it's better or worse to have legal,
regulated sports betting, right, because clearly it's more widespread now
it's on your phone, it's advertised at you all the time, right,
So there's just more people.
Speaker 7 (19:19):
Involved different ways.
Speaker 10 (19:21):
It's also much more closely monitored when it's legal, because
you can see every bet and there, and there are
these organizations that actually are watching for suspicious betting activity,
which is how in many cases, including these cases, investigators
get tipped off. They see unusual betting activity and they
follow up.
Speaker 3 (19:40):
All the gaming ops apps on your phone, those are
all regulated people are monitoring or no.
Speaker 10 (19:46):
Yes, so if you're betting on Fandel DraftKings, other legal
sports books, yes, those bets are being monitored by these
independent groups that have access to the data and whose
job it is to on behalf of the leagues and
the sports book who you know, if you listen to
Federal prosecutors are the victims in these cases because people
are using inside of information to take out bets that
(20:07):
then win and the sportsbooks have to pay out. So
they participate in these monitoring systems that are set up
to catch suspicious activity where often is a lot of
action suddenly, a lot of bets very suddenly on a
player to underperform, you know, in very large bets from
maybe betters who've never bet before. Those are the things
(20:28):
that get flagged.
Speaker 1 (20:28):
It does seem like ira there could be a happy
medium here where maybe the government comes out and says, Okay, well,
maybe we let the cat out of the bag a
little too much a few years ago with the Supreme
Court decision. Maybe the Supreme Court let the cat out
of the bag. I don't know if they can do
this legally, but what if there were a way to say, Okay,
we can allow you to bet on some stuff, the
outcomes of games, but the granular prop bets that are
(20:52):
one hundred percent in the control of one single player
that just isn't working.
Speaker 7 (20:57):
Yeah, is that possible. We're seeing this happen.
Speaker 10 (20:59):
Bets on college players in some states are not allowed.
The NBA, after the John tay Porter case convinced major
US sports books to no longer offer under prop bets
on the lowest paid players in the league, and.
Speaker 1 (21:14):
With the idea that the lowest paid players would be
more incentivized most vulnerable.
Speaker 10 (21:17):
So John tay Porter was what's called a two way
player on a four hundred and fifteen thousand dollars contract.
What's interesting about the accusations today, the indictment today is
that Terry Rosier, who's accused of doing this making twenty
six million dollars this year, So it may not be
just a case of going after the most vulnerable players.
Adam Silver, the NBA Commissioner, has recently hinted that they're
(21:39):
looking at other things they might be able to do
to restrict prop betting. And you know, after the cases
in Cleveland with the Guardians Pitchers, the governor there Dwine
asked their state gaming regulators to get rid of all
prop bets, and so Ohio is looking into that. So
there is movement to try to limit prop bets, but
it's not clear kind of how that will shake out.
(22:00):
And actually, I think one of the other things that
this might lead to is more pressure to have a
federally regulated system, which is what Adam Silver has always
been asking for.
Speaker 1 (22:08):
You were part of a group of reporters the few
years ago who did a big Bloomberg Business Week special
on gambling in sports, and I'm just wondering, if what
we knew at then, or now we knew then, would
it have turned out this way? Or in other words,
has this how is this gone? Has this gone? Okay?
Speaker 11 (22:26):
Yeah?
Speaker 10 (22:26):
I think the experiment there's two big vulnerabilities, right. There's
the erosion of trust and the corruption issue. Right whether
if you keep having cases like this, fans will no
longer really believe in what they're watching on TV. That's
a big problem. I think it grows today. We will
see how persistent that is and how.
Speaker 11 (22:44):
Big it gets.
Speaker 10 (22:45):
The other thing that I think is just more broadly
and sort of the experiment of sports, of legal sports
betting in this country. I think once you've had legalization
and it's now on phones and mobile, what we're finding
out is that it's addiction is a real problem, and
it's damaging the personal finances of a lot of particularly
young men who get into this. So I think those
are two things that it's not like we didn't know
(23:07):
that problem gambling and manipulation existed, and it's not like
those two things don't exist when you do this in
black markets, but there is I think a real case
to be made that opening it up this way has
exacerbated those problems.
Speaker 3 (23:21):
Yeah, I know. And then you've got the other story
that's out there. Arkat Dougherty wrote, I think you are
part of that two DraftKings acquiring a federally regulated trading venue,
marking its most aggressive move yet into the contested world
of prediction market. So this just melding of stuff is interesting.
Come back soon so we can continue this. Ira Budua,
Global Business of Sports reporter at Bloomberg News, joining us
(23:41):
here in our Bloomberg Interactive Brokers studio.
Speaker 2 (23:45):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting a two pm Eastern on applecar Play
and Android Auto with the Bloomberg Business App. You can
also listen live on Amazon Alexa from our flagship New
York station. Just Say played Bloomberg eleven.
Speaker 3 (24:01):
Thirty Tesla shares. If you check them out, they have
been bouncing all around twenty.
Speaker 1 (24:08):
Four percent right now. They turned positive later in the session,
but for most of the day they were lower.
Speaker 3 (24:12):
Yeah, down almost six percent at their lows today right listen.
The company came out. They posted earnings late yesterday, results
largely disappointing, profit missing estimates despite record vehicle deliveries and
operating income plunging forty percent in the third quarter.
Speaker 1 (24:26):
Tim meantime, the head of the company, the world's richest
man we're talking about, Elon Musk. He hijacked the earnings call,
pleading with investors to approve his one trillion dollar pay
package and blasting the shareholder advisory firms that have come
out against the proposal.
Speaker 6 (24:40):
The point is, I just like then screen enough voting
control to give a strong influence, but not so much
that I can't be fired if I go insane.
Speaker 7 (24:49):
That's it.
Speaker 3 (24:49):
That's a classic. That's just in case I got it insane.
Speaker 7 (24:52):
Hey, hey, just those two things. I guess that's the barometer.
Speaker 3 (24:56):
That's what we're doing.
Speaker 7 (24:57):
I guess. So I don't know.
Speaker 3 (24:58):
All right, that's Elon Musk apparently making the case last
night for that paid package on the earnings clomb. Really,
I guess his position at the company. Let's talk all
things Elon and Tesla with us his Bloomberg BusinessWeek senior
reporter Max Chafkin, co host of the Everybody's Business podcast,
author of the Contrarian Peter Thiel, and silkon Valley's Pursuit
of Power right here in studio. All right, we got
a lot to talk about. That's classic Elon.
Speaker 7 (25:20):
It is.
Speaker 12 (25:21):
I mean, there's probably no figure in modern life who
so openly flirts with the idea of his own insanity
as Elon Musk.
Speaker 7 (25:29):
And but of course what he's talking about ponsibility.
Speaker 12 (25:34):
Uh, of course, what he's saying essentially is you gotta
let me cook. And and the only reason I should
be fired is if I am going you know, going crazy,
and that would be crazier than he normally is, because
of course he's he's pretty out there on a normal day.
And and for for believers, that's that's kind of part
of the appeal.
Speaker 1 (25:52):
Dare I say, Max, A lot of people would say,
even though they would could be critical of a trillion
dollar pay package, they say, well, what would test be
without Elon Musk?
Speaker 12 (26:01):
Yeah, And that's kind of the difficult position that investors
find themselves in this company, where, yeah, there's some opposition
to this pay package, and we've seen some of the
shareholder advisory firms come out against it. But I think
for most investors you're kind of in a position where
if you put if you say no to this package
and Elon Musk threatens to leave or even does leave,
(26:23):
the stock falls, right, it doesn't, it doesn't go up
because so much of this company's value is about the future,
and that future is all about Elon Musk. The other
thing I'll say about this pay package, big as it is,
it's mostly it's requiring the company to get even bigger,
to hit milestones that seem almost cartoonish at this point.
(26:43):
So if you're an investor, you're saying, well, I mean,
you know, let's hope it works out. He's been effective before, why.
Speaker 7 (26:51):
Not this time?
Speaker 3 (26:52):
Well, I got to say one investor. We're talking about
New York State, and the comptroller, Thomas DiNapoli did say
that Tesla pay package for Elon is overly generous, lacks
clear performance metrics to justify the one trillion dollars that
he could earn under this proposal. He plans to vote
against the compensation package and test the directors up for
reelection on November sixth. He spoke with Bloomberg Surveillance on
(27:13):
TV earlier today.
Speaker 6 (27:15):
When you see the excessive compensation package, I mean, you know,
credit to mister Musk, He's already one of the richest
men in the world.
Speaker 11 (27:24):
How much more rich does one person have to be?
Speaker 3 (27:27):
I don't know. I'm not that rich, but so I
think it's I don't know if I don't know.
Speaker 1 (27:32):
I know that we joke about that, but I don't
know if that's the right question to be asking Max.
Is it about wealth? Or is it about control. I
think it's about both.
Speaker 12 (27:39):
I mean, you know, people always say and and you
always hear things like while Elon must doesn't care, he's
so rich he has hundreds of fourth hundreds billion dollars,
what's another couple of hundred billion dollars? But I think,
I think when you're talking about this level of wealth,
you do, like the amount of money he stands to
make on this package, would you know, double his wealth potentially,
so like that that is a big difference. And the
other thing, tim, as you said, Musk says, this is
(28:02):
about control. It's about being able to maintain his position,
to essentially be able to operate without any kind of
shareholder activism.
Speaker 7 (28:13):
A critic might say, without constraint.
Speaker 3 (28:15):
You know, having said that, you go to the core business, right,
And EV's like, listen, for a long time, he and
Tesla did not really face much competition here in the US,
and he and Tesla for a long time promised promise, promise,
didn't deliver it, and then they started to deliver. But
the environment is changing, but so too is the evolution
continuing for Tesla as a company, right, whether it's battery
(28:37):
storage and other businesses. But I don't know what is
the business and does that business would be able to
hit some of these metrics to justify this pay package.
Speaker 7 (28:47):
I mean, that is what's so difficult.
Speaker 12 (28:49):
And to the point that Thomas Napoli is making in there,
you know, Tesla has not done that great over the
last couple of years.
Speaker 7 (28:57):
The stock price has been has been phenomenal.
Speaker 12 (29:00):
Investors and particularly like the kind of retail investors who
follow what Elon Musk says and buy his stock like
they they are in love with this thing. There is
a boom and AI. Elon Musk is talking a lot
about AI. But you know, car sales have not been great.
And even in this quarter which was good right where
sales went way up, margins went down. And there is
(29:21):
a sense among investors, and you've even heard this from
the company itself, that this is gonna be a bit
of an operation. Because what happened is the tax credit,
the seventy five hundred bucks is effectively making electric cars cheaper.
It went away as part of the big beautiful bill
that you know that Trump passed.
Speaker 7 (29:37):
So so this is kind of.
Speaker 12 (29:39):
Like a one time thing where you have a bunch
of people basically moving purchases forward. At the same time,
lots of competition from lots of automakers.
Speaker 7 (29:47):
Now, now we talked about.
Speaker 12 (29:48):
This really for years, for almost a decade, like you know,
GM and others are gonna come, Well they're here.
Speaker 5 (29:53):
Now.
Speaker 7 (29:54):
There are a bunch of really great.
Speaker 12 (29:55):
Electric cars that cost the same amount of money or
in some markets US than a Tesla. You know, BYD
has cars in Europe that are very very competitive with
Tesla and are cheaper. GM has cars now that are
about the same price as the cheapest car and then
are competitive.
Speaker 7 (30:11):
So that's a challenge.
Speaker 12 (30:12):
And then on the other hand, you have Musks kind
of fantastic promises around humanoid robots, around autonomy, and that
stuff is hard to value.
Speaker 7 (30:20):
You basically either value that at zero.
Speaker 12 (30:23):
Or you value it at like twenty trillion dollars, And
so it's kind of created, yeah, in the discourse around
this company.
Speaker 1 (30:31):
So look, obviously none of us know the answer about
how to value that business. But if increasingly these autos
are becoming commodity and outside of the US, especially with
competition BYD and shout me, then it looks like a
more insular market for Tesla, at least for autos here
in the US, if they don't lean into optimists, if
they don't lean into other technology.
Speaker 12 (30:52):
Yeah, I think, well, I think there're two things. So
one is optimists humanoid robot. Elon Musk says, you know,
very soon, like a matter of years, we're gonna have
these things in our homes. They're going to be like friends.
You're like not even gonna be able to tell. I
think you said on the earnings call, You're not gonna
like barely be able to tell it's a robot.
Speaker 7 (31:09):
Like, if that's true, obviously that's great.
Speaker 12 (31:11):
The other thing, the other thing is is sort of
robotaxis unsupervised self driving, which Tesla.
Speaker 7 (31:18):
Has yet to do, but it is trying to do.
Speaker 12 (31:21):
There is a question on how you value that because
Elon Musk has said for years and years and years,
you know, basically that is.
Speaker 7 (31:28):
Worth an unlimited amount of money.
Speaker 12 (31:29):
Your cars will increase in value because of this thing.
But you're seeing Chinese companies essentially give this stuff away.
So that's why I say, like, we don't really know
how valuable this is yet. Even though the idea of
not having to drive your car and be able to
take a nap that obviously sounds great, it's just unclear
how much people will pay for that and how much
(31:52):
they will be asked to pay for that, giving that
a bunch of other automakers are giving away very similar technology.
Speaker 3 (31:57):
Also not quite quite doable, right Like like listen, we've
talked about Weimo, how much we love it, but I
mean it's still tricky and the infrastructure doesn't necessarily support
it everywhere.
Speaker 12 (32:08):
No, do not take a nap in your Tesla today,
despite what you say on Twitter. Yeah, I mean there
there are huge question marks here, and I think when
you look at Waimo, it's a big success, but it's
a success in a very narrow way, like a defined
number of markets operating at slow speed. You know, they
don't drive on highways yet you know, there's tons of supervision,
(32:28):
there's remote supervision. We've talked about this same thing with Tesla,
and Waimo has been very deliberate, you know, rolling this
out in just in a handful of markets moving very slowly.
Speaker 7 (32:38):
I think Tesla, and.
Speaker 12 (32:39):
I think most people who cover the autonomy space closely
believe that there is no way Tesla gets anywhere near
the timelines that Elon Musk is talking about. You know
what we kind of expect is that it follows more
like the WEIMO path now now, of course, and if
it does that, it's worth a lot less money.
Speaker 8 (32:55):
Now.
Speaker 12 (32:55):
Of course, Elon Musk is telling a different story where
where one day he's going to just basically flip the
swing and you're going to see this deploy everywhere.
Speaker 1 (33:01):
We had an interesting conversation with Ross Gerbrann with that
love though yesterday and the academic differences between the radar
light our side of things with Waymo and the vision
only stuff with Tesla. Where do you fall on that,
max is that do you believe that? I mean, Ross
Gerbert doesn't think it's possible to have vision only self driving.
Speaker 12 (33:16):
There are a lot of a lot of experts who
I've talked to who are very skeptical of the technical approach,
which I think is a problem. The great thing about
light are is it's like an additional safety feature. I
also think again, there are so many reasons to think
that the timeline is going to take much longer than
(33:37):
what we're talking about that it's almost not worth parsing
the technical differences.
Speaker 7 (33:41):
This is something that is going to.
Speaker 12 (33:42):
Take decades to pull off in the way that Elon
Musk wants it to pull off.
Speaker 3 (33:47):
Relevant when you've got a company that trades with a
pe of three hundred and twenty or forward peve about
two sixty two, right, because these are things that aren't
going to happen so quickly. Got to run, Love, Love Love.
Max Chafkin, Senior reporter, a Bloomberg BusinessWeek, co host of
The Everybody's Business podcast and author of The Contrarian Peter
Tiel and Silicon Valley's Pursuit of Power.
Speaker 1 (34:07):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 2 (34:14):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five pm Eastern.
Listen on Apple CarPlay and Android Auto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 1 (34:29):
We're watching a lot of different companies, but I want
to home in on one, and that would be Intel
share surging in the after.
Speaker 3 (34:34):
Hours, building the momentum to the upside.
Speaker 1 (34:37):
Yeah, seven percent to the upside of right now in
the after hours, a little bit at the beginning trepidation
I think for shareholders. But I could have to do
also with some corrected numbers that we're coming back and
forth over the terminal for the results. The most recent results,
as you mentioned shares, what of ninety percent going into
the print this year?
Speaker 3 (34:55):
Well, yeah, we know, like there was the US taking
that position, Intel specific an equity position, and it is
now the third largest investor in INTELSA. That certainly has
given it a jolt if you will, this year. But again,
I think what's interesting is the company's CFO speaking in
an interview. You can check out our Ian King's right
through on this, but Intel saying the third quarter was
(35:17):
stronger than it thought across the board. So yeah, server
demand was a surprise positive. It feels like there's a
lot of things that feel like the changes, the moves
by Lip Bhutan, the CEO, maybe some of it's starting
to pay off.
Speaker 1 (35:32):
Well, I want to see what Jake Goldberg has to
say about all this. He's semiconductors and an electronics senior
analyst at Seaport Research Partners. He joins us from San Francisco. Jay,
good to have you. You cover a lot of these companies,
including Intel. You've got a neutral rating on Intel. Just
give us your first reaction to this report that shows
(35:52):
an encouraging forecast after a rebound in the PC chip market.
Speaker 11 (35:57):
Yeah.
Speaker 6 (35:57):
I think it's an encouraging step forward for the company.
They've been through some rough times, and I think the
driver of this quarter's results are their new products coming
on stream using their eighteen A, their new manufacturing process,
as well as some help from TSMC, so a bunch
of new products starting to ramp into production and volume.
(36:18):
I think that's helping a lot. And I'm most encouraged
by sort of the gross margin outlook for next quarter.
I haven't run through all my numbers, but it looks
like it's much better than expected, which is important not
just for the financial weight of that, but also it's
a good indicator into how their manufacturing process is tracking.
Speaker 1 (36:34):
I don't well, oh sorry, go ahead, I don't want
to get you in trouble with compliance, but can you
are you going to change your outlook? You're rating on
the stock, so.
Speaker 6 (36:45):
I just upgraded it about a month ago from sell
to neutral. And my concern here is more of that
big picture question you all were talking about earlier. As
much as this quarter is good progress and we're seeing
sort of tactically their move in the right direction, the
looming question over the company.
Speaker 11 (37:03):
Is what are they going to do with the fabs.
Speaker 6 (37:05):
Last quarter, CEO of Bhutan said, if they don't get
a customer for Intel Foundry, an external customer for Foundry,
they're going to stop doing advanced manufacturing. And I think
that's one of these tough analyst calls because in the
near term, if they stop doing that, it's it removes
a lot of expense numbers go way up, stock goes up.
It's a near term easy thing to do, but long
(37:26):
term it's probably really bad for the company. And it's
just hard to square that sort of long term forecast,
multi year forecast.
Speaker 11 (37:33):
So I'm still on the fence.
Speaker 2 (37:35):
Hey.
Speaker 3 (37:35):
One thing I want to just point out, Jay, is
that it looks like they're talking about seeing a fourth
quarter adjusted gross margin of thirty six point five percent.
Third quarter adjusted gross margin was forty percent against an
estimate of thirty six point one percent. Is that the
number you were looking for?
Speaker 11 (37:53):
Yeah, but there's a lot of adjustments in there, so
I haven't worked into them all.
Speaker 3 (37:56):
Okay, okay, Hey listen, listen. This is a company that's
been around for a long time. You know, you're entrenched
in how you were, what you were different executives coming
in to try and write this ship. You know, it's
a big ship to turn while also facing lots of
growing competition. Do you feel like it is in the
(38:18):
right direction.
Speaker 6 (38:20):
I think it's too soon to tell. I really hope
it's in the movement in the right direction, but it's
too soon to tell. Like, what are they going to
do with those fabs?
Speaker 8 (38:27):
Right?
Speaker 6 (38:28):
And you know, I've been saying for years that Intel's
biggest challenge is not external competitors or customers. It's their
biggest challenge is internal and fixing their culture. So that
on that mark, I think this is a step forward.
Lepoo who's put a you know, he has a plan
and he's chipping away at this sort of internal problem.
But they really have to readjust their worldview internally and
(38:49):
understand that they're not the dominant player that they were
for twenty years. They're they're the upstart now and they
got to act like it.
Speaker 1 (38:56):
Jay, we spent a good portion of our program earlier
talking about economic state craft and the new role of
the US government is taking in companies, the reporting around
potentially investing in some of these quantum companies. We of
course have the Intel among the US government being among
the biggest shareholders in Intel, US Steel the golden share
(39:17):
there the critical minerals and mining companies that have taken
investment or had interest expressed in them. From an Intel perspective,
how does the US government investment change Intel?
Speaker 6 (39:31):
I think it is going to encourage other US chip
companies to consider working with Intel Foundry, right, because you know,
in Nvidia has already invested in it, SoftBank's invested in Intel.
Now do we see Apple or Amazon or Google or
one of these other potential Intel customers sign up to
work with Intel Foundry take that risk? But because it
(39:52):
could be seen as patriotic.
Speaker 1 (39:54):
Well, that's okay, I'm glad you said that. Do they
do it because it's the right thing for their business,
because it's the best option for a foundry or is
it because it shows the Trump administration that they're supporting
a business that the administration has invested in.
Speaker 6 (40:08):
So I think it can be both, right. My view
is that these companies need to work with Intel. They
need to see Intel boundaries succeed because if they abandon
Intel Foundry today and Intel abandons it, you know entirely
what happens in five years when they're you know, TSMC
has it effective monopoly today. Right in five years they'll
have a true, actual monopoly. And that's that's going to
(40:31):
be really challenging for all these all these companies. And
so it's hard, you know, the way that companies work,
they've you know, they're thinking on ninety day cycles. Somebody
needs to be thinking of sort of the five ten
year time horizon. And maybe the government is the sort
of the forcing function that gets us there.
Speaker 3 (40:46):
You know who thinks in more than five or ten
year cycles. A little country named China, they're pretty good
about those long term plannings. Just having some fun with
you Jay Well. Having said that though, you know, on
the other hand, and are there companies who are saying,
I don't want to get involved with anybody who's involved
in the government, because just like the way the US
(41:07):
government for a long time has been or you know,
US investors have been critical of you know, sovereign held
entities you know in other countries. So is there some
you know, justification in that as well, or should we
just assume that Intel now has a massive you know
backup called the US government.
Speaker 6 (41:29):
So I think everybody's a little bit uncomfortable with the
US government taking stakes in companies. Everyone I know on
Wall Street, everyone I know in the valley just a
little bit uncomfortable about it, sort of ideologically, it's not
something we're used to. It's clear that, you know, the
US is moving towards some kind of national industrial policy.
(41:50):
This is one way to achieve that. I'm not sure
taking a stake in it is quite the right way
to do it, but you know, there are merits for
being a little bit more somewhere in between the government
controlling everything and the government doing nothing.
Speaker 11 (42:03):
Maybe there's a happy medium we can find.
Speaker 3 (42:05):
Hey, thirty seconds on the call, you're sitting down with
Intel execs. What do you want to ask them?
Speaker 11 (42:09):
Just quickly, what are you doing with Foundry?
Speaker 3 (42:13):
Okay, that was Craig, so appreciate it. Jay Goldberg, thanks,
have a good evening. Senior Analyst Semiconductors and Electronics at
Seaport Research Partners.
Speaker 2 (42:22):
This is the Bloomberg Business Week Daily 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
(42:43):
and always on the Bloomberg Terminal
Hosts And Creators
Tim Stenovec
Carol Massar
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.