August 7, 2021 • 28 mins
Serial SPAC dealmaker Betsy Cohen joined to talk about finding her seventh target, Pico, a New York-based technology provider for financial services companies that merged with FTAC Athena Acquisition Corp. in a $1.75 billion blank-check company deal. Senator Cynthia Lummis, Republican of Wyoming, came on to discuss the cryptocurrency amendment holding up the infrastructure package and why she is trying to narrow the language of the provision. Adam Ozimek, the chief economist at Upwork, outlined his latest report titled, "The Great Resignation" about the lasting impacts of the pandemic on the labor market. Then Glenn Fogel, the CEO of Booking Holdings, reacted to their second quarter earnings and talked about the impact of the Delta variant on the travel rebound.
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Episode Transcript
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Speaker 1 (00:08):
Welcome to What You Missed This Week? I'm Joe Wisenthal.
This podcast has some of our favorite interviews from the
Daily Market Clothes Show that I co anchor along with
Romaine Bostick and Caroline Hyde. What do you miss It's
the perfect way to kick off your weekend. This week,
serial spack dealmaker Betsy Cohen found her seventh target, a
technology provider for financial services companies. F t A c
(00:29):
Athena Acquisition Corps agreed to merge with New York based
Pico in a one point seven five billion dollar deal.
This comes after Cohen spack deals for Perella and Toro.
So we spoke with Betsy Cohen and started by asking
her what it is about spack specifically as a vehicle
that she finds so appealing. Well, I think it permits
(00:50):
a lot of flexibility and the and the opportunity to
understand the needs of a company and structure a transaction
around it. It also allows a company that has come
to an inflection point of growth to be able to
show and share with investors on a deep discussion basis
(01:12):
what the company's about and what it might look like
two and three years out. So it has a number
of aspects of real conversation, real analysis and real commitment
on the part of long term fundamental investors to understand
(01:34):
the company. And so with regards to let's see the
idea that this will continue, the idea that maybe not
at the frenzy pace that we've seen, but the idea
that this is now considered a viable and legitimate way
to come to market, that will continue to see this
maybe for years to come, that right alongside some of
the big ipels, there will be big spacts. I think
(01:55):
that we have finally crafted a third leg to the
stool of the transition from a private to a public
company being direct listings and I p o s being
the other two favorites. Uh, And that this vehicle does
not fit every company, just as an I p O
(02:19):
does not or a direct listing. So yes, I think
we will see uh, the normalization, the optimization and the
appropriate use of the SPAC vehicle for a long time
to come. Of course, you've taken been prolific. I mean
(02:41):
a Toro took public in this particular way of company
I'm knew well from covering the European tech market also
looking at platform pioneers, pioneer for example, what can you
give the sense of a fintech business and doult suit
the sort of way what sort of fintech businesses are
really getting you with cited? How do you zone in
(03:01):
hone in on the target that you want to really acquire? Well,
I think first we look at the underlying business and
the both macro and UH vectors of the marketplace, and
having been an operator and a founder of fintech businesses,
(03:24):
have a great appreciation for where those businesses might fit
in what's really a total ecosystem. We then look at management.
Is management ready? Are they strong? Are they able to
guide through UH difficulties? You know, the pandemic provided us
(03:45):
almost with the Petri dish for evaluating UM management because
there are many of the where there were many opportunities
to tweak or to really change strategy became beneficial to
the company as we ended this first phase of the pandemic.
(04:06):
So we learned a lot about management. Is the company ready?
Does the company have the internal structure that's required, because
we're not only looking for good companies that might have
a great idea, but those that will be good public companies. Well,
in theory, there's only so many good companies that have
(04:28):
a great idea that match all that criteria. There's a
lot of money out there still, and I'm curious, how
would you characterize what distinguishes your work from say many
other you know, blank checks that are out there currently
that might be competing against you for some of the
companies that match that bill And what do you what
do you bring to the table And what should an
(04:50):
end investor think about when they're thinking about, well, why
should they invest in one of your spects versus any other?
I think one of the distinguishing characterists six of spects
that has emerged in the last I don't know month
or two months, is really a differentiation among sponsors. UH
The spect as a vehicle for execution appears to be
(05:15):
UH at easy, almost a magic moment, but I can
tell you from experience that it requires deep knowledge of
a variety of different aspects, from capital markets to the
base business, to an understanding of management, and therefore distinguishing
among sponsors for the experience that they've had, for the
(05:38):
success that they've had, not only on the stock price,
because these are companies that should be more valuable two
and three years out than they are today. That's what
we look for, but also in terms of what all
call seamless execution, and so I think those are distinguishing
characteristics and the esther should be looking at them. This week,
(06:04):
President Biden's long awaited one trillion dollar infrastructure package got
bogged down by an unlikely culprit on Capitol Hill, cryptocurrency.
Searching for new funds to pay for the legislation, a
provision was added to step up tax reporting requirements on
cryptocurrency transactions. Has written the proposals, estimated to raise twenty
eight billion, but another group of lawmakers are warning that
(06:25):
the language is too broad and could give the Biden
administration the opportunity to crack down not just on cryptocurrency brokers,
but on bigcoin minors. So I caught up with one
Republican senator who's trying to narrow the language in the
crypto amendment sent the alumnus of Wyoming. I started by
asking her how confident she was of her language changes
being inserted. I'm not a hundred percent confident. We're working
(06:48):
on that now. We're working with the floor managers of
the bill. We're working with Senator Widen of Oregon. So
we have a bipartisan group working on this legislation to
clarify UH that brokers means people not to include miners
and others who really don't have access to the type
(07:08):
of customers and buyers and transactors that we think that
Treasury is trying to get at. Let me ask you.
You're very knowledgeable about bitcoin and crypto in general, and
you've established a reputation as someone who really cares about it.
But I have to imagine that a lot of your
colleagues just don't think about it very much, and that
(07:29):
when you talk about a miner or a node or whatever,
that they really don't have much understanding of, say the
role of a minor in the network, or what the
miners actually do. How much education is happening. How much
are your colleagues trying to actually take this stuff seriously
and learn about what these different terms mean and what
these different entities mean. I hope the controversy over this
(07:52):
amendment will encourage people to learn more about digital assets.
I founded a Financial Innovation cock US with Senator Kirsten
Cinema of Arizona for the specific reason of educating UH
senators and their staff, Members of the House and their staff,
as well as visiting with financial regulators about the differences
(08:16):
between digital assets and traditional FIAT assets. They are different. Uh,
this requires a different set of definitions. We need to
come with some definitions. So I hate to take a
step in the wrong direction as an amendment or a
provision on a bill that wasn't intended to address digital assets.
(08:39):
We should wait and handle digital assets in an informed
manner that starts with definitions of a whole broad array
of digital asset. Uh. There's there seem to be kind
of two things going on at once here in this
particular situation, because of course there is this reputation a
lot of people haven't They're like bitcoin is just for
(09:01):
money laundering, it's just for tax evasion. You hear people
say that all the time. So there's the question of
like is their tax wanting to be collected? And then
there is the more technical question that you just discussed
about the fact that the miners don't wouldn't even have
the data or the information that would allow them to
fulfill such a compliance requirements. How much perception is there
(09:22):
still or how much do you see a lot of
people on the hill perceived that digital assets don't have
any use other than say, um law, evading the law. Well,
there is a problem with it. When we signed the
pipeline the ransom was paid in digital assets, people said,
oh my gosh, you know they're used for criminal purposes. Uh.
(09:45):
They didn't bother to find out that of that bitcoin
was retrieved recovered within a week of that transaction. Uh.
So there's uh about it. Half as much not ledge
as people need to make a clear decision about these assets.
So we've got to have more education here in the U. S. Senate.
(10:08):
Right now, we've been talking, of course, about bitcoin and
when when we talk about mining, we're talking about proof
of work systems that use energy. But of course there's
another debate about crypto happening right now in d C,
and that is essentially related to the intersection of crypto
and securities law and some of these other tokens that
are not bitcoin, things like the centralized finance. Do you
(10:32):
believe that there is essentially trading of unregistered securities going
on in the broader crypto universe that regulators need to
get their handle lot, get a better hand lot. Well,
we do need to define when bitcoin is a commodity,
which it is, and when it is bundled in a
manner that makes it act more like a security. UM.
(10:56):
So I'm very confident that bitcoin etherory them and other
digital assets are correctly identified as being commodities subject to
the Commodity Futures Trading Commission, but that they can be
uh bundled into uh securities. That's why I think it's
(11:19):
uh great to work with Gary Ginsler at the SEC
to determine when that happens. He has interest in knowledge
in digital assets. We think that he'll actually be helpful
uh in uh sculpting legislation that helps make those distinctions.
(11:39):
That means you when someone comes to you, maybe one
of your colleagues and says like, yeah, well, why should
I care about this? What is the value of crypto
digital assets? And it still hurts people's head and it's like, Okay,
it's not tax evasion, is not money laundering. What do
you say, why do you believe that this is an
important area to be fighting for and to um create
(12:02):
space for this industry to flourish in the United States. Well,
first of all, I believe that bitcoin certainly is a
great store of value. It's like digital gold. Uh, It's
an alternative to fiat currencies, including the US dollar. UH.
It creates an opportunity for people who are saving to
(12:22):
save in a very diverse asset allocation that includes UH
some US dollar denominated investments and some non fiat investments.
So I like it as a diversifier and a store
of value, but I also like it for people who
are extremely poor and unbanked. A great example is what
(12:45):
happened in El Salvador. They declared bitcoin to be legal tender,
and they did it because people in the United States
sending money home to a relative, we're paying the fees
associated with using Western Union UH, and UH that money
is carried in a way that subjects it to theF
(13:06):
by a very heavy handed criminal element. In El Salvador.
This allows a son in the United States to transfer
money on his cell phone to his mother in El Salvador,
and these people who are unbanked can essentially transact with
no fees and in much more safety than they can
(13:28):
in UH in hard dollars. So UH, it's good for
people who are extremely poor UH, and it's also good
as a diversifier. So I think it has some characteristics
that's going to make it catch on even more among
both the poor and people who save. Let me ask
you one more question, and that is about sort of
(13:48):
the right to transact or perhaps transaction privacy or censorship
free transaction. And we know that if we use a
you know, a lot of people are worried that cash
is going to go away, and that if we have
to use a corporate network or a Facebook digital currency
or PayPal or something that we're at the whim of corporations.
Who gets to send money to whom? How much do
(14:08):
you think that is an important value for US law?
US laws to preserve the ability of personative to send
person be money without any sort of person see whether
it be corporation or government to say you're not allowed.
I think it's really important, you know where One of
the concerns I have about the Digital you want is
(14:29):
that it will be used by the Chinese Communist Party
UH to spy on people and how they're using their
digital you want. For example, if someone in China where
to make a donation to a church or some unapproved
activity that the Chinese Communist Party doesn't like, they're able
to crack down on that person and make sure that
that person can't transact and digital you want and if
(14:51):
that's the only type of currency they have, UH, they've
cut off their means of exchange. UH. So it's very
important that we resp act the privacy and UH non
government involvement in non fiat currency and yet still allow
the innovation so it can intersect with a traditional fiat economy. UH.
(15:17):
And there are ways to do that that can protect
the u S ability to collect taxes when someone reaps
a large capital gain and a transaction in digital currencies,
but at the same time allows for that digital currency
to be exchanged without the heavy handed eyes of government
upon every transaction and every person and how they're using
(15:39):
their money. And we also caught up with what you
missed regular Adam Ozamec, the chief economist at UPWARD, who
is a new report out called The Great Resignation. The
survey takes a deep dive into how professionals are looking
at their opportunities in the labor market. We started by
asking Adam what permanent changes to how people will work
will come out of the pandemic. I think there's no
(16:03):
doubt that the share of people working remotely is gonna
go up a lot compared to pre pandemic. And when
you talk about the new normal. It's interesting because I
think a lot of businesses think that they are going
back to the new normal. They're making up their minds
about what their workers have to do UM and saying,
you know, we're back in the office or not back
in the office. And they think that's the new normal.
(16:24):
But that's not the new normal because the power is
still in a lot of workers hands. And what we
found on our survey was that of workers who are
working largely remote during the pandemic, they're considering quitting to
find a job that was more remote, and eight percent
are considering freelancing. Interesting, we were just talking about the
gig economy workers lift drivers. Of course, there's a supply
(16:48):
demand issue there and drives rides on lift or river
are pretty expensive right now, Adam, what about the joy
of freelancing on not thereof I mean, all people already
making that pivot and are they taking low salaries on
the back of it, but to get that flexibility so
UM people are already definitely making a jump. It's been
(17:09):
a really strong year for up work, I can tell
you that. And also if you look at Census data,
you can see that UM non employer business registrations have
been really strong through the pandemic and even through the recovery.
I don't think that it's really a matter of having
to take less pay in order to freelance in general,
and our survey of freelancing, we find that people think
(17:30):
that they make more money freelancing than they did from
the traditional employer. And you know, the flexibility is extremely
valuable to a lot of people, the flexibility. I do
wonder though, if we get to a stage atom where
some of the uh, the established businesses maybe sort of
adjust to the times, whether it's increasing pay or just
providing that flexibility that a lot of these workers want. Here,
(17:53):
I mean, is there some potential for that, or if
we just sort of kind of just crossed some rubicon
that will never go back. Well, you know, the labor
markets very diverse. Employers are very diverse, and there's not
gonna be one way of working in one way of operating.
So you're gonna have businesses operating across the spectrum of
remote and across the spectrum flexible. But I think what
(18:13):
we're going to see the most growth is in more
flexible arrangements and more remote arrangements. And you know, for
workers who truly want to be flexible to decide what
hours of the day you work, what days of the
week you work. You know, if you want your work
amount to very week to week, month to month and
have a choice there, that's not really something that traditional
employment can replicate. So I think employers can give a
(18:34):
lot of flexibility, and I do think that they will,
but it gets to a certain point where you know,
you just traditional employment can't offer the same flexibility the
freelance and can. Well, and just talk a little bit
more about traditional employers, and you sort of say it
at the beginning, they all think the new normal or
the normal is going to come back, And eventually they're
all gonna everyone's gonna come back to office. Maybe it'll
(18:56):
be after Labor Day, maybe in October, maybe a little later,
depend they on delta. At one point, is the rubber
going to hit the road? And what do you expect
companies and managers who expect that old normal to return
to do when it's sort of dawns on them that
they can't get a talented labor force all back in
the office like they could in December. Yeah, I mean,
(19:20):
I think the elevated quit rate already. I'm not gonna
say it's mostly due to people leaving because remote work,
but I do think that that is part of it.
That we are seeing some people already making the decision
to leave their jobs because people are their employees are
telling them they have to come back. So I think
we're starting to see a little bit of that traction.
And you know, I think it's basically going to correspond
to the return to work plans. People think they're coming
(19:42):
back September October, um. I think that's when when people
are really gonna make the decision, am I going back
or am I looking for new work? And it you know,
from our survey, it sounds like a lot of them
are going to be looking for new work. I think employers, uh,
you know, they have to they have to realize that
just because something is not the optimal away from their perspective.
For a management perspective, that's at the end of the discussion.
(20:03):
If they can't hire people, if they can't retain people,
you know, they may have to change their optimal way
of working. And you know that's the nature competition. Adam,
how do you rate how long this will last or not?
Is there a this is how people feel in the moment. Yes,
it's also as we still see the delta baron out there.
(20:24):
And do you think at some point two years time
we'll all go back to actually craving being in office
and some time or or getting back to the city
hustle in some way? Is this Dare I say, some
sort of fad, some sort of immediate backlash to what's
just occurred in our lives and then we'll sort of
slowly but surely find some differently equilibrium. Again, I really
(20:45):
don't think so. You know, we've done surveys of managers
where we asked them what share of workers are going
to be remote five years out, so specifically asked them
to think about the longer term, and those numbers are
still really high. They're nowhere near pre pandemic levels. We're
still talking to the labor market remote. So those are
really big permanent changes. That's from the management perspective, which
(21:07):
I think is going to be more conservative, and that's
focused on the long run. So I don't think it's
fat And I also think, you know, the fact that
people are willing to quit their jobs over it suggests
that they are pretty serious about it. And you know,
You don't quit your job over some sort of short
term light consideration. You do it when you have a
really big disagreement with your employer. This week, earning season
(21:31):
largely wrapped up. One company that reported second quarter results
was Booking Holdings, the parent company of the travel search
sites Booking dot Com, Price Line, Kayak, chief Flights, and
Open Table. The company posted a better than expected surge
and room night reservations and expressed optimism that the pace
of travel will continue to improve is more people are
vaccinated and restrictions are loosened. So we spoke with CEO
(21:53):
Glenn Fogel and asked what he is seeing in the
travel sector right now amid increasing concerns at the delta
bearing well, thanks for having me, and of course we
all are concerned. We see what's having some of the
numbers on the in the hand though, we've been dealing
with the different problems with this pandemic for a long
time now eighteen months maybe more for some countries, so
(22:15):
we know if there are sometimes some setbacks and such,
but we are very pleased with our numbers that we
announced last night. We were pleased to see this ssequential
growth in our room nights going up fifty nine percent
quarter over quarter. So we're pleased with where we are.
We recognize there are some issues, there are some concerns,
but the long run still as bright as has always
been in terms of my mind. We know this pandemic
(22:36):
will end. We do know that we're going to get
back to travel the way it used to be. The
thing we don't know is how fast. And we just
hope more people will get that vaccine and that will
help make this thing go away faster. It's sounding pretty
bullish about looking forward how much you're seeing variations from
region to region from the sort of types of traffic
(22:56):
that you're seeing as well, I mean, where is the
strongest from a geographic coal perspective of the moment plan.
So we talked about this a little bit, that your
had the largest recovery in the last quarter for US,
but the US is going very strong. Also in the
US is our number one country. We also pointed out
that Asia definitely having some problems there and travel, and
it's because of the vaccine lack of vaccines and slow distribution,
(23:19):
and also the countries in Asia are being much more
strict about how people can travel or not travel depending
on what the healthy situations are. That's hurting travel a
lot in Asia, but overall, long run, I do believe
we're gonna be getting back to where it used to be.
And we see it in terms of the UK had
the terrible delta variant upswing. Now it's going down. We
(23:41):
saw in India big delta upswing. Now we going down,
and I am hopeful. We don't know, but I'm hopeful
that the US will follow a similar pattern, will peek out,
and then it will start going down. Uh. You know,
Glenn Wan, you know Booking uh became popular and Priceline
obviously before uh before it was rebranded here. You know,
(24:02):
you went there to sort of book with a major
airline or a major hotel. We're now in a day
and age where of course Airbnb, Verbo and sort of
all these sort of alternative sort of lodging and travel
alternatives are out there. Now. I'm wondering how you integrate
that into onto the Booking dot Com site and just
into your own ecosystem so that you're sort of along
for the ride for what is clearly just a transition
(24:24):
in the way that we travel, in the way that
we lodge. We've talked about how strong we are in
the alternative accommodations. We want to talk about a non
hotel at home and apartment of villa or something on
the beach. We talked about, Look, we've been doing that
since two thousand booking dot Com and we've been very
strong in Europe. We recognize in the US we're not
as strong. We talked about how we'll continue to build
(24:45):
that out, but I am I know we have great
competitors and we're gonna keep fighting it out. But I'm
not concerned about that. We've been in this is for
a long time. We are the leader. We've been the
leader for a long time. And one of the advantages
we have is that we have the homes and the
hotel the biggest distribution system for both types of properties.
So when somebody comes to us, many times they don't
(25:06):
know what they want. Yet they come to us, they compare,
they can trast, and then they choose what they want.
We're able to offer whatever it is. Uh, Glen. I
want to ask about the future of the lodging of business,
and there is this theory that's been put forward, including
by some in the industry, that hotel bookings will start
to resemble airline bookings more where there's more disambiguated and
(25:27):
more separated by price, and you know, okay, you pay
by bag, and maybe you pay extra four towels every day,
or maybe you pay extra for making the bed every night.
Do you see that? Is there going to be a
permanent change and how lodging is priced going forward in
the wake of this, Well, what we always want is
have transparency, and we want to have a way for
customer understand what they're buying when they're buying. And one
(25:50):
of the things I really do not like is this
idea of grit pricing and that situation where product person
puts out and says it's something for this, and then
you find us a little bit more for on the
else that's required. So, for example, is take resort fees.
Nobody likes a resort fee. What we really need, though,
is we need a government regulation to prohibit that type
of activity, because every company says, look, I don't like it,
(26:13):
but if I don't do it, if I put all
the prices all up front, is one thing I'm not
as competitive against somebody else who does that pricing type thing.
So it would be helpful if the administration would come
out with regulations that makes transparent pricing a requirement, everybody
would be better off. I believe by that. Interesting, Glenn,
(26:33):
I want to ask you as a business leader right now,
you sounded pretty optimistic about well in the next quarter
in terms of growth continuing despite this ongoing delta variant
we can concern about. But from you as a business leader,
what do you all return to works processes looking like
at the moment? And and are you changing your viewpoint? Well, look,
it's obviously nobody really knows how the right way to
(26:55):
work in the future is going to be. We know
that many people are saying we're gonna try and do experiments,
and that's what we're gonna do. We're gonna come out
and say we're gonna try a couple of days a
week in some areas. We're gonna see how it works.
And then we'll say does that work? Where do we
need to everybody in the office? Where do can we
do it with lots of people not in the office
at all. We'll find out what the right thing to do.
(27:15):
Right now, we're not even sure when we want to
ask people to start coming back to the office in
large numbers because of this delta variant. We're concerned about
the hell situations, but we'll work it out. One thing
that could be very interesting is if we have a
lot of people who are working from home part of
the week and in the office part of the week.
I could see a lot of people saying Thursday Friday,
let's go work somewhere else. Many vacations that can help
(27:38):
build the travel industry. Sure you're working Thursday Friday, but
you're working from a beach or a lake, and you're
using your You're traveling and enjoying life a little bit more.
Perhaps that's something that you don't look forward to. I think.
And that's it for what you missed this week. If
you like the show, and make sure to subscribe and
rate us an Apple podcast or wherever you listen to podcast,
(28:00):
you can catch our show every weekday from three thirty
to five pm on Bloomberg TV and from four to
five pm on Twitter. Thanks for listening and have a
great one.
Welcome to What You Missed This Week? I'm Joe Wisenthal.
This podcast has some of our favorite interviews from the
Daily Market Clothes Show that I co anchor along with
Romaine Bostick and Caroline Hyde. What do you miss It's
the perfect way to kick off your weekend. This week,
serial spack dealmaker Betsy Cohen found her seventh target, a
technology provider for financial services companies. F t A c
(00:29):
Athena Acquisition Corps agreed to merge with New York based
Pico in a one point seven five billion dollar deal.
This comes after Cohen spack deals for Perella and Toro.
So we spoke with Betsy Cohen and started by asking
her what it is about spack specifically as a vehicle
that she finds so appealing. Well, I think it permits
(00:50):
a lot of flexibility and the and the opportunity to
understand the needs of a company and structure a transaction
around it. It also allows a company that has come
to an inflection point of growth to be able to
show and share with investors on a deep discussion basis
(01:12):
what the company's about and what it might look like
two and three years out. So it has a number
of aspects of real conversation, real analysis and real commitment
on the part of long term fundamental investors to understand
(01:34):
the company. And so with regards to let's see the
idea that this will continue, the idea that maybe not
at the frenzy pace that we've seen, but the idea
that this is now considered a viable and legitimate way
to come to market, that will continue to see this
maybe for years to come, that right alongside some of
the big ipels, there will be big spacts. I think
(01:55):
that we have finally crafted a third leg to the
stool of the transition from a private to a public
company being direct listings and I p o s being
the other two favorites. Uh, And that this vehicle does
not fit every company, just as an I p O
(02:19):
does not or a direct listing. So yes, I think
we will see uh, the normalization, the optimization and the
appropriate use of the SPAC vehicle for a long time
to come. Of course, you've taken been prolific. I mean
(02:41):
a Toro took public in this particular way of company
I'm knew well from covering the European tech market also
looking at platform pioneers, pioneer for example, what can you
give the sense of a fintech business and doult suit
the sort of way what sort of fintech businesses are
really getting you with cited? How do you zone in
(03:01):
hone in on the target that you want to really acquire? Well,
I think first we look at the underlying business and
the both macro and UH vectors of the marketplace, and
having been an operator and a founder of fintech businesses,
(03:24):
have a great appreciation for where those businesses might fit
in what's really a total ecosystem. We then look at management.
Is management ready? Are they strong? Are they able to
guide through UH difficulties? You know, the pandemic provided us
(03:45):
almost with the Petri dish for evaluating UM management because
there are many of the where there were many opportunities
to tweak or to really change strategy became beneficial to
the company as we ended this first phase of the pandemic.
(04:06):
So we learned a lot about management. Is the company ready?
Does the company have the internal structure that's required, because
we're not only looking for good companies that might have
a great idea, but those that will be good public companies. Well,
in theory, there's only so many good companies that have
(04:28):
a great idea that match all that criteria. There's a
lot of money out there still, and I'm curious, how
would you characterize what distinguishes your work from say many
other you know, blank checks that are out there currently
that might be competing against you for some of the
companies that match that bill And what do you what
do you bring to the table And what should an
(04:50):
end investor think about when they're thinking about, well, why
should they invest in one of your spects versus any other?
I think one of the distinguishing characterists six of spects
that has emerged in the last I don't know month
or two months, is really a differentiation among sponsors. UH
The spect as a vehicle for execution appears to be
(05:15):
UH at easy, almost a magic moment, but I can
tell you from experience that it requires deep knowledge of
a variety of different aspects, from capital markets to the
base business, to an understanding of management, and therefore distinguishing
among sponsors for the experience that they've had, for the
(05:38):
success that they've had, not only on the stock price,
because these are companies that should be more valuable two
and three years out than they are today. That's what
we look for, but also in terms of what all
call seamless execution, and so I think those are distinguishing
characteristics and the esther should be looking at them. This week,
(06:04):
President Biden's long awaited one trillion dollar infrastructure package got
bogged down by an unlikely culprit on Capitol Hill, cryptocurrency.
Searching for new funds to pay for the legislation, a
provision was added to step up tax reporting requirements on
cryptocurrency transactions. Has written the proposals, estimated to raise twenty
eight billion, but another group of lawmakers are warning that
(06:25):
the language is too broad and could give the Biden
administration the opportunity to crack down not just on cryptocurrency brokers,
but on bigcoin minors. So I caught up with one
Republican senator who's trying to narrow the language in the
crypto amendment sent the alumnus of Wyoming. I started by
asking her how confident she was of her language changes
being inserted. I'm not a hundred percent confident. We're working
(06:48):
on that now. We're working with the floor managers of
the bill. We're working with Senator Widen of Oregon. So
we have a bipartisan group working on this legislation to
clarify UH that brokers means people not to include miners
and others who really don't have access to the type
(07:08):
of customers and buyers and transactors that we think that
Treasury is trying to get at. Let me ask you.
You're very knowledgeable about bitcoin and crypto in general, and
you've established a reputation as someone who really cares about it.
But I have to imagine that a lot of your
colleagues just don't think about it very much, and that
(07:29):
when you talk about a miner or a node or whatever,
that they really don't have much understanding of, say the
role of a minor in the network, or what the
miners actually do. How much education is happening. How much
are your colleagues trying to actually take this stuff seriously
and learn about what these different terms mean and what
these different entities mean. I hope the controversy over this
(07:52):
amendment will encourage people to learn more about digital assets.
I founded a Financial Innovation cock US with Senator Kirsten
Cinema of Arizona for the specific reason of educating UH
senators and their staff, Members of the House and their staff,
as well as visiting with financial regulators about the differences
(08:16):
between digital assets and traditional FIAT assets. They are different. Uh,
this requires a different set of definitions. We need to
come with some definitions. So I hate to take a
step in the wrong direction as an amendment or a
provision on a bill that wasn't intended to address digital assets.
(08:39):
We should wait and handle digital assets in an informed
manner that starts with definitions of a whole broad array
of digital asset. Uh. There's there seem to be kind
of two things going on at once here in this
particular situation, because of course there is this reputation a
lot of people haven't They're like bitcoin is just for
(09:01):
money laundering, it's just for tax evasion. You hear people
say that all the time. So there's the question of
like is their tax wanting to be collected? And then
there is the more technical question that you just discussed
about the fact that the miners don't wouldn't even have
the data or the information that would allow them to
fulfill such a compliance requirements. How much perception is there
(09:22):
still or how much do you see a lot of
people on the hill perceived that digital assets don't have
any use other than say, um law, evading the law. Well,
there is a problem with it. When we signed the
pipeline the ransom was paid in digital assets, people said,
oh my gosh, you know they're used for criminal purposes. Uh.
(09:45):
They didn't bother to find out that of that bitcoin
was retrieved recovered within a week of that transaction. Uh.
So there's uh about it. Half as much not ledge
as people need to make a clear decision about these assets.
So we've got to have more education here in the U. S. Senate.
(10:08):
Right now, we've been talking, of course, about bitcoin and
when when we talk about mining, we're talking about proof
of work systems that use energy. But of course there's
another debate about crypto happening right now in d C,
and that is essentially related to the intersection of crypto
and securities law and some of these other tokens that
are not bitcoin, things like the centralized finance. Do you
(10:32):
believe that there is essentially trading of unregistered securities going
on in the broader crypto universe that regulators need to
get their handle lot, get a better hand lot. Well,
we do need to define when bitcoin is a commodity,
which it is, and when it is bundled in a
manner that makes it act more like a security. UM.
(10:56):
So I'm very confident that bitcoin etherory them and other
digital assets are correctly identified as being commodities subject to
the Commodity Futures Trading Commission, but that they can be
uh bundled into uh securities. That's why I think it's
(11:19):
uh great to work with Gary Ginsler at the SEC
to determine when that happens. He has interest in knowledge
in digital assets. We think that he'll actually be helpful
uh in uh sculpting legislation that helps make those distinctions.
(11:39):
That means you when someone comes to you, maybe one
of your colleagues and says like, yeah, well, why should
I care about this? What is the value of crypto
digital assets? And it still hurts people's head and it's like, Okay,
it's not tax evasion, is not money laundering. What do
you say, why do you believe that this is an
important area to be fighting for and to um create
(12:02):
space for this industry to flourish in the United States. Well,
first of all, I believe that bitcoin certainly is a
great store of value. It's like digital gold. Uh, It's
an alternative to fiat currencies, including the US dollar. UH.
It creates an opportunity for people who are saving to
(12:22):
save in a very diverse asset allocation that includes UH
some US dollar denominated investments and some non fiat investments.
So I like it as a diversifier and a store
of value, but I also like it for people who
are extremely poor and unbanked. A great example is what
(12:45):
happened in El Salvador. They declared bitcoin to be legal tender,
and they did it because people in the United States
sending money home to a relative, we're paying the fees
associated with using Western Union UH, and UH that money
is carried in a way that subjects it to theF
(13:06):
by a very heavy handed criminal element. In El Salvador.
This allows a son in the United States to transfer
money on his cell phone to his mother in El Salvador,
and these people who are unbanked can essentially transact with
no fees and in much more safety than they can
(13:28):
in UH in hard dollars. So UH, it's good for
people who are extremely poor UH, and it's also good
as a diversifier. So I think it has some characteristics
that's going to make it catch on even more among
both the poor and people who save. Let me ask
you one more question, and that is about sort of
(13:48):
the right to transact or perhaps transaction privacy or censorship
free transaction. And we know that if we use a
you know, a lot of people are worried that cash
is going to go away, and that if we have
to use a corporate network or a Facebook digital currency
or PayPal or something that we're at the whim of corporations.
Who gets to send money to whom? How much do
(14:08):
you think that is an important value for US law?
US laws to preserve the ability of personative to send
person be money without any sort of person see whether
it be corporation or government to say you're not allowed.
I think it's really important, you know where One of
the concerns I have about the Digital you want is
(14:29):
that it will be used by the Chinese Communist Party
UH to spy on people and how they're using their
digital you want. For example, if someone in China where
to make a donation to a church or some unapproved
activity that the Chinese Communist Party doesn't like, they're able
to crack down on that person and make sure that
that person can't transact and digital you want and if
(14:51):
that's the only type of currency they have, UH, they've
cut off their means of exchange. UH. So it's very
important that we resp act the privacy and UH non
government involvement in non fiat currency and yet still allow
the innovation so it can intersect with a traditional fiat economy. UH.
(15:17):
And there are ways to do that that can protect
the u S ability to collect taxes when someone reaps
a large capital gain and a transaction in digital currencies,
but at the same time allows for that digital currency
to be exchanged without the heavy handed eyes of government
upon every transaction and every person and how they're using
(15:39):
their money. And we also caught up with what you
missed regular Adam Ozamec, the chief economist at UPWARD, who
is a new report out called The Great Resignation. The
survey takes a deep dive into how professionals are looking
at their opportunities in the labor market. We started by
asking Adam what permanent changes to how people will work
will come out of the pandemic. I think there's no
(16:03):
doubt that the share of people working remotely is gonna
go up a lot compared to pre pandemic. And when
you talk about the new normal. It's interesting because I
think a lot of businesses think that they are going
back to the new normal. They're making up their minds
about what their workers have to do UM and saying,
you know, we're back in the office or not back
in the office. And they think that's the new normal.
(16:24):
But that's not the new normal because the power is
still in a lot of workers hands. And what we
found on our survey was that of workers who are
working largely remote during the pandemic, they're considering quitting to
find a job that was more remote, and eight percent
are considering freelancing. Interesting, we were just talking about the
gig economy workers lift drivers. Of course, there's a supply
(16:48):
demand issue there and drives rides on lift or river
are pretty expensive right now, Adam, what about the joy
of freelancing on not thereof I mean, all people already
making that pivot and are they taking low salaries on
the back of it, but to get that flexibility so
UM people are already definitely making a jump. It's been
(17:09):
a really strong year for up work, I can tell
you that. And also if you look at Census data,
you can see that UM non employer business registrations have
been really strong through the pandemic and even through the recovery.
I don't think that it's really a matter of having
to take less pay in order to freelance in general,
and our survey of freelancing, we find that people think
(17:30):
that they make more money freelancing than they did from
the traditional employer. And you know, the flexibility is extremely
valuable to a lot of people, the flexibility. I do
wonder though, if we get to a stage atom where
some of the uh, the established businesses maybe sort of
adjust to the times, whether it's increasing pay or just
providing that flexibility that a lot of these workers want. Here,
(17:53):
I mean, is there some potential for that, or if
we just sort of kind of just crossed some rubicon
that will never go back. Well, you know, the labor
markets very diverse. Employers are very diverse, and there's not
gonna be one way of working in one way of operating.
So you're gonna have businesses operating across the spectrum of
remote and across the spectrum flexible. But I think what
(18:13):
we're going to see the most growth is in more
flexible arrangements and more remote arrangements. And you know, for
workers who truly want to be flexible to decide what
hours of the day you work, what days of the
week you work. You know, if you want your work
amount to very week to week, month to month and
have a choice there, that's not really something that traditional
employment can replicate. So I think employers can give a
(18:34):
lot of flexibility, and I do think that they will,
but it gets to a certain point where you know,
you just traditional employment can't offer the same flexibility the
freelance and can. Well, and just talk a little bit
more about traditional employers, and you sort of say it
at the beginning, they all think the new normal or
the normal is going to come back, And eventually they're
all gonna everyone's gonna come back to office. Maybe it'll
(18:56):
be after Labor Day, maybe in October, maybe a little later,
depend they on delta. At one point, is the rubber
going to hit the road? And what do you expect
companies and managers who expect that old normal to return
to do when it's sort of dawns on them that
they can't get a talented labor force all back in
the office like they could in December. Yeah, I mean,
(19:20):
I think the elevated quit rate already. I'm not gonna
say it's mostly due to people leaving because remote work,
but I do think that that is part of it.
That we are seeing some people already making the decision
to leave their jobs because people are their employees are
telling them they have to come back. So I think
we're starting to see a little bit of that traction.
And you know, I think it's basically going to correspond
to the return to work plans. People think they're coming
(19:42):
back September October, um. I think that's when when people
are really gonna make the decision, am I going back
or am I looking for new work? And it you know,
from our survey, it sounds like a lot of them
are going to be looking for new work. I think employers, uh,
you know, they have to they have to realize that
just because something is not the optimal away from their perspective.
For a management perspective, that's at the end of the discussion.
(20:03):
If they can't hire people, if they can't retain people,
you know, they may have to change their optimal way
of working. And you know that's the nature competition. Adam,
how do you rate how long this will last or not?
Is there a this is how people feel in the moment. Yes,
it's also as we still see the delta baron out there.
(20:24):
And do you think at some point two years time
we'll all go back to actually craving being in office
and some time or or getting back to the city
hustle in some way? Is this Dare I say, some
sort of fad, some sort of immediate backlash to what's
just occurred in our lives and then we'll sort of
slowly but surely find some differently equilibrium. Again, I really
(20:45):
don't think so. You know, we've done surveys of managers
where we asked them what share of workers are going
to be remote five years out, so specifically asked them
to think about the longer term, and those numbers are
still really high. They're nowhere near pre pandemic levels. We're
still talking to the labor market remote. So those are
really big permanent changes. That's from the management perspective, which
(21:07):
I think is going to be more conservative, and that's
focused on the long run. So I don't think it's
fat And I also think, you know, the fact that
people are willing to quit their jobs over it suggests
that they are pretty serious about it. And you know,
You don't quit your job over some sort of short
term light consideration. You do it when you have a
really big disagreement with your employer. This week, earning season
(21:31):
largely wrapped up. One company that reported second quarter results
was Booking Holdings, the parent company of the travel search
sites Booking dot Com, Price Line, Kayak, chief Flights, and
Open Table. The company posted a better than expected surge
and room night reservations and expressed optimism that the pace
of travel will continue to improve is more people are
vaccinated and restrictions are loosened. So we spoke with CEO
(21:53):
Glenn Fogel and asked what he is seeing in the
travel sector right now amid increasing concerns at the delta
bearing well, thanks for having me, and of course we
all are concerned. We see what's having some of the
numbers on the in the hand though, we've been dealing
with the different problems with this pandemic for a long
time now eighteen months maybe more for some countries, so
(22:15):
we know if there are sometimes some setbacks and such,
but we are very pleased with our numbers that we
announced last night. We were pleased to see this ssequential
growth in our room nights going up fifty nine percent
quarter over quarter. So we're pleased with where we are.
We recognize there are some issues, there are some concerns,
but the long run still as bright as has always
been in terms of my mind. We know this pandemic
(22:36):
will end. We do know that we're going to get
back to travel the way it used to be. The
thing we don't know is how fast. And we just
hope more people will get that vaccine and that will
help make this thing go away faster. It's sounding pretty
bullish about looking forward how much you're seeing variations from
region to region from the sort of types of traffic
(22:56):
that you're seeing as well, I mean, where is the
strongest from a geographic coal perspective of the moment plan.
So we talked about this a little bit, that your
had the largest recovery in the last quarter for US,
but the US is going very strong. Also in the
US is our number one country. We also pointed out
that Asia definitely having some problems there and travel, and
it's because of the vaccine lack of vaccines and slow distribution,
(23:19):
and also the countries in Asia are being much more
strict about how people can travel or not travel depending
on what the healthy situations are. That's hurting travel a
lot in Asia, but overall, long run, I do believe
we're gonna be getting back to where it used to be.
And we see it in terms of the UK had
the terrible delta variant upswing. Now it's going down. We
(23:41):
saw in India big delta upswing. Now we going down,
and I am hopeful. We don't know, but I'm hopeful
that the US will follow a similar pattern, will peek out,
and then it will start going down. Uh. You know,
Glenn Wan, you know Booking uh became popular and Priceline
obviously before uh before it was rebranded here. You know,
(24:02):
you went there to sort of book with a major
airline or a major hotel. We're now in a day
and age where of course Airbnb, Verbo and sort of
all these sort of alternative sort of lodging and travel
alternatives are out there. Now. I'm wondering how you integrate
that into onto the Booking dot Com site and just
into your own ecosystem so that you're sort of along
for the ride for what is clearly just a transition
(24:24):
in the way that we travel, in the way that
we lodge. We've talked about how strong we are in
the alternative accommodations. We want to talk about a non
hotel at home and apartment of villa or something on
the beach. We talked about, Look, we've been doing that
since two thousand booking dot Com and we've been very
strong in Europe. We recognize in the US we're not
as strong. We talked about how we'll continue to build
(24:45):
that out, but I am I know we have great
competitors and we're gonna keep fighting it out. But I'm
not concerned about that. We've been in this is for
a long time. We are the leader. We've been the
leader for a long time. And one of the advantages
we have is that we have the homes and the
hotel the biggest distribution system for both types of properties.
So when somebody comes to us, many times they don't
(25:06):
know what they want. Yet they come to us, they compare,
they can trast, and then they choose what they want.
We're able to offer whatever it is. Uh, Glen. I
want to ask about the future of the lodging of business,
and there is this theory that's been put forward, including
by some in the industry, that hotel bookings will start
to resemble airline bookings more where there's more disambiguated and
(25:27):
more separated by price, and you know, okay, you pay
by bag, and maybe you pay extra four towels every day,
or maybe you pay extra for making the bed every night.
Do you see that? Is there going to be a
permanent change and how lodging is priced going forward in
the wake of this, Well, what we always want is
have transparency, and we want to have a way for
customer understand what they're buying when they're buying. And one
(25:50):
of the things I really do not like is this
idea of grit pricing and that situation where product person
puts out and says it's something for this, and then
you find us a little bit more for on the
else that's required. So, for example, is take resort fees.
Nobody likes a resort fee. What we really need, though,
is we need a government regulation to prohibit that type
of activity, because every company says, look, I don't like it,
(26:13):
but if I don't do it, if I put all
the prices all up front, is one thing I'm not
as competitive against somebody else who does that pricing type thing.
So it would be helpful if the administration would come
out with regulations that makes transparent pricing a requirement, everybody
would be better off. I believe by that. Interesting, Glenn,
(26:33):
I want to ask you as a business leader right now,
you sounded pretty optimistic about well in the next quarter
in terms of growth continuing despite this ongoing delta variant
we can concern about. But from you as a business leader,
what do you all return to works processes looking like
at the moment? And and are you changing your viewpoint? Well, look,
it's obviously nobody really knows how the right way to
(26:55):
work in the future is going to be. We know
that many people are saying we're gonna try and do experiments,
and that's what we're gonna do. We're gonna come out
and say we're gonna try a couple of days a
week in some areas. We're gonna see how it works.
And then we'll say does that work? Where do we
need to everybody in the office? Where do can we
do it with lots of people not in the office
at all. We'll find out what the right thing to do.
(27:15):
Right now, we're not even sure when we want to
ask people to start coming back to the office in
large numbers because of this delta variant. We're concerned about
the hell situations, but we'll work it out. One thing
that could be very interesting is if we have a
lot of people who are working from home part of
the week and in the office part of the week.
I could see a lot of people saying Thursday Friday,
let's go work somewhere else. Many vacations that can help
(27:38):
build the travel industry. Sure you're working Thursday Friday, but
you're working from a beach or a lake, and you're
using your You're traveling and enjoying life a little bit more.
Perhaps that's something that you don't look forward to. I think.
And that's it for what you missed this week. If
you like the show, and make sure to subscribe and
rate us an Apple podcast or wherever you listen to podcast,
(28:00):
you can catch our show every weekday from three thirty
to five pm on Bloomberg TV and from four to
five pm on Twitter. Thanks for listening and have a
great one.
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