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tv   Bloomberg Technology  Bloomberg  November 9, 2021 11:00pm-12:00am EST

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>> from the heart of where innovation, money and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. ♪ caroline: i am caroline hyde in for emily chang, and this is "bloomberg technology." coming up, bitcoin soares and coinbase slumps. third-quarter results missed wall street estimates.
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users are declining. plus, robinhood data breach is a nightmare. five million email addresses were hacked. can the company live up to the safety mantra. firstand we speak with a ceo on making health care easier, and the series e finding that the company just got to make that a reality. first let's get a look at the markets. u.s. stocks halted their longest winning streak since 2017 in terms of the s&p 500, sending major indices a little bit lower off their all-time highs. kriti gupta to break it down for us. kriti: after an eight day winning streak, stocks ending in the red. the s&p 500 down 0.4%. big tech not coming to its rescue. the new york faang index down on the day. what stayed in the green all session long? cryptocurrencies, up 3.6%. i went to delve into the semiconductors. check out this terminal chart. we know that ev's have been
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hot lately. take a look at what else has been, chipmakers. a little known fact, an ev engine takes more chips than a regular engine does, and some of the market knows that it is trading in lockstep since november 9, since that big pfizer announcement about the vaccines. you can see the trade is very protectable, something to watch if and when that relationship diverges. let's go to the earnings story. that seems to be the hot topic after the bell. palantir is down after hours, much more intraday after folding -- after falling the most on february -- the most since february on shrinking margin forecasts. you have doordash higher on the day, 7.8% after hours, this after they announced a deal with a finnish food-delivery company for 7 billion euros. that is $8.1 billion. and we have coinbase missing
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their estimates, tying that to lower volatility in the third quarter, saying a lot of retail volume that was driving the crypto space slowed down a little bit. those shares down 10% in after-hours. we will get more into the topic with our own ed ludlow. ed: i want to look at some of the specific numbers, because there are keywords that give it away. there is a miss on the top and bottom line, but if you look at the trading volume overall, it is much softer compared to the prior quarter, around $320 billion or so in the third quarter, down from $460 billion in the second quarter. here is what is so astonishing. you read the shareholder letter, and the word "volatility" appears 17 times. often in reference to greater volatility or lower volatility. the takeaway is, trading volumes were down quarter on quarter. clearly, the market not liking it. down almost 11%. let's get into the meat of this with brett harrison, ftx u.s. president, a fellow u.s. regulated crypto exchange.
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a lot of unpack here. what is your take on these coinbase numbers? brett: definitely a lot of -- a lot to unpack in the shareholder letter. coinbase as a business developed as a retail-focused business. they have 70 million users, 7 million monthly active users, and as we know, retail loves to trade crypto right now, but it is moving a lot, especially when it is moving up a lot. we have seen crypto volumes pick up on exchanges across the u.s. in the last several weeks as crypto has reached an all-time high. but early on in the quarter we were seeing general lower trading volumes, lower volatility, and that seems to have a huge effect on the amount that retail wants to actually transact. we are seeing a lot of mentions in the coinbase letter about how much their business is correlated with the volatility of the crypto market. ed: so coinbase is talking in the shareholder letter about how the company is a long-term
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investment. it doesn't want investors to pay attention quarter to quarter. but one of the things analysts caught on to was how use of the app spiked after the listing of the shiba inu coin. they want to move into nfts, non-fungible tokens, as well. what is the future for the platform overall? brett: one thing that really stuck out in the letter was the fact that, bitcoin trading on the exchange -- in general, bitcoin dominance in the crypto market cap as a whole keeps going down. the amount of users that are using more advanced features of exchanges are going up. you see people trading alternative coins -- ethereum, these different coins. certainly on our exchange, they have been steadily growing in volume. people are using things like their earned products, their staking products, and now they are getting into nft's.
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they are, just like ftx, getting into the nft space, they are looking to make longer investments in the web3 ecosystem and provide better experience. ed: let me look at this chart on the bloomberg terminal. bitcoin had an astonishing rebound since july, but it has lagged the bloomberg galaxy crypto index, which includes other coins, including ethereum. is this a maturing cryptocurrency market or is it still nascent, to the mind of institutional and retail investors? brett: i think it is still nascent. a lot of the largest institutions, in the u.s. especially my have yet to be able to tap the full potential of crypto because of their compliance issues, regulatory issues that are preventing a lot of these major institutions from getting into cryptocurrencies. we are just starting to tiptoe into institutional adoption by the first bitcoin futures etf being released, but that is just the beginning. until we see a better regulatory clarity that allows for
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institutions to get into cryptocurrencies like bitcoin and ethereum, only then will you start to see the maturing off of this market. caroline: full disclosure, my husband works as a senior manager at coinbase. i won't delve too much into the encourager sees of that business -- into the intricacies of that business, but i am sure you are talking to regulators yourself. how swiftly are we going to see a less nascent regulatory framework here in the united states? brett: it is a great question. talking to regulators and thinking about the regulatory landscape right now is a major part of what we are doing at ftx. we truly believe that the long-term viability of this industry rests on the ability for exchanges like ours, and the gatekeepers of this ecosystem, to interact collaboratively with regulators and lawmakers. it is very clear that this is a top of mind for these agencies. we want to get to a place where there is a good federal regime
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regulating its cryptocurrencies and other kinds of crypto assets. all the discussion around the infrastructure bill passing was the beginning of all of that. we think this is imminent for some sort of decisions, or the beginning of bills to come out that will try to shape the future of what this is supposed to look like in a way that makes people feel that this is no longer a fringe industry, this is a properly regulated industry that everyone should take part in in a safe manner. caroline: it is evident nft's are no longer fringe. christie's, the auction house is once again auctioning off nft's tomorrow. how do you think such an auction will help affect nft's? brett: look, nft's are growing
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in their adoption. it helps that now exchanges, centralized exchanges, not just exchanges like ftx and coinbase, are jumping into the nft space. nft's have a lot of appeal for people outside of crypto because they make crypto relatable. thinking about things like layer one block chains and staking, that can be hard for people to put their minds around. by the idea of a collectible, a piece of art where you can trace the origin of the art to a particular creator or minter, that has a lot of appeal to other collectibles and communities in the world, art communities. nft is really going to help the world get more into crypto, not less. i think seeing these auction houses really equates nft's with other forms of art. it will only help further the adoption of nft's. caroline: we thank you both. ftx u.s. president, brett harrison great to have some time
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with you. meantime, let's look at apple ceo tim cook has been talking about cryptocurrencies. you are no immediate plans for apple to accept crypto for its products. cook says he does not have any plans for apple to invest in the asset. behind the tech industry boom into the stock market's most profitable sector, one ceo how with a new book on how investors can identify future winners in the space. i'll chat with him next. this is bloomberg. ♪
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caroline: mark mahaney has been covering internet stocks on wall street since 1998 from morgan stanley, citibank and others. he has seen the boom in the tech
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industry become the stock market's hottest and most profitable sector. now he is out with a new book entitled "nothing but net." it takes a look at the underlying drivers of tech outperformance and how investors can identify future winners in the space. mark joins us now. brave to take on writing a book. not for the fainthearted, not for those without as much time as you have a zer -- as you have as well when you are trying to work on the side. what sparked the idea? why sign up for such a herculean task? mark: i do enjoy writing. i have been covering internet stocks for 25 years. i wanted to take a stab at stepping back and thinking about big lessons. i was inspired by a classic book written in 1980, great fundamental advice for retail investors, even institutional investors, about how to tap into the market. i wanted to do something similar, except using today's household names like netflix,
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facebook, and google. i thought i could pull together those lessons. caroline: let's talk about some of the fundamental advice. a lot of it comes down perhaps to not looking at fundamentals in the way we are used to, certainly with value stocks. mark: that is true. if there is one thing i try to get across to people, it is the acronym dhq, "dislocated high-quality companies." the best way you can invest in the market is mitigate valuation risks and fundamentals risks. you do the by looking at stocks first that correct by 20% and 30%. the second is the more important thing, you try to find this high-quality asset that has excellent management teams, super strong consumer value propositions, and companies that are really good at product innovation. if you put that package together, those can be really good sustainable investment longs. that is another thing i am trying to get across in this
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book. you don't need to trade to make really good money investing in stocks if you invest rather than trade. caroline: sort of buy-and-hold. many didn't when it came to the likes of apple and others. if i could be paid a dollar for every story someone says they sold the wrong time. how much perseverance and patience did investors need to ride out the promise of "no jam today but jam tomorrow?" mark: i will cut this both ways. i look for management teams that are truly relentless. i love to see founder-led companies. they don't always succeed, but if you look at the history of tech stocks, the biggest winners have almost always been the founder-led, founder-run, founder-led for multiple years. the biggest tech market cap names have been having the founders involved for two decades. when you get that kind of
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consistency. in investment parlance, there is this saying that "past performance is no indicator of future performance." that is true. but when it comes to management teams and especially product innovation, i think that is usually a harbinger of the ability of the company. so you stick with that stock. you stick with that company for the ups and downs of the markets. i have seen the most successful companies avoid mishits from time to time. caroline: talk about funny moments in the book, some of the particular anecdotes or experiences that you really had to share. mark: one of my worst stock calls, i had to sell on google at the time of its ipo right after the first earnings of the stock. i was referred to as having a three-egg omelette on my face. one of the wiser tech strategists was right. it was a moment for me to step back and think about, where is
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the real product innovation going on in the sector? leave aside valuation. valuation is super important. but to me it is almost the last thing you should do. you should find a high-quality asset and then think about valuation. one of the mistakes i made early on was focusing on valuation first. find a good asset and then think about entry prices rather than going the other way. caroline: bring it to the here and now, mark, because it is very hard not to look at valuations when you had the run-up in stocks that we have. when you have the likes of tesla take a nosedive to the tune of 11%, they all have idiosyncratic reasonings around that. what now of valuations? is now the good time to still be looking at growth names? mark: i think so. you can always find dislocated stocks. that was one of my lessons in the book, even the highest quality assets can get dislocated. they can trade off 10%, 20% from time to time. sometimes because of company missteps, but sometimes just
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because the market rose over. even amazon had a 30% roll off. when you see that, that is when you should buy. i look at companies today, the highest quality internet companies that are look at, which what i say are most dislocated today? first is amazon. it hasn't dramatically corrected, but stocks flatlined for 18 months now. i think the future cash potential has grown. it's a great stock to buy if you are willing to look out 12 months or more. second is facebook. highly controversial. great business model and wonderful value proposition. third is uber. it is the least proven of these. it is still relatively new, but the total market is massive and they are one of the leaders in that market. lots of great value propositions. caroline: mark mahaney, always great to have your take and reflections as well in your new book, "nothing but net." check it out. thank you for joining us. robinhood's struggles continue. the company revealed its biggest data breach in history. the data that was stolen and
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what that means for the company's mantra. this is bloomberg. ♪
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caroline: let's talk about hertz, ending the day down more than 19% on its first day of trading. the kind of debut, coming back to the market, striking a turnaround for the company, after it filed for bankruptcy last year. bloomberg's erik schatzker spoke with the interim ceo and the company's chairman about their plans to add teslas to the fleet. >> we know our corporate travelers want electric vehicles to visit their clients and do business in, we know that our leisure travelers want electric vehicles. it is a great way for them to try electric vehicles without committing. specifically, they want teslas.
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they want to rent teslas. in combination of understanding the demand is there, an opportunity to get an amazing product that allows us to put it in the hands of people who want it, it was an easy decision. >> at the ipo price of $29 a share, you pretty much tripled your money in the space of four months, which is remarkable. there are some skeptics, haters you might call them. they don't believe in your story. they say hertz doesn't have a firm order for teslas. they say elon musk is dumping model 3's. what can you say to address some of that confusion? >> i think there is no question that there is an incredible amount of demand for our products generally. we have a very robust environment for the rental car industry. we expect that to continue. we are very focused on bringing products into our fleet that we know people want to rent. there is no question they want to rent teslas, no question they want to rent higher value
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vehicles. there is no question it is a big move to electrification. for the people who doubt what we are doing, we would simply ask that they stay tuned and watch what we have to come because we think this is just the beginning of an effort to put hertz at the center of mobility in a way to serve our oem partners and our customers, to provide a better rental experience and corporate partnership with those parties. >> mark, tom and greg are financial guys. you are a real economy ceo, you ran ford. you know about operation and execution. what are the biggest challenges hertz has to overcome in the move to electrification and the transition to what we might call shared mobility? >> first off, i don't look at them as challenges, i look at them as huge opportunities. we are staking ourselves out in a very important place in, as
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tom mentioned, the mobility ecosystem. as we look to lead in electrification, making sure we get our charging infrastructure in place, that is happening as we speak. and then that first mover advantage of learning how to manage these large electrified fleets, i think is going to give us a very big competitive advantage, not only in the near term to get customers into these vehicles that they want to drive, but in business you have to start looking around the corner. so as you think about autonomy down the road, those large electrified fleets, i think we will be well-positioned to work with a lot of different partners to make that happen. caroline: bloomberg's erik schatzker with the hertz executives. 7 million customers of robinhood were hacked. even some personal data like birth names and names exposed. robinhood is not giving exact details of how the heck happened, but in a bit of irony, it was a customer support staffer who helped the hacker gain access during a phone call. joining me now is bloomberg sonali basak.
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you broke this yesterday when it occurred. what now? sonali: it is amazing. 7 million accounts for about one-third of robinhood's users, so the scale of this hack is enormous. the customers we are most worried about, they have names, zip codes and personal details exposed. they are the most vulnerable group, because once those details are exposed, it could lead them to other issues. because those are things that verify other aspects of their online behavior. but for many of the users, a lot less was exposed. could it have been worse? yes. however, it also happened for vulnerable areas for robinhood, which has been investing in customer safety. this happened, as you said, through a customer representative. caroline: ironic, because people complained they never had one. sonali: bloomberg has been talking to a lot of users that have been nonchalant about this issue. they say it is par for the course in doing business online. should there be more financial losses for these customers,
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which have not happened, as we know, to this point, then that would pose a risk to robinhood. caroline: people are always worried about certain parts of their cryptocurrencies being exposed and hacked. sonali: exactly, cryptocurrencies is part of this. but remember, personal information. how much information did they really get? if they had gotten social security, bank account or debit card numbers, which they did not get, it could have been worse. robinhood has reportedly hired a security firm to investigate this. we don't have all the details on how this breach happened. as we know, through a phone call to a customer service representative, definitely not something you want to see happen to other brokerages, though, as we know, all of them are vulnerable. caroline: and the shares are only off about 1%. sonali: it shows you the nonchalantless. if you are a user here, you have been hacked somewhere before. but, at the same time, 7 billion customers is no small number. caroline: it is not. sonali basak, thank you so much.
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coming up, we start to look at the end of the pandemic. what happens to all of those covid testing sites? one company says it has the answer. that is next. this is bloomberg. ♪
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caroline: this is "bloomberg technology." i am caroline hyde in new york. let's get back to the financial markets. inn two da -- in two days, a big drop. a $200 million of market cap capitalization lost. it is only tuesday. ed ludlow has a breakdown on tesla. [laughter] ed: it is important to take stock of what has happened, quite literally. we are down from thursday of last week, when tesla hit a record high. there is a lot going on.
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elon musk, asking twitter, should i sell 10% of my stake? you have michael burry tweeting that elon musk wants to sell his stock because he is under pressure to meet his debt meet -- meet his debt obligations. a lot to unpack. let's look at this chart. michael got me thinking about short interest. it is 3.5% of the tesla's float. you can see the yellow line being tesla's share price. the shorts have not been successful historically when it comes to that stock. can we rule that out as an option for what is happening with tesla stocks? hard to say. let's bring up a tweet from elon musk about whether or not he should sell 10% of his stake. some wall street analysts saying on tuesday it at least gives investors an excuse to sell. they may still believe in the long term thesis when it comes to tesla, but there has been a
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series of negative news, and a lot of people have ridden this stock to the fresh record high and made a lot of returns in the process. that seems to be the thinking on tuesday. we don't know if elon musk is selling, but we know that with a tweet, you get an excuse. a lot of unpack, caroline. caroline: we love ceo's that tweet, and the impact it can have. ed ludlow, thank you so much. meanwhile, the end potentially of the global pandemic could be near? dr. fauci: we are on the downward trend. we want to keep going on a downward trend. we are not going to be having to wear masks forever. caroline: here is hoping. that was anthony fauci, director of the national institute of allergy and infectious diseases, speaking about covid cases starting to plateau. while we are not out of the woods yet, we are starting to look at the future. that is exactly where my next guest is currently focusing, ceo of color health. on tuesday, the company announced $100 million of series
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e funding. it looks to expand its more than 6500 covid testing sites in offices and schools. joining me now is the ceo and cofounder. great to have some time with you. first and foremost, $100 million. what are you going to do with it? >> thank you for having me on today. let me start by sharing what color actually does. we provide essential and public health care services in the context of where people's lives actually happen. and so over the last couple of years, we have been building and deploying services across the u.s. in very different settings, whether it is schools, universities, workplaces, even community centers like churches. almost 7000 either testing or vaccine sites. to your question about what we are planning on doing with this fundraise and also generally in our operation in general, when
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, we are thinking about health equity and access to essential health care services, one of the biggest factors in people being able to access basic health care is the immediacy and simplicity of access. that is a big driver, taking these essential services and deploy them in the context of people's lives. i am happy to walk through a few examples. caroline: i am interested as you walk through those examples, because you have been offering covid services to state governments and universities. there is an awful lot of other places that want to become closer to us. i am thinking of cvs and pharmacies on the high street , they want to give me the flu shot and continue the testing they currently provided when they gave the vaccines. how will you tackle the competitor space? othman: it is such a vast and challenging problem that i don't think there will be a single way to do it. one of the things we have seen time and time again across different industries is that when you bring immediacy, take
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things closer to people, you get an exponential increase in utilization of various services. that is what happened in retail and e-commerce and other services. the way we think about it is, think about schoolchildren, for example. right now we are running thousands of both testing and vaccine sites in schools. when you think about how you serve the school-based community, the most logical and low friction place to do that is in schools. i think there is a place for centralized health care, which is the traditional model we came from, but when we look around the world as well as other industries, the ability to take things into the context of people's lives and their communities we believe to be one of the biggest things we can do for public health. caroline: being able to get my flu shot here at work is seismic when you have a busy life and trying to care for my own kids.
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i'm interested in -- as you look at a $4.6 billion valuation, you are a company that knows how to pivot. you are doing genetic testing originally, a competitor to 23andme. you pivoted, and you pivoted well. i am interested in how your relationship evolves not only with companies and governments, but also insurers. will you be working in lockstep with them? what is so interesting about covid, we didn't have to worry about the insurer, it was the federal government that wanted to put these things in our arms. othman: it is a great question. one of the effects of the covid crisis -- it has been an incredibly challenging window of time for all humanity, but with these types of crises, what tends to happen is it creates a mobilization that moves people out of a local maxim. the thing that we have seen is that all the key stakeholders in health care and in public health have dramatically changed their approach. we are seeing that with innovative departments of public health like in california and
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massachusetts and other states. some of the largest manufacturers of health care services and supplies have all taken a very big step up to drive access and immediacy of these services. and the other big thing that has changed is our own expectations. through the last couple of years, we have seen that it is possible for us to receive basic services in a way that is more convenient as part of our lives. i think that expectation is not going to change. that is one of the biggest shifts i think that has happened in the entire industry, at least for the last 20 years. i think this will be a big shift that, when we look back a decade from now, we will see it is one of the big threshold moments for how we think about public and population health. caroline: you mentioned how you have looked at other countries and seen perhaps they more efficiently do things than the u.s. are you looking at international expansion yourself as well?
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othman: pre-covid, we were doing a fair amount of non-u.s. work, but through the covid crisis, there has been such a huge need locally and that has been the driver of our focus, just to serve our community and the country. all of us at color, where we are mostly living. but frankly, the same pattern of using technology to distribute basic building blocks of health care i think is actually something that will apply in a number of other countries. slightly differently, because of the way the finances work will be different, through a single-payer system versus not. but the essence of distribution through a technology-first, high leverage model, will apply quite globally, not just in the u.s. caroline: color health ceo, othman laraki, thank you for sharing your news and congratulations on the fundraise. meanwhile, it is one of the most
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storied companies in u.s. history. general electric. on tuesday, the company's chairman and ceo took the big but long-overdue step to break up the company into three publicly traded companies. he told bloomberg earlier about why he made the move now. >> the board and the leadership team are firmly of the view that on three distinct bottoms, these businesses will be more focused, there will be a higher, greater level of accountability, we should have sharper capital allocation, more strategic flexibility, and frankly, it will be good for the team as well. the team that we have today, certainly the team that we will build over time. we know that today's markets are more mission and purpose-driven. we will stand up two new boards full of strong directors with domain expertise, and i think we will end up with investor bases focused on these pure plays come investors that are probably underinvested in ge today. you put that together, it is clear this is the best path for us to unlock and create value
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going forward. >> i suspect you have learned from bitter experience that there is no such thing as a free lunch, you have to pay something to get anything. there are some benefits that will go through the you think you will see. but are you giving something up in the synergy? it was thought that general electric did have some benefits, in particular the research work, such as the research on high-powered wind turbines. are you going to give up some of that? >> the ge team has heard from me in the last three years, and i will bet on the benefits of focus every day far more than the often illusory benefits that come from synergy. we enjoy synergies today in certain places, but more and more, we have been running the company on a decentralized basis. not as one ge, not even the four reporting segments, but the 30 that deal with markets. so in the synergies today, we will work to continue those, of course.
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but the vast majority of the benefits here will come from focus. >> so that is why you are doing it. why are you doing it now? what about the timing? why not a year or two years ago, or a year from now or two years from now? >> we have had a lot of work to do to take care of the balance sheet. we reduced our debt load by over $75 billion over the last three years. we also needed to strengthen our core operations. if you look at what we will do this year in terms of our adjusted free cash flow, it should come in around $5 billion. those two proof points needed to be in hand before we could even entertain a question like this. it certainly helps being increasingly on the other side of the pandemic. but also, our customers want ge at its best, focused on them. whether it be our utility customers coming out of cop26 dealing with the energy transition, our air framers and airline customers dealing with post-covid recovery, let alone everything that is happening in precision health care. >> what will happen to the general electric name and the logo?
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we know it has been there forever. who is going to get that? >> i think everybody wants to make sure they hang onto their part of the brand, right? the monogram was recently evaluated at nearly $20 billion of brand value. it means a tremendous amount in each one of these markets. so we don't have a definitive brand plan today. we will work through that in the months to come. rest assured, they will share the ge heritage. >> so you are un-scrambling the omelette. a lot to work on. what has been a significant factor for ge is this legacy health care long-term contracts. where are those going to go? >> our long-term care insurance business will stay with the core corporate entity, which is ge aviation. ge as you know it today at a corporate level will spin health care and renewables, we will
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retain aviation as well as our long-term care insurance operation in addition to some other liabilities. caroline: the ge ceo and chair larry culp speaking with my colleague david westin earlier. meanwhile, we will speak to the blue apron ceo about their third quarter results, and what is next for the meal provider, as we come a fully out the other side of the pandemic. let's look at poshmark shares, plummeting after forecasting missed estimates. we will keep an eye on the story. this is bloomberg. ♪
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caroline: let's talk about
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shares of the meal kit provider blue apron. dropping in premarket trading after the company missed third quarter estimates and posted a bigger loss than compared to the year previously. what is their outlook moving forward, and how is the company managing what we hope is a post-pandemic world? let's ask blue apron's president and ceo, linda findley. thanks for spending time with us. let's talk first about the future as we look at a loss that continues. do you hope to gain profitability? how do you see the world evolving in meal kits? and you are branching into deliveries now of fully made processed food. linda: so we see this as a standard impact of seasonality with a twist. q3 in the meal kit industry tends to be the highest cost quarter no matter what because
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of the fact that we are very concerned about food safety in the summer months, so we tend to use extra packaging and extra ice, etc. q3 is usually our highest cost quarter and that is consistent in the industry based on seasonality. what we saw this year was a very entertaining spike in pent up travel demand that came in to the business as people were trying to get travel in before school started. maybe they hadn't been able to travel earlier because of covid. the interesting aspect about this quarter is we demonstrated what we had intended, which is we have been focused the last two years on building value for our customer. revenue per customer, and orders per customer remain extremely high in post-pandemic trends even with the high travel we actually saw this quarter. so we look at that as a very positive sign on going for the business. when we think about the ability to drive customer growth on top of that and then push towards profitability. with the $78 million we just raised and closed this past
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thursday into the business, we will lean into marketing to scale on top of that and focus on growth for the next year, to really drive that customer acquisition number up on top of those key customer metrics that have been so strong. caroline: you are also changing what you can offer to the customer. you have still the ingredients being delivered, the menu options, but you now have heat and eat, your foray into prepared single-service meals. how is that going, and who are you targeting with that? linda: it is about flexibility. we want to provide high-quality meals to our customers and make sure we are meeting their needs. the core meal kit is still very successful for us. we have the highest quality ingredients, and great recipes. now we have introduced where you can buy single boxes, a preconfigured box without a subscription, and then we layered heat and eat on to give people options to be able to add
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more food, more meal occasions. with heat and eat specifically, customers were looking for the ability to supplement their meal boxes with prepared meals for lunches or on the go -- when the kids are going to soccer practice or something and you need something really quick, but they wanted the blue apron quality. this has become additive to the business as we expand. then we continue to add new products that will open up a new audience as well. caroline: interesting that you talked about how ice can be costly in the summer. all i can think of is supply chain issues at the moment, the posta of food in particular going up. how is that affecting your business? linda: we have seen cost pressures when it comes to food and logistics. we try to manage that very carefully. on the food side, what is interesting about blue apron is that we are a direct supply model. 70% of what we put in a box comes directly from the producers. we have great relationships with the suppliers in order to
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maintain quality at a reasonable price. we are very focused on continuing to manage those costs without sacrificing anything about the experience in the box. we saw a lot of those cost impacts come into q3, which was expected. we saw a lot of logistics costs as well. what we have seen at this point based on negotiations with our suppliers is that most of that impact is already visible. what you are seeing in q3 as part of impact is always our highest, quarter -- cost quarter anyway. it is something we can predict and manage going forward, and we expect margin to recover coming into q4 and into 2022. caroline: thank you for being so transparent with us. thank you for telling us about the new products. blue apron president and ceo, linda findley. great to have some time with her. coming up, online insurance company sets its site on autos. -- its sights on autos. we will speak to the ceo, daniel schreiber. this is bloomberg. ♪
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caroline: insurance technology lemonade rolling into the car insurance business. it has purchased metromile, a data science company focused on auto insurance. lemonade stocks actually was down 11.8%, one of the biggest falls has seen the biggest fall -- biggest falls since march following the announcement, even as the company posted strong third-quarter results in beating forecasts for the full year. we dive into all of it with the ceo, daniel schreiber. what do you make of the investor reaction to the purchase? daniel: honestly, not that much. we tend to shy away from any particular day. as you note, we announced still the results for the quarter and we surprised by exceeding a lot of market expectations. 101% growth in revenue. feeling good about the fundamentals. having launched the car insurance just last week and overnight announcing an
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acquisition, we feel the winds are in front of us. caroline: do you feel like investors are stating a concern, in terms of the price being paid, or how you will be adding to the symbiosis of the two businesses? what do you think you need to prove to them? daniel: almost all the analysts who cover us brought out positive coverage. market reaction in terms of the stock price does not reflect what we are hearing from the institutional investor base for -- base or from the retail investor base. we do see this, oftentimes acquisitions get rewarded, so to speak, with negative returns on the first day as investors digest the news and update their models. i am actually incredibly optimistic. i think tremendous synergies in the deal we just announced. we are acquiring a company that has roughly $115 million of enforced premium, paying an enterprise value of just 200 million dollars.
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they have $215 million in the bank and 10 years of experience in using data science for car insurance, having monitored billions of miles and let their ai algorithms crunch those. they are one-of-a-kind and have capabilities that are unavailable to our competitors. it puts us in a strong position as we enter this new market space. caroline: i can see it helps certainly with your offerings, being able to offer many types of insurance across one presence so i can get my renters insurance, my pet insurance, my car insurance. but how will it add to profitability? daniel: you are right. we ipo'ed 16 months ago just as homeowners and added pet and cars, so we are moving at a fast clip. profitability will benefit from this. we are entering such a huge market, stencil blue an alm -- market, a stencil blake an
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almost unlimited market from where we are standing, $300 billion in the u.s. alone. for us, this create tremendous headroom, not that we were particularly cramped to start with. it really does help with the unit economics, because the bundling and cross-selling are where the great unlock of profitability comes from. we saw 30% of our sales coming at zero acquisition cost because existing customers were buying pet insurance and increasing their premiums threefold or fourfold. hundreds of percent increase. we have seen the same as we launch life. car is the biggest unlock of all. in a sense, we have been operating with one hand tied behind our back. we tried selling homeowners insurance, the bulk of our business, without the ability to bundle car insurance. you are at a distinct disadvantage. being able to add these capabilities unlocks tremendous value for our existing business. when you look at our customers, 1.4 million they are spending over $1 billion on car insurance and they don't have the opportunity to spend it with us.
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from all perspectives, this has to be good news. caroline: great to have time with you talking through the business model and indeed, showing off the beautiful artwork behind. join us tomorrow. the doordash ceo will be joining. this is bloomberg. ♪
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