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00:00 Copyright (c) 2013 Microsoft Corporation. All rights reserved. From Black Swan headquarters in New York. From right here in London. I'm Caroline. Hi, I'm Joe weisenthal. I'm romaine bostick. Let's check in and where we stand in the markets markets. At one point we're having one of the worst days and months. That was until Kathy would and others decided to buy the dip. But the question is, would you miss? Well, I mean wow, what a day earlier is remained said. Going back, it felt like a full pull back on risk tech stocks. Tesla sliding Nasdaq 100, tumbling as much as 3 1/2% and then came well the buy the dip mentality perhaps helped by Fed Chair Jay Powell's remarks to the Senate signaling look, the US Central Bank is no where close to pulling back on IT support for the economy. Most stocks indeed did give a bit of a rebound into the clothes, leaving only slight losses except for of course some notable exceptions like the tide to lucid Motors. Before we get deep into the Lucent story, green energy names like yeah, talk to us about the wild swings and the recovery that we saw here is like nothing happened today in the end, at least on some of the really big names that we all check in the morning when we get up every day. But there, you see I mean, NASDAQ, I think it was down to 3 1/2 percent. It was down around 3 1/2 percent today. Around 9:45 came back almost out, basically to even an then hardly fill it all. But we got huge declines really off the bat. You know the aforementioned Ark of the aforementioned Tesla, and some of these other momentum names, but pretty pretty impressive. Our recovery. All told, I'll try and tie this in a boat here and bring it back to the GameStop Saga News Crossing the wire right now on GameStop, their CFO announcing his resignation, Jim Bell going to leave the company on March 26 Company now looking for a new CFO, shares down slightly here in after hours trading. Alright, so joining us with more insight, Bloomberg News Cross asset Reporter Sarah Ponzek, Sarah Conover Historic Day I guess. Ultimately the. The size of the comeback. Right, what a day it was. If you just look at the size and the scope of the comeback that we had just focusing on the Nasdaq 100 like you guys just said down 3 1/2% at a time. Yes, we did close lower for those keeping tabs, but we did erase all of those losses at a time and that's something that we really hadn't seen since February of last year. Of course, not a very good time considering what came next, but still, it just shows you the rarity of moves this large of recoveries this large. And if you move into more speculative areas of the market. Tesla at a time down more than 13%, yet closing down 2%. An index that tracks fax. Broadly fax down close to 12% at the time that was a record loss for the index, which I should point. It is a relatively new index, but still a record loss yet ending up the day down 5%. So really, a historic day all around considering their recovery. The comeback that we did see. But all told at the end of the day we did see some of those more speculative pockets of the market still under the red. Indeed, an it was interesting, like Dan Curtis pulling together some great charts mid show to show that really we never seen then as that 100 have that sort of a turn around. But prior to 2018 and only twice and we seen it since this, therefore ongoing reflation rotation. Whatever way you want to call it. Is it still on? Are we still going to see this movement into value stocks? In particular whether the end of the day? Well, if we look at today, we did still see a continuation of the rotation. So for example, if you were to look at a market neutral value portfolio this using thousands information of value portfolio still close up on the day close to 7/10 of a percent. Meanwhile you look at momentum still down one point, 3% growth, closing broadly lower too. And you also just have to take stock of where we currently stand. Do you look at this month so far the month of February 1? If you look at nominal 10 year yields, we've seen a 20 basis point rise. That's the most for any month since. Early 2018, on the flip side of that, you look at the equity market in the rotation that we have been discussing. If you look at S&P 500 value versus growth, we have seen a 6 percentage point gap in the month of February alone in favor of value. And that's actually the largest gap in favor of value since all the way back in December of 2000. So we are still seeing this rotation take hold, and if you can just break it down on the sector level today, you still thought energy in the lead up 1.6%. You still saw tech down at the bottom of the pack, so you're still. Seeing it even with the concert recovery that we did with that. Yeah, I just like to point out you wrote a story around 11:00 o'clock this morning saying that stock pain was building and the $1 trillion route. I'd just like to point out that didn't age. Well, Sarah, but I missed it. That's not right, that's not right. Calling me out Sarah, I was. I was born a skeptic, so I'm not really sure I buy into the turn around that we saw today, because a lot of people are saying, oh this because of what Powell said. But was the rise that we had seen and yields prior to today? I mean, that didn't really have anything to do with the Fed, did it? No, I mean it had. It has been very clear all along that they're looking for quotes for the progress days. Probably. Maybe I'll be able to update it 3 days from now. We'll see, but but yeah, the FedEx made it very clear that they're going to be supportive that they're going to continue their bond buying program. And yet we have seen this reaction over the past, not just couple of weeks, but really over the past couple of months. But what it does come down to when we think about the benchmark level. Yes, when tech balls, because tech has a hefty waiting in the benchmarks, are going to see it. Ripple through the benchmarks, but at the same time I mean Kathy, would we just heard she is buying the different Tesla today? Many people clearly were when you think about yes there is a story for value. There's a story for Cyclicals and that is the economic recovery and inflation. But on the other side of the story, you also have not much so much Tesla. But we think of the big tech companies explain companies. They are very strong companies, very strong balance sheets. Then you move further down the speculative side and you look at Tesla. You look at companies that belong to Ark for example. And how many people really believe in believe in those long term growth stories? Those narratives that these are companies that are going to really, really everyone to grow, and it's a secular growth trend going down the road. So it makes you wonder if that you can rise in tandem still so real quickly. You mentioned Kathy Woods comments to Bloomberg Radio just now purchasing more Tesla. How much today and tomorrow will you be watching some of those other Ark names to see if there is any sort of ripple pressure? That sort of building through? I mean obviously recovered, but building through this family of funds. Oh, very closely. I mean, it seems like it's everyday now that the world is talking about tacky. Wouldn't talking about arc and talking about Tesla and talking about other members of the funds. And you also just think about some of the other names within the ARC funds that have large weightings relatively large waiting the likes of Roku? Where teledoc? I mean, these are companies that have performed very, very well over the past year, so if you are going to see the yield rising yields really play into the market and filter through, you're going to see it in those. In this high flying stocks, anyway, so it's definitely being a closely are closely watched area the market. Yeah, a lot of focus on Tesla, but those names you mentioned a lot of others. Shopify, PayPal, Twilio, Zoom purification is basically you know who's who are companies that are basically been rallying. Sarah Project will catch up with you as I'm sure shortly just want to go back. Of course to that news on GameStop, the CEO, CFO excuse me, CFO Jim Bell going to resign from the company in March and there so company looking for new and a permanent CFO. To kind of help the company and its successor alright will be back. And a bit, and this is Bloomberg. Alright, Joe, probably one of the biggest sell the news events that we've had in quite some time was actually that deal for lucid Motors. Churchill Capital course. The big spec finally agreeing to take lucid Motors public. The stock rallied Churchill that is about 470% over the past month, gave back about 38% of that today. Yeah, this is kind of wild because people have just gotten so used to buying some of these specs and then they announced a deal with the car company that you may or may not have heard of, and then they make a lot more money. It didn't quite workout this way, at least for some holders of Churchill Capital, which is going to merge with lucid Motors and take it publicly. We'll talk about that next, but look at that pretty ugly down 33%. Ultimately, over the last five days, kind of a messy looking chart there. And just to tie it in, a bow like remained in a bit earlier, we've been talking about GameStop in the CFO moving on there a lot of harping to these new specs and the way in which they're bringing in retail investors. And they're the ones who are left carrying the bag when the shares for which we should tie it up with Joe's tie. That's a very colorful title. Tired up right there, I'll ish. Thank you from you. That's that's a high compliment joining us for more from San Francisco, Bloomberg said. Ludlow, who spoke earlier with the Lucid CEO and really kind of weird and wild. Story all kinds of moving parts, but for our audience, what do you think is sort of the key thing to understand about sort of this weird repricing of the deal for investors this week? Yeah, I mean, you know we first reported back on, you know in January that talks between these two are kind of ongoing and what we saw is just lots of retail investors pile in to see Civ, the Churchill Capital SPAC, you know, basically on speculation and there are benefits to listing virus back right? You get to basically advertise using financial forecasts to potential investors, but there are downsides that those buying into the spec don't see what's. Under the hood, pardon the pun. Until the deal is done, and that's kind of what we saw happen with lucid that there was this announcement that production would be pushed back there was, you know, a deeper look at the kind of big sums of money that lucid plans to burn through over the next four years, and that just raises more questions about the path forward for this company than it answers. Well, yeah, I am curious. I mean, the financials of this I think, are definitely something that needs to be looked at a little bit closer. But when we talk about these spec deals, the whole selling point at least part of the selling point, is the idea that you're sort of getting management. You're getting some experience to go to come along for the ride. No pun intended here, and the idea that they're basically telling Rolison keys according to the interview had with him to basically kind of slow things down a bit. Let's get this right. Let's not make this mistake. Mistakes. Tesla made you get a sense here that he really is buying into that. Well, it's kind of astonishing remain is I've spoken to Peter Rawlinson several times over the last six months, particularly when we saw the big run up in Tesla shares. But I also put the question about specs to him over and over again, and he actually urged caution. He said that there is a lot of speculation in that market that the risk was Spanx is that no one takes the time to fully appreciate the technology, but ultimately lucid went down that route anyway. This is what Peter Rawlinson had to say about why Lucid did decide to go public through a spec. That process is enabling us to accelerate our growth. We've got a fantastic injection of cash. We've got long-term security. We've been able to attract the bluest of blue chip companies to make long-term investments in us. And I just see the spec as just a useful tool. Now to achieve that. You know, Long story short, building cars, regardless of whether their electrical is a capital intensive process, right? And this route going public via SPAC gives you quick access to capital and also a shop window for your business in a similar way to the traditional IPO does. Have we heard any of the executives, like when he spoke to the CEO sort of try to locate the market and say stick with us? It's interesting seeing more and more analysis that perhaps backs out something you should hold in the longer term people. So speaking about you know. Yeah, the inequality when it comes to information. Those, then the pipe investors. the Bing Lag Mark invite investors ahead of choosing the asset. Do get to see a lot more than the retail investor. The powers on. Are they speaking to that investor base to say stick with us? We know we. The shares dropped a lot today, but but this is going to be a long term investment that's going to pay off. It's certainly a message now when these spec deals get done, we don't just look at the pre money or post money valuation, but you look at the name of institutional investors that participate in the pipe and it is fair to say that lucid managed to bring in a stellar list of investors. Some of the big names, not just the public investment Fund from Saudi Arabia, but the likes of BlackRock, Fidelity, Wellington Management, etc. It's something that run in some really played up during the interview. He called them the bluest of blue chip investors, part of it as well, is that you have to be patient. If you look at the financials outlined in the investor deck. You know there is revenue coming in from 2022, but with modest deliveries but $10 billion of cash burn through 2024 is pretty eye watering. The first company that comes to mind that's already public is Uber, right? We waited for years for Uber to stop burning through cash and become profitable. And investors in that company had a threshold to how patient they would be. It's a very similar story, with the automakers. Building EVs is very capital intensive. Building the prototypes is very easy and getting them to production is very hard. So it's going to take a long time, several years, and a lot of patience for lucid to kind of have something to show for it, and that kind of going with today's stock move was compounded by this idea that we went into Monday, expecting them to say, oh, we're going to start delivering cars in the next month, but that was pushed back. They're not even going to start production into an unspecified time in the second half of the year, and the psychology around the company is definitely shifted over the last 24 hours. Alright and great interview there. Of course all over this. A lot of people are going to focus only on this back deal here, but really the future of lucid Motors and whether we get that car anytime soon. I'm told it's going to be quite expensive, Bloomberg said Ludlow. There, coming up here, we're going to talk about that Texas power crisis, highlighting the fragility of the US power grid. We're going to speak next with the CEO of Alternative energy company Bloom Energy. We're going to talk about what can be done to prevent a similar crisis from happening in the future. KR Street are coming up next. This is Bloomberg. So today we've been focusing in on a few names in terms of new technology, new focus as well on energy, but also they've been in the red. We've had Tesla in the red today. I've had lucid Motors in the red as well and we're not going to attention to Bloom Energy. It's a company that has been on a spectacular Eisenmann share price perspective. Joe, after the US election after we turned towards a Democratic controlled Senate, the focus on clean energy climate change. But over the last 10 sessions we've seen weakness is. Perhaps we're thinking more about competition Anan. In Texas, we saw some of the blame trying to be ushered, Appan new technologies in some way for the energy crisis. Yeah, exactly right. If you look at shares of Bloom, I mean they have been an incredible run. And honestly, they do look like a lot of these momentum. Clean EV is not an easy company, but clean energy so forth. Having tumbled a little bit since the middle of February. But this company involved in fuel cells, on-site power generation. Bulbuls very impressive performance with a little bit of a cool down. Yeah and people. I mean, it's the reason why it's called alternative energy. People are looking for those alternatives. Those alternatives starting to become the norm. Alright, so I want to bring in Cary St our Founder, Chairman and CEO of Bloom Energy, which manufacturers energy services converting natural gas bio, gas and hydrogen into electricity. Doctor Streeter thank you so much for joining us. Really appreciate it. You know obviously so much, so much thought right now being put into our energy infrastructure. In the wake of the disaster that we saw with the Texas grid, in your view, technologies such as yours, hydrogen fuel cells, how does it fit into making a? You know it's the basic case for how it can make a grid more robust. So thank you so much for having me and what we saw in Texas. Here is just an indication. Of what every other state in every other city in this country should expect. That's not an abnormality. That is the new reality that we are facing in this. World where natural disasters have increased exponentially, going from about 6 a year in the year 2000 to 2010. Two $22 billion plus natural disasters in 2020 alone, right? So the grid. We have to focus on resiliency. And the reality is we have not invested in resiliency. Becausw lawmakers don't demand it. And market does not reward it. And if you don't fix that. Unfortunately, at a time. Then always on electricity is not just a luxury or a privilege. It is necessary for everyday life and at that time. There is no market mechanism. And there is no regulatory mechanism. To ask for resiliency, we have to fix that. Yeah, that's the problem. Is it coming chaoan, and in particular in the aftermath of the dire situation that we saw in Texas? Are you getting more phone calls or corporates wanting to come to you? Not only states are legislators wanting to come to you to say, look, how do we make our power grids more resilient? Yes, we are speaking to both elected officials as well as you know, corporate customers asking the question. So let me break that down into you know, three different ways to think about this. The first is we need to improve the resiliency of the grid overall for everybody better than where it is. the American Society of Civil Engineers gave it a failing D minus grade or our grid. Why becausw on average? The age of the grid is greater than 50 years. It's past the design life. For useful operation, that's where it is. Fixing that is going to take time. In the meantime, what do we need to do? We need to make sure that critical infrastructure such as hospitals, nursing homes, water treatment facilities, water pumping facilities, essential services are all protected better than. The average credit should be becausw. They're essential to everyday life and safety. We can do that with new technologies. Thank God we have those new technologies today. There are not only proven incapable of building microgrids and offering resiliency for this critical infrastructure, but they are economically viable. The problem is there is not a construct in the marketplace and there's not regulation that allows this to happen. Talk a little bit more about that because I mean, this isn't something that you can really do without. Regulation or without really the involvement of government. I mean the the idea of sort of. Any sort of changes or massive changes to the grid, it's it's going to be a government, or at least to some degree of societal project. Do you have the buy in or do you think you're going to have to buy in from the policy makers? I think people have to buy in, and here's why people's lives are at stake, right? So you know, it's you know it's not just Texas. Let's take the California wildfires, right? The problem in California is if a essential service. Disid still say let me. Take my power to stay in my own hands because I'm not getting it from my utility. I don't want to go through days of power outage, which is called the PSPS events in California. I want to put my own microgrid. The current. Monopoly era regulation. Makes that company makes it essential. Service pay a punitive price for departing the grid. Not only is it not. Encouraged. Not only is it not incentivized, it is, you know it is penalized for doing that, so we are in discussions with lawmakers and regulators to say you absolutely have to change that. And we're having this discussions right now. The same thing is going to happen across the country, and I think federally the Biden administration needs to say there needs to be a minimum standard for safety of the electric grid in this day of IoT and everything being connected electrically. Not having electricity is not a luxury, you know he. It is just not acceptable. We want to thank you so much. We manage EC OK, Chaos Rita, just fascinating time for everyone to be picking over. What lessons can be learned from Texas and indeed from California. You put it so well. Thank you. Meanwhile extraordinary day. Yeah, just to reflect again on what's happening in the market, I don't think I'll ever recover from January, February timeframe. But today just to see that reversal. Joanne, it is sort of just bottom pickers right now, but can we? Would be one of them. She really sort of. Pick the bottom and start to buying the dip. When it comes to Tesla and I think tomorrow will be super interesting. Will see if there's really some sustained upward pressure. If the selling resumes. Also, he's like Bitcoin got clobbered today. So all these are momentum areas of the market really getting hit and you know it's two days in a row is a bounce back but still down. Think tomorrow is sort of a guide perhaps. I guess the question too is did the narrative really change here? I mean, what sort of led to this sort of pullback and consolidation over the past couple of weeks? Did that somehow change today? did I miss it? We, if we did, we were supposed to tell that supposed to tell that's the name of our show. Your supposed to have told everyone, but I guess not then. I mean, we discovered life on Mars. Nothing gets past us. Meanwhile that does it from German Bloomberg technology up next in the US and Daybreak Australia. That's coming up next in Asia. Have a great evening. This is Bloomberg.

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'What'd You Miss?' Full Show (02/23/2021)

Caroline Hyde, Romaine Bostick & Joe Weisenthal bring the news and analysis you may have missed after the closing bell on Wall Street. Today's show tackles stocks roaring back and renewable energy Guest Today: KR Sridhar of Bloom Energy. (Source: Bloomberg)

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