Price. Peloton fell sharply in the first day of trade, down another 5 endeavor pulled the plug on its offer late last night. A headline in the times asks is the ipo party over bob greifeld, chairman of virtue financial, and author of the book market mover. Lessons from a decade of change. Great to have you back happy friday great to be here. We would love you to help us draw a thread through some of the ipo pricing weve seen this week, the offers that have been pulled what should investors be keeping in mind right now . Well first, i would say we have to recognize the ipo market generated over 50 billion of capital this year. I remember back in 2003 when i started with nasdaq, we had zero ipos and zero dollars raised lets keep it all in context i also want to make clear you have a number of ipos that have come public which are not nyow making money peloton yesterday, their market cap is 10 billion thats about ten times revenue to me, when i hear and read about whats wrong with the ipo market, i think the goalpost moved very high to float a company at ten times revenue, thats money losing. Thats pretty successful outing. Is this partly what happens when you shove a year and a half of ipos into a year . I mean, this is a very active year of ipos, besides the 50 billion you mentioned. Could it be that demand just isnt there as well as valuation issues i think thats a great point. For the market, for investors to absorb 50 billion not in 12 months but 9 or 10 into it is a statement. You have something there theres a certain amount of supply for the market at one time, certainly weve had a rush to the door this year, i think that impacted some of the ipos, but not all of them. All right if everybody is trying to get to the dance at once, how long of a period of absorption do you need before you can get other large deals to market and not disrupt everything well, i think what you have to look at is the quality of the offerings. Anytime you have difficulty in the ipo market, we see theres a flight to quality. Clearly if you have a company thats generating profit that is growing, i think that window is wide open. But to the extent you have a story to tell like we and others where youre not making money, in certain situations losses have increased, thats going to be difficult for some period of time here. You think you actually need paper profit to come to market or is the promise of one still good enough . I think the path to profitability has to be fairly clear right now. Thats a line that you can see, not just a story you have to believe in you look at the we ipo, you saw that regardless of what they said and the story they weaved, they were still in a real estate business with its amount of peril to it, and a somewhat limited path to profitability. What does this do to private markets . Silicon valley, we have seen this the past decade lets say as a trend toward Companies Staying Private longer because theres money there for them, even employees able to cash out during some of the transactions in private markets, are they getting the price wrong now in a way thats going to effect how that works for the next ten years . The first thing you have to really focus on is private market valuations are fundamentally different than Public Market valuations, and a private market, most of the transactions are bilateral and theyre also not dealing with common stock, theyre dealing with some kind of structured note i remember many years ago i heard the term and it stuck with me, said if you name the price you want, ill give you the terms i want, or if you name the terms, ill give you the price when you see the price, the headline price in private market companies, you have to recognize there are terms associated with that that has economic value so the Public Market, youre dealing with common stock with many investors discovering a price without terms except buying, selling, and clear the transaction in two days. There are two different worlds there. I would also say the private market since it is primarily bilateral has a greater opportunity to get that price wrong. Clearly Public Markets have mispriced assets, thats with many people voting when you have two people voting to come up with private market valuation, that obviously has a greater percent probability of having something wrong with that price. Yeah. Speaking of valuations being wrong i guess, quote, unquote, i wonder wheres your head on softbank and its potential to become a liability for the Broader Market the way in which their fund has been modeled, and the bets theyve made that this year if you look at uber and sprint even and wework have gone wrong. I would say this. One, theyre dealing on a large scale, dealing with assets that are in some ways priced not to perfection but perfection plus thats going to be tough to pull over in the long term. We is a great example, you had a 47 billion valuation put on it by softbank. Now, we had a great story, when i went to visit their offices, it struck me that it was going back again to 2003, 2005 and the dot com era where you used to have great user interface for company websites, we went to we, had a great User Experience as a person that came to work every day, i liked the feeling in that situation. But at the end of the day, it was a real estate play we had one problem, they had Public Company comps that did the same thing when you stripped away the great user interface, whether a website or real estate, you have to look at whats the core business this is a core leasing real estate business which has a certain value associated with it, and that value had been firmly established by the Public Markets for a long period of time, and that was a very hard thing for them to argue with other investments that softbank had might not have such a clear comp. Associated with it, but theyll have to deal with fundamental economic reality at some point in time. Bob, taking another bite out of the call he is getting at where softbank is concerned, they pumped so much money into so many companies. When companies have just a ton of money, they do things differently than companies that are trying to be super efficient. Peloton is not a softbank company, but i look at them, for example. They spent 320 million i believe in the past fiscal year, ended midyear, and lost 200 million. I wonder, for a company that has such great retention, low churn, high customer sat, spending all that money on marketing, thats not what you would have seen maybe 15 years ago, post dot com bust companies were on diets. They were being efficient in a different sort of way. Does that have some impact on what were seeing in ipos today . Yeah, i think that peloton story is a great story one, i am a user of the product, i love the product, and it is a question of how large can the marketplace be i look at peloton, i think of apple, right theyre the apple of that space. And one of the concerns i have with peloton is the android competitor will show up which will be quite capable at a different price point. How does that survive that the second factor you have with peloton is we have all been around awhile, seen a lot of gym equipment turned into a place you can hang your clothes. Thats an issue you have with peloton over time. Certainly the churn rate now is pretty good, but you dont know what it will be over time. Clearly they think they have a large Market Opportunity you dont spend that money on marketing unless you believe it is a large addressable market. What i liked about the peloton Business Model is they chose to scale back that spend, which is their option to do that, if they recognize the ability for customer customers to buy a bike and then for subscription is limited. Then they could scale it back and have a good recurring revenue model. Getting 40 a month from a dedicated core group of users, you can have that be a very Successful Company is that Company Worth more than 10 billion over time, thats not my business to understand that, but i know 10 billion is a large amount of money for an exercise company clearly they have their sights set on overall gym member ship ships, but the point is really good, bob. Good clarity on important names. Good to see you. Have a good weekend. Good to see you you too, enjoy it. That android to pelotons apple has already arrived, called echelon at costco for half the price. Shares of micron getting crushed. The ceo told us earlier is next, and the first test of the tv creator deal ever, why netflix thinks the debut of the politician will turn the u. S. Bssu decline around. Back after a quick break man can i find an Investment Firm that has a truly longterm view . It begins by being privately owned. With more than 85 years of experience over multiple market cycles. With Portfolio Managers who are encouraged to do whats right over whats popular. Focused on helping me achieve my investors unique goals. Can i find an Investment Firm that gets long term the way i do . With capital group, i can. Talk to your advisor or consultant for investment risks and information. Shares of micron are lower following disappointing guidance from the chip maker. The ceo joined us exclusively to talk about the Current Quarter and the bounce back he predicts is coming for semis in early 2020 the industry has some excess supply thats impacting the pricing thats effecting our fq 1 guidance it is important to note demand growth is now higher than supply growth the industry is coming down rapidly. Basically, the stage is set for improving fundamentals in the industry as i look at the 2020, yes, in the first calendar quarter of 2020, there will be some seasonality, but Long Term Health of the industry, im optimistic about industry fundamentals in 2020 supply dynamics again in focus. We have been here before with these guys oh, yeah. Late last year, beginning of this year, sanjay was saying back half of 2019 is going to look a lot better. We got some trade stuff, the Semiconductor Industry has these supply issues always you always have to Pay Attention as to whats happening right now, and a grain of salt to the sun coming out tomorrow. Netflix, meanwhile, hoping its 300 Million Investment in content creator ryan murphy begins paying off tonight with the show the politician launching on the Service Today is it enough to turn around decline in u. S. Subscribers . Julia boorstin has more from l. A. Jon, netflix is hoping it will help it compete with upcoming rivals. When the series the politician lauchs today, well see the first product. The reviews are not great. It has a 56 positive rating from over 30 critics on rotten tomatoes, but netflix lured murphy from fox where he created hits, including glee, American Horror story it is the priceyest deal for a tv creator in tv history they also have deals with other big producers. Game of throats, David Benioff and dbwise, and a deal with shonda rhimes. Behind scandal and greys anatomy. Barkle barclays could be too much content. Writing we recognize it is only getting more competitive, we continue to believe new services will not be a major threat to Netflix Subscriber numbers, given netflix quality and quantity of content. When netflix reports earnings next month, well see what the ceo says about traction for this show, and whether it is helping reverse that decline in u. S. Subscribers, jon, that you mentioned we saw last quarter. Carl, jon. I have to ask you about more big news your way in hollywood marvel is back in for another spiderman movie with sony. Is this disney blinking . He said he didnt have time to work on another spiderman movie but time for star wars. Whats going on . To give the news. Back in august sony which has rights to spiderman and disney who has rights to the rest of the marvel universe said they were splitting sony said it would make future spiderman movies on its own, not having them produced by Disney Marvel who did a good job with those so far. Just now, sony and disney announce the third film in the spiderman series will be produced by marvel and kevin figey, the big name at Disney Marvel heres the thing, jon. I think it is sony that blinked. Spiderman is a more valuable property if also included in all of the other vendors and marvel movies, the characters are woven in there i think it may be sony realizing that they would be better off having disney and marvel help them out there, rather than going it alone that means you think theyre sharing profits on this. That was the big issue, right . They didnt want to give disney all the extra money, disney said if we work on it, we want a bigger take. Do you think theyre getting that take . Exactly i dont know the details of the deal i havent, this just crossed, havent been able to make calls to sources yet, but i will say theres probably some sort of compromise seems like it is better for everyone if marvel is involved in the production of these movies to be able to have a spiderman basically promoted by all of the other vendor movies would be great thing for sony, and arguably, sony should want expertise with superhero movies from marvel, which kevin brings. You could argue it would be in sonys best interest to share the profits with marvel. One more example of tug of war over creative ip in the media. Incredible this month. After the break, remember the Grass Roots Campaign designed to take down amazon it is funded by the likes of walmart and oracle Pulitzer Prize winning reporter hihat story joins us in a minute he way, shes the next mozart. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. But when i started seeing things, i didnt know what was happening. So i kept it in. He started believing things that werent true. I knew something was wrong. But i didnt say a word. During the course of their disease around 50 of people with parkinsons may experience hallucinations or delusions. But now, doctors are prescribing nuplazid. 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Com. 18 months ago a small socalled Grass Roots Campaign was launched, intentions of cutting down amazon. Except backers behind it werent exactly so small funded by amazon rivals like walmart, oracle, Simon Property group. Those are major businesses, each with a bone to pick with amazon. They each have things like a government cloud contract, with foot traffic in the mall, direct head to head ecommerce competition to think about now the Pulitzer Prize winning reporter behind the story joins us james gramaldi thanks for having me. Great to have you fascinating how you dug through, figured out who was behind this. How common do you think this is and what does it say about the state of play in competition and all of the things amazon has its fingers in i think it happens a lot where you find corporations that are backing think tanks and other groups that may share their agenda, may divert their agenda a little bit that direction. What was somewhat unusual about this is this group is only whats called free and Fair Markets Initiative was only aimed at amazon. Just about everything they had done with a small exception had been critical of amazon, critical of government subsidies, critical of hq2, alleged privacy lapses, damage to small businesses, what have you, as well as antitrust concerns had a list of people listed as members. When i dug into that, i found a lot of phony baloney and realized i needed to dig deeper to figure out who was really behind it. We long suspected that walmart may have pressured suppliers to choose maybe not amazon web services, you can see whats in it for oracle. What about comment from either of the two giants . Oracle acknowledged that they had funded the organization, of course as you pointed out, they were big competitors for them, for this 10 billion cloud contract from the pentagon oracle is out of the running, amazon still in it oracle is trying to slow it down walmart said they never funded this group free and Fair Markets Initiative my reporting shows it was funded through an intermediary that supported it and Simon Properties simply didnt respond theyre the largest mall operator in the country. The whole operation was run by phil singer, former aide to senator Chuck Schumer and Hillary Clintons 2008 president ial campaign. He founded an organization, a firm called Marathon Strategies. Walmart is a client of Marathon Strategies, at least until the time the story was reported, and oracle also had helped fund the organization so they really tried to distance themselves from it, somewhat deny it, but our reporting