# SpaceX Pounces on $60 Billion Cursor Takeover Days After IPO

An episode of [Bloomberg Intelligence](https://invisiblenetwork.ai/podcast/326301337), 16 Jun 2026, 24 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7f534b8c-9e91-429a-b102-ae3c00090c6d/be45f1d9-28f9-4fed-baad-b46b011a950b/audio.mp3?utm_source=Podcast&in_playlist=0ad812bf-fd15-4012-a18c-ae3c00090c76

Watch Paul and Scarlet LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg Intelligence hosted by Paul Sweeney and Scarlet Fu -Seth Fiegerman, Bloomberg AI Team Leader, discusses SpaceX agreeing to take over Cursor in a deal that values the startup at $60 billion, part of Elon Musk's efforts to catch up with rivals on coding tools. The deal is expected to close in the third quarter, with Cursor investors having the right to receive SpaceX stock based on the implied $60 billion equity value of the startup. -Gautam Mukunda, Lecturer at Yale School of Management and Bloomberg Opinion contributor, discusses his Bloomberg Opinion column: “Trillionaires and Republics Will Be a Toxic Mix.” SpaceX’s initial public offering made Elon Musk the world’s first trillionaire, giving him absolute power. A mega-billionaire has resources that approach or exceed those of many nation-states and can convert their wealth into power. The exchange rate between wealth and power has never been so favorable, with some individuals spending large sums on presidential elections and having significant influence over government decisions. -Poonam Goyal, Senior U.S. E-Commerce and Retail Analyst at Bloomberg Intelligence, discusses how AI is pushing US e-commerce into a new growth phase. According to Bloomberg Intelligence: Amazon.com's Prime Day will be an early test of whether AI-driven shopping and bargain hunting can coexist. As inflation, higher gas prices and tariff-related costs keep consumers focused on value, Bloomberg Intelligence's fifth annual proprietary survey suggests shoppers are entering the June 23-26 event seeking deals with convenience and delivery speed defining Prime's core appeal. -Michael Halen, Bloomberg Intelligence Senior Restaurant and Foodservice Analyst, discusses Yum! Brands selling its Pizza Hut division for $2.7 billion to focus on its KFC and Taco Bell chains. Private equity firm LongRange Capital will acquire Pizza Hut excluding China for $1.5 billion, and Yum China Holdings Inc. will buy the rest for $1.2 billion. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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[0:24] Speaker 2: Lost in all the SpaceX discussion is that they made
[0:27] Speaker 2: it sixty billion dollar mm A trade today and it's like,
[0:30] Speaker 2: you don't even talk about it.
[0:32] Speaker 3: Well, partly because they had indicated before their IPO that
[0:35] Speaker 3: this was something that they acquired the rights for, so
[0:38] Speaker 3: now they've just kind of pulled the trigger on it.
[0:41] Speaker 4: All right, let's talk to somebody.
[0:42] Speaker 2: It's his job to know what's going on with the stuff.
[0:44] Speaker 2: Seth Fiegerman, Bloomberg AI team leader. I didn't know we
[0:47] Speaker 2: had an AI team leader, but we do, and it's.
[0:48] Speaker 5: Set That's awesome.
[0:50] Speaker 6: What is Cursor and why did SpaceX buy it?
[0:53] Speaker 4: Sure? Cursor is one of the leading startups that focuses
[0:56] Speaker 4: on AI codings, basically building AI tools that streamline process
[1:00] Speaker 4: of writing and debugging COG. You know, it's one of
[1:02] Speaker 4: the fastest growing startups in terms of the revenue run rate,
[1:06] Speaker 4: but it also faces a lot of competition with the
[1:08] Speaker 4: likes of Open AI and Anthropic, but it has historically
[1:11] Speaker 4: been quite beloved by coder's in Silicon Valley. I should
[1:14] Speaker 4: say historically this is really, you know, a three or
[1:16] Speaker 4: four year old company that just got bought for sixty
[1:19] Speaker 4: billion dollars. So quick turnaround, quick turnaround.
[1:22] Speaker 3: Indeed, So what does owning Cursor allow SpaceX to do
[1:25] Speaker 3: that it couldn't do before?
[1:27] Speaker 4: Yeah, I mean it's important to step back and think that,
[1:28] Speaker 4: you know, SpaceX merged with or require Elon Musk's AI
[1:31] Speaker 4: venture XAI, and since then has tried to position itself
[1:35] Speaker 4: as not just a rocket play but an AI play.
[1:37] Speaker 4: But today they really haven't made too much of a
[1:40] Speaker 4: dent in the AI landscape, and coging has really been
[1:43] Speaker 4: the most lucrative early market for these AI tools. Are
[1:47] Speaker 4: certain irony there. They're kind of disrupting their own folks
[1:49] Speaker 4: in their own backyard. But I think the bet here
[1:51] Speaker 4: is that bring Cursor in there, bring their talent in there,
[1:54] Speaker 4: and you can help supercharge SpaceX's own efforts to build
[1:57] Speaker 4: a more viable, credible AI product.
[2:00] Speaker 2: All right, I'm asking for all Cursor shareholders shared. Did
[2:05] Speaker 2: I sell my company for one hundred and thirty five
[2:07] Speaker 2: dollars stock or stock today. Do we know the terms?
[2:11] Speaker 4: I'm not sure we know at the moment, but the
[2:13] Speaker 4: deals should close in the third quarter.
[2:17] Speaker 2: I like the sixty billion dollars valuation one hundred and
[2:19] Speaker 2: thirty five dollars stock. Yeah, so I get the upside.
[2:22] Speaker 3: Well, let's see how good Cursor was at negotiating all this, Okay,
[2:26] Speaker 3: I mean.
[2:26] Speaker 2: Do we know how how M and A might figure
[2:30] Speaker 2: into their growth strategies?
[2:31] Speaker 3: Good question? Yeah.
[2:32] Speaker 4: Again, I think like they're trying to position themselves as
[2:35] Speaker 4: more of an AI company, and I think they're doing
[2:36] Speaker 4: that along two problems. One is three deals like this one,
[2:39] Speaker 4: and I would be shocked this is the last time
[2:40] Speaker 4: that we see them pursue an AI company to build
[2:43] Speaker 4: a real, credible and hoas product. The others through these
[2:45] Speaker 4: infrastructure tie ups that they're doing with the likes of
[2:47] Speaker 4: Anthropic and Google kind of using the chips and data
[2:50] Speaker 4: centers that they already have to make money while they
[2:52] Speaker 4: figure out how to build a credible AI product.
[2:54] Speaker 3: SpaceX is using cash an stock to buy Cursor. If
[2:58] Speaker 3: they're going to be buying more com companies, are we
[3:01] Speaker 3: going to see SpaceX. Taking on debt as well, you know,
[3:03] Speaker 3: selling bonds for instance, possible.
[3:06] Speaker 4: But again I think the fact that I just when
[3:07] Speaker 4: Public gives it a leg up on arrivals like Opening
[3:10] Speaker 4: I and Anthropic, as they compete not just for talent
[3:12] Speaker 4: but for acquisitions like this one, they have something they
[3:14] Speaker 4: can offer that other companies can't.
[3:16] Speaker 2: All right, you're you're the AI, dude. Where are we
[3:19] Speaker 2: on that spectrum of let's spend money, spend money, spend
[3:22] Speaker 2: money too. Now let's really see what we're getting in
[3:25] Speaker 2: return for that money.
[3:26] Speaker 4: I think we're still I think we're still in the
[3:27] Speaker 4: spend money spends going. But I will say what we
[3:30] Speaker 4: are starting to see is companies Opening Eye, Anthropic are
[3:33] Speaker 4: thinking about how much they're charging for this stuff across
[3:36] Speaker 4: across different spectrums. That includes sort of getting rid of
[3:38] Speaker 4: this all you can eat model where we just kind
[3:40] Speaker 4: of charge you a flat fee and then you kind
[3:41] Speaker 4: of use as much a as you want. Now they're
[3:43] Speaker 4: starting to charge based on the usage that you do,
[3:45] Speaker 4: or maybe they'll charge more money for premium subscriptions. So
[3:48] Speaker 4: where are we on?
[3:49] Speaker 2: So Anthropic and Opening Eye have also filed confidentially for
[3:54] Speaker 2: fish public ofference do we have any sense it's the
[3:56] Speaker 2: timing frives of those two.
[3:57] Speaker 4: Deals, you know, the most reason that we've reporters that
[3:59] Speaker 4: both were targeting the fall. Now, I should say that
[4:01] Speaker 4: could be fluid, but the fact that SpaceX is doing
[4:04] Speaker 4: so well right now in its early days, but the
[4:06] Speaker 4: fact that they're doing so well probably does open up
[4:08] Speaker 4: an opportunity for those companies to go public then or sooner.
[4:12] Speaker 4: You know, it's always a vibes thing on some level,
[4:13] Speaker 4: and this kind of creates a positive moment to try
[4:16] Speaker 4: to bring it to market sooner.
[4:17] Speaker 3: I go back to that idea that open AI's S
[4:19] Speaker 3: one filing indicated that it wasn't necessarily in a rush
[4:22] Speaker 3: to go public either. You know, it said that there
[4:24] Speaker 3: are things I could do as a private company.
[4:26] Speaker 7: That.
[4:27] Speaker 4: Yeah, I think that they probably were a bit more
[4:30] Speaker 4: explicit on that than Anthropic was. So it's certainly possible
[4:34] Speaker 4: that open ai pushes this. We don't have updated reporting
[4:37] Speaker 4: on that timetable yet, but they certainly indicated that perhaps
[4:40] Speaker 4: they could still do financing on the private market as
[4:43] Speaker 4: opposed to in the tap of the public market. But
[4:45] Speaker 4: at the end of the day, all these companies, including SpaceX,
[4:47] Speaker 4: are spending tens, if not hundreds of billions of dollars
[4:49] Speaker 4: on chips and data centers and talent. You need capital
[4:52] Speaker 4: for that, and public market is a good place for that.
[4:55] Speaker 8: Stay with us. More from Bloomberg Intelligence coming up after this.
[5:01] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[5:05] Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
[5:08] Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever
[5:12] Speaker 1: you get your podcasts, or watch us live on YouTube.
[5:16] Speaker 2: One of my favorite functions on the Bloomberg terminal is
[5:18] Speaker 2: rich go uric h. It's the best accounting for the
[5:23] Speaker 2: wealth of the wealthiest folks out there. The methodology is outstanding,
[5:27] Speaker 2: the data's outstanding. Elon Musk is number one, one point three.
[5:33] Speaker 2: Let's go exact here, one point two seven three trillion dollars.
[5:36] Speaker 6: Number one.
[5:37] Speaker 2: Number two is Larry Page of three hundred and thirteen billions,
[5:40] Speaker 2: which just.
[5:40] Speaker 8: So outpaces everyone else. It's laughable.
[5:42] Speaker 2: You're today He's up six hundred and fifty billion dollars.
[5:44] Speaker 2: That's representing the public markup and value of SpaceX here.
[5:49] Speaker 2: So the question is a trillionaire, I mean, what are
[5:53] Speaker 2: we doing here? What's the impact here Gutha mcconda, he
[5:56] Speaker 2: thinks about this stuff. He's a lecturer at the Yale
[5:58] Speaker 2: School of Management and he's the Blomberg Opinion contributor Waltham.
[6:03] Speaker 2: When you think Elon, you think about that wealth and
[6:06] Speaker 2: again number two is three hundred billion and he's at
[6:08] Speaker 2: one point three trillion. Put that in perspective, how do
[6:12] Speaker 2: you think about that?
[6:14] Speaker 9: I mean, just just imagine being the second wealthiest wealthiest
[6:17] Speaker 9: man in the world and thinking, Wow, I'm a trillion
[6:19] Speaker 9: dollars behind.
[6:20] Speaker 6: You got to feel for them, You got to feel
[6:21] Speaker 6: for him. Really, it seems seems awful.
[6:23] Speaker 10: So what does it mean for policy?
[6:25] Speaker 2: What does it mean for influence?
[6:28] Speaker 6: I don't know.
[6:28] Speaker 2: The numbers here are getting just you know, extraordinary.
[6:32] Speaker 9: Yeah, And I think we have to layer in that
[6:35] Speaker 9: the big difference between the Gargan Show and wealth of
[6:38] Speaker 9: today's sort of wealthiest people lens the equivalent one hundred
[6:41] Speaker 9: years ago in the Gilded Age, when you had people
[6:43] Speaker 9: with about the same level of GDP is. Back then,
[6:45] Speaker 9: there were profound normative constraints about you could you could
[6:49] Speaker 9: not be seen to use your wealth to just sort
[6:53] Speaker 9: of like drown the political system. However, much political influence
[6:56] Speaker 9: they had, there were limitations about what you could do
[6:58] Speaker 9: when you were sort of expected to give my I
[7:00] Speaker 9: need to charity and things like that. All of those
[7:01] Speaker 9: things have apparently fallen by the wayside. So the easiest
[7:05] Speaker 9: way to think about the level of Elon Musk's political power,
[7:08] Speaker 9: even apart from his work with the administration, is in
[7:12] Speaker 9: Ohio the most expensive Senate race of all time. The
[7:15] Speaker 9: two campaigns combined spent about one hundred and fifteen million.
[7:17] Speaker 6: Dollars, So that's a lot of money.
[7:20] Speaker 9: So that is about less than one percent of a
[7:24] Speaker 9: day to day random fluctuation in Elon Musk's network, so
[7:29] Speaker 9: he can buy he can spend more money than two
[7:32] Speaker 9: senate campaigns combined, and the most the powerful, most expensive
[7:35] Speaker 9: Senate campaign in history. About as casually as you or
[7:38] Speaker 9: I buy a cup of coffee or soda. If you
[7:41] Speaker 9: are a politician and you and you're thinking about what
[7:45] Speaker 9: political stances you should take or how you should shape
[7:47] Speaker 9: government baction, if that's not top of your mind, you
[7:50] Speaker 9: should get out of the business.
[7:52] Speaker 3: Okay, Well, you've given us a lot to think about here.
[7:55] Speaker 3: And one thing that I did like about your column
[7:57] Speaker 3: is that you point out these megabillionaires. And I think
[8:00] Speaker 3: according to Rich God, there's maybe like twenty odd people
[8:03] Speaker 3: who have who are worth.
[8:04] Speaker 8: At least one hundred billion dollars.
[8:06] Speaker 3: So let's just call them the mega billionaires in one trillionaire.
[8:09] Speaker 3: They run companies, they own companies, and those companies employ
[8:13] Speaker 3: a lot of people, and a lot of those people
[8:15] Speaker 3: reach out to you for advice, and as you put it,
[8:19] Speaker 3: the conversation always goes like this. These are people who
[8:21] Speaker 3: have accomplished a lot of things, and they're very successful
[8:24] Speaker 3: what they do, but right now they're struggling in this
[8:26] Speaker 3: company that they work for.
[8:28] Speaker 8: Why is that? And what do you tell them?
[8:31] Speaker 9: Because when you operated this stratosphere of wealth and power
[8:34] Speaker 9: and influence, we should stop thinking about you like a
[8:37] Speaker 9: private citizen. You're a king and you're surrounded by a court,
[8:41] Speaker 9: and there are people around you whose only desire in life,
[8:44] Speaker 9: whose only goal in life is to please you.
[8:47] Speaker 6: That's being a court here.
[8:49] Speaker 9: So you know, I talk to people who you know,
[8:51] Speaker 9: they've been army special forces or very senior executives, and
[8:54] Speaker 9: they go to these companies and they're like, nothing makes sense.
[8:57] Speaker 9: I have been trained to succeed, but I don't even
[9:00] Speaker 9: know what success means. And I said, that's right, because
[9:02] Speaker 9: you've always been trained success means winning a war or
[9:04] Speaker 9: making a profit. Success means keeping the king happy, that's
[9:09] Speaker 9: what it means. And that's a completely different way of
[9:12] Speaker 9: looking at the world. And so now you have these people.
[9:15] Speaker 9: They have the power and resources of a nation state.
[9:18] Speaker 9: In fact, most of the nation states in the world
[9:20] Speaker 9: don't have the resources of someone like Elon Musk, you know,
[9:23] Speaker 9: and it changes everything.
[9:25] Speaker 2: You know, I was thinking, Gotham, just when you're speaking here, well,
[9:28] Speaker 2: he's got to answer to a shareholders. And then I'm like, no,
[9:30] Speaker 2: he doesn't because he's got the super voting stock.
[9:33] Speaker 10: So there goes that argument.
[9:34] Speaker 8: Nominally he might, but in practice, in reality, he doesn't.
[9:38] Speaker 9: So go, yeah, that's right and in a real sense,
[9:40] Speaker 9: So like there's this wonderful term post economic right, if
[9:45] Speaker 9: Elon Musk fails to answer the shareholders and they sell
[9:48] Speaker 9: the stock and his net worth goes down by seventy
[9:51] Speaker 9: five percent, he'll still have three hundred billion dollars.
[9:55] Speaker 6: I'm sure he'll be okay.
[9:58] Speaker 3: Yeah, I mean, although for those who are keeping score
[10:02] Speaker 3: that that's not okay with them. I mean, so you
[10:04] Speaker 3: don't get to that level without keeping score.
[10:06] Speaker 6: So I think that's completely right.
[10:08] Speaker 9: You keep you know, keeping score, and it is striking
[10:10] Speaker 9: right that like that, it seems like the one thing
[10:12] Speaker 9: that they can't buy is enough. But let me put
[10:15] Speaker 9: it differently. At that level, I think keeping score isn't
[10:18] Speaker 9: just about the number on the Bloomberg Billionaires list.
[10:21] Speaker 6: It's about power.
[10:23] Speaker 9: Right, you have transcended with the things where the things
[10:26] Speaker 9: you can where you can buy material things. What you
[10:28] Speaker 9: can buy are governments or immunity from the law, or
[10:31] Speaker 9: just the fulfillment of your every whim, no matter what it.
[10:34] Speaker 6: Is, that what that might be.
[10:36] Speaker 9: And at that point, the amounts of money that you
[10:39] Speaker 9: have can translate to power in ways that we just
[10:43] Speaker 9: haven't seen in democratic societies before.
[10:46] Speaker 2: Is there any I'm not to say there's a problem,
[10:48] Speaker 2: so I'm not going to asay for a solution, but
[10:50] Speaker 2: is there any way that you think society may change
[10:54] Speaker 2: or bend or try to deal with some of this
[10:57] Speaker 2: newfound extraordinary wealth and influence?
[11:01] Speaker 9: There is because we've done this before, right, the United
[11:04] Speaker 9: States has dealt with people of this kind of wealth
[11:07] Speaker 9: and power relative to society, not in ansolute terms. Before
[11:10] Speaker 9: Theodore Roosevelt did that with JP Morgan, and you know,
[11:13] Speaker 9: the anti trust people did that with John D.
[11:15] Speaker 6: Rockefeller. And there are two big lessons that we should
[11:18] Speaker 6: take away from that.
[11:18] Speaker 9: Right One is that however powerful, wealthy and powerful these
[11:21] Speaker 9: people are, when the government, backed by the people, decides
[11:26] Speaker 9: to go and say do things, the government is still
[11:28] Speaker 9: the government. And in a democratic republic like the United States,
[11:31] Speaker 9: the people still rule, not individual wealthy, not in certain
[11:34] Speaker 9: individual oligarchists. But the second thing to remember is that
[11:37] Speaker 9: over the long term, that outcome was much better for
[11:40] Speaker 9: the wealthy people than the fulfillment.
[11:42] Speaker 6: Of their whims.
[11:43] Speaker 9: Right, would you rather live in a state like Russia
[11:46] Speaker 9: that bends to the whims of you know, whatever the wealth,
[11:49] Speaker 9: the wealth the handful of wealthiest people who around the state.
[11:51] Speaker 9: Would you rather live in the United States? The answers,
[11:53] Speaker 9: you would rather live in the United States. It hard,
[11:56] Speaker 9: as it is to might to hear. Right constraints can
[11:59] Speaker 9: be good for you, even if you're a trillion error.
[12:01] Speaker 9: And democratic constraints aren't just good for the whole society,
[12:04] Speaker 9: They'll end up being good for the wealthiest members of
[12:06] Speaker 9: it too.
[12:07] Speaker 3: Gotam, have you gotten any feedback on writing this column?
[12:10] Speaker 3: I'm wondering if any readers have reached out to you
[12:13] Speaker 3: and what they've said.
[12:14] Speaker 9: More than any other column I've written for Bloomberg Actually,
[12:17] Speaker 9: and so far, I would say of people who have
[12:20] Speaker 9: reached out to me directly, the result the response has
[12:24] Speaker 9: been sort of enormously positive.
[12:26] Speaker 6: Of people who responded.
[12:27] Speaker 9: On Twitter who seem to be big fans of Elon Muss,
[12:30] Speaker 9: let's just say that they were not so positive.
[12:32] Speaker 8: Stay with us. More from Bloomberg Intelligence coming up after this.
[12:39] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[12:43] Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
[12:46] Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
[12:49] Speaker 1: you get your podcasts, or watch us live on YouTube.
[12:53] Speaker 2: Stuck ale of retail Here, we just got through a
[12:55] Speaker 2: lot of the earnings from the retailers. They was kind
[12:57] Speaker 2: of bringing up the rear their different calendars. Here, Bloomberg Intelligence,
[13:00] Speaker 2: take it a survey. I'm looking at Prime Day deals
[13:03] Speaker 2: and there's a lot to talk about there. I want
[13:06] Speaker 2: to talk about how AI influences how we shop.
[13:09] Speaker 6: Who do we talk to about that?
[13:10] Speaker 10: We talked to put them goil.
[13:11] Speaker 2: She covers all all the e commerce and the retailers
[13:14] Speaker 2: for Bloomberg Intelligence.
[13:17] Speaker 7: Put them.
[13:17] Speaker 2: I know you have a new survey out here. What
[13:19] Speaker 2: did you find here? What you're looking to find?
[13:24] Speaker 7: People are still interested in deals in shopping Amazon's Prime Day,
[13:28] Speaker 7: which comes earlier this year. It comes in June versus
[13:30] Speaker 7: July last year, so part of two Q not three
[13:33] Speaker 7: Q in terms of their financials. I think what we
[13:38] Speaker 7: found just confirmed what we believed, which is that more
[13:41] Speaker 7: than every deals matter today, especially in the face of
[13:43] Speaker 7: rising inflation where you have tariffs and higher gas prices,
[13:47] Speaker 7: consumers are looking to find ways to stretch their dollars,
[13:50] Speaker 7: and more and more are looking to shop on Prime
[13:53] Speaker 7: Day than last year.
[13:55] Speaker 3: This is a dumb question, but I'm going to ask
[13:57] Speaker 3: it anyway. It's called Prime Day, and Amazon has that
[13:59] Speaker 3: Prime loyalty program.
[14:01] Speaker 8: But do people who shop Prime Day?
[14:03] Speaker 3: Are they all Prime Members or is there a significant
[14:07] Speaker 3: number that actually has not signed on to the program
[14:10] Speaker 3: yet And we'll do so because of these offers.
[14:13] Speaker 7: No dumb question, but the answer is Prime Day is
[14:16] Speaker 7: for Prime Members, so to take advantage of the deals,
[14:19] Speaker 7: you have to be a Prime Member. So Amazon does
[14:22] Speaker 7: have over two hundred million Prime members around the world
[14:25] Speaker 7: that will be taking advantage of these deals. But it
[14:27] Speaker 7: is also a time where many people sign up for
[14:31] Speaker 7: deals that don't have the membership. Some of them sign
[14:33] Speaker 7: up to take advantage of the deals and cancel, and
[14:35] Speaker 7: many of them do stay on. In fact, in our survey,
[14:38] Speaker 7: that was one of the questions we asked is do
[14:40] Speaker 7: you have a Prime membership? And if not, are you
[14:43] Speaker 7: planning to get one? And the answer was very consistent
[14:46] Speaker 7: with last year that there is a select group of
[14:48] Speaker 7: respondents that plan to get the Prime membership and hold
[14:52] Speaker 7: it indefinitely, just growing that Prime member base, which is
[14:55] Speaker 7: always a key win for Amazon.
[14:56] Speaker 2: All Right, yesterday I pulled to John Tucker. I said,
[14:59] Speaker 2: you know what, I need a powerwasher for my back patio.
[15:03] Speaker 8: So it sounds like you could borrow that from him.
[15:06] Speaker 2: I could probably borrow from John Tarker. So instead of
[15:08] Speaker 2: going to Google, I just went into Amazon dot com
[15:10] Speaker 2: search bar, power washer, boom. A lot of stuff comes up,
[15:13] Speaker 2: a lot of good descriptions.
[15:14] Speaker 10: I found on Boom.
[15:15] Speaker 2: Didn't even go to search. And it's coming tomorrow.
[15:17] Speaker 10: For those that care.
[15:19] Speaker 5: You didn't want to wait for Prime Day now, I'm
[15:21] Speaker 5: not just I don't know. I want to ride away.
[15:25] Speaker 5: AI punam. How are people using AI for shopping? How
[15:30] Speaker 5: are retailers using AI?
[15:33] Speaker 7: Yeah? I think Amazon is furthest along when you think
[15:35] Speaker 7: about how a retailer is using AI. You know what
[15:38] Speaker 7: you just explained about the search bar. I think what
[15:40] Speaker 7: many people still don't know is the Amazon search bar
[15:42] Speaker 7: is no longer just in search bar. It's an AI
[15:45] Speaker 7: powered agent led tool, which means if you don't have
[15:49] Speaker 7: to no longer go in the search bar like you
[15:50] Speaker 7: did and say powerwasher, you can say I'm looking to
[15:54] Speaker 7: clean the bricks or the paper outside of my house,
[15:56] Speaker 7: and I want the strongest powersher, and it will provide
[15:59] Speaker 7: you with an answer. Not only that when you get
[16:02] Speaker 7: to it, you can go ahead and say what was
[16:05] Speaker 7: the cheapest price that this power washer sold in the
[16:09] Speaker 7: last three months six months? And it will give you
[16:12] Speaker 7: a price chart. Then you can go ahead and further say, okay,
[16:15] Speaker 7: when this power washer drops to this price, go ahead
[16:19] Speaker 7: and purchase and long behold. If it drops at that
[16:22] Speaker 7: price next week, you'll have it at your door without
[16:23] Speaker 7: you having to go back. Well, that's really really further along.
[16:27] Speaker 2: I thought I was like doing really well, Yes, it's
[16:29] Speaker 2: just going into Amazon search, But apparently put them says
[16:32] Speaker 2: I could do a lot better.
[16:32] Speaker 3: Yeah, you could make it work for you as opposed
[16:34] Speaker 3: to doing the legwork yourself. Given all of this put them,
[16:38] Speaker 3: how are competitors responding.
[16:40] Speaker 8: We've seen how Prime Day and you know the fact
[16:43] Speaker 8: that it's an.
[16:44] Speaker 3: Annual sales extravaganza has really forced other companies, like the
[16:49] Speaker 3: targets of the world, like Walmart, to come up with
[16:53] Speaker 3: their own kind of sales extravagant in the middle of summer.
[16:57] Speaker 7: Yeah, and it won't be any different this year. So
[16:58] Speaker 7: as soon as Amazon launches it's Prime Day dates, what
[17:02] Speaker 7: happens is the larger retailers and some of the smaller
[17:05] Speaker 7: ones just follow right to make sure that they can
[17:07] Speaker 7: capture some of that walletchhare. To remember, this Prime Day
[17:10] Speaker 7: comes before the July fourth sales, so it's actually a
[17:14] Speaker 7: move to pull sales forward even more than it has
[17:16] Speaker 7: been ever in the past. And we do expect online
[17:20] Speaker 7: sales across the board, not just for Amazon, but even
[17:22] Speaker 7: the Walmart's, the target's best spies of the world to
[17:25] Speaker 7: feature deals to try to lower that customer spend because
[17:29] Speaker 7: it's a time when consumers are prepared to stretch their
[17:32] Speaker 7: wallets to take advantage of the deals put iman.
[17:34] Speaker 2: You mentioned Walmart, and I'm just amazed. Every quarter whenever
[17:37] Speaker 2: they report earnings, I go right to their digital sales,
[17:41] Speaker 2: and every quarter they don't disappoint it. You know, teens
[17:44] Speaker 2: twenty five percent growth in digital Walmart's they go toe
[17:48] Speaker 2: to toe with Amazon, don't they?
[17:51] Speaker 7: Absolutely? I mean, Walmart's done an amazing job at at
[17:54] Speaker 7: capturing the online shopper. You know, if I speaking to
[17:56] Speaker 7: you five years ago, they were very, very small when
[17:59] Speaker 7: it came to the online presence that they haven't today
[18:02] Speaker 7: they're approaching over roughly two hundred billion dollars and almost
[18:05] Speaker 7: online sales, So quite a move since then. When you
[18:08] Speaker 7: compare it to Amazon, you know, we're expecting Amazon to
[18:11] Speaker 7: get to a trillion dollars and GMB, so still you know,
[18:15] Speaker 7: Amazon is further along on a global basis, but Walmart
[18:18] Speaker 7: is catching up fast for sure.
[18:21] Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
[18:28] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[18:32] Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto
[18:36] Speaker 1: with the Bloomberg Business app. Listen on demand wherever you
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[18:43] Speaker 2: One of the M and E trades today, Young Brands
[18:45] Speaker 2: selling its Pizza Hut division for two point seven billion
[18:48] Speaker 2: dollars to focus on it's KFC and Taco Bell chains.
[18:52] Speaker 2: I'm in on all three of those.
[18:53] Speaker 6: Those are all good with me.
[18:54] Speaker 2: Michael Halen he joined us here, a senior restaurant of
[18:57] Speaker 2: food service analysts for Bloomberg Intelligence. Michael, just about this transaction.
[19:01] Speaker 2: What's Yu'm doing here?
[19:03] Speaker 11: Yeah, And it's been expected they've since last fall they
[19:06] Speaker 11: had announced that they were looking for strategic options here
[19:11] Speaker 11: for Pizza Hut, which has been struggling for years, right,
[19:14] Speaker 11: and so we think it's a great deal for them,
[19:18] Speaker 11: you know, and it allows their very talented management team
[19:21] Speaker 11: to focus on their two real growth brands, Taco Bell,
[19:25] Speaker 11: which is a monster, it's the gold standard and QSR
[19:30] Speaker 11: best marketing program, phenomenal seam source sales for years now,
[19:35] Speaker 11: probably since I've been you know, an analyst of probably
[19:38] Speaker 11: about fifteen plus years, great seam sore sales. And KFC,
[19:43] Speaker 11: which is phenomenal overseas, strong net unit growth overseas and
[19:49] Speaker 11: starting to turn around here in the United States in
[19:51] Speaker 11: the last couple of quarters. So you know, with the
[19:55] Speaker 11: cash it's going to be about two point three billion
[19:57] Speaker 11: after tax.
[19:57] Speaker 10: Are going to for that right now into into.
[20:00] Speaker 11: Share buybacks to offset some of the operating profit loss
[20:05] Speaker 11: that they're going to have here.
[20:06] Speaker 10: And you know, we think it's it's a good deal.
[20:11] Speaker 11: It's it's going to have a much higher operating profit
[20:13] Speaker 11: and net unit growth, faster revenue growth than all of
[20:17] Speaker 11: that is, you know, turning into a higher multiple. Is
[20:21] Speaker 11: what we're seeing in the market today.
[20:22] Speaker 2: Stocks up two point three percent today on this news,
[20:25] Speaker 2: up about almost five percent year to date and up
[20:27] Speaker 2: about eleven percent of the trailing twelve months. KFC and
[20:31] Speaker 2: Taco Bell, do you think they're going to maybe think
[20:34] Speaker 2: about growing va acquisition? Is there something for them to
[20:37] Speaker 2: go out and buy? Is that part of their strategy
[20:39] Speaker 2: their DNA?
[20:39] Speaker 10: You know, we could be you know, it has historically.
[20:42] Speaker 11: They purchased Habit Burger a few years ago, but it
[20:45] Speaker 11: was just really too small to make a big difference
[20:49] Speaker 11: in the in the top and bottom line. But that
[20:52] Speaker 11: could be an option. You know, Chris Turner, he was
[20:56] Speaker 11: the prior CFO, is the new CEO, and he's more
[21:00] Speaker 11: you know, the company was run pretty conservatively under their
[21:03] Speaker 11: prior CEO, you know, good solid company, you know, but
[21:08] Speaker 11: not very exciting. And so you know, as you can
[21:11] Speaker 11: see with this deal, uh Turner hasn't wasted any time
[21:14] Speaker 11: and he's being more aggressive with the moves that they're making,
[21:18] Speaker 11: and so I could see I could see.
[21:20] Speaker 10: M and A being an option going forward.
[21:23] Speaker 2: So what was the problem with this Pizza Hut? Was
[21:28] Speaker 2: it simply Dominoes? What was kind of the problem?
[21:31] Speaker 11: Dominoes was a big part of it because since two
[21:34] Speaker 11: thousand and nine, and in two thousand and nine Pizza
[21:37] Speaker 11: Hut was number one in the country, Dominoes has taken.
[21:41] Speaker 10: Share year after year after year, So that's been a
[21:43] Speaker 10: big part of it.
[21:44] Speaker 11: Papa John's had some good years in there too where
[21:47] Speaker 11: they were taking some share.
[21:48] Speaker 10: So that's a big part of it. But you know,
[21:51] Speaker 10: I'd say a big issue is like food.
[21:53] Speaker 11: Quality and the real estate, right, Like they have these
[21:56] Speaker 11: really big boxes that cost a lot of money. These
[21:59] Speaker 11: franchise are paying big rents, and when you don't have
[22:01] Speaker 11: people coming into the restaurants anymore, because in addition to
[22:05] Speaker 11: the Dominoes and Papa John's competition, you had more competition
[22:09] Speaker 11: at sit down restaurants, higher qualities, sit down pizza joints
[22:12] Speaker 11: cropping up locally, you know, and it just starts this
[22:16] Speaker 11: downward spiral that that that you know, people aren't coming in,
[22:19] Speaker 11: so the franchises aren't going to spend money on improving
[22:22] Speaker 11: you know, the look and the feel of the restaurants.
[22:27] Speaker 11: You know, restaurants fall into disrepair. And so it's kind
[22:30] Speaker 11: of been been this spiral here in the US anyway
[22:34] Speaker 11: that that's you know, been going off for quite I've.
[22:38] Speaker 2: Been telling the story today. Back in the eighties and
[22:39] Speaker 2: college in Richard, Virginia, it was our savior. It was
[22:42] Speaker 2: our go to place.
[22:44] Speaker 10: But that was a long time ago. Listen, of the
[22:46] Speaker 10: breadsticks were phenomenal.
[22:47] Speaker 2: Exactly, all right. So all the restaurant companies that you cover,
[22:51] Speaker 2: you cover them all.
[22:53] Speaker 6: What's the theme you're.
[22:54] Speaker 2: Hearing from your restaurant companies about kind of how the
[22:56] Speaker 2: consumer's doing out there.
[22:58] Speaker 11: The theme is that they're holding in right. And I
[23:01] Speaker 11: think part of that was the tax refund checks.
[23:03] Speaker 6: You know.
[23:04] Speaker 11: You know, as you probably know, I was pretty bullish
[23:06] Speaker 11: coming into this year because inflation was close to two percent,
[23:10] Speaker 11: we had these refund checks coming. We're less much less
[23:14] Speaker 11: bullish now based on the inflation that we're seeing, you know,
[23:17] Speaker 11: like I said, a lot of them are talking about
[23:20] Speaker 11: kind of holding in.
[23:23] Speaker 6: Beef.
[23:23] Speaker 11: Inflation continues to be an issue, So some of those
[23:25] Speaker 11: chains are kind of worried there, you know what they're saying.
[23:30] Speaker 11: I'm paying closer attention what they're doing, and what we're
[23:32] Speaker 11: seeing is the most aggressive discounting we've seen in this
[23:36] Speaker 11: business for a while, and that's that's really worrisome.
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