Power Lunch - Bill Gates Goes To China, and Investor Appetite 6/15/23

Episode Date: June 15, 2023

Microsoft Co-Founder Bill Gates is going to China, reportedly to meet with President Xi. That comes as China’s latest economic numbers show a slowing, not a strong post-Covid recovery. We’ll explore.Plus, today’s red-hot IPO is Mediterranean restaurant chain Cava, soaring in its public debut. We’ll look at the investor appetite for restaurant stocks overall right now.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And welcome to Power Lunch, everybody, alongside Kelly Evans. I'm Aymn Javers in for Tyler Matheson today. Coming up, Bill Gates goes to China, reportedly to meet with President Xi Jinping tomorrow. This comes as China's latest economic numbers show a slowing, not a strong COVID recovery. Plus, today's red-hot IPO is Kava. The stock soaring in its debut. We'll look at the investor appetite. Appetite, get it, for restaurant stocks right now.

Kelly, over to you. Thank you, Aman, and welcome. First, let's get a check on the markets where stocks are higher. Look at the Dow of 418 points now. The S&P at 4419, that's a 1% gain. Same for the NASDAQ. Just incredible stuff. And speaking of the gains continuing while Tesla's winning streak was snapped after 13 days,

take a look at Delta Airlines. This is our new winner. Up 15 sessions in a row if it stays positive today. It's up about 1 and a 3rd percent for a total gain of 20% during that time. The company bringing back its quarterly dividend at 10 cents a share. had suspended it in March of 2020. Also keep an eye on shares of Domino's pizza rising and actually leading the S&P up more than 6% today. After Stiefel says investors are too focused on the competition and food delivery and they're missing out on Domino's growth in carryout, Amen.

Oh, this is me. I'm sorry, everybody. The big market story so far of the year, the AI boost for big tech. Thanks to a nearly 200% gain so far, Nvidia is now a trillion dollar company. We had new all-time highs again today. AMD and Microsoft still 92, 45% gains for the year so far. Our next guest says AI isn't the only reason tech stocks are soaring, though. Let's bring in Michael Kantrowitz.

He's chief investment strategist with Piper Sandler. Michael, it's great to see you. Is this, what do you think, Fed pivot, Fed pause? What's really going on here? Well, I think it's that. And I think that got started getting priced in back in October of last year. But I think besides the banking crisis, the AI, excitement, I think lower energy prices is going underneath the radar as one of the biggest

drivers of this multiple expansion in the market. Obviously, it's accelerated the concerns, decelerated the concerns around inflation. And it's been a major reason that I think you've seen some consumer resilience in the last six, eight months. Explain that, Michael, if you could, because I think a lot of our viewers are not going to understand why you might say, well, you've got gas prices coming down, so that means that's good for tech stocks, right? It's not an intuitive leap to make that connection. Explain why you see that. Sure.

When we look at all the industries in the S&P 500 software, semiconductors and tech and cyclicals like financials and banks and material companies, and at the tail ends of the industries that are most sensitive to energy prices in terms of their relative performance, it's technology and software names that tend to benefit the most when oil prices are falling or when rates are coming down, which typically kind of coexist together. And the flip side of that is obviously the energy sector, which has been the worst performers. So software and semis are among the two best performers since October or techs the best sector, while energy is the worst sector since October. So, you know, I don't think we're going to see another massive drop in oil prices

without some further economic pain. So I think it's an important acknowledgement that that has helped part of the story. So I don't want to be ghoulish here, but I do want to ask you about these layoffs that we saw in the tech sector earlier this year, right? A lot of reports throughout the beginning part of this year of thousands of job cuts all throughout tech.

And I wonder what you think about the impact of those. Did that sort of lighten the load for some of these companies? They were able to capitalize on that and move forward in a more streamlined way? Well, I think certainly that's the way investors have looked at it so far as these companies had the ability to cut costs because they overhired during the pandemic. I think, you know, the view of the investors that, well, that didn't immediately spill over to broader areas of the economy, which we're now starting to see.

We've got two back-to-back weeks now where unemployment claims are at about 260,000, give or take, and further signs of kind of broader deterioration in the employment backdrop. It's by far a concern among investors, but that can sneak up on people real quick when you look back at history. Hey, Mike, before you go, can we just talk about jobless claims? Because you've been saying, you know, the downturn isn't coming until claims start rising. And yet even today's increase is obviously being completely shook off. Yeah. Yeah. We thought the beginning of the year, the market would be more range bound. And while that's true for the average stock, it's certainly not true for the index.

as, you know, I think the banking crisis and AI excitement and lower oil created kind of this perfection environment for growth stocks. I think, you know, we're not going to see hopefully another big banking issue. I think oil has come down and helped. I would say that we're kind of, again, this has been a P.E. expansion story and all these things we've talked about have led to that P.E. expansion. At some point, we're going to need earnings to kick it. and since October, the forward earnings for the S&P 500 are basically flat, actually down a percent or so. So with seeing the jobs data, the leading indicator, the Fed still can keep rates where they are, it's really hard to see a cyclical upturn and areas of the economy and the market that are cyclical,

whether it's small caps or financials, energy, materials, industrials, or retail, unless their earnings pick up, it's really hard to see some upside from here. And I think investors will continue to pile into growth stocks. So Bank of America, oh, sorry, Mike, the Bank of America who had been more bearish and expected a recession in the back half just pushed that out to 2024 and downgrade it saying maybe we'll just have a growth recession. What would your framework say about that? Yeah, we were not, quote, bearish in the first half. We think this is going to play out the second half as employment starts to become or move up the list of investor concerns. And I think it is.

It's been on investors radar for the last couple months since those revisions. And now we've seen two back-to-back weeks of higher claims. Our framework suggests that it's still the most likely scenario to get a hard landing. And that claims have begun an upward shift. and will continue to trend higher, when the market cares about that and sees it as a risk rather than great news, that that must mean the inflation data is going to get soft, that's going to get soft. I have no idea. But it is a very behavioral question, and we'll find out at some point. Yeah. Michael Cantorowitz, thanks for your time today. We appreciate it.

At heart landing, always out there over the horizon, right? Now it's China where Microsoft co-founder Bill Gates is expected to meet with Chinese President Xi Jinping tomorrow. The meeting will be she's first with a foreign private businessman in recent years. It comes with new data out overnight showing the Chinese economy is slowing. Could that be why the government is ramping up meetings with all these tech giants? For more on this, let's bring in Dennis Uncovic. He's a partner at Meyer, Uncovic, and Scott. He advises companies doing business in China.

And Dennis, we have seen this parade of technology and other executives through China over the past couple of months. We saw Elon Musk there. We saw J.P. Morgan's Jamie Diamond over there. We saw Tim Cook of Apple and now Bill Gates. What is going on here? On a micro level, I think that Xi Jinping wants to meet with Bill Gates because Bill Gates has, oh, Microsoft, not Bill Gates, but over the last year and a half has been reshoring a lot of their capacity out of China. So I think he's saying to Bill Gates, although I know you're running the Gates Foundation, why don't you talk to your folks back at Microsoft and tell them, and what a great place China is to do business. The other thing is that Xi Jinping has been cracking down really hard, Eamon, on companies, not just Chinese companies, but foreign companies doing business there.

And at this point with their economy, as you said, a minute ago going south, or at least not doing as well as they want, I think this is a, let's open up and be friends. Yeah, that's the tension here, right? Because Xi Jinping is the person driving the crackdown on these companies. And yet at the same time, he wants to do business. He wants the companies to stick around. If you're Bill Gates sitting there in the chair across from him or side by side as they tend to do in these state meeting kind of rooms, what do you say to Xi Jinping about that? I said to Xi Jinping, you have not been consistent in your approach to the United States.

Intellectual property is still a problem and you're trying to crack down on the operation of foreign companies here. I think if you see Zin Ping could be more transparent, which is very difficult in China, and you come to us and say, this is what we're going to be. we really want, we're going to do it. But otherwise, I think you've seen a lot of reshoring coming out of China over the last 18 to 24 months. And I predict it's not only going to continue, but I think it's going to grow. Dennis, we spoke with a senator yesterday who was concerned that we're basically not going to release the FBI's report about the spy balloon because of Chinese pressure. You couple that with these reports about whether they're putting a spy base in Cuba and the desire to press forward with this trip by Anthony Blinken, as I understand it.

Talk to us about what you think the significance of that trip is and if the choice is a worthy one. Kelly, that's a great question. My concern about China is that they're building up their military in a significant way across the world. And with the most recent spy center that they're talking about putting up in Cuba, I thought it was significant that neither the CIA nor the NSA had anything to say about that even existing. And this is at the same time that Biden, I think, at least publicly, is trying to bring the United States and China closer together. And so my concern in the long run is that I think U.S.-Chinese relations, because of these external factors, are going to make trade slow. You know, the Chinese have been putting a lot of pressure on Cuba for years, though, Dennis, right? I mean, I was in Havana back in 2015, you know, so years ago, all the buildings in Cuba are crumbling.

They haven't had any maintenance in 50 years. and you look down the Malacona and see all the different buildings that are crumbling. And then you see these skyscrapers that are gorgeous. And I asked my guide, you know, what are those? And he said, well, those are the Chinese buildings, right? So that's years ago they've been putting a ton of money into Cuba. And you wonder what kind of impact does that have on U.S.-Cuba relations. Is there an incentive here for the U.S. to pump some money in there and open up trade again with that island?

Amen, if Clinton, I'm sorry, if Blinken called me, which he won't, I would say it's time to the United States to totally change its view toward Cuba. I think we should open up our relationship with Cuba. I think we should lower the embargoes. And I think if we did that, the couple of billion dollars that it appears that China is going to be putting in there for its eavesdropping station or whatever you're going to call it, I think would be less likely to happen.

But I think part of this is the problem of the United States not really facing down to what Cuba is. And is this just geostrategory, right? I mean, you've got Taiwan is an island off of China. And China says to us, hey, you've got an island off of your coast, too. And so both of us can play at that game. And they are playing the game. You saw a couple of weeks ago when the spy balloon, we talked about that on an earlier show,

but more recently, the two ships that almost collided, you think that's an accident? No, the Chinese are ramping up their aggressive military view toward the United States. And I think Cuba's just the most recent example. Dennis Uncovic, great conversation. Thanks so much for your insights today. Really appreciate it. And a reminder, I will be diving even deeper into China and an FBI sting operation. that took down a Chinese government spy who tried to steal jet engine technology from GE in a special CNBC documentary.

That's coming up next week. Here's a preview. This is a spy story. This is as big of a case as we've had in 20 years. There is a Chinese spy who's trying to obtain secret technology. A story that shows how millions of American jobs now and in the future are on the line. I think every major American corporation in any of these fields needs to, to assume that they are a target to be either replaced or gutted. What's at stake here for the U.S. economy? American quality of life, American innovation,

ultimately American national security. This is not just Wall Street. It's Main Street. Our documentary, China's Corporate Spy War, premieres on Wednesday, June 21st at 10 p.m. Eastern. I hope you will watch it. I'm really looking forward to it. Amon, your reporting is unparalleled.

Further ahead in the show, a kick in the app. Jack Dorsey's dream. of a decentralized social app may be thwarted by Apple's strict payment and app store rules. But first, we'll talk Mediterranean restaurant chain, Kava, going public. Surging in its debut, it opened at 42 versus the $22 IPO price. Could it set the table for other restaurants looking to go public, as well as the IPO industry in general? We're back in a moment.

Welcome back. The Mediterranean restaurant chain, Kava, soaring in its public debut, climbing as much as 107% from its $22 IPO price. They sold about 14.5 million shares raising nearly $320 million and valuing the restaurant chain just shy of $2.5 billion. Investors are hoping the stock will be the next Chipotle, which has, of course, been a hugely strong performer for years and is up another 50% just since Jan 1, although it could disappoint like Sweet Green, which went public late in 2021 and has lost nearly 80% of its value since. Here to weigh in as Wed Bush's Nick Sedyon, Nick, it's great to have you here today. Kava. It's almost like I feel like I'm asking you for a stock trade. Do you buy it, sell it, hold it, eat it? Well, look, I mean, I think the valuation actually isn't that, you know, crazy at these levels.

You know, I mean, it's a mini Chipotle growing up two to three times the rates of Chipotle, if you believe they're long-term targets. And so if Chipotle is trading out of 25 times, you know, E.D. Bada multiple on our 24 estimates, there's no reason why, you know, Kava shouldn't be trading at, you know, 50 or or even above 50. And that's, you know, pretty much, I think, where it's going to be headed. Nick, where is Kava's market share coming from? It seems to me, I don't know, thing one about the restaurant industry, but they seem to be positioned sort of between fast food on the low end, and then you've got sort of the white tablecloth restaurants on the high end. Kava kind of in between those two things.

Whose market share are they eating here? No pun intended. Well, you know, the fast casual category is the fast-scoring category within restaurants. You know, a lot of that share is actually coming from food. service, believe it or not, despite the post-COVID recovery, we just haven't seen the kind of post-COVID recovery within full service that we thought we would see. And it's because, you know, fast casual and QSR are taking share that has, you know, a lot to do with the average checks. You know, you're seeing some trade downs, but ultimately it's convenience. And, you know, the differentiated

stories these restaurants are able to tell. I'm skeptical, Nick, that this is the next Chipotle. I just don't think it has broad enough appeal. You know, Chipotle, it has huge fans of young adults and teens, and Kava, frankly, is too healthy. I just don't think a lot of people are going, you know, for the olives and the, you know, the lamb meatballs. I personally love it, but it seems almost unfathomable that they could reach the kind of scale. I mean, if you look at the successful restaurant teens, Panera before it went public, there, it's almost as ubiquitous as Starbucks. And I just don't see Kava being that. Well, you know, certainly, you know, one of the detracting, you know, points of view.

The argument is over the last decade plus tastes have been changing. Millennials, Gen Z are becoming a greater proportion of the clientele. And certainly, you know, Kava is now in 24 states. They've been proven that they travel very well. The unit economics are certainly very compelling. And their same store sales growth trends are at the top of the industry. And so as long as they can keep the relative pricing. uh... attractive which they were able to do for example last year when

industry was you know seeing high single legit low double to pricing they were able to you know keep their pricing at less than five percent and grow margin so uh... as long as they can continue to do that uh... i think it's uh... you know potentially uh... a very powerful story you know nick as the father of a couple of teens who like both of these chains chipotle and kava whether they're healthy or not they will eat all of the

stuff uh... i wonder what the impact is though of of inflation you mentioned pricing just a second and go. Are you seeing now that inflation is sort of moderating a little bit and we're sort of, you may be out of the woods on the inflation question, maybe not. How is that playing out in the restaurant sector? Well, you know, the other side of this inflation is that grocery, you know, costs are actually going to come down much faster than restaurant, you know, costs, right? And so, you know, my worry is that you are going to see. Well, it's going to put some pressure on the top line. If you're a company-owned business,

model, you certainly are going to have some margin tailwinds after seeing, you know, over 200 basis points of margin pressure over the last couple of years. And so even with some incremental, you know, potentially some incremental, you know, top line pressure from potentially a soft and consumer environment, you've got the grocery competition now, I do think a lot of these restaurants, especially the company-owned models, are positioned very well because you're going to see that margin expansion over the next, at least for the foreseeable future. And what about the decline of shopping malls generally?

We saw a big story out of San Francisco. They lost a big downtown shopping mall. Malls have been taking it on the chin. Does that impact Kava at all? Is that where they're co-located? Do they have a different geographical approach in terms of the real estate? Well, they have a different geographical approach. In fact, they've done very well in both urban and suburban locations.

They're now, you know, I mean, they have 20 stores with drive-thrues, you know, similar to what Chipotle is doing. got the pickup lanes. And so I think that's going to be a greater focus going forward. Nick Setian, thank you so much for your time. Thank you for putting the lunch in Power Lunch today. Really appreciate your insights. And coming up, they say a rising tide lifts all boats. But even Tech's rally can't lift. Well, lift. That stock down 5% this year holding its shareholder meeting today. That's today's Tech Check. Power Lunch. We'll be right back. Welcome back to Power Lunch. Ten-year yield down sharply from yesterday. Stocks,

up. Who can make sense of it? We turn to Rick Santelli. Hi, Rick. Looks like we don't have Rick's Mike Kelly, so we're going to have to do the bond report without Rick Santelli right now, unless we can get him wired up in time. If that man can run a truck on natural gas, then he can figure out how to mic himself up in just a moment. I actually love coming up here at Englewood Cliffs to talk to you about bond yields because you always know what's going on in this treasure market. Today, I mean... In Washington, I talk to the Treasury all the time. I can never quite figure it out. They don't have the answer. Yeah. All right. The U.S. and European allies have been moving away from Russian uranium and Russian energy more broadly.

But one area that's avoided multiple rounds of sanctions is Russia's nuclear industry. But that could be about to change. Pippa Stevens is here with more. Hey, Pippa. Hello, Amon. While more and more lawmakers are calling to limit our dependence on Russian nuclear energy, but the issue is that Russia's dominance means at present there is no alternative. The country controls 38% of global conversion and 46% of enrichment. About 24% of the U.S. is enriched uranium comes from Russia.

Now, some utilities are self-sanctioning due to fears that Russia could cut off exports. Already this year, more than 100 million pounds has been purchased. That's almost the entire volume from 2022. That's driving up spot prices, which are hovering around 58 bucks, according to UXC. And that is lifting uranium mining stocks with the URA and URNM, both of double digits so far. year. Pippa, thank you. It's been a huge, huge part of that story, a late, and move and then a significant one. Let's get back to Rick Santelli now. Rick, maybe now you can explain what's going on with bond yields. Yeah, it's battery issues, whether it's my mic or a Tesla. All right,

if you look at import prices, import and export prices, we're both down sharply, but at 830 Eastern, we were down nearly 6% on year-over-year import prices, a three-year low. Was that what moved yields lower? Maybe that. So this, look at a chart of initial jobless claims. Back-to-back, $262,000 with revisions, you have to go back to October of 21 to find a higher level of initial jobless claims. Now, how did the markets respond?

Well, you heard Kelly? What's pushing yields down? Well, look what happened to two-year-note yields. And when you add in a two-day chart and compare it to yesterday, we basically negated all the pop that we had on the Fed meeting. And if you go further down the curve to a two-day rate,

of tens, not only have we matched levels pre-fed meeting, or below those levels. And that's something to pay attention to. That's put Tuesday tens at the most inverted in three months. And, well, with the equity markets going full tilt, it certainly seems though investors post-fed meeting have a view that doesn't necessarily agree with the doc plots. Amen, back to you. Rick, thank you. Sounded great. Meanwhile, the fight between J.P. Morgan and the U.S. Virgin Islands over the deceased sex trafficking financier Jeffrey Epstein heating up today. In a new filing, J.P. Morgan alleges the government of the U.S. Virgin Islands was complicit in Epstein's sex trafficking crimes. Among the most explosive claims in the filing,

J.P. Morgan says when the Virgin Islands rewrote their sex offender laws in 2012, they got Epstein's input into how to write the laws. The filing also claims officials looked the other way when Epstein arrived at the airport with girls and young women and even got visas so that Epstein could bring them to the island. The USVI is suing the bank, claiming it facilitated Epstein's illegal activity. And while J.P. Morgan settled with Epstein's victims, it is fighting back against this lawsuit.

And we now have a response from a spokesperson for the U.S. Virgin Islands attorney general that says this. J.P. Morgan Chase has cherry-picked and mischaracterized Epstein's interactions with U.S. Virgin Islands officials and residents in an attempt to distract and shift blame away from its role in facilitating Jeffrey Epstein's heinous crimes. So, Kelly, I've got a view as to what's going on here. Let me see if this makes any sense to you.

We saw a filing from the U.S. Virgin Islands on Monday dropping new emails from inside J.P. Morgan. We see this filing today from J.P. Morgan dropping embarrassing details about what was going on in the U.S. VI in terms of their relationship to Epstein. I think it's possible there's a settlement negotiation going on behind closed doors. And both sides are firing broadsides at each other in these court filings. just agree to settle for almost $300 million and then come out with these pretty explosive, you know, claims that this is true that the U.S. Virgin Islands got Epstein's input in rewriting their sex offender laws, facilitating his sex driver? Why settle and then come out with this? I mean, it's an incredible set of facts, right? But it has to do with the U.S. Virgin Islands, right? Not the women who were the victims. Right. So on one hand, you can look at the pool of women who are the victims here and say, that is a very sympathetic class of people. And we might be better off settling with them. But this U.S. Virgin Islands can.

If you talk to J.P. Morgan privately, they say, hey, wait a second. How is it possible that U.S. Virgin Islands is accusing us of not knowing what Jeffrey Epstein was doing? He was on their island. He was talking to their government. And so to be clear, that settlement Monday was with the victims. That was with the victims. Right. So the lawsuit with USVI continues to go on. And many, and you're saying this as well would make sense, Amen, that this is now setting us up for a settlement of this as well. Presumably. Now, I don't have any reporting that suggests that there are settlement negotiations going on, but they settled one of these. Right. Now the second one, the fight with the U.S. Virgin Islands is going on, and you see these filings dropping throughout the week. Boom, boom. Both sides saying we've got more ammunition on you. The implicit message, I think, in terms of the lawyers, is come to the table and let's talk. Right, if you want to make this go away and at what price. Amen, thanks. Coming up, new reports that BlackRock is close to filing for a Bitcoin ETF. Details on what we know. Is it futures? Is it spot? Bitcoin itself down almost 3% today. Power lunch is back after this. Welcome back around the crypto world in half a month. Mackenzie Sagalos traveling from city to city to attend the top crypto conferences and track all the headlines in the space and they are fast and furious. Today especially, we just heard this afternoon that Binance is reportedly laying off 50 employees after SEC charges, Tether reportedly losing its dollar peg again today and news about another potential crypto ETF from a big name.

McKenzie has all of those details. She joins us from Oslo today, Mac. How's it going? What can you tell us? Hey, hi, Kelly. I'm here at the Oslo Freedom Forum, an event that gathers hardcore Bitcoin developers and cryptographers, together with hundreds of dissidents from more than 100 countries. We're talking activists from Palestine, Venezuela, Afghanistan, Eritrea, and Uyghurs from China who are actively using decentralized technologies like Bitcoin, stablecoins, and the Lightning Network as alternative payment rails. Now, this emphasis on decentralized tools also encompasses privacy-focused messages.

platforms, which is crucial for those living under authoritarian regimes. These are the use cases that industry enthusiasts believe give Bitcoin its staying power. Indeed, BlackRock, the world's biggest asset managers, reportedly close to filing an application for a Bitcoin ETF and would use coin-based custody for that. But it's difficult to ignore the fact that we're still in the thick of a bare market. You already mentioned the fact, Kelly, that Reuters reporting that Binance U.S. is laying off around 50 people following that SEC lawsuit last week, came at the same. time as that Coinbase lawsuit. And the world's most popular U.S. dollar peg

stable coin tether has lost its peg amid a broader crypto market selloff. Ether is down 11% in the last week. Bitcoin down more than 5% to around $25,000, Kelly. We also, Mac, have some controversy between big tech and some of the decentralized players. Apple going after a Jack Dorsey-backed social media platform this week that was supposed to be the next Twitter. What's going on on that front? Right. So this week you had Apple warn that it could removed from its app store, a decentralized social media app similar to Twitter called Daumice. Now, this Dorsey-backed app allows people to tip one another. It's a function called Zaps, and it's able to do that because it has integrated the Lightning Network, which is a payment

system built on top of Bitcoin. Apple considers those apps in-app purchases, and, well, they want their cut. But of course, the whole point of peer-to-peer crypto payments is that there shouldn't be a fee, at least not the 30% that Apple charges for those in-app purchases. Now, Apple later reneged on its threat, but only if Doniz agreed to remove certain payment functionality. The founder of that decentralized version of Twitter is here in Oslo. And Jack Dorsey himself weighed in on Twitter saying that Apple building on and with Bitcoin could benefit their company immensely. The main concern is that the move could stall one key plan to ease the use of Bitcoin and turn it into a more convenient transnational digital currency. Kelly?

Hey, McKenzie, it's Eamon Javers here. I've got two questions. One you don't have to answer, which is who do you know in this building who gave you the assignment of going all over Europe in June? I love that. The second question is a real one, which you do have to answer, because I don't quite understand how a Bitcoin spot ETF would work. I mean, I guess we have futures ETFs that already exist, right? But how would that work mechanically? And for investors who are looking to get into that space, especially after we've seen the Bitcoin prices do what they've done over the past year, how would they begin to get into that?

Yeah, that's a great question. So so far, all those contracts have run through the CME. It's been in the futures market. And this is where Coinbase comes in to actually be a part of the custody around that because you are dealing with the spot prices. So it's a more complicated mechanism at play. We haven't seen it go through yet. But the fact that Black Rock is throwing their hat in the ring, very compelling. And it certainly could be a part of compelling more institutional money to come into the game. It will be interesting to see what happens with their application. McKenzie, thank you so much. Is that a cocktail party going on behind you? It sounds like a lot of fun there in Norway. Is it happy hour? It is, yes. And I'm headed there right after this. I knew it.

I knew it. McKenzie, thank you so much. Appreciate it. You ever been to Oslo? I've never been. I've been. Is it great? How are the cocktails?

Same as everywhere. Same as everywhere. Coming up, Liv and Miss the Ride, along with the broader tech rally. The sheriffs are down 4% since January, but could its 30% share of the North American market make it primed for a potential takeover, we'll discuss. And as we had to break, June's Pride Month, MCNBC is celebrating all month long, sharing stories of corporate leaders. Here is K.R. Lou, Google's head of brand accessibility. My advice is to tap into the power and uniqueness of your

identity. That is the undeniable essence of you and will in fact help feel your career growth. Early in my career, I hate who I was at work, a queer disabled woman in tech. It wasn't until I to study bringing all aspects of who I was into the work I did that I truly started to hit my stride. Don't shy away from bringing your whole self to work. Stand confidently in who you are and incorporating it into how you approach work will propel you to greater heights. Welcome back, everybody. Take a look at the ride sharing companies so far this year. Uber is up 75%.

Lyft is down 4%. Lyft is holding its shareholder meeting today. So let's bring in Dear Jerbosa now for today's tech check. Deirdre, I got to imagine Lyft shareholders are not happy with that comparison. To say the least, no. And, Amon, can you imagine if you were one of those Lyft drivers that was able to buy into the IPO before it went public? This is a stock that went public at $72 is now trading at, what, 10 in change? But the backdrop for this shareholder meeting, it is very, very grim.

The founders, they have stepped away from the day to day, and the company has lost some 85% of its value since that day it went public in 20%. Now, it is still bleeding money. It's been losing market share to Uber. And its new CEO, David Risher, who stepped into the position just a few months ago has yet to prove himself to Wall Street. So there's a lot at stake today for him and the company at large, so much so that some analysts are wondering if it might just sell itself. Here's what Risher told me in his first interview taking over as CEO.

If you cannot turn the business around, if Lyft continues to stay where it is or lose even more market share, is merging with another company. an option? It's not on my mind right now, to be honest, but I, I'll have to step back. I think there is a really strong position, a case to be made for a really strong number two. You look at any market that's got, you know, a couple of competitors in it, you really want both of them to be strong. And I think that's where we're going to go. So in a subsequent interview, though, he did soften that stance a little, saying that he's not focused on a deal, but he would be open to offers, which raises the question, Kelly and Aman, who wants it? Yeah, you know, Deirda, that's just what I was going to

ask you. Kelly and I were talking about this during the break. You know, who is the suitor who comes in here? Is it somebody in private equity? Is it an activist investor? Is it Uber themselves? Does Meta want this? Are they going to have people wearing Apple headsets in there? What is this? What's the deal? I think you're touching on an important point, and that is what Lyft does have is data. Years and years since the beginning of ride sharing actually started before Uber, data of what customers want to do. I don't think Uber wants that. It's got the clear number position and it's only been growing that. Raised question, big tech company, right? Like a Google that has a Waymo, maybe it could use Lyft's network or its existing customer base, but the regulators, I mean,

I don't see that going through. A lot of analysts I speak to you don't see that going through. Private equity, interesting, but this is a company still losing money that has cut a lot over the last year. So what else is there to cut? What can they do with this company? Automakers, that may be maybe the most interesting category earlier on when it was still startup, Lyft, took an investment from Cruz, so maybe there's something there for the network. But guys, I don't know. It's a big question. I'm going to throw it out.

And not necessarily likely. What about Tesla, right? If you're in a position where you're creating automatic cars that are going to drive themselves, you might want some access to the data. At least that might be valuable for Tesla, which is a data company. I don't know the exact numbers behind this, but I have a feeling Tesla might argue it has more data, right? And say that they were way more evasive. in the autonomous vehicle race.

Because remember, Uber and Lyft, they were going there, but they've scaled that back so much since being public companies, since being under shareholder pressure. So nobody. There's nobody left to buy it. Maybe Lyft itself can go. Maybe. Maybe. Is the LBO market, how's that looking?

We'll see. Thank you very much. No, I'm just rambling at this point. Deirdre Gbosa, we'll let you go for this version of tech check. The U.S. Open teeing off today, the first major tournament since that controversial PGA live golf merger that may or may not actually happen. We'll discuss the fallout, where golf goes from here. The USGA head joins us shortly. Power Lunch with you right back.

And welcome back. We only have three minutes left in the show and a bunch of more stories that you need to know. So let's get right to it. One more story just crossing. The Wall Street Journal reporting the Fed and the SEC are probing Goldman Sachs's role in SVB's final days. Both bodies are seeking documents related to Goldman's role as both a buyer of the securities and advisor on the capital raise for SVB. And Ticketmaster, seat geek. Before you jump in that, let me just offer, I don't want to say it's not surprising,

but it kind of makes sense that they're going to probe this because this played a key role in SVB's demise. Now, SVB's problems were self-inflicted absolutely, but they made a key decision to put up some of those securities for sale that revealed a capital hole that they then had to plug. It caused a cascade of issues that led to its very rapid demise, and Goldman was in, in, the middle of all of that, both talking about the sale ultimately with doing the portfolio

itself. So, you know, it's awkward. Look for Goldman no matter what and no matter what ultimately comes of this particular probe. And the problem for Goldman is once they start pulling these documents out, you never quite know where it's going to lead. You don't know what they're going to find. Absolutely. Right. Ticket master, Seekek, and other platforms are meanwhile agreeing to end those so-called junk fees. All those fees tacked on at the end of transactions. This is amid White House pressure President Biden first made ending the practice of priority after backlash over Taylor Swift's ERA's tour, Airbnb started doing it as well. Here we go. Airbnb started including all these fees. So like if you're, first of all, if you want a Taylor Swift ticket,

it's going to cost you. Right? They know it's a lot, but now you'll have more clarity about exactly how high that's going to go. But those surprise fees are a killer. And the fallout for Bud Light is continuing. The brand lost its number one spot on the U.S. list of best selling beers. owned by Modelo Especial. That's the new number one, according to Nielsen. Ironically, AB InBev is the owner everywhere except the U.S. where a constellation is. Right. So you wonder what the net, net impact of all this is, right? I mean, beer is beer, right? And there's only a couple of companies that make beer in this world. But their sales decline has been so huge. It's extraordinary. Amen, thanks for your time today. Yeah, thank you. And thanks for watching

Power Lunch. Closing bell starts right now.