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First Move with Julia Chatterley

The U.K. Unveiling Plans to Exit Lockdown; LG Closing its Mobile Business after Years of Losses; Godzilla and King Kong Give Hollywood Recovery Hope. Aired 9-10a ET

Aired April 05, 2021 - 09:00   ET


BECKY ANDERSON, CNN INTERNATIONAL ANCHOR: Well, Egyptian culture goes back thousands of years. Now, with that long heritage, it has a new place to

call home.

Twenty-two ancient mummies are now settled in a new museum in Cairo. The Royal Pharaohs were paraded through the streets on Saturday as they were

relocated to Egypt's new Museum of National Civilization.

The museum officially opened its doors on Sunday.

Thanks for watching. I'll be back in an hour's time for another edition of "Connect the World." For now, my colleague, Julia Chatterley up next with



JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.

Testing times. The U.K. unveiling plans to exit lockdown.

Smartphone surrender. LG closing its mobile business after years of losses.

And Monster Mash: Godzilla and King Kong give Hollywood recovery hope.

It's Monday. Let's make a move.

A warm welcome once again to FIRST MOVE. Great to have you with us this Monday where Wall Street's rally is set to resume, thanks to the March U.S.

jobs boom and hopes for a U.S. infrastructure bloom and Tesla's Q1 sales vroom.

Wow. I can't believe I got that all out. Analyzing all this for us though, Mohamed El-Erian, the Chief Economic Adviser at Allianz. Of course, we've

got the CEO of Verizon, Hans Vestberg whose company will benefit if the U.S. goes big on infrastructure.

Plus, Wedbush analyst, Dan Ives who says Tesla's delivery numbers represent a paradigm shift. We'll be explaining that, too.

Now, at this hour, we are seeing a labor-led leap in stocks futures. Friday's robust jobs number gains giving investors confidence in the

recovery. Remember, more than one million jobs recovered in the past several weeks including those upward revisions for January and February.

The bond market though having a say on this as well with shorter term bond yields, like the five-year yield rising to more than one-year highs, ten-

year yields also ticking higher today, too.

Once again the question is, whether the data justifies years of low rates. A lot, of course, depends on what happens in the rest of the world and the

I.M.F., the International Monetary Fund, set to raise its global growth target during the spring meetings this week.

But expect to hear a lot, too, about a two-track recovery or multitrack recovery as countries struggle with vaccine rollouts and virus spikes and

those nations that lag behind. Some 650 million doses administered worldwide, but the E.U., Brazil and India are still seeing infection spike.

Indian stocks fell more than 1.7 percent today as their health crisis worsens.

Reasons for caution layered with reasons for hope.

Let's get to the drivers. The U.K. government unveiling its road map for the staggered reopening of the economy in just a few hours' time.

At the heart of the strategy will be mass testing. Everyone in England will be offered two rapid tests a week. Salma Abdelaziz joins us now.

Salma, getting warmed up this Monday. Clearly, struggling there a little bit, Salma. Talk us through the reopening plans and how this two rapid

tests a week strategy is going to work.

SALMA ABDELAZIZ, CNN REPORTER: Good morning, Julia, so Prime Minister Boris Johnson as we speak probably is meeting with Cabinet officials trying

to push through the next phase of this road map, and this is going to be a pretty detailed announcement that we are expecting tonight because there's

a lot to go through.

First, nonessential shops are expected to reopen on April 12th. That's next week. So we are going to see a return of the economy in that sense and,

yes, testing. That's a pretty critical line there.

Up to two tests per week will be offered at that all residents in England. Can you have this delivered to your home or pick it up at your local

pharmacy or you can go to a testing center.

And why is this? Well, it comes down to the possibility that the government is trying to play a stick and carrot approach here. And I say that because

the other thing that is going to be announced is what are essentially called vaccine passports. The authorities here are calling a vaccine status

certificate, a document which will allow you to enter potentially venues and events. They're going to pilot the scheme this month.

It will be a document on the phone or maybe a piece of paper and it will have some few basic facts on it. Have you taken your vaccine? Yes or no?

Have you had a negative result recently? And have you had a positive result in the last few months that could give you natural immunity?

And with that bit of information, authorities are hoping they can use it so that you can go to a sports match or go to a concert or a conference.

They're going to be testing this out, the first event is going to be a comedy night in Liverpool on April 16th. We'll see how that all plays out

in accordance with the testing and everything else.

But the U.K. really trying to figure out how to resume normal life, what you do once you get on the other side of the mountain of coronavirus --


CHATTERLEY: Yes, it is an approach New York is taking, too. So we are all looking forward to that here. But it is interesting for an entire nation to

be looking at trying to tackle it this way.

What about international travel? I know there's talk of a traffic light system based on level of vaccines and also level of virus. Are we unlikely

to get any kind of concrete information over dates today, Salma?


ABDELAZIZ: That's a very key part, and I'll tell you, I personally, am very excited because many people here have simply not been allowed to

travel to go on any holidays, any vacations. Now, that could potentially resume on May 17th.

But as you said, it's still going to be strict. There's going to be a traffic light system. So countries will fall under one of three categories:

green countries, you can travel, no quarantine, nothing required. If it's amber, that means you can go, but you have to self-isolate upon return. A

red country means you have to agree to a government quarantine in a hotel.

But here's what we won't find out today. We won't know which countries fall under which categories. That's going to have to be a sort of, of the moment

decision if you will, based on numbers based on figures inside of those countries.

But the start here, the beginning here of international travel resuming, which, of course, is something that everybody is desperate to find out more

about, but still nobody ready to book their holidays because we just don't know which countries are going to fall under which categories -- Julia.

CHATTERLEY: Yes, so this is just late booking, doesn't it, rather than booking ahead and then you just have to sort of take your chance based on

what the situation is when you actually travel. It's going to be fascinating to see.

Salma, great to have you with us. Salma Abdelaziz there.

All right, let's move on. Calling it quits. LG hanging up its mobile phone business saying the competition in the market is too intense.

Selina Wang is on the story for us. Selina, this is an interesting one because it's been rumored for a while, they've been squeezed at the top end

by the likes of Samsung and Apple, squeezed at the bottom end by Chinese competition, and now, they're saying, "We give up."

SELINA WANG, CNN CORRESPONDENT: Julia, that's exactly right. This has been a long awaited move. You have LG now finally saying it is giving up on this

mobile phone unit. The company says that it's going to complete this wind down by the end of July, and this move as you say, it does not come as a

surprise because LG has been struggling against the competition for years.

But this once was considered a leading innovator in this market. For a long time, it was one of the top three global smart makers. It had pioneered the

Android operating system working with Google for this Nexus phone brand.

In the early days, its display and its cameras were considered some of the best on the market. But as the smartphone industry became more crowded and

more saturated, it just couldn't keep up.

On the low end, you had cheaper Chinese smartphone brands coming at you at Huawei, Xiaomi, Oppo, and Vivo. But on the high end, they were losing out

to the likes of Apple and Samsung, and this business as well, over the past five years, it lost around $4.5 billion and its market share had dropped to

about two percent. This is according to Counterpoint Research.

So for quite a while, investors have been waiting for some major shake-up in this business unit either a sale or a downsizing or potentially a

complete withdrawal from the market, which is what we see the company has ultimately decided on -- Julia.

CHATTERLEY: So very quickly, what happens if you've got an LG phone? Are they going to continue to service that? To help you with that phone? And

what is the focus going to be going forward?

WANG: Now, the company says that it is going to continue to meet supplies until May. It is going to continue with the warranty there as well.

In terms of it shifting focus, the company says that this exit is going to allow it to focus on growth areas so that would be electric vehicles, smart

homes, robotics, and artificial intelligence.

This mobile unit was about eight percent of revenue last year, so it is expected to have a dent on sales in the short term, but the company says in

the long term, it's going to be beneficial first for financials.

Now, when it comes to this vehicle components area, this is expected to be a major focus for LG. They've been investing and expanding in this area.

They have recently set up a JV with Magnus International to make components for electric vehicles, and Julia, there have been other bright spots for LG

as well. They had soaring demand for their home appliances and TVs during the pandemic.

So really, when we look at the saga with LG, the bottom line here is that in this smartphone business unless you're the top maker, it is incredibly

difficult to sustain yourself to be profitable. So LG decided to just cut their losses and focus on more promising areas -- Julia.

CHATTERLEY: Absolutely and it literally is cutting their losses because it takes a bite out of revenues. But if you can draw a line under those

losses, then it helps the financials in the end.

Selina Wang, great job. Thank you so much for that.

All right, let's move on. In a historic cybersecurity breach, now, the personal information of more than half a billion Facebook users has been

found online, including phone numbers, e-mail addresses and locations.

Now Facebook says, it is old data. It was already reported stolen back in 2019, and that the issue was fixed back then.

Donie O'Sullivan has more.


DONIE O'SULLIVAN, CNN BUSINESS REPORTER: So hackers in this case, apparently back in 2019, were able to exploit a flaw in Facebook systems

where they were able to match phone numbers of apparently hundreds of millions of Facebook users with their Facebook accounts.

Now, what that has now resulted in is someone has posted on a hacking form the details we are told of 500 million -- half a billion Facebook accounts.

Phone numbers, e-mail addresses, where people live, people's names, all of this information, really a treasure trove for cyber criminals who might

want to engage in identity theft.

Breakdown of the numbers by country. We see 32 million accounts in the U.S., 11 million in the U.K., 28 million in Saudi Arabia, and hundreds of

millions more around the world.

Facebook says it has fixed that flaw, that they said they actually fixed the flaw back in 2019. Obviously, this data is still out there.

We asked the company if they are going to tell users, if they're going to tell people who have been affected by this that their information is out

there. They said no comment at the moment.

One thing I should also mention as we were speaking to a cybersecurity expert who now has access to this data, and he was able to quickly pull up

the details of two of our CNN colleagues. So a lot of people impacted by this.

CHATTERLEY: Donie O'Sullivan there.

Okay, let's move on, an oversized ape and a radioactive lizard have come to the rescue of the U.S. movie industry, perhaps. "Godzilla versus Kong" just

had its biggest opening weekend of the pandemic so far.

Still, the numbers are nowhere near what you would have expected, of course, pre-COVID.

Paul La Monica joins me now. Paul, and you watched it so you can give us your view without giving away any of the endings and a tease only, but this

is quite a --

PAUL LA MONICA, CNN BUSINESS REPORTER: No spoiler alert. A lot of monsters.

CHATTERLEY: Exactly. No spoilers. Paul, talk us through the numbers.

LA MONICA: Yes. $48.5 million for the five-day holiday weekend, which as you point out, that is not something that in the pandemic era would have

lit up the headlines for being great numbers. It would have been okay, probably considered a disappointment, to be honest.

But $48.5 million given that a lot of people are still a little wary of going to theaters is a very strong number. $32 million over the three days,

you know, Friday to Sunday, and what makes it even more impressive, obviously, this is, you know, part of the HBO Max strategy, HBO Max owned

by WarnerMedia, CNN's parent -- to have movies come out in theaters, but also be available for streaming on the HBO Max service.

So full disclosure, my son and I did not go to a theater to watch this movie. We watched it at home, so we don't count in that $48.5 million


But a lot of people obviously felt that they wanted the big screen, life- sized adventure with this popcorn flick because this is your classic summer movie coming, albeit in early April.

You know, a very, very healthy debut and much better than some of the other HBO Max movies, Warner Brother movies that came out earlier this year, like

"Wonder Woman 1984" and "Tom and Jerry."

So I think it's an encouraging sign for the studios and the theater companies.

CHATTERLEY: Yes. And in the United States, the majority now of cinemas open, but they're still running capacity somewhere between 25 percent and

50 percent, in certain cases, too, and I think also to your point about the fact that it streamed instantly as well with HBO Max, you don't even have

to pay extra. That was the big decision they said. You pay your subscription, you get access to the movies at the same time as the cinema.

So it's going to be interesting to see.

Paul, the international viewings on this and the money that was drawn as well, interesting to me, particularly in China where there's been this

preference for local movies more recently, and even these guys were going to watch this movie, too.

PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think that when you look at these two characters, Godzilla and King Kong, they are iconic. They have a

global following. This didn't seem to be probably that tough of sell to international audiences, as well as obviously, domestic audiences in the

United States to see this movie.

I mean, you have a history with these two characters, and going toe to toe, I mean, it was a fun popcorn summer movie. I mean, we need it at a time

like this, to just sit back and relax and have this escapism, you know, nothing to worry about, about COVID-19 in this movie. It's all just about

whether or not a monster is going to knock down the office building you happen to be in.

CHATTERLEY: Cinematic comfort food, that's what this is.

LA MONICA: Exactly.

CHATTERLEY: I have to say, I don't know, I'm not sure I'm going to watch it, but I get all the points you make.

Paul La Monica, thank you so much for that.


CHATTERLEY: All right, let me bring you up to speed now with some of the other stories making headlines around the world.

A worrying milestone for India in the COVID-19 pandemic, the highest one day tally of new coronavirus cases. More than 100,000 cases registered on

Monday. As Vedika Sud reports, a new wave of infections is threatening to spin out of control.


VEDIKA SUD, CNN REPORTER (voice over): A rapid surge in COVID-19 cases in Mumbai has turned this parking lot into a 400-bed makeshift hospital.

India's richest state, Maharashtra which includes Mumbai reported more than 57,000 new infections, Sunday. With cases rising, the state government has

imposed night curfew and complete lockdown on weekends through the end of the month.

DR. RANDEEP GULERIA, MEMBER, INDIA'S NATIONAL COVID-19 TASKFORCE: We know that there are large crowding which occurs in certain cities in

Maharashtra, for example, Mumbai. Mumbai being the industrial capital and lot of movement of people happens in that state, not only from India, but

from outside also.

And with crowding and total lack of COVID-appropriate behavior, this actually is a classical case for the infection to spread.

SUD (voice over): The Health Ministry says the situation across India is worrying.

DR. VINOD K. PAUL, MEMBER, NATIONAL INSTITUTION FOR TRANSFORMING INDIA: The situation is becoming from bad to worse, and a serious cause for

concern. In some states in particular, there is a huge cause for worry.

SUD (voice over): India reported over a hundred thousand new cases Monday surpassing its all-time daily high of almost 98,000 new infections in mid-

September last year.

RAMANAN LAXMINARAYAN, SENIOR RESEARCH SCHOLAR, PRINCETON UNIVERSITY: The first wave happened under significantly stringent lockdown. Right now, much

of the economy is open. People are moving around. Transportation is open. So it's only natural that we will see a much sharper and steeper rise in


SUD (voice over): While the government has repeatedly urged citizens to wear masks and social distance, politicians have been busy addressing

thousands of supporters in poll bound states.

That's not the only cause for concern. One of the world's biggest festivals, Kumbh Mela, is taking place in India's northern state of

Uttarakhand. Tens of millions of devotees are expected to attend the event in the month of April.

GULERIA: Any event where you have a large number of cases -- a number of people coming together, and when in such an event there is no COVID-

appropriate behavior, people are not wearing masks can become super sweating events.

SUD (on camera): Eleven states and union territories have been categorized as states of grave concern by the Indian government. With the daily surge

in COVID-19 cases, expect more partial lockdowns in the coming days.

Vedika Sud, CNN, New Delhi.


CHATTERLEY: Israeli Prime Minister Benjamin Netanyahu appeared in court in Jerusalem today for the opening of his trial on corruption charges.

Prosecutors say he abused government power to advance his own interests calling it a quote, "serious and significant case."

Prime Minister Netanyahu has denied all wrongdoing.

Okay, so still to come here on FIRST MOVE. Electric stock, Tesla shares looks set to soar after deliveries beat forecasts.

And Verizon's new port call, the American Telco nets its first 5G deal in Europe. We're joined by the CEO. Stay with us. We're back after this.



CHATTERLEY: Welcome back to FIRST MOVE live from New York where U.S. markets are set to take a post Easter leap, higher as investors reacted

Friday to strong U.S. jobs report, the S&P 500 set to hit fresh records after closing above the 4,000 milestone for the first time on Thursday.

Stocks advancing even as the retail crowd pulls back on investments with activity on the Robinhood app reportedly down by over half in recent weeks.

GameStop also down by over nine percent premarket after announcing plans to sell more than three million new shares, raising money. GameStop down

around half to from its January peak.

And speaking of losses, investors are awaiting updates this week from Credit Suisse on the damage done to its bottom line due to its bottom line

due to its relationship with the U.S. based investment fund, Archegos Capital.

The collapse of Archegos raising uneasy questions about how excess liquidity is fueling risky market bets from investors desperate to find


Joining us now Mohamed El-Erian, the Chief Economic Advisor at Allianz and the President of Queens College at Cambridge University.

Mohamed, always fantastic to have you on the show. Thank you for joining us.

Let's begin with the jobs numbers. Your take on what we're seeing there.

MOHAMED EL-ERIAN, PRESIDENT, QUEENS' COLLEGE, CAMBRIDGE UNIVERSITY: It was a very strong report, Julia, and thank you for having me.

We had massive job creation. We have more hours work. And importantly, it was non-inflationary, and that's why the market likes it so much. The

market is looking for a transition from liquidity powered gains to gains powered by fundamentals, and it got some indications of that last Friday.

CHATTERLEY: The bond market and the bond market investors also reacted, too, if you look at the two year part of the interest rate curve, the five-

year part again, we're starting to see yields climb higher. I think at this stage, the market is predicting the Fed will be raising rates by December

of next year. That's far earlier than the Federal Reserve is saying. Bond market investors are testing the Fed once again.

EL-ERIAN: Yes, they are, and that is the big issue out there. It is that the marketplace believes that at some point, the Fed is going to have to

move earlier than what it has indicated, and the Fed gives no indication of wanting to do that. So we've got to see that play out.

But importantly, it's a well-behaved bond market. And early in the year, we were worried about a misbehaved bond market. So on the whole, investors are

relatively sanguine because it is very calm in the bond market so far. I don't think that's going to last, but that's what investors are seeing so


CHATTERLEY: How long can it last? Because the Fed can hold firm and continue to say, rising yields is a sign of positive economic momentum,

that we continue to recover at the point where it's no longer orderly, to your point, then they have a problem. How long does the calm last?

EL-ERIAN: So it can last a while, but you've noted earlier when you were talking about what happened with the hedge fund, but also we saw that

earlier with Robinhood. We've had three near liquidity accidents this year so far and that's something to keep an eye on.

The problem with maintaining such loose monetary policy with liquidity sloshing around the system is it encourages excessive and irresponsible

risk taking in some places.

So that's the big question. Do we have more near accident and actual accidents? Or do we have a smooth handoff? I think, it's pretty likely we

will have some near accidents, if not an accident.

CHATTERLEY: But you think the Fed only adjusts when we see an actual accident versus numerous near misses.

EL-ERIAN: Yes, that signal is very clearly they are no longer in the business of being proactive, they are going to respond, and that's the big



CHATTERLEY: You know, last time we spoke, you said something that I've been desperate to follow up on. We were talking about companies like Tesla

adding Bitcoin to the balance sheet or cryptocurrency to the balance sheet. And you said to me, you think that we see more companies doing this because

they don't know how else to mitigate risk.

And I was desperate to follow up and we were running out of time. Can you expand upon that conversation? Because it's very much tied, I think, to the

conversation that we're having now.

EL-ERIAN: Oh, absolutely. The problem of repressing the asset markets too much is that you've caused massive distortion. So the Fed has

understandably wanted interest rates to be very low.

Now, if you're an investor, government bonds are your safe asset. Government bonds is how you diversify away from equity. But if the price of

government bonds is artificial, as it is today, it is too high, this is no longer a risk mitigator for you, and so you look elsewhere.

Normally, you would look to gold, but there is issue with the gold market, so a lot more people have gone into Bitcoins as the risk mitigator, which

sounds absurd because Bitcoins are incredibly volatile.

But this is a situation where it is in the eyes of some investors, the least bad asset to use. And that's just an indication of the distortions we

are having in the marketplace, because of this massive intervention of Central Banks.

CHATTERLEY: What is it in your eyes, Mohamed, is it inappropriate investment approach? As you said, it's the least bad option in a battle of

the uglies it seems. Is this an appropriate investment choice to be making at this moment, when you have no other choices?

EL-ERIAN: So if you making it, it's because you believe that private sector adoption is going to continue, which I think is the right thing to

believe. But also you believe that governments are not going to interfere with this. That I'm not too sure.

So I tend to tell people be really careful. This is an asset that wants to establish itself, but it can only establish itself if governments allow it

to, and it takes away a lot from governments. It takes away what was called seigniorage, the ability to provide currency and benefit from that.

So I tell people, be cautious, because not only are you assuming on private sector adoption, but you also assuming on government tolerance. And that

second one, I'm not so sure about.

CHATTERLEY: I was having the debate last week that whether or not Bitcoin is too big to fail, and whether or not it is, governments could still step

in and say to regulated companies, in particular, we want you to stay away from this.

Your view on both of those things: too big to fail, and the likelihood of regulators saying, I'm sorry, we don't want you involved in this. It's

still too risky at this stage.

EL-ERIAN: So from a narrow perspective, it's not too big to fail. From a broader perspective, that would be another challenge to the liquidity

paradigm where investors simply bet on liquidity.

And as I said earlier, we've already had three near accidents. So you've got to be careful. You never know, which little fender bender is going to

cause a pileup on the highway and that's what you've got to be careful about.

CHATTERLEY: You know, one of the other things that people are pointing out at this stage and crypto enthusiasts, but it also ties to the point we were

making about the jobs numbers not being so inflationary, and that was the wage component is the money supply growth that we're seeing, record money

supply growth, and I'm looking specifically at what we call M2, increasing 27 percent year-on-year.

In the February numbers, it was almost as high in the previous month. Mohamed, when this is used as an excuse or a reason for investing in

cryptocurrencies, what do you make of it? And how should we as ordinary investors or ordinary individuals be looking at specifically that number as


EL-ERIAN: So remember, you have three types of investors in cryptocurrency. You have those who do it for defensive reasons and we

talked about that. You have those who do it for speculative reasons. But also you have those who truly believe that we are debasing currencies

because of money supply growth.

So they're doing it for positive reasons. They are embracing something that cannot be debased. So the more money supply growth you're going to see, the

more that's going to push people into the currency.

The problem with the money supply growth is that it made sense when the U.S. economy was facing headwinds. Now, the U.S. economy has massive

tailwinds, and yet we continue to grow the money supply at these incredible levels and that's why people are starting to say, hey, wait a minute,

shouldn't the Fed be slowly taking its foot off the accelerator?

CHATTERLEY: Yes, it's a whirlwind and the Fed is at the center of it having to make some incredibly tough decisions.

Mohamed, great to have your perspective as always, Mohamed El-Erian, Chief Economic Adviser at Allianz.

EL-ERIAN: Thank you.

CHATTERLEY: And President of Queen's College at Cambridge University. Great to have you with us as always.

The market opens next. Stay with us.



CHATTERLEY: Welcome back to FIRST MOVE. Wall Street is open for business after the long holiday weekend. We have a fresh record high for the S&P 500

right out of the gate as markets applaud. Concrete signs that the U.S. jobs market is on the mend.

The next catalyst for stocks could be upcoming corporate earnings and the prospects for President Biden's more than $2 trillion infrastructure

spending bill. Republicans now are saying they might agree to a more pared back bill.

Amazon meanwhile opening flat as investors await the outcome of a historic vote by workers in Alabama over whether to unionize. The company being

dragged into an embarrassing public back and forth the past few days over whether its staff gets appropriate bathroom breaks. As you can see right

now, the stock higher by some four tenths of one percent.

Meanwhile, Tesla shares surging after the EV maker posted record deliveries of over 185,000 cars in the first quarter of 2021. So demand was strong

including in China.

My next guest says the results are a paradigm shift.

Joining us now is Dan Ives. He is Managing Director of Equity Research at Wedbush Securities. Dan, great to have you with us. Explain what you mean,

a paradigm shift.

DAN IVES, MANAGING DIRECTOR OF EQUITY RESEARCH, WEDBUSH SECURITIES: Yes, right now, I mean, there's a green tidal wave going on not just in China,

but we've been seeing it domestically and in Europe, and Tesla, if you look at these delivery numbers, just given the chip shortage supply issues,

whispered numbers were about 10 percent lower.

So this is really what I view as a game changer not just in terms of showing where the demand is, but the trajectory for the rest of the year

and going into the next few years, and I think this is one that has been a painful selloff, but I see a thousand dollar stock in the next 12 months.

CHATTERLEY: We'll come back to that, Dan, because I want to unpick some of what we saw in the results. And one of the things I mentioned there in the

introduction because it felt very important was China and demand in China, particularly in light of recent headlines, the concerns over whether the

cars have been suspended for purchases by government workers over fears of spying.

This is a pivotal market for Tesla, as you and I have discussed many times. How worried are you by some of the headlines that you've seen there about

impact perhaps on future demand?

IVES: Yes, and you hit on a great point. I mean, China, that's the core linchpin to the bull thesis. I mean, that's about 40 percent of overall

deliveries for Tesla for next year. So given some of that noise, given the U.S.-China cold tech war, it's not just Apple, Tesla caught in the middle.

When you look at these delivery numbers, I mean, China really we're seeing skyrocketing growth on the EV from not just from domestic players, I think

Tesla more and more is gaining share there. You combine that with what we're seeing in Europe and the U.S., and I think this is really just the

star, this next leg of the EV story going forward.

CHATTERLEY: Let's talk about the U.S. and potential green catalysts, too, because we have Biden's -- President Biden's infrastructure bill where a

huge focus is on cleaner energy, electric vehicles, boosting charging capacity, for example, too.

Buried within this and this is something that you believe is an underestimated positive catalyst for the stock, the removal of the ceiling,

which Tesla obviously now has hit, which is the $7,500.00 tax credit for buying an electric vehicle. You think that ceiling gets removed?

IVES: Yes, that's the paradigm change. I mean, of course, last week, Biden kicking off this EV green tidal wave, but it comes down to right now GM,

Tesla, 200,000 ceiling in terms of units they hit. So you buy those cars, you don't get a tax credit.

We believe based on our contacts in the Beltway if that ceiling gets removed, so credits get restored to Tesla and GM, as well, as we hear and

we believe, the $7,500.00 credit could potentially go to $10,000.00.

And I think that's significant in terms of catalyzing green growth in terms of from price parity, I think Tesla, take a step back. I mean, U.S. is two

percent of EV in terms of EVs as a percent of auto compared to China, four and a half percent, and Europe, more than that.

U.S. has lagged, I believe the green tidal wave gets kicked off now and Tesla front and center.

CHATTERLEY: It's such a tiny fraction of the market, EV, I think we have to remember this and we've again, we've talked in the past about

competition being one of the biggest risks, and I believe Tesla is around 80 percent. It's got 80 percent market share in the United States.

You know, we recently spoke to Volkswagen, and the CEO was talking about their massive investment in electric vehicle capacity, charging capacity,

for example, and saying, you look, it is game on versus Tesla at this stage. Do we need to stop thinking about the EV market as a zero sum game?

All of these can continue to compete in the market and expand, even if Tesla's market share narrows, it can still sell more cars, because the

market at this stage is so tiny and will grow.

IVES: It's a key point and it's really the most important point if there's any takeaway. We're talking about a $5 trillion market over the next

decade, we're still in that early part of it. This mean many winners, many boats that could fit in the ocean. You look at VW, I believe they're going

to have massive success. We also view them as a potential partner with the Apple Car.

Look at what's happened to GM domestically, and I think this is just starting off and that's why these automakers, you see what's happened to GM

stocks, they're not treated as automakers in the market, they're treated as a disruptive technology benders.

And I think that's what we're seeing when you take a step back on these delivery numbers. It shows that massive pent up demand just starting to

take hold, despite noise and the chip shortage.

CHATTERLEY: Yes, I was about to say, there will be some traditional investors' eye rolling there with your comment over automakers as

disruptive technology creators, but that's what makes markets.

So is that the point and it ties to why the market has been so beaten up, and I guess, Dan, you're going to argue it's a buying opportunity, because

I know you've raised your target price on Tesla, too.

IVES: Yes, because I think part of it is that it's viewed competition. You're starting to see boom come off the roads in some of these traditional

EV players. I believe this is just a speed bump in terms of where it broadly goes, in terms of the $5 trillion market, and this green tidal wave

globally in terms of plan.

The ecosystem being built in front of our eyes, not just globally, but domestically.

CHATTERLEY: Yes, and charging capabilities. I mean, VW, they said those charging facilities can be used by anybody. Another game changer going

forward, too.

Dan, always great to get your perspective.

IVES: Thank you.

CHATTERLEY: Dan Ives, Managing Director of Equity Research at Wedbush Securities.

All right, coming up after the break, Verizon arrives in the U.K. Hans Vestberg joins us as the company celebrates a 5G deal at the English port

of Southampton. Stay with us.



CHATTERLEY: Welcome back to FIRST MOVE. From auction houses to basketball courts, digital artists like Beeple to people like you and me. It seems

wherever you look, NFTs, they are the hottest ticket in town, but for all the buzz right now, there are worries that these new kids on the blockchain

could end up as one hit wonders if the boom tends to bust.

Clare Sebastian explores the crypto craze.


CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT (voice over): This is not just a 12-second clip of basketball star, LeBron James. It's a potential slam

dunk investment.

MICHAEL LEVY, FINANCIAL ANALYST AND NFT INVESTOR: I purchased that in October for about $3,200.00 at the time, and a different version of that

same moment sold for $208,000.00 just a few weeks back.

SEBASTIAN (voice over): Financial analyst, Michael Levy has been investing in NFTs or non-fungible tokens for about seven months focusing mainly on

NBA Top Shot, a collaboration between the National Basketball Association and blockchain company, Dapper Labs.

In the case of the LeBron moment, the NFT is a digital certificate of ownership linked to the clip. NFTs can prove ownership of anything -- GIFs,

digital artworks, even a virtual house.

SEBASTIAN (on camera): The point is each NFT is unique and therefore collectible, a bit like a physical basketball card.

SEBASTIAN (voice over): Levy has so far spent $175,000.00 on Top Shot moments. He now estimates his collection to be worth more than $15 million.

LEVY: It's a 100X return in six months. It's something that you can't find without going through a ton of risk and taking on, you know, a level of

speculation that probably isn't the smartest move for most people.

I think that the NFT space as a whole could definitely be considered above that --

SEBASTIAN (on camera): The message, whatever your online collectible of choice, this is a Wild West and investors need to tread carefully.

SEBASTIAN (voice over): The problem is, just like the pioneers in the movie "How the West Was Won" most of the teams are not being careful. NFTs

have created a race to colonize the internet, an endless caravan of buyers and sellers sending valuation skyrocketing.

And because NFTs are stored on the blockchain, anonymous decentralized databases, and often paid for using cryptocurrencies, there's no sheriff in

this town.


NICHOLAS WEAVER, UNIVERSITY OF CALIFORNIA BERKELEY: We don't know how many of the transactions are even legitimate because somebody could easily be

selling to themselves or selling to a friend and selling back and forth, and there's at least indications that a lot of the trades are what we'd

call wash trades in the stock industry.

SEBASTIAN (voice over): Analysts at, a website aiming to provide third party data on the NFT space say they are seeing just that.

This is an example of an artwork that was sold between the same two accounts five times in an hour last July, rapidly inflating the value to

over three and a half thousand dollars.

LEVY: You do see it pop up periodically, hey, you know we're all going to invest in this new unproven token and let's all tweet about it or let's all

put out blogs about it, and then we'll sell it.

SEBASTIAN (voice over): It's clear in this new digital Gold Rush, all that glitters is not necessarily a good investment.

Clare Sebastian, CNN, New York.


CHATTERLEY: I wonder what the capital gains tax is on an asset that you've bought and sold to yourself to inflate the price. Just saying.

We are back after this. There's more to come.



CHATTERLEY: Welcome back to FIRST MOVE. The latest overseas import to arrive at Southampton docks in England is the U.S. telecoms' giant,

Verizon. The company is a household name here in the United States, but it's relatively unknown in the U.K.

Verizon will build a private high speed 5G network within the port, which is a major point of entry for goods coming into Britain.

Hans Vestberg is CEO of Verizon and he joins us now. Hans, congratulations on the deal. I'm sure there's plenty of European telcos that have liked to

have been in charge of this. What's it going to mean in practice?

HANS VESTBERG, CEO, VERIZON: In practice, this means that we have been on to this 5G mobile edge compute for some one and a half to two years. We are

the only commercial sort of 5G mobile edge compute here in the U.S. Now, we see this also spreading around the world.

Where we do private 5G network, we are basically doing a network that is a secluded for that operator, for that enterprise, in order for them to have

low latency enterprise application that needs real-time for taking decisions and this is what we're doing with the port authorities here and

offering what we are doing.

So we are bringing our know-how and how we've built this together with partners in the U.K., so we are, of course, global, but our consumer brand

is only in the U.S. That's why we are not equally known in places like U.K.


CHATTERLEY: Yes, important point to make. How quickly can this be up and running? And I know you were looking at opportunities across Europe and

Asia Pacific as well. How quickly can you start to build these kinds of deals and expand further?

VESTBERG: I think that this is now going fast. We have been having a funnel over local tribes and tests with customers across Europe and Asia;

and of course, here in the U.S., we have a lot as well. And now we thought we can start replicating them and that's what we're about to do and with

partners that also have applications, because sometimes you need an application that can do all this control of different type of devices or

bolts or whatever it might be in that sort of secluded 5G private network.

So I think these can scale very fast. And as we said, when we had our Investor Day a couple of weeks ago, we believe this in a couple of years

will be a $10 billion business. And so far, we are the only carrier in the world that has commercial solutions for this at this moment.

CHATTERLEY: You know, if I bring it closer to home as well, and we talk about more broadly about 5G rollout, you also said on the Investor Day that

your expectation is by 2023, fifty five percent of your postpaid customers will have a 5G phone, it's around nine percent at the end of 2020.

Just in terms of the shift that we're seeing from sort of 4G to 5G capabilities, never mind rollout, it seems to be far quicker than the shift

when we went from sort of 3G capabilities to 4G, am I correct in that respect?

VESTBERG: Julia, you're absolutely correct. That's what we've seen between all the Gs, 1G to 2G, 2G to 3G, 3G to 4G and 4G to 5G. It's always been

faster to the next G and that's the same thing here.

We're actually quicker deploying 5G and the uptake from consumers is also quicker on 5G devices. But the difference with 5G is that we also have

enterprise solutions and we have home solutions on 5G and that has never happened before that we have three different use cases on the same

technology we're deploying.

And that's, of course, the excitement around 5G because there's so many different capabilities of 5G that we didn't have on previous wireless


Everything from low latencies, enormous throughputs, reduced battery consumptions. So that's part of it.

CHATTERLEY: Okay, let's talk about Biden's infrastructure bill as well. A significant chunk of this is technology. We've talked in the past about the

need for even if we just stay in the United States here, greater, more fair and even distribution of broadband 5G access.

Hans, what do you make of this plan? Is there anything missing that you think actually, we need to be seeing more focus on?

VESTBERG: What we have seen in the last 12 months in this pandemic is, of course, a leap from five to seven years, how to use technology. Everything

from home, remote from home work, education, telehealth and everything like that.

So of course, when you see that leapfrog, technology is not catching up, and that doesn't really matter where you are in the world, it's the same.

That of course shows that infrastructure or mobile mobility, broadband and Cloud, these are 21st Century infrastructure. So of course, it's very

important to deploy this.

But what I think is important is to think about accessibility of it, affordability and usability that all three needs to play in order for you

to actually have this big divide closed, meaning access to broadband, but also you can afford it.

And finally usability, applications that are useful like remote learning, et cetera and that has to come together when you think about these type of

infrastructure bills.

CHATTERLEY: Is the government thinking like that, Hans? I mean, you're clearly having conversations with them. I hope they're asking your advice.

VESTBERG: I, of course, have been working with the BRT where I am on the infrastructure committee. We are giving them all the advice. We have seen

them and one thing we have to be very clear, the networks in the U.S., they performed extremely well during the pandemic compared to the other regions

where they actually had to decide to take down applications.


VESTBERG: And I am proud of us and the whole industry that have been doing this. So hopefully, they are listening to that and understanding how they

have been catering for this where we are right now.

CHATTERLEY: I mean, we talked about it, you had to ramp up CapEx because you initially saw with the boost in streaming, with the wireless networks,

immediate stress on the network that you had to manage and clearly did.

What are you seeing today as we enter a phase of recovery and greater proliferation of things like vaccines? Are you seeing a shift back to urban

environments, to less streaming? Just give us a sense of what your data is telling us about the recovery?

VESTBERG: We have to confirm. Yes, we increased our CapEx since the dependent pandemic started because we didn't know what will happen. But

honestly, our networks were performing well without that CapEx, but we want to do it for precaution.


VESTBERG: If I look today, we see clearly a shift back to urban areas. Remember, during some time, the handovers in the mobile networks were some

50 to 60 percent, meaning people didn't move. We're seeing that coming back right now.

We see also less of streaming and gaming, but we still see a lot of video collaboration across the border, and I think that many companies like

Verizon still are sort of a doing a lot on video with our employees so that, we still see there.

We still see a lot of normal communication, phone calls, text messages being on a high peak.

CHATTERLEY: I am glad that that makes me normal. Hans Vestberg, great to have you with us. Thank you so much for the update. Congratulations. Normal

-- on the deal. The CEO of Verizon there. We will speak soon.

All right, that's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages. Search for


In the meantime, stay safe. "Connect the World" with Becky Anderson is back up next.