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Quest Means Business
Disney Sues Florida Governor DeSantis And Oversight Board; UK Blocks $69 Billion Microsoft-Activision Merger; New Book Examines Missteps By US Authorities; First Republic Stock Drops Again; Europe Leads On Crypto Regulation; Xi And Zelenskyy Speak; Kim Kardashian On Her Mom. Aired 3-4p ET
Aired April 26, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:25]
ELENI GIOKOS, CNN INTERNATIONAL HOST: In the final hour of trade, markets have shed the day's early gains. Let's take a look at what the Dow Jones is
doing right now.
We are currently in the red 0.7 percent. In fact, all eyes on the big tech companies, they're out with earnings. We'll be delving into some of those
numbers throughout the show.
Well, those are the markets and these are the main events.
Disney sues Florida Governor Ron DeSantis.
Microsoft and Activision plan to appeal after UK regulators block their deal.
And spring could spell the end of crypto winter. I'll be speaking to an analyst who sees Bitcoin going back to $100,000.00.
Live from Dubai, it is Wednesday, April 26th. I'm Eleni Giokos in for Richard Quest, and this is QUEST MEANS BUSINESS.
All right, a very good evening.
Tonight, Disney is striking back against the governor of Florida accusing him in a lawsuit of retaliating against the company for its opposition to
his Don't Say Gay Bill.
It is the latest twist in a battle between the House of Mouse and Republican Ron DeSantis, a possible presidential candidate. The feud is
raising questions about Florida's business friendly reputation, all right, and it is weighing on Disney's stock. It is down at this moment, let's take
a look at those numbers.
All right, the company's lawsuit claims that Florida's actions are jeopardizing its economic future there.
We have Steve Contorno, who is in Florida for us. Great to have you on the show.
Look, this is a drawn out feud. It seems to now be escalating. Take us through the latest.
STEVE CONTORNO, CNN REPORTER: Yes, this this has been going on for 14 months. It started with the state's decision and then Governor DeSantis
championing a bill that prevents teachers from instructing students on sexual orientation or gender identity up until third grade. Disney spoke
out against it; DeSantis didn't like it, and so DeSantis went after Disney's special taxing district and they have been in this tit-for-tat,
back and forth over the future of this district for months now.
Well, today DeSantis is appointees on that district voted to nullify past agreements between the board and Disney. Disney shot back with this lawsuit
that claims that DeSantis, "engaged in a targeted campaign of government retaliation, orchestrated every step by his administration." And they are
saying this is punishment, that this is a violation of their contracts -- national contracting laws, as well as their First Amendment rights.
Now, the DeSantis administration, though, has fired back and they said they are not backing down. They have released their own statement that says, "We
are unaware of any legal rights that a company has to operate its own government or maintain special privileges not held by other businesses in
the state."
So this is all now headed to the courts where we expect this fight to continue for the foreseeable future.
GIOKOS: Yes, and what is interesting, and you know, you spoke to this, that Disney says that DeSantis orchestrated at every step, a campaign to punish
Disney that now threatens the company's business. It is perhaps one of the biggest employers there.
To what end, do you think DeSantis is trying to punish Disney the way that he has actually been -- you know, this is how he has been phrasing it, it
is sort of a punishment trying to revoke rights.
CONTORNO: Yes, and it is absolutely being framed that way, and it is something that he is not only taking action on, but it is something he is
using as part of his political narrative, as he goes around the country, building the case for a likely presidential campaign.
I've seen him speak many, many times now in multiple states and this is a big piece of his stump speech. It is a big reason why he has become such a
huge figure in the Republican Party here, and so he has said, he is going to go to the mat to continue this fight.
Now, where does that actually end? Well, you know this is going to be fought out in the courts for a while. DeSantis though is threatening more
legislative action from the state of Florida.
[15:05:07]
He has even floated the idea of building a competing theme park next to Disney, of building a prison next to Disney's Magic Kingdom.
So he has said he is willing to go as far as it takes and Disney can get the heck out of here if they want to. So that's the degree to which he is
willing to go to, to continue this fight against Disney, but Disney now is saying we're going to let the courts decide who is in charge here.
GIOKOS: Yes. This is going to be drawn out as you say.
Steve Contorno, thank you so much. Great to have you on the show.
Well, Microsoft and Activision are firing back at UK regulators for blocking their $69 billion merger. Activision, the developer of games like
"Call of Duty" says the UK is clearly closed for business. Its CEO vowed to fight on saying today's decision is far from the final word.
The UK's competition authority said the merger would stifle innovation and choice. It said Microsoft already holds up to 70 percent of the cloud-
gaming markets, and that merger would strengthen the company's position.
All right, Activision's shares fell sharply on the back of this news. They are more than 10 percent lower and well off Microsoft's offer of $95.00 a
share, and you can see those playing on your screen right now. Microsoft's stock is up more than seven percent.
Mergers typically hurt the acquiring company's share price, at least in the short term. Microsoft's gains also reflect its latest earnings reports.
Revenue at its cloud division jumped 16 percent in the first quarter.
We've got Clare Duffy, joining us now. Great earnings coming through from Microsoft, a merger that perhaps might not happen. It is being been blocked
by competition authorities in the UK.
Can you take us through what we are expecting with regards to the pushback from both Microsoft and Activision saying they're going to fight this?
CLARE DUFFY, CNN BUSINESS WRITER: Right, Eleni. This deal would have been one of the biggest tech acquisition deals in history. It would have made
Microsoft the third biggest game publisher in the world. And so, this is really a blow to Microsoft and to Activision the day after Microsoft's
really positive earnings results.
So both Microsoft and Activision say they plan to push back on this. Microsoft had already agreed to make a number of concessions in an effort
to try to win over lawmakers, for example, by making some of these really popular games that it would be taking over available on rivals' platforms
for a number of years, but it appears that was not enough to win over UK regulators.
And this really adds to the regulatory pressure that these companies are facing over this deal. The US Federal Trade Commission had already sued to
block the deal in December, and EU regulators were sort of evaluating it as well.
GIOKOS: All right, Clare, thank you so much. Great to have you on the show.
We've got Rahul Sood, who is a former partner at Microsoft Ventures. He is now the CEO of Irreverent Labs, and he joins us.
Great to have you on.
I think you were part of, you know, the people watching on, anticipating that this merger will probably happen. What is your reaction to it being
blocked?
RAHUL SOOD, CEO, IRREVERENT LABS: You know, I was surprised to be honest with you. I don't think the CME is doing anyone any favors with this other
than maybe the regulators who can say, yes, we stopped Microsoft from doing this deal with Activision. Like, it doesn't make sense, that's my first
thought.
GIOKOS: Well, I mean, they say that it's going to stifle competition in cloud-gaming markets. Do you agree that there is some truth to that?
SOOD: No, not at all. I mean, cloud gaming is so small, generally speaking, Microsoft has already agreed to give "Call of Duty" to NVIDIA for their
cloud gaming.
You know, cloud gaming is a small part of the market. I don't know -- I don't think they fully understand what cloud gaming is and I think they
were just looking for something or anything to say that this is the reason why we're shutting it down.
I think there is much bigger opportunities with regards to the IP, movie rights, maybe using it to train their AI, things like that. But, you know,
the CME didn't talk about any of that stuff. They just, focused directly on gaming and they are going to hurt Activision for this.
They're going to help maybe the shareholders temporarily, I think the shareholders might be a little happy because Microsoft might have been
overpaying for it based on the market. So I just don't think they're doing anybody any favors except maybe Microsoft shareholders for now. But you
know, at the end of the day, this is just terrible for the UK, I think.
GIOKOS: Look, I think there was a lot of speculation that it might have been other players that could be interested in Activision, do you think
that we'll see some new companies emerge circling this?
[15:10:04]
SOOD: No, not at that price. No, I don't.
Look, I think that if this deal expires and Activision gets the $3 billion, you know, cancellation fee, I really think this is just a slow death nail
in the culture at Activision. All it is doing is it is creating more confusion amongst the people that are working there, and it is just going
to be a culture destroyer.
I think this is the beginning of the end of a really, really great, you know, company with some great, great products that could have been five
times what it is right now under Microsoft.
But you know, with this deal not happening --
GIOKOS: So, Rahul you're saying that yes, you're saying that -- basically, you're saying if this deal doesn't happen, this could spell the end of
Activision. That's the dire situation you're expecting.
SOOD: I think so. I think just culturally, yes, yes, absolutely.
I think culturally, they are already kind of in challenges, you know, coming into the deal. And, you know, and Microsoft was going to bring a lot
of, you know, structure and comfort to the place where, you know, people were sort of unsure about their jobs and their future. And you know, that
the culture was quite aggressive there. You probably read some things about Activision in the past.
And, you know, none of that would have survived under Microsoft's leadership. So, yes, look, I think this is really bad for Activision if it
doesn't go through like they need to make this happen.
GIOKOS: Yes. I think there was major fear, and I mean, we've heard that from US and European regulators that Microsoft could basically get control
over various games, and I think "Call of Duty" was mentioned quite a few times. Why is there a fear that emerged in this regard that Microsoft would
basically be dominating?
SOOD: This is an old school fear of tech in general. You know, back in the days of being very few tech companies, and if you recall, way back when
Microsoft Windows was under the anti-trust with the US government in the 1980s or 90s, or whatever it was, this is kind of the same thing where
people are thinking that if Microsoft gets a hold of "Call of Duty," somehow, they're going to have a monopoly in gaming. It's just so not true.
It's far from reality.
None of it makes sense. Like the reasoning that the CME has for doing this makes no sense. If they had talked about things like IP rights, as it
pertains to, you know, OpenAI and the partnerships there and things like that, and they had some good reason, maybe you could kind of squint and see
something there.
But at the end of the day, you know, I just think nobody wins from this decision today.
GIOKOS: Yes. I mean, that is an interesting insight. What about innovation in the space with a deal like this not going through or falling through,
does it hurt more innovation within the space?
SOOD: Well, I think what it does is it makes it challenging to think about innovating in certain markets, for example. You know, like, if you're a
startup, are you going to start up in the UK or are you going to choose another country?
You know, if you're innovating in this space, are you worried about, you know, regulators kind of stifling your innovation and things like that? I
mean, that's a real worry. It's a worry in the US and other industries. And, you know, certainly it would be a worry for me, if I were starting up
a new company. You know, we are worrying about regulators kind of regulating by enforcement or sort of pushing their opinions on something
that they may not know enough about.
And clearly, based on this decision, they really don't understand cloud gaming, and I agree with Brad Smith on this. I think it's just -- I just, I
don't --
GIOKOS: Very quickly, Rahul, do you believe that they can get this appeal? That they can push and motivate to get this through?
SOOD: Well, I mean, maybe based on the reaction today, possibly. I think there have been enough people on TV kind of talking about this, that they
might possibly, you know, say, ah, well, you know, maybe we should have let this happen. But other than that, I don't think so.
So, you know, so if there's enough public pressure to make this happen --
GIOKOS: Rahul, I am going to get into trouble for this. How many screens do you have in front of you right now? I feel like you're in your game room.
SOOD: Yes, I have one, two, three, four, and one giant one, so five.
GIOKOS: I knew it. Rahul, great to have you on. Thank you so much. Speak soon.
SOOD: Thank you.
GIOKOS: All right, in the face of a growing threat from North Korea, the United States is sending more nuclear deterrence to Seoul. We're headed to
the White House next week where Joe Biden is hosting his South Korean counterpart. Stay with CNN.
(COMMERCIAL BREAK)
[15:17:17]
GIOKOS: The United States will send a nuclear armed submarine on a visit to South Korea as part of a new agreement aimed at deterring North Korean
aggression. The deal was announced by President Joe Biden and his South Korean counterpart, Yoon Suk Yeol, at the White House that happened a short
time ago. Let's listen in.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: When it comes right down to it, it's about what you believe, what you stand for, what kind of future you
want for your children and grandchildren. And right now, I believe the world is at an inflection point.
The choices we make today, I believe are going to determine the direction of our world and the future our kids for decades to come.
(END VIDEO CLIP)
GIOKOS: All right, Phil Mattingly is at the White House for us.
Just how significant is it that the US is going to send this nuclear-armed submarine and what this means for the region?
PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, it is a tangible move that underscores I think, some significant concern inside the
US on really two fronts.
One, keep in mind from a historical perspective, it has been more than four decades since they sent anything near the capability like this over to
South Korea, in terms of an asset or a capability type of basis.
I think more broadly, though, it underscores there is very real concern inside the Biden administration right now, that the direction particularly
of domestic politics and domestic sentiment inside South Korea about not just very real concern related to North Korea, its growing nuclear
capabilities, the sheer tempo of its nuclear testing, but also it is concerned about the kind of stability or sturdiness of the US Defense
assistance agreements that they have right now.
And I think what you saw over the course of the last four or five months, this was really put together behind closed doors at the request of
President Yoon working together at a very high level from President Biden's national security team is a recognition that while beyond some of the
assets and capabilities, this isn't a dramatic shift away from what has long been the extended deterrence posture that the US has kind of offered
to many of its allies, putting it in a very concrete, very, I think stabilizing terms and was viewed as essential in this moment in time, not
just because of the North Korean threat, but also because of real questions about the US role and leadership in the world.
GIOKOS: Yes, and that's a really good point, right, and it sends an interesting message globally, doesn't it?
MATTINGLY: I don't think there is any question about it. I think when you step back a little bit, when you think through how President Biden has
approached foreign policy, particularly in the wake of his predecessor, but I think this has long been his approach in the arena for the better part of
the five decades that alliances are critical.
[15:20:00]
It's not that much of a difference than where kind of US kind of general foreign policy has been for several decades after World War Two, but I
think President Biden is very much of that thought, the building up the alliances, ensuring that kind of the pillars of global stability,
particularly for Western democracies are sturdy and together are central to everything.
And I think you've seen that, obviously, through the transatlantic alliance that has been so critical to the support for Ukraine, but I think in the
Indo Pacific region as well, they have taken a very similar approach, whether it's with AUKUS, whether it's with the Quad, I think this is
another example of that bilateral basis, recognizing the importance of a particular ally, which President Biden called the linchpin in the region
for the US, but also the importance in the region, given the challenges that are very clearly coming and faced currently by China and others in the
region.
GIOKOS: Phil Mattingly, thank you so much.
Well, the United States, one of the wealthiest and best resource nations on earth lost 1.1 million people to COVID-19 in just three years, more
fatalities than most other countries.
A new book examines not only America's missteps during the pandemic, but highlights how unprepared the US is for the next one.
"Lessons from the COVID War" says the CDC was not built to directly respond to a national health crisis, while local health departments were
disjointed, Dr. Anthony Fauci told CNN, and he agrees.
(BEGIN VIDEO CLIP)
DR. ANTHONY FAUCI, FORMER DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: When it came to the implementation of public health,
the uniformity of response, the communication, the ability to get data in real time, we really fell very short.
(END VIDEO CLIP)
GIOKOS: CNN chief medical correspondent, Dr. Sanjay Gupta joins us now from Atlanta, Georgia.
Hindsight is a wonderful thing, isn't it? You can look back and see the faults and what could have and should have been done, but the point here
is, the US perhaps failed on what it could have achieved? Why?
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Yes, I mean, and if you also add to the fact that the United States was considered the best
prepared country in the world according to the Global Health Security Index before the pandemic, and yet, you know, the numbers, not only in terms of
deaths, but infections overall and impact on society, we spent $5 trillion in terms of COVID response and have, you know, more than a million people
who died as you point out.
I mean, there's going to be a lot of reasons as to why that is. One of the things that came up over and over again was this slowness, at least
initially to react to what was clearly happening around the world, and I talked to Dr. Deborah Birx, who was running the COVID response for the
country at the time. I asked her specifically about that.
(BEGIN VIDEO CLIP)
GUPTA: When you look at your data now, and you think, okay, had we mitigated earlier, had we actually paused earlier and actually done it, how
much of an impact do you think that would have made?
DR. DEBORAH BIRX, FORMER CORONAVIRUS RESPONSE COORDINATOR: I look at it this way: The first time, we have an excuse, there were about 100,000
deaths that came from that original surge. All of the rest of them, in my mind, could have been mitigated or decreased substantially.
(END VIDEO CLIP)
GUPTA: Think about that, Eleni. So the initial 100,000, that was, you know, sort of this fog of war, people still trying to figure that out. But most
of the deaths afterwards, Dr. Birx says could have been mitigated or outright prevented, which is an enormous thing to say. I mean, again, 1.1
million people have died.
In this country, as you may know, we haven't even been able to get a national COVID commission authorized to go back and look at the lessons
learned. That hasn't even happened yet, and I think that's why this book that you're referencing is so important. It points out some of these
things, the impact of what has happened, and maybe some solutions to prevent it in the future.
GIOKOS: Yes, the solutions in the future, right, that's a big question. So, is there anything in your mind that we can do on an individual level to get
prepared?
GUPTA: Yes, I mean, I think the individual levels are really -- it is a really good point you're raising. And I know, if you looked at what was
happening with this particular pandemic and looked at how the virus was indiscriminately affecting people, it became clear that if you had
preexisting conditions, you were much more at risk. I mean, you know, certain conditions put you at much higher risk than the average population.
And I think, you know, one of these things in medicine is this idea that wealth cannot buy health. And the United States, not a very healthy
country, so that really put us behind, you know, to start things off.
For example, chronic kidney disease if you had that, four times higher risk of being hospitalized with COVID versus if you didn't. Severe obesity,
nearly four-and-a-half times higher risk. You can see those conditions.
This is an important lesson. I think when we talk about you know these diseases, Eleni, lot of times we say okay my risk over my lifetime of
having a heart problem you know is X over 40 years, here is my risk.
[15:25:10]
What COVID did is it really compressed the timetable of risk for a lot of these types of different diseases, and all of a sudden people who, you
know, thought that they would eventually get around to living a healthier lifestyle were suddenly forced to confront what was happening to them
because of COVID.
So, being healthier overall, it's always a good idea, but I think what COVID sort of really unmasked is that in wealthy countries, you have some
of the unhealthiest populations, which is why some of the wealthiest countries I think were hit so particularly hard by this pandemic.
GIOKOS: Yes, it is a really good point, and I have to say it was a moment for everyone I know to take a look at their states and their status.
Sanjay Gupta, always great to have you on. Thank you so much.
GUPTA: Good seeing you, Eleni.
GIOKOS: Well, coming up, shares of First Republic are falling heavily as the troubled bank tries to find a long-term solution to its problems.
(COMMERCIAL BREAK)
GIOKOS: Hello, I'm Eleni Giokos, and there is more QUEST MEANS BUSINESS in a moment.
All right, First Republic shares are suffering another brutal selloff. Reports suggest the US government won't be coming to its rescue anytime
soon.
And reality star, Kim Kardashian tells CNN how she built a multibillion dollar fashion empire.
Before that, this is CNN and, on this network, the news always comes first.
Sporadic violence around Khartoum is undermining a temporary ceasefire agreement between Sudan's army and a powerful militia. Adding to the chaos,
a former minister charged with war crimes announced he had escaped from prison in Khartoum, along with other members of the regime of Omar al-
Bashir, who was ousted in 2019.
Former magazine columnist E. Jean Carroll took to the stand Wednesday in her civil lawsuit against Donald Trump. She accuses the former president of
raping her in 1996 and then defaming her years later, when she went public with the allegations. Trump has repeatedly denied wrongdoing.
Singapore has executed a 46-year-old man accused of trafficking about two pounds of cannabis. Rights groups and activists had called for clemency.
One described the evidence against Tangaraju Suppiah as shockingly thin. Amnesty International says he was interrogated without a lawyer present.
[15:30:34]
(MUSIC PLAYING)
Let's check in to see how the markets are doing. It's a mixed day. Tech stocks all about the numbers and earnings that we've seen coming through.
Take a look at the Dow, falling steadily over the afternoon.
As you can see, it's down around 250 points heading toward the close. The S&P, down about 0.4 percent and the Nasdaq is about half a percent higher.
That's on the back of Microsoft and Google.
Both of those companies have bounced on strong earnings. Meanwhile, shares in First Republic are down 20 percent after already losing half of its
value on Tuesday. The bank has been struggling since the collapse of Silicon Valley Bank earlier this week.
It revealed deposits of about 41 percent in the first quarter and it would've been worse without a $30 billion package of support from other
banks. Reports suggest that the U.S. government is unwilling to intervene in the rescue. Rahel Solomon is with me.
It's good to have you on. Here's the thing. We have seen support since Silicon Valley Bank, First Republic clearly having a tough time. Its market
value plunging below $1 billion for the first time ever. I want you to give us a sense as to why there are reports that governments at this time will
not intervene.
RAHEL SOLOMON, CNN CORRESPONDENT: I think there are a lot of questions, Eleni, it's good to be with you. There are a lot of potential scenarios
about what the future of First Republic looks like. I just want to give you a bit of context.
It's shocking to see this stock at about $5.50 a share. Take a look over the last 12 months. You can see that before March, the stock price had been
relatively stable. It had fallen a little bit since April of last year but had been relatively stable.
Of course, SVB fell. For context, this is a bank considered the bank of the rich, for the wealthy. The loan quality is stellar, so this isn't a loan
issue. It's not a credit issue. This is not even a depositor issue, because we heard the bank say earlier this week the deposits had, in recent weeks,
stabilized after late March, had actually stabilized.
This is not a loan issue, it's not a depositor issue; this is a profitability issue. The concern with investors that the spread between
what the big borrowers and with the bank can actually earn is shrinking.
There are a few potential scenarios that you're seeing being discussed. One is perhaps one of the big banks or private equity firms step up and
potentially provide the rescue plan or just buys the bank. First Republic has at one point been under one of those banks, under Bank of America,
under Merrill Lynch not too long ago.
In 2008, I want to say. So that's a potential scenario. There's also the likelihood that maybe it just skirts along as a stand-alone company. As the
senior portfolio manager at Fernwood Investment told me a short time ago, when I asked, what do you think happens here?
She says, I don't think that it goes bankrupt.
So does the share price languish here for a long time until management can come up with a strategy that's coherent?
I think that's probably the best thing to do at this point. Then there is also the scenario that is being considered, that it might go into
receivership like SVB.
To your question, Eleni, why would the U.S. government not want to step in and make depositors whole like they did with SVB?
I'm not sure they want to set a precedent of stepping up to rescue depositors every time a bank goes under. Not to say that they would like to
see more banks go under. But I think they made it pretty clear that they want the banks to figure this out amongst themselves.
They want some of the private banks to step up. It's very expensive for the FDIC and Treasury Department to step up and rescue depositors. To that
point, Eleni, the bank pointed out earlier this week that, of its total deposits, 75 percent are fully insured at this point.
It is not a ton of deposits on its balance sheet right now that are not insured. But at this point, at least according to the reports, the
government doesn't appear to be wanting to make those other depositors whole, if in fact we get there.
GIOKOS: And it's such a good point, setting the precedent, with SVB, people were saying, are we going to see a wider safety net to avoid
contagion?
[15:35:00]
So these are the questions that will remain in the market I suppose for sometime. Rahel Solomon, great to have you on, thank you so much.
Bitcoin is up almost 3 percent today. It's been on a tear this year and now Standard Chartered says the crypto winter worsened by the collapse of FTX
is over. The bitcoin, the bank says, the bitcoin could hit 100,000 by the end of 2024. That is over triple its current value.
Analysts at the bank say that turmoil in the traditional banking sector and the end of the Fed's rate hiking cycle will be the drivers. We've got Geoff
Kendrick, the head of Standard Chartered's crypto research. He's behind that bullish report and joins us now.
It's great to have you on. I think anyone exposed to bitcoin, reading your reports, must be very excited at the prospect of bitcoin going to $100,000.
What is behind your scenario at this stage?
I think everybody started seeing a lot of negative sentiment and concerns about the longevity of crypto because of what we saw with FTX. But you are
saying that things have changed.
GEOFF KENDRICK, STANDARD CHARTERED: Absolutely, Eleni. The first thing that changed, about six weeks ago with SVB and just coming on the back of
your previous segment, First Republic now as well, those traditional financial institutions are now having trouble.
And really, that's what bitcoin was invented for in 2008, which is to have a peer to peer payment system, which allows there to be no issues around
trust.
Coming into this year, I think we would've thought banks like SVB and First Republic would have been very trustworthy. So the fact that they are having
issues now is why people started to reengage with that core use case of bitcoin.
Very importantly, that's now seen this go roughly from 20,000 to 30,000. It starts to reopen some other more positive potential stories for bitcoin.
Miners are much more profitable now.
I estimate the average mining cost is about $15,000 for the large U.S. listed miners. So when we got down to 15,000 last November, a big risk that
they could've been selling a lot of coins down there. Now we are up 30,000 roughly. That takes that risk away.
GIOKOS: It's fascinating to actually see that certain events within the traditional banking space, again spurring interest and excitement around
bitcoin and its viability.
But the reputational damage that we saw with FTX, the pain that people felt with FTX, has that, do you think, dissipated?
Do you think we're sitting in a scenario where exchanges are prepared for any type of scenario similar to an FTX?
KENDRICK: On the FTX point, what happened there is that trust in centralized exchanges has been thrown into question. We now have a
situation where centralized exchanges are less trustworthy than they were before.
We also have a situation where stablecoins are less trustworthy than before. We had the collapse last May of the Terra LUNA system. We also had,
over the SVB weekend, the second largest stablecoin, USDCD pegged for a couple of days.
So because of that, within the crypto ecosystem, money is seeking that truly safe high, which is bitcoin. It was the first on the market 15 years
ago. And it steps away from those traditional financial backing and, quite frankly, centralized exchange tough issues.
GIOKOS: Yes, really fascinating. I think that a lot of people would say that it is still a big risk.
One of the reasons that things could change is the regulatory environment. We don't really know on the regulatory front, how that can impact the
crypto space and de facto bitcoin.
What's your prognosis on this?
What are you expecting?
KENDRICK: So I expect regulation to be positive for the sector. And so just last week, in the E.U., they passed new regulation there. That's the
first of its kind globally. In the U.K., we've had some very constructive noises out of the Bank of England as well.
So Europe's kind of leading the way on regulation now. And the important component to think about for regulation is that will allow institutional
type money -- so pensions, et cetera, that we all hold globally to invest in crypto assets.
Then over time, that will probably see, as well as inflows, volatility come lower. Quite frankly, regulation would've seen this through some of the
issues of last year. If we had regulation and centralized exchanges, we would not have had the FTX issue.
[15:40:00]
Regulation on others like stablecoins and you wouldn't have had issues there as well. So for me, regulation is the next big medium term driver,
which can help us get to those very lofty levels that I am talking about next year.
GIOKOS: You spoke about digital coins and, of course, stablecoins as well.
What's the outlook for that segment of the market versus bitcoin?
KENDRICK: I suspect where we go, in tandem with regulation by the FCC or others globally, as I mentioned earlier, we already have it on the European
side, will be central bank digital assets coming through as well.
So the Bank of England is quite a ways down. A consultation process around how to do that and I suspect, medium term, they become the safe asset
within a digital asset ecosystem.
When we saw central banks become this ultimate risk free asset 10 or 15 years ago, depending on the country, you're talking about when central
banks became independent, but also then saw volatility across bond markets come with it as well.
I think that when we get regulation and/or central bank digital assets helping that stablecoin type of space, probably volatility will comes well
across riskier assets in the asset class as well. So again, a medium term positive for bitcoin.
For me, it is the jump on the back of banking concerns, miners being more profitable, regulation medium term, perhaps even risky assets more broadly
doing a little bit better once the Fed ends that cycle, which we expect them to do either next week or in June.
GIOKOS: Geoff Kendrick, thank you very much for that update. I'm sure will be speaking a lot between now and the $100,000 mark. Thank you so much for
your time.
Well, 14 months into Russia's war on Ukraine, China's leader has spoken to the president of Ukraine for the very first time. We will be back, right
after this.
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GIOKOS: China's leader, Xi Jinping, has spoken with Ukrainian president Volodymyr Zelenskyy for the first time since Russia's invasion began. Xi
offered to send a special convoy to Ukraine to facilitate talks with Moscow.
China is seeking to position itself as peacemaker in the conflict. So far, Beijing has remained neutral on the war --
[15:45:00]
-- while strengthening its economies and economic ties with Moscow. They have denounced Western sanctions against Russia. CNN's international
diplomatic editor Nic Robertson joins us now from Kyiv.
We've been anticipating this call for quite some time now. It has been, specifically from the Ukrainian side, that China just hasn't engaged since
the start of the war.
Can China play mediator here?
NIC ROBERTSON, CNN SENIOR DIPLOMATIC EDITOR: They can, in Ukraine's view. That was part of what President Zelenskyy wanted to get across in that
hour-long call, which was longer than the Ukrainians had originally expected the call to last.
They are taking that as a good sign as well. One of the points President Zelenskyy made was that there can be no (INAUDIBLE) to find peace, there
can be no territorial compromise.
Essentially, Ukraine cannot be expected to give up any of its territory. I think that gets to the point that the critics of president Xi's peace
proposal put forward, when he was in Moscow a month ago, meeting President Putin.
And he does have a close and strong relationship with President Putin and his economic supporter, Russia, at the time of this war, helps President
Putin finance the war. President Xi's peace plan makes no recognition of the fact that Russia has illegally invaded Ukraine whatsoever.
But from Ukraine's perspective, China was, before the war, going back a couple of years, their number one trading partner, bigger than Russia even.
So there is a strong relationship there. They've been wanting to appoint another ambassador to China.
And this is something that has now been accepted and gone through. I think that the way that diplomatic process works, it didn't start on the phone
today with president Xi. So I think that we can certainly see there was some conversations going on between the Chinese and the Ukrainians about
this behind the scenes, behind this, paving the way.
I think they see it in a positive light and, from their perspective, doing what President Zelenskyy did, you have to get in China's ear, if you will,
if you want to interrupt its thinking on Russia.
Because Ukraine believes that China, just by giving that diplomatic and economic support, is really helping to enable Russia continue with its
narrative of war. So how they expect to bring the two, Russia and China's positions closer together, how they expect to do that is not clear.
But they do hope that this is the beginning of a process that can work to close some of the gaps.
GIOKOS: Nic Robertson, always great to have you on the show, thank you so much.
There are two words that can get a reaction out of almost anyone: Kim Kardashian. Love her or hate her, the new reality TV queen shares her
secrets to business success with Poppy Harlow. Stay with us.
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[15:50:00]
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GIOKOS: Welcome back.
Now Kim Kardashian says when it comes to business, she follows her gut. While some think of her as merely a reality TV star, she has proved that
her reach goes far beyond that.
Kardashian has used her influence and 350 million Instagram followers to become a billionaire. Her shapewear line, Skims, is valued at more than $3
billion. She also has a beauty line called Skim and last year she cofounded a private equity firm called Sky Partners.
Kim spoke to my colleague, Poppy Harlow, at the Time 100 Summit in New York about her life as a mom, daughter, aspiring lawyer as well as executive.
(BEGIN VIDEOTAPE)
POPPY HARLOW, CNN ANCHOR: I was thinking a lot about sort of how you do business and observing it from the outside. Do you trust your gut?
KIM KARDASHIAN, ENTREPRENEUR AND FOUNDER, SKIMS: Absolutely.
HARLOW: Over the data?
Over what other people say?
Kim, you should do this. We should do this.
KARDASHIAN: Absolutely. And I like to be in business I think -- there's two things. I like to do things that I will feel very confident in, that I
obviously feel like I know what I'm doing.
I want to learn and surround myself with people that will support you in a way where you trust them so much in the area that they're going to run the
business in and you give them that control and they trust you in the area that you really know. And if you just trust even other like that, it
absolutely can be magic.
HARLOW: Equal respect and trust?
KARDASHIAN: Yes. And I do have, I think as you get a little bit older and you learn a lot along the way, I think one of the most important things and
there was a time when I didn't have this luxury of choosing who I was in business with --
HARLOW: Yes.
KARDASHIAN: But if you're at a place and you take your time, you realize that you absolutely do not want to be in business with people you don't
want to spend holidays with and that you don't like.
HARLOW: So your dad. You've said that a lot of your work ethic, because I've heard you only sleep about five.5 hours a night, if that. A lot of it
comes --
KARDASHIAN: Now.
HARLOW: Now. A lot of it comes from your dad. And you lost him when you were 22.
KARDASHIAN: Yes.
HARLOW: He died from cancer. Just a two-month battle with cancer. He was a lawyer and your dream was to follow in his footsteps. We were talking about
this backstage. My dad, too, lawyer, died when I was young, four months in the hospital. So I understand that and wanting to make them so proud.
Is his memory and what he wanted for you and what you learned from him a driving force now in your criminal justice work?
KARDASHIAN: Absolutely. But I know that he would probably get such a kick out of this because he wouldn't have expected it at all.
We talked so much about me going to law school and he always said he would help, give us an allowance if we stayed in school. And I couldn't --
couldn't do it. I was like, I'm on my own. I don't care. I'm not going to go to -- I didn't finish school. And then now that the opportunity came
about, all these years later, it's so much more meaningful to me.
HARLOW: Didn't he tell you not to be a lawyer?
KARDASHIAN: He did. He did. He did say it was --
HARLOW: Well, she's going to be a lawyer.
KARDASHIAN: He did warn me how stressful it is and said, I know you, you're not going to want to go through this. So figure out something else
to do.
But I will say, I did learn my work ethic from my dad.
HARLOW: Yes.
KARDASHIAN: But I learned so much more from my mom than I ever give her credit for and that I ever -- you know --
HARLOW: So give Kris credit right now.
KARDASHIAN: Yes. I don't know, is it a thing. Like you kind of give -- this is like I'm not even trying to be funny but you kind of give the dead
parent a lot of credit, you know?
HARLOW: I mean it's so true. My -- my -- my mom said the same thing to
me. We did this video for CNN all about my dad and she's, like, I love it, Poppy, but you know, I was there, too.
KARDASHIAN: Yes. I'm still here. What about me?
HARLOW: I was there, too.
KARDASHIAN: Yes.
HARLOW: I get it.
KARDASHIAN: I'm sorry, mom. You know, if you watch this, I feel like we've always given my dad so much credit.
HARLOW: What -- what did she teach you.
KARDASHIAN: Well deserving but she -- I mean the one thing is she taught us how --
[15:55:00]
-- to have a home, how to make a home. And all of my -- I mean, she's the most nostalgic, sentimental person. So she kept everything from when we
were growing up. I could find a tooth, I could find locks of hair. I could find -- she has these chests that she saved for us, with baby books.
And so I do that with all of my kids. And I write each one of my kids a letter, like a four- or five-page letter every year on their birthday that
I will give them when they are 21 and about what we did through the whole year, what their favorite shows are and what they like to eat and who their
friends are.
(CROSSTALK)
HARLOW: You do this for every child, I definitely feel like I'm underperforming --
(LAUGHTER)
KARDASHIAN: Yes, that fear, it's a lot.
HARLOW: (INAUDIBLE) do it.
KARDASHIAN: So she taught us how to be really good moms.
HARLOW: How to make a home. I don't -- I love being a homemaker and I love working and I don't know if we often talk about both, so I'm really glad
that you said that. You've said that my 40s are about being Team Me.
Me, too.
KARDASHIAN: The 40s are the best.
HARLOW: So far so good, got almost a year in the books. I agree.
Any advice for folks on Team Me?
KARDASHIAN: Just -- oh, my goodness, I've got so much advice and I'm blanking. I think it's just really simple. I live my life trying to be a
good person, do right by other people, be kind to everybody and focus on yourself.
Sometimes you need to give yourself a little bit more love, sometimes other people need a little bit more love. And there's enough to go around.
(END VIDEOTAPE)
GIOKOS: Kim Kardashian there with Poppy Harlow.
We are just moments away to the end of trade on Wall Street. We will have the final numbers and the closing bell, right after this.
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GIOKOS: We are just a few moments away to the end of trade on Wall Street. The Dow is near a session low -- sitting in the red as you can see, around
200 points down. And it is headed for a second straight losing session as more companies report earnings. Amazon, MasterCard, all report tomorrow.
Let's look at the Dow components. It's almost all red, Honeywell near the bottom, down 2.5 percent. Merck also down ahead of reporting. Disney losing
1.3 percent, now in a legal fight with the Florida governor.
END
