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First Move with Julia Chatterley
Hundreds of Criminals Caught in a Global Surveillance Sting; F.B.I. Recovers Some of the Colonial Pipeline Ransom; Websites and Apps across the World Go Dark. Aired 9-10a ET
Aired June 08, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:20]
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.
App trap. Hundreds of criminals caught in a global surveillance sting.
Hackers hacked. The F.B.I. recovers some of the Colonial Pipeline ransom.
And a worldwide what? Websites and apps across the world go dark.
It's Tuesday. Let's make a move.
A warm welcome once again to FIRST MOVE. Great to have you with us on what we will call Super Tuesday here on the show. We will discuss the return of
supersonic jet travel with the CEO of Boom Supersonic. We've got superstar musicians ready to hit the road as reopenings ramp up. The President of
concert giant, Live Nation will tell us when the rock 'n' roll will start to roll.
And a super snag for cyber criminals U.S. officials retrieving millions of dollars in crypto ransom, what it means for the business model of hack
attacks, just ahead, too.
Now, in the meantime, no sign of Super Tuesday on Wall Street. Futures, a touch higher though after a tepid Monday with the S&P unable to hold on to
record levels. Europe meanwhile driving the data agenda today, German industrial production falling last month -- why and why -- due to supply
chain issues, something that the Biden administration is now tackling head on here in the United States.
The White House announcing a supply chain task force to deal with the ongoing shortages of chips, farmer supplies and things like EV batteries.
There is also going to be a so-called strike force on U.S.-China trade. The scarcity of goods though and the rising cost of everything, thus becoming a
hot button political issue in the United States.
Deutsche Bank today warning that global economies are quote, "sitting on an time bomb" that could lead to a deep recession, particularly in emerging
markets if Central Banks allow economies to get too overheated.
It is a long way from the, at least, public views of the persistently Patient Powell and his fellows at the Federal Reserve.
Okay, on to our drivers.
Not so anonymous after all. Eight hundred people across 300 crime syndicates have been arrested in a sting operation involving an app known
as ANOM. That audacious app trap was developed and run by an international police operation.
Ivan Watson joins me now. Ivan, this reads like a plot of a movie, a record breaking movie quite frankly coming to a cinema near you. Just talk us
through the details of how police operations coordinated around the globe and managed to capture so many criminals.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Julia, police forces around the globe are taking quite a victory lap today. They're delighted
with what they say are the successful results of this really audacious Trojan horse. I mean, they say that the F.B.I. essentially created a
communications platform that criminal organizations unwittingly used to organize their logistics and in the sting and the dragnet, hundreds have
been arrested, tens of millions of dollars and cash seized, and tons of illegal drugs as well.
(BEGIN VIDEOTAPE)
WATSON (voice over): The police in Australia have been busy raiding homes, seizing tons of drugs, tens of millions of dollars in cash, more than 100
of guns, and conducting hundreds of arrests.
UNIDENTIFIED MALE: We allege them as an outlaw, many of those are gangs, Australian mafia, Asian crime syndicates and serious organized crime
groups.
We allege they have been trafficking illicit drugs into Australia at an industrial scale.
WATSON (voice over): The crackdown in Australia part of the parallel investigation with the F.B.I. rolling out across at least 18 countries.
UNIDENTIFIED MALE: The Australian government is part of a global operation has struck a heavy blow against organized crime not just in this country,
but one that will echo around organized crime around the world.
WATSON (voice over): The F.B.I.'s man in Australia says law enforcement fooled criminal gangs by targeting their communications.
UNIDENTIFIED MALE: When criminal organizations have to engage in the logistics of moving their illicit materials, their money, organizing
violence, all of that activity has to happen over a communications platform of some kind.
[09:05:07]
WATSON (voice over): Australian law enforcement say hundreds of suspected criminals communicated on customized phones equipped with an encrypted
messaging app called ANOM. That app was essentially created by the F.B.I. and decrypted by the Australian Federal Police.
UNIDENTIFIED MALE: We introduced a dedicated encrypted communications device into the global criminal marketplace.
WATSON (voice over): This animated video distributed by the Australian Police explains the operation.
UNIDENTIFIED FEMALE: The customized phones were used by alleged senior crime figures which gave other criminals the confidence to use the
platform. You had to know a criminal to get a hold of one of these customized phones.
The phones could not ring or e-mail, it could only communicate with someone on the same platform.
WATSON (voice over): For nearly three years, law enforcement say they have monitored these communications.
UNIDENTIFIED MALE: Essentially, we have been in the back pockets of organized crime and operationalized a criminal takedown like we have never
seen.
WATSON (voice over): Thanks to the app, Australian Police say they intercepted a planned mass shooting while acting on at least 21 threats to
kill.
Meanwhile, authorities across Europe, New Zealand, Canada and the U.K. say they have also joined the operation, conducting their own raids and
arrests.
With the round-up continuing around the world, police predict criminals may start turning on each other as decrypted messages reveal their secrets.
(END VIDEOTAPE)
WATSON (on camera): Now, Julia, part of what the Australian Federal Police say made this audacious strategy possible was the fact that law enforcement
were able to bring down several years ago a different encryption app called Phantom Secure that they say various narco mafias had been using for their
communications and then that the F.B.I. working with the Australian Federal Police moved quickly to try to get this alternate app, ANOM, out into the
black market into the criminal underworld, and they used that to gather evidence for years, real-time information and communications.
And the Australian authorities insist that the criminal gangs were not hiding, not speaking in code. They were very open about the kind of drugs
that they were moving around and ordering and also the violent hits that they were threatening against each other and their rivals -- Julia.
CHATTERLEY: I mean, you had the perfect phrase for it, it is a digital Trojan horse created by the F.B.I. and police authorities and the bad
actors thought it was encrypted and safe, so they carried on talking. It is quite fascinating.
Why are we finding out about this now, Ivan? Has it simply run its course? That they have utilized it as much as they needed to, it seems a shame, if
it was proving to be so useful that we are now finding out about it.
WATSON: Well, it is a good question. I mean, the announcements are being rolled out in Australia and in New Zealand first. There was a press
conference with Europol announcing that around a dozen European countries that were also involved in this, and then we are expecting in the hours to
come that one of the F.B.I. offices is going to make their own statements about their participation in this international operation, which also has
different names depending on which country and which jurisdiction is involved with here.
The Australians say that they were already making arrests leading up to this announcement. They also hint that perhaps a number of cold cases can
be solved with the evidence they have been gathering from the app and perhaps from testimonies that they may get from some of the suspects if,
for example, they flip on each other.
But there is an additional point here that the Australian Police Commissioner made, and that is that only a fraction of the criminal
underworld out there actually uses this app, ANOM, and there is much more of this kind of communication out there.
So this might be just the tip of the iceberg even though it has been a very successful day, apparently, for law enforcement around the world.
CHATTERLEY: Yes, a bad day for the bad actors, too, and to your point, let's hope that there are other apps like this and they are already on to
their next project. ANOM may be over, but there may be another one in the works. How long until the movie, Ivan? What's your bet?
WATSON: Well, I wish I had written the script or gotten the rights to it, because I could probably move on to another career.
CHATTERLEY: Yes, we will write, legendary. I'll join you. Please. Ivan Watson, thank you so much for that.
Okay, moving on. Ransom recovered. U.S. investigators say they have reclaimed millions of dollars' worth of cryptocurrency paid to the Colonial
Pipeline hackers. Alex Marquardt joins us now.
Alex, as I said, this is a bad day for the bad guys quite frankly. Talk us through how they found this ransom money. Fascinating.
[09:10:00]
ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: I was going to say a bad day for bad actors over here as well. Very simply, they followed
the money.
When Colonial Pipeline was hit, it was their IT side of operations that was struck by these ransomware attackers that was taken hostage, if you will,
but they then shut down their operations, and in order to get their operations back up online, the CEO of Colonial Pipeline says that they paid
the equivalent of $4.4 million in ransom to get their operations back.
But at the same time, they quietly alerted the F.B.I. and the Department of Justice. And so the Federal investigators were able to very quickly start
tracking that money and they were able to track it down to a cryptocurrency wallet, and they were able to retrieve, to recover, and confiscate
essentially around $2.3 million of that Bitcoin.
Now, that is more than half of the original value, but the value of Bitcoin has actually dropped. They were able to recover the majority of the
Bitcoins that were paid to this ransomware attack or Darkside, its operators are believed to be based out of Russia.
Now, this is a rare success story in this plague of ransomware attacks that is hitting not just this country, but other countries and around the world.
This was the first operation of its kind for a ransom -- for the ransomware taskforce that was recently stood up by the Department of Justice, and it
really highlights, Julia, that one of the main tactics, if not the main tactic, that the Biden administration plans to use against these ransomware
attackers to disrupt their networks. Follow the money, disrupt the flow of that money in order to remove the incentive for these attacks to take
place.
At the same time, the Deputy Attorney General Lisa Monaco said that companies really need to take this moment to look at their cybersecurity,
to harden and modernize their defenses. Take a listen to a bit of what she said.
(BEGIN VIDEO CLIP)
LISA MONACO, U.S. DEPUTY ATTORNEY GENERAL: No organization is immune. So today, I want to emphasize to leaders of corporations and communities
alike, the threat of severe ransomware attacks, pose a clear and present danger to your organization, to your company, to your customers, to your
shareholders, and to your long term success.
So pay attention now, invest resources now. Failure to do so could be the difference between being secured now or a victim later,
(END VIDEO CLIP)
MARQUARDT: The Department of Justice and the F.B.I. did praise Colonial for alerting them so early to the attack and that is something that they
hope other companies will do. Oftentimes, companies or organizations simply don't say anything. So, the authorities aren't able to track that money.
They're unable to learn anything about the attackers.
But the administration is also telling companies, we don't want you to pay these ransoms, which, Julia, of course, puts many companies and all sorts
of organizations in a very hard place which simply want to get their operations back up and running again -- Julia.
CHATTERLEY: Typically, when it's critical utilities or the supply chain is materially impacted, you're in this catch 22 situation, as we saw in this
case, they paid up, but there was so much in that.
The first one that you point -- that you mentioned, which is a great point that it doesn't look like all the money was recovered. But of course, we've
seen -- what -- 40 percent plus drop in the value of Bitcoin, in which case, you're talking about a far smaller sum of money. And I think the
critical thing for people to understand here as well, is that Bitcoin transactions are available in a publicly distributed ledger, so you can
track those payments.
And that's very different, perhaps, if this would have been made in cash or fiat currencies in terms of the payment, and I think this is something that
people really need to understand about criminal activity involving cryptocurrencies in particular.
We are going to hear from the CEO of Colonial Pipeline, because he is testifying in Congress today and tomorrow, I believe, Alex. What are we
going to hear from him, do you think particularly to your point about needing to shore up defenses?
MARQUARDT: Joseph Blount is the CEO and the President of Colonial Pipeline. He is going to be testifying in front of the Senate Homeland
Security Committee in just under an hour's time, and we expect to hear a number of things.
First of all, a detailed timeline about how the attack played out, when the alert was made to the F.B.I., when the payment was made, that kind of
thing. We would expect, I imagine to hear some contrition about the fact that services were not delivered, the fact that, you know, there were gas
shortages, long lines of gas stations as a result of those operations being shut down.
But we'll also, I imagine, hear a call from the CEO, from Mr. Blount to other companies to harden their defenses, but also for more support from
the Federal government for these companies, particularly those as you pointed out, Julia, that are part of the critical infrastructure.
The vast majority of the critical infrastructure in this company is made up of private companies, so that partnership between the government and those
companies is absolutely paramount, and then from the lawmakers' side, we would expect them to hold up Colonial Pipeline as an example of failures in
cybersecurity, of the need to go after these ransomware attackers and some of the shortcomings by the Federal government, what more needs to be done
in order to safeguard these companies and the country's critical infrastructure -- Julia.
[09:15:16]
CHATTERLEY: More money and more money and more money, even when you think you're spending enough on this, you need to do more.
Alex Marquardt, thank you so much for that.
MARQUARDT: Thank you.
CHATTERLEY: All right, the global internet outage now fixed, a number of websites and apps around the world went offline earlier today after Cloud
service provider, Fastly suffered a major glitch.
Anna Stewart has the latest. The internet not working quite so fastly today, Anna. Who are Fastly? And what actually happened here? Help us
understand.
ANNA STEWART, CNN REPORTER: Well, it was a huge web outage. Websites including Amazon, HBO MAX, the U.K. government's website, and a load of
different news websites, including CNN were down for a short period this morning.
And of course, everyone immediately concerned about is this the result of a cyberattack or some sort of ransomware attack? The good news is, it was
something much less malevolent, it was an issue at Fastly, a catastrophic failure really.
Now, Fastly is a Content Delivery Network, a CDN, and effectively, that means it has got a distribution network of servers all around the world and
it means that websites that use them can make sure that their websites are loaded fast, wherever they are because these servers can be nearer the
user.
Now, there was some sort of issue here. Fastly said that they know what it is. It has now been fixed. Websites are up and running again. But I think
it has really highlighted just how reliant we all are on the internet. It caused quite a panic -- Julia.
CHATTERLEY: Yes, you know, all the stories this morning for me are completely connected. What it shows is these critical hotspots, in this
case, internet infrastructure, places like Fastly, like Amazon Web Services, that are the foundations of all the operations, the apps, the
websites that we have on the internet, and if they go down for whatever reason, for innocent reasons or nefarious reasons, we are in the dark.
STEWART: The internet is reliant on a few, albeit huge companies, like you say, Amazon, Google, Microsoft, Fastly, Cloudflare, and although this is
possibly the biggest outage of its kind, it is certainly not the only one.
I was looking just last year, Cloudflare went down very similar to Fastly. That's because its service provider went down, it took down a host of
websites. We've seen something similar with Amazon as well. Is the centralization of these companies a good thing, I think it has just showed
just how fragile really the internet is -- Julia.
CHATTERLEY: Yes, better for speed, better for accessibility, better for connectivity, but when they go wrong, it really goes wrong.
Anna, I can't help but notice, you're no longer at home. You're no longer with a cat with you. You're no longer being blown by a wind machine that's
-- you're in the studio.
STEWART: I am in the studio. I'm not being rained on for once, right? I'm not going to celebrate. I was here for one day last year and then the U.K.
went back into lockdown. Hopefully, it's not just a one day event, but it's lovely to be back.
CHATTERLEY: Yes, fingers crossed, but you do look great. I always say with the wind blowing, machine or otherwise.
Great to have you back in the studio, Anna. Anna Stewart, thank you.
Okay, let me bring you up to speed with some of the other stories making headlines around the world.
The Speaker of Israel's Parliament says lawmakers will vote on a new government this Sunday. If the coalition passes the confidence vote, it
will be sworn in that same day. Right-wing politician, Naftali Bennett would also become the next Prime Minister ending Benjamin Netanyahu's 12-
year run.
The U.S. Vice President has arrived in Mexico as part of her trip to address the flow of migration from Latin America. In the coming hours,
Kamala Harris is expected to meet with the Mexican President to discuss the issue.
They will also witness the signing of an agreement linked to migration and development in Central America.
Okay, still to come here on FIRST MOVE, an IRL revival. The world's largest concert organizers say live events are back. We speak to the parent company
of Ticketmaster.
And also back with a boom, a startup is planning supersonic flights by 2029. Can it succeed where the Concorde failed? That's next. Stay with us.
(COMMERCIAL BREAK)
[09:21:47]
CHATTERLEY: Welcome back to FIRST MOVE with an interesting week already on the show and it's only Tuesday.
Jeff Bezos set to rocket into space, the multimillion dollar Bitcoin ransom traced, and the online presence of major websites erased -- at least
temporarily.
Many leading global websites are back up and running as Anna discussed after a sweeping technical glitch knocked them offline earlier today. The
outage traced to issues at Cloud computing firm, Fastly whose shares are down -- what -- 2.4 percent now in premarket trade.
Major moves meantime in the meme space, AMC and GameStop all rallying premarket after strong gains, Monday, despite a new warning from the U.S.
Securities officials that say they are monitoring Reddit stocks for signs of quote, "manipulative trading or other misconduct."
As you can see, not stemming gains premarket once again today. Tesla, meanwhile revving ahead premarket, too, on news that its China car
deliveries rose 29 percent month over month in May after a disappointing performance the previous month. Today's numbers are raising fears the EV
community that China sales may have been slowing.
Dan Ives is the Managing Director of Equity Research at Wedbush Securities. Dan, the comparisons, let's be clear with a month before aren't difficult
to improve upon, but I think there is a sigh of relief going on for Tesla investors this morning and good morning.
DAN IVES, MANAGING DIRECTOR OF EQUITY RESEARCH, WEDBUSH SECURITIES: Oh yes, I mean, the month of April was a disaster for Tesla, especially in
China. But if you look at May, and look, there are fears this trend was going to continue, instead massive rebound from May, I think this just
shows that the yellow brick road to 300,000 is back on track for Tesla and that's key.
That's key to the whole bull thesis. The haters and skeptics will paint it how they want, but May, clear shot in the arm for the bulls.
CHATTERLEY: I mean, they've had some shaky issues there in China, safety issues, sort of big brother watching over them, skepticism about the need
for the car. What do you make of what we've seen in those issues now past?
IVES: Yes, there have been a lot of ER black eyes, your Big Brother watching, battles with Beijing. You've always had those safety issues. And
for Tesla, they can just shoot us away. And for Musk, that's the whole linchpin to the bull thesis.
I mean, we think China will be 40 percent deliveries next year. If you get domestic competition in country, that's why this is so important for the
stock in terms of this overall green tidal wave. China is a key piece for Tesla. That's why these main numbers can one month does make a trend, but
very important to reverse what was just a horrific month, April for Tesla.
CHATTERLEY: And you often say this, we have to take a step back when we look at China. I mean, what proportion of car sales are electric vehicles,
it's what -- just under five percent at this stage. The next two, three, four years are going to be incredibly transformational, whether it's for
Tesla or some of the domestic players like the NIO for example, surely.
IVES: Yes, I mean, you bring up an awesome point because it's 4.8 percent, and we think that goes to 10 percent over the next two to three years.
That's why this is a $5 trillion market. There's more than room, you know, for just one boat in the ocean, so you're going to have a lot of winners
and GM, I could argue is going to be a big winner domestically, but Tesla is going to continue to be leading this race and I think if you see what's
happening in China, this is going to be shaky as we go through it.
[09:25:08]
IVES: But I think on the other side, we're still looking at $1,000.00 stock in the next 12 to 18 months.
CHATTERLEY: Wow. Still bullish on Tesla.
Let's flip to Apple because we had some announcements, nothing on the hardware front yesterday from them, it was all about interconnectedness,
data, privacy, security, and now you can FaceTime somebody on another platform, too, which I happen to like.
IVES: Yes, and look, for Apple, they need to listen to the developers, and then this comes at a critical time, especially with the "Game of
Thrones" battle with Epic in the courts, regulatory focus on the App Store. If you look what they laid out with iOS 15, it is also more integration of
services. Remember, that's the golden jewel for Apple, and if you look at some of just the enhancements, they're laying the groundwork, the
foundation for what I view is the next stage of innovation in Cupertino.
CHATTERLEY: Are they listening to the app developers? I mean, I get your point about the interconnectedness for FaceTime, for example, but we've
still got the epic battle going on over the fees that they charge in the App Stores and some of the pushback that they've had there.
How worried should we be about that, Dan, because it's still sort of sitting there in the background?
IVES: Yes, I mean, right now, that's a black cloud over Cupertino and now, even though I think Apple is ultimately victorious in the Epic lawsuit, if
you look at -- this is just the first round of a 12-round boxing match, because in the E.U., you know, every day you wake up is, you could have a
cup of coffee, and there's going to be another headline about E.U. going after Apple about the App Store, about the Beltway going after him and I
tis ultimately left to developers, that's 30 percent thing continues to be the line in the sand. Very important, because that's a crown jewel.
So, I think that right now, it is about $15.00 to $20.00 overhang in the stock.
CHATTERLEY: Okay, price target on that one?
IVES: So we're $185.00, and I still think that when we get through this, it's a super cycle playing out a year from now. I mean, you're talking a $3
trillion market cap.
CHATTERLEY: We should do that, my friend. Okay, let's talk cybersecurity, because I know this is a decade's long interest for you and something that
you've tracked for a really long time. I keep talking on the show about how far greater investments needed was so under invested in the United States,
never mind around the world, and we're seeing a significant ramp up in cyberattacks even just in the last few weeks and months.
Dan, who benefits from this? Where should investors be looking in terms of companies that perhaps benefit from a ramp up in spending that surely has
to come?
IVES: Yes, I think it's a golden age for cybersecurity. You look at SolarWinds, you look at the Colonial Pipeline, look at names like Zscaler,
TELUS, SailPoint and Palo Alto, those are really names with CrowdStrike that are really going to benefit here. I think you're always going to have
a lot of M&As.
Julia, the only way I'd say it, it is a defensive and an offensive sector of tech. CIOs are ramping up spending just given the growing attack vector.
CHATTERLEY: Do you expect the government to do the same, too?
IVES: Well, I think they've -- you know, the bar ultimately, I mean, they've talked a great game, but the spending has been underwhelming. I
think the Biden initiatives that we've seen post-Colonial is the real ramp up.
We think Federal spending is going to be up 30 percent this year.
CHATTERLEY: Wow. Okay, you heard it here first. Dan Ives, great to have you with us as always.
IVES: Thank you.
CHATTERLEY: Dan Ives, Managing Director of Equity Research at Wedbush Securities there.
The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:31:41]
CHATTERLEY: Welcome back to FIRST MOVE where U.S. stocks are up and running at this Tuesday and we've got some green on the screen in early
trade. Tech stocks are on the rise for a third straight session.
The NASDAQ adding some half a percent here in early trade. The S&P 500 still set to close, close to record highs and two tenths of one percent.
Ten-year bond yields also helping to lend support to the bullish case for stocks this morning. Ten-year yields currently sitting near three-month
lows.
The big test for the bond community, too, comes on Thursday when we get updated consumer price inflation data in the United States, too.
Now among today's stock market gainers, Aerospace giant, Boeing, Southwest Airlines announcing today that it is upping its order for the smallest
version of the 737 MAX on expectations of stronger travel demand later this year.
In the meantime, concerts are returning and music fans rejoice. Live Nation, the world's largest live entertainment company, which also owns
Ticketmaster is saying that concert venue bookings are finally rebounding. This comes as more countries accelerate COVID-19 vaccinations. Just to give
you some sense here in the United States, over 42 percent of the population now fully inoculated.
And joining us now, the President of Live Nation, Joe Berchtold. Joe fantastic to have you on the show. Talk us through this rebounding booking.
Very exciting.
JOE BERCHTOLD, PRESIDENT, LIVE NATION ENTERTAINMENT: Yes. Thanks for having us on, Julia. It feels so good to be where we're at now. We're just
seeing massive pent up demand for concerts globally led by the U.S. and the U.K.
This week, we have over 30 concert on sales, probably the largest ever at Ticketmaster, the biggest stars out there -- Billie Eilish, Lady Gaga,
Bruno Mars, Garth Brooks, The Eagles, Guns and Roses. It just keeps coming and coming, and all of these are just doing tremendously well. There's such
pent up demand.
We're seeing it this summer out of the gates outdoors. Our festivals have been selling out faster than ever before. Our amphitheater business is
ramping up quickly; and leading into this fall and '22, we expect to be our largest years ever.
CHATTERLEY: Wow. People really are ready to get back into action. Can you just give us a sense of, in terms of the bookings that you're seeing, sort
of what proportion are people that held on to credit from bookings that they'd made in the past and obviously then got cancelled versus people
perhaps who got refunds and are making fresh bookings?
Can you give us any sense of, of sort of what you're seeing here because I know you made getting refunds or extending credit to people to spend in the
future as easy as possible.
BERCHTOLD: Now, we certainly did our best to make sure that any show that was moved, people had the full opportunity to return their ticket if they
needed the money. It was amazing, 83 percent of the people held on to their tickets, so they really spoke and said going to the concert is a real
priority. And if I got that great Billie Eilish ticket in the 20th row for my daughter, I'm not giving it up because I'm never getting it back.
And as a result, we had a nice level of demand preset, but a lot of what's going on sale now is new concerts. Those are selling tremendously well.
Garth Brooks selling out stadiums in under an hour, a record for us. Astroworld with Travis Scott selling out in about an hour.
Just everything that is going across all genres, we're seeing this. This is going to be a golden age of music. Urban music is selling fast. Country
music, pop, traditional rock, every genre of music is doing incredibly well, because everybody is a fan, and everybody sees that going to concerts
is the energy they need. It's the social connection, getting out there, re- engaging. There is nothing better than a concert to celebrate the end of this pandemic.
[09:35:30]
CHATTERLEY: And doing it safely, I guess, Joe, at the same time. How are you handling the relative safety measures? Obviously, it differs by state,
it differs by nation. We've also got to be flexible, I guess, in case we see a rise in cases due to variants out there. Are you going to maintain
the same level of flexibility as well over -- fingers crossed, it doesn't happen -- but again, cancellations or postponements going forward?
BERCHTOLD: Oh, absolutely. You nailed it, Julia. The one thing we've learned over the past year is flexibility, adaptability, and figuring out
what the situation requires. We're in 40 countries, all 50 states, and the answer today on what you need is different than the answer a month from now
or six months from now. So we need to be figuring out what's the right situation.
We work with the health authorities in every market that we're in. What is it based on? The vaccination levels. Does the vaccination levels go up? The
great news is we have more freedom for life to get back closer to normal.
So we're continuing to be encouraged by seeing some of those levels pick up. We're doing everything we can to help all the local health authorities
to encourage the vaccine, the more people to get the vaccine, the more everybody can get back to concerts.
So we're encouraging that, at the same time, we're just figuring out what makes sense in the moment for that market, but we are seeing that in every
case, people just want to get back to the show.
CHATTERLEY: In the United States, are you having any trouble hiring? Whether it's event staff or for sponsorship staff to support delivery? Any
challenges there?
BERCHTOLD: Yes, no, it's a great question and a lot of people are seeing that in the market. When we look at our permanent staff, and unfortunately,
we had to furlough some of our people when we largely closed down for the year, we're seeing tremendous success in their return. Over 90 percent of
the people that we called back from furlough are coming back.
So our key staff, the people that run the business over time are coming back and we're seeing that working well. Thus far, as we're looking at our
festivals and our amphitheaters, we're not having real issues. We're just in the beginning of that. We expect that our cost may be up slightly this
summer. But because we'll be operating on a partial level, we don't expect it to have a material impact, and we expect it to get sorted out over the
next six months or so before we really ramp up to full speed.
CHATTERLEY: Okay, I have to talk about something that seems to be dominating the music and the art world right now and that's NFTs. I'm sure
you could guess before I even asked you. And I know you said look, we're deep in exploration, which is a great way to say look, we are sort of
catching up like everybody else.
But can you put it into practical terms to me. How do you think it sort of replies to Live Nation, particularly on things like ticketing, for example?
How do you make NFTs relevant for your customers?
BERCHTOLD: Oh, absolutely. We think NFTs are a great digital collectible. So when we move to digital ticketing, a lot of people will no longer have
that ticket stuff, that memorabilia of the shelf, or they still buy a poster, they still buy some merchandise and NFT is going to give them a
digital alternative.
So if you have your digital ticket, we make it easy, you can buy a digital poster when you go to the show and you can have that in your wallet, you
can use that as your brag point for the fact you went to the show, or you're a big fan and you can spend a bit more and get the serial print
that's of higher value and more exclusive, or you can buy the original.
So if you're a big Dave Matthews fan and you want to track -- I've gone to 20 Dave Matthews' bands, here's the NFT from every show. When I get to show
you, hey, this is what I went to, this is where my seat was, maybe it's a clip of the show. Those are going to be great ways for people to have a
memorabilia of the experience.
And so we're building out so that we can easily sell them on Ticketmaster. We can sell them when you're out the show. But we see it as a very nice
incremental piece of our business, a logical extension.
CHATTERLEY: Okay, and the other thing would be live streaming platform because I know you took a big chunk in in Veeps as well, and this seems
like a huge opportunity, something that we've learned over the pandemic period that you can still attend a concert even if you're sitting on your
sofa back home.
How important a chunk of the business do you think in light of everything that you said about everyone wanted to get back in physical presence and
see stars perform -- how much of a chunk of the business do you think that might be in the future?
BERCHTOLD: Yes, I think we've learned a few things. First of all, we've reaffirmed that there is no replacement for going to the show, that social
event, going with your friends, singing along, and dancing. There is no replacement of that.
[09:40:10]
BERCHTOLD: But we've also learned that a lot of people can't get to the show. It's not in their city, it's sold out. They just can't make it. And
so we want to be able to provide that live streaming alternative. We think the Veeps team is a great team. They've really melded well with our
company. And we think that to be able to offer a large portion of those 3,000 artists we work with every year, when you put on the tour, we want to
be able to have some live streams so the fans that can't make it can also experience it.
And they will do the opening night, a few in the middle, closing night, leverage the fact that we can wire our venues, leverage the fact that we
can sell the ticket on Ticketmaster to make it easy. All of that will just create again another incremental revenue stream for the artist, but we want
to continue to help support -- help them get their economics back in shape after not being able to get out for the past year.
CHATTERLEY: Yes, that's such a great point because it is about the stars, too, and getting them back out there and get people access to them and
their talent. Joe, great to have you on the show, and thank you for the boost of positivity, too. It is great to hear.
Joe Berchtold there, the President of Live Nation. Thank you so much and we'll chat soon.
BERCHTOLD: Thank you.
CHATTERLEY: Okay, let's move on. Boom. That's the sound of a new supersonic jet -- oh, I didn't do that very well -- aiming to carry United
Airlines passengers within the next decade. We'll talk to the CEO of Boom Supersonic to explain.
(COMMERCIAL BREAK)
CHATTERLEY: Boom is trying to bring back supersonic air travel. It signed a deal with United Airlines to provide 15 jets. It is an investment for the
future as the company is aiming to fly passengers until 2029, and by then, it will have been 26 years since the last commercial supersonic flight
onboard the Concorde, but the appeal is straightforward.
Supersonic jets can move twice as fast as traditional airliners and that means you can get to where you're going in half the time.
The CEO of Boom Supersonic, Blake Scholl joins us now. Blake, fantastic to have you on the show. I actually saw that your ultimate ambition is to fly
people anywhere in four hours for around $100.00, which is one heck of an ambition, but let's just start with what you're doing at Supersonic. Talk
to me about these jets.
[09:45:03]
BLAKE SCHOLL, CEO, BOOM SUPERSONIC: Yes, well, I mean fundamentally, we believe that a world in which more people can go more places more often is
a better world for us to live in, a better one for our kids to grow up in.
And so after really 50 years of no progress in the speed of air transportation, Supersonic is back, it's back in a big way, and a far more
mainstream way and it is here to stay.
And so aboard Overture, which is our first passenger airliner, you could go from, say, London to New York in just three and a half hours. You could get
across the Pacific, Tokyo to Seattle in just four and a half hours, really, really big speed ups. And it's not just about the time it saves you. It's
about the places you could go that today, you wouldn't even think of visiting.
Imagine being able to do a weekend trip to Hawaii, or a day trip across the Atlantic.
CHATTERLEY: Yes, the world suddenly becomes a far smaller place, but I think we have to do the comparison with Concorde because there are crucial
differences. I mean, the technologies -- what -- 60 years on since we were talking about the technology for Concorde, initially. You're saying that
you can do this a hundred percent carbon neutral, it's also much quieter, and I think people can see just by looking at the pictures, it's far more
narrow, I think than what we were looking at with Concorde. Just explain what makes this unique.
SCHOLL: Well, you nailed it. It has been 60 years since Concorde was designed, right, with slide rules and drafting paper and no computers. And
today, we've got new materials. We've got computer optimized aerodynamics. We have new engines that are quieter and much more fuel efficient and what
we're doing at Boom is bringing those technologies together to achieve a 75 percent reduction in the cost of supersonic flight from day one, which
means supersonic flights are going to be available to far more people than we're ever able to benefit from Concorde.
And like you said, also 100 percent sustainable. A thing I deeply believe is the flight that you most want to be on from a speed and comfort and
convenience perspective should also be the best one from the planet's perspective.
And that's why, Overture is designed from the ground up to run on a hundred percent sustainable aviation fuel, first airliner to do that, and that
means the entire Supersonic fleet is actually going to be a hundred percent carbon neutral.
Onboard the airplane, we are building something really wonderful for passengers. Our goal is to make it such that you feel better when you step
off the flight and when you stepped on. And so yes, it's a relatively long and skinny airplane. But there's great personal space, a large seat, a
large window, a 25-inch screen. We want to build something we are going to feel comfortable to read or relax or even have a supersonic flying desk
where you can be productive at 60,000 feet.
CHATTERLEY: You call it skinny, call it streamlined. Come on, it is beautiful. You know, there will be people watching this going, you know
what, Concorde failed for a reason and that's because as great as it was, and as quick as it was, people weren't willing to pay the super high price.
It was like a once in a lifetime trip rather than just being, you know, a business or let's get around the world and go on a holiday and do it really
quickly kind of resource.
Talk to me about cost and trying to bring the cost of this down? How much more expensive is it going to be perhaps than let's say, flying business
class or flying first class because I do feel like that's critical. And I also feel like WiFi and Zoom have kind of disrupted the business model of
travel already and you can fight back on that, but these are also surely critical impediments to the return of something like this.
SCHOLL: Well, I think you're a hundred percent right. The biggest problem with Concorde is most people couldn't afford to fly on it routinely. It was
about $20,000.00 for a return ticket. And so fast forward to Overture.
Overture 1 has a 75 percent reduction in cost of operation versus Concorde, and what that means is the cost of flying is going to be a bit more like
flying business class today. And yes, that's not yet for everybody, but it is for tens of millions of people, both for business trips, and leisure
trips.
And the basic premise is instead of paying top dollar for a subsonic flying bed, because you -- the flight so long, you can trade in the bed on the
airplane for the best one in the world, which is the one at home the night before you have to leave.
And so it's a really strong value proposition. It's not going to be a fare that's tremendously different from what people are already paying today and
business class. And like you said earlier, you know, our ultimate goal is to get the cost even further down.
I want flights that are faster, that are more affordable, that are more convenient, that are more sustainable, and so there's going to be an
Overture 2 and an Overture 3, and as the cost comes down what we're going to find is supersonic starts to displace subsonic as the main mode of
transportation over long distances, not just for a few people, but for all of us.
CHATTERLEY: I saw your sort of hottest competitor in the supersonic race was a Florida-based company called Aerion and recently said, look, we've
run out of money and we are shutting down. It's an expensive, intensive industry and project to be on. Do you have enough money to go between now
and 2029 and bring these planes to market? Like how many orders do you have ahead of time?
[09:50:02]
SCHOLL: So United placed the first order for any supersonic civil aircraft since Concorde in the 1970s, the first true order. Boom has had preorders
before, other people had preorders. This is the first order.
And the company is super well-financed. I'm super proud of the investor base we have. And yes, this is capital intensive, but one of the reasons
Boom is succeeding is because we have picked an approach to market that has a tremendously large opportunity. So tens of millions of people already fly
business class internationally in routes where we're going to be able to give them a big speed up and that creates a need for over a thousand
Overture aircrafts, so a really significant opportunity.
And when you look at Boom's approach, I love it because you know, Concorde, the big problem was it was too expensive and so, we are moving towards a
more mainstream opportunity, getting the cost down, which also makes the opportunity bigger.
Other folks have tried this, they have tried to make it a private jet, and the problem is when you build a private jet, you can't really sell very
many of them. It's much harder to justify the case to investors.
CHATTERLEY: For now. Blake, good luck, and I would just like to nominate myself for 2029 for that first flight if you need a journalist to report on
it. Blake Scholl, founder and CEO of Boom Supersonic. Great to have you with us. Thank you.
Okay, still ahead, another stunning vote of confidence in Bitcoin from one of Corporate America's biggest crypto bulls. That story and more, just
ahead.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back. Another challenging day for the Bitcoin faithful. The leading cryptocurrency lower again today and down some 11
percent in the past week. That said, Bitcoin bull Michael Saylor, the CEO of MicroStrategy is doubling down yet again on his crypto bets. His company
borrowing some $400 million by issuing junk bonds to buy more Bitcoin while at the same time warning of a hefty quarterly loss on its current Bitcoin
investments.
Shares of MicroStrategy are down some four percent today on the news in early trade. Saylor, still a Bitcoin buyer, though, former President Donald
Trump ruffling the Bitcoin community, perhaps suggesting Bitcoin quote, "Seems like a sham."
Paul La Monica joins me now. Paul, as market indicators go, I don't know whether that's a buy signal or a sell signal, quite frankly. But there's a
lot going on.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think it is fascinating. For one, you know, MicroStrategy, to their credit, they have been consistent,
unlike say Tesla with being bullish on Bitcoin. But President Trump's comments are pretty interesting regarding Bitcoin defending the dollar.
If you close your eyes, and you know, you didn't realize that it was Donald Trump saying it, you could have thought that it was Warren Buffett or
Charlie Munger, who are also extremely critical of Bitcoin and cryptocurrencies.
So, I think there are still a lot of investors out there looking to, you know, kind of bold type names like the former President for cues about
where prices are going to go. So, it's going to be fascinating to watch what happens in the coming weeks since Bitcoin and other cryptocurrencies
had a terrible month in May that has extended now into June.
[09:55:12]
CHATTERLEY: You raise a great point though about pushback when you have a nation like El Salvador saying, look, we are going to have this as legal
tender when current legal tender is the U.S. dollar. You'd expect to see perhaps some official pushback if the dollar is going to be in some way,
even just a tiny little bit, replaced by certain individuals. What do you make of the recovery of the crypto ransom -- Paul.
LA MONICA: Yes, I think that that is another factor that is potentially driving down Bitcoin prices, barely or not, there have been people have
criticized cryptocurrencies an easy medium of exchange for fraud and other malfeasance. So, that I think is -- you know, this is being raised as a
potential problem again.
CHATTERLEY: And yet, it was identified, it was found and it was on the ledger. So, the officials could identify it. I'd argue that's a positive.
We shall reconvene on that, my friend.
Paul La Monica, we have run out of time. I am being told off. Thank you.
That's it for the show. Stay safe.
"Connect the World" with Becky Anderson is next.
Must stop talking. I'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
