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First Move with Julia Chatterley
U.S. Consumer Prices Jumped in July, but there are Signs of Moderation; PSG's New Striker Says He Wants to Win the Champions League; $600 Million of Digital Assets Stolen from a Key Crypto Network. Aired 9- 10a ET
Aired August 11, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:14]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE, and here is your need-to-know.
Inflation infatuation. U.S. consumer prices jumped in July, but there are signs of moderation.
Merci, Messi. PSG's new striker says he wants to win the Champions League.
And DeFi defiled. $600 million of digital assets stolen from a key crypto network. Don't panic. I'll explain -- or try.
It's Wednesday. Let's make a move.
A warm welcome to FIRST MOVE once again. Great to be with you, as always. And another day of Messi mania in the sports world. It's PSG OMG, the star
footballer giving Parisian fans glee, plus the U.S. infrastructure deal, RSVP, Senate approved. Now, it's on to the House and more market highs ASAP
as U.S. stocks are at records and they are pushing higher after today's inflation data.
Let me give you the details. The U.S. reporting a 5.4 percent year-over- year consumer price jump last month, that's a half a percent month over month rise. It's as expected and it of course, it is way above the Federal
Reserve target, but there are bright spots: Core inflation, which strips out the volatile food and energy prices rose less than expected and used
car prices also softened as well. So, this is good science.
And here is a look at the premarket action. Future's turning higher after that data. We are watching airline stocks though, too, today after a
warning from U.S. carrier Southwest that bookings are slowing as the delta variant spreads.
Building related stocks gained Tuesday, too, after the infrastructure vote and remain in focus, as I mentioned already, the U.S. Senate earlier this
morning also passing a separate $3.5 trillion spending plan that faces another tough legislative slog.
The bottom line remains, Congress wants to keep the fiscal firehose flowing, and the White House wants the oil spigots turned on, too. Oil
hauling as the White House pushes OPEC+ to boost production to ease rising fuel prices that are also flowing into inflation numbers, another world
Wednesday.
Let's get right to our drivers and July's pricing punch.
Christine Romans joins us now. Christine, great to have your analysis on this. So, we did see another significant jump that is way above the Federal
Reserve's targets, but bright spots within it. I also mentioned used cars - - huge -- the sort of drop that we've seen, the relative drop in growth in prices that we saw there.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Yes, I mean, that's a real change, the used car prices because we had seen big double
digit gains in those prices, and now, some moderation there.
I think there are two ways to look at these numbers. One, if you're a consumer, this confirms everything you know. Anybody who has bought
anything over the past month knows that these prices have been going up. If you're an investor though, you're looking at these signs of moderation, and
you like what you see, you like the core rate of 0.3 percent, a little cooler than what we saw last time around and you like some of those places
where you're seeing some moderation.
Still, though, the overall headline number, five tenths of a percent increase month over month, 5.4 percent year-over-year, those are numbers
that signal to you that prices have been rising pretty aggressively here as the economy roars, and there are these mismatches between supply and
demand.
So, for consumers, this confirms everything they already know; for investors, I think they are focusing in on some of those signs that maybe
the worst is behind us in terms of price increases.
CHATTERLEY: Yes, the Institute of International Finance noted last week that the U.S. price markups that we're seeing far surpass anything like
what we're seeing anywhere else in the world, and we can point to the bottlenecks that we've seen.
But I think we can also point to the money that people have in their pockets, and they are absorbing these costs and businesses are able to pass
them on, which we've heard in earnings season as well. So, it's a question of when that moderates whether or not the wage rises that people are seeing
are even compensating them to some degree for the prices that are playing because at some point, you have to assume that some of this unravels.
But we're going to talk about something else. What's going on in the United States? They've passed an infrastructure deal in the Senate, then we have
this $3.5 trillion amount that also got signed off in the Senate. The House, though is the crunch. Can we talk about this and how likely more
spending actually is to see ultimately coming to the economy? And I heard a sigh. Yes.
ROMANS: And yes, it's certainly a good day for the Biden agenda and it is certainly a good day for you know, the proof that Biden's bipartisanship
and his years and years in the Senate were able to push both of these measures this far.
There's still a lot of work to do, and think it's going to turn out to be a frenetic fall as they try to figure out how to move this all forward. That
infrastructure bill, we talked about it yesterday. That, as I've always said, is just a pure intelligence test for Congress. Upgrading and updating
America, the guts that run America is a good idea, and that will be good for the productivity of this country. Maybe not a big spending push right
away, because not everything to shovel ready, of course, it is spread out over time. But that is something that is a net positive for the American
economy.
[09:05:25]
ROMANS: The $3.5 trillion budget resolution that is moving forward, passed in the Senate; that is a whole pile of money that maybe moderates will want
to see trimmed a little bit. So, there could be problems or really some restraint from the Democrats on that big bill, and also on that
infrastructure bill that passed the Senate, what will happen in the house? Will there be other demands from progressives, for example, who'd like to
see other measures?
So, there is still political work to be done, but even getting both of these bills to this line on the field is something that a lot of people
didn't think they'd see happen.
CHATTERLEY: Yes, it feels like a win. The Senate at least has passed the infrastructure intelligence test. The question is, can they isolate this
and recognize the need for this rather than trying to wrap it up in something else? Yes, on to you with that intelligence test to the House,
the House leadership, too.
ROMANS: Your turn, your turn, House of Representatives --
CHATTERLEY: Yes. The ball in your court. Christine Romans, thank you so much.
Speaking of balls, football's biggest star hoping to shine bright in the city of lights, Lionel Messi says he wants to win the one trophy that has
so far alluded his new club, PSG. He spoke to our Amanda Davies.
(BEGIN VIDEO CLIP)
LIONEL MESSI, PSG FORWARD (through translator): I'm aware of my background and the objective this club has fighting for a while to win a Champions
League, and it came close these last few years.
For me on a personal level, I would love to win another Champions League, like I've said in previous years, and I think I've come to the ideal place
that's ready for that.
(END VIDEO CLIP)
CHATTERLEY: Meanwhile, the PSG President seen here with Messi is defending the transfer saying the club has always followed UEFA's financial fair play
regulations. CNN senior producer Saskya Vandoorne is in Paris for us.
That's a very interesting one actually, Saskya, that there are a lot of people looking at this and saying, hang on a second. If Barcelona couldn't
afford him, how can PSG who are also in pretty financial exciting conditions as well given what we've seen in the past year?
But let's talk about the reception, the celebrations, the joy and what we heard from him today, emotional leaving Barcelona, but game on now with PSG
and the Champions League, certainly in focus.
SASKYA VANDOORNE, CNN SENIOR PRODUCER: Exactly, Julia and I mean, Messi said everything that the fans wanted to hear today during the press
conference. He said that he had the same goals as Paris, and that he was going to do his best to win those titles. And crucially, he believed that
PSG can now win the Champions League.
Of course, Messi has won the Champions League four times before. He's a six time Ballon d'Or winner. So, the fans really believe that with Messi, they
finally have a chance. And let's talk about those fans.
Julia, you and I were talking yesterday when he arrived in Le Bourget, and the fans were back here again today because they were waiting for that
press conference. In fact, a lot of them were even lined up in front of the PSG stall.
Let's talk about the commercial success of Messi. They're outside that PSG store to get his number 30 shirt. It was a huge line, and then we came
here, Messi went inside, gave that press conference and during the press conference, the fans out here once again, just utter joy. They let off
flares, the colors blue, red, and white for the French flag. They let off fireworks again.
You know, I spoke to a neighbor here, she said that she had never seen anything like it since she lived in the neighborhood. So, really very
similar scene from what we saw yesterday -- Julia.
CHATTERLEY: I'm just noticing the lack of masks as well and getting completely distracted. Saskya, what does this do and what does his presence
do for the brand of PSG? Because whether it's the commercial opportunities, just the fact that they've got such a well-known, such a brilliant
footballer now on board, what does it mean for brand PSG?
VANDOORNE: Well, exactly, it means so much for the global brand. And you know, we just said Julia that PSG was one of the only clubs that could
really afford Messi. And this is just going to do wonders for them because it's now not just Messi on the team, you've got Neymar you've got Mbappe,
those are three huge mega stars.
So you know, again, we spoke about this yesterday, Julia, but it's going to be quite difficult for the for the manager and the coach to be able to
manage perhaps these three egos, but for the global brand, it's going to be -- it's going to be so much, and as I said, Julia, we really saw it this
morning, just in terms of that line in front of the store. It's snaked all around down the Champs-Elysees, all these people waiting to get their hands
on that number 30 shirt -- Julia.
CHATTERLEY: Yes, absolutely. And it was quite nice to see as well in that press conference, the fact that he said Neymar, his former colleague of
course, the Brazilian footballer played an important decision in his choice to come to PSG, so it's going to be quite fascinating to see those guys in
action once again.
Saskya, great to have you with us. Thank you and enjoy the celebrations. I'm sure the atmosphere there is a pretty electric.
Saskya Vandoorne there.
[09:10:10]
CHATTERLEY: Okay, let's move on. A crypto hack of epic proportions, more than $600 million worth of cryptocurrency has reportedly been stolen from
Poly Network, a decentralized finance platform that connects different blockchains. They confirmed the hack.
Clare Sebastian is following the story for us. This is an exciting one to unravel, Clare, and of course, Poly Network confirmed the hack because they
were open about it and said, hey, please give us the money back. You've taken it from people in the community that basically can't afford to lose
this.
Who are Poly Network? What do they do? And what do we know about how this money was taken? This digital asset cash was taken?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, so Poly Network, as you said, they are a sort of platform that promotes the interoperability of
different blockchains. We know there are different blockchains out there, the likes of Binance chain, Ethereum, the allow them to sort of work
together for contracts and transactions to be executed across different blockchains. So that's their mission. That's their philosophy.
And in terms of the hack, well, they disclosed it, as you said. They tweeted out an open letter. We live in a world, Julia, where the "Dear
hacker" letters are now being published on the internet. So, they published this letter, yesterday around lunchtime. And the letter said, "We want to
establish communication with you and urge you to return the hacked assets," and appeal, as you noted, to some sort of perhaps affinity with the crypto
community.
They said, "The money you stole from tens of thousands of crypto community members, hence, the people." So, that's sort of the first we heard about
the attack, then analysts started to move in and tried to determine how it happened. A company called Slowmist, which is a sort of crypto intelligence
company, they said that more than $610 million were transferred to three different addresses.
They say, they think there was a vulnerability within these smart contracts that was exploited and that allowed the hacker to reroute these funds to
their own addresses. It's unclear yet exactly what happened. There's different speculation about this online, but $610 million worth of
different kinds of crypto coin, an enormous, enormous sum.
So, that's really where we are now. But in terms of the return that Poly Network has asked for, we are now starting to see -- this is really
interesting, some of the funds being returned. As of about an hour and 20 minutes ago, almost $4.8 million in various different coins has been
returned. That's obviously a very tiny fraction of the overall amount, but still begs the question as to who might be behind this, whether it could
be, you know, a white hat hacker, perhaps trying to make a point, maybe even an inside job, we just don't know at this stage -- Julia.
CHATTERLEY: Yes. And I think one of the big questions that I was asked when this news broke was, so does this mean the blockchain itself, which
records all the data has been hacked? And no one is suggesting that's the case. So, I think this is a very important aspect of this, and when we're
talking about, we've touched on that on the show, decentralized finance, we're talking about what people hope is going to be, and you mentioned
smart contracts, too -- a more efficient, quicker way of getting insurance or loans out there, but this is the last thing the industry needs.
And what we have seen, according to those who are tracking this data, an explosion of fraud, theft crime, and in this part of the crypto sector, in
particular -- and particularly relative to the border sector itself.
SEBASTIAN: Yes, and perhaps, look, it's not good news for DeFi, as we're seeing decentralized finance as, you know, as we're seeing a surge in
popularity of this kind of -- these kinds of applications and lending platforms, exchanges, that happen on the blockchain. They are being hacked
in a sort of increasing amount.
The crypto intelligence company, CipherTrace put out a report, they said that, that DeFi hacks are up by almost three times this year in terms of
the losses compared to last year. Meanwhile, in the crypto space in general, including decentralized finance, that's actually decreased this
year by almost two thirds compared to last year and by much more compared to 2019. So, you're seeing a sort of an exponential decrease in terms of
overall hacks of the crypto sector perhaps as that area matures.
So that perhaps, DeFi can take heart from that, that as it matures and sort of deals with some of these vulnerabilities, it might also see a decrease.
But for right now, this is a new sector, and it is seeing an increase in these attacks. And one really interesting point given that we're now asking
who might be behind this Poly Network attack is that CipherTrace points out that one quarter of the attacks on decentralized finance so far this year
came from what they call rugpulls, so essentially inside jobs -- Julia.
CHATTERLEY: Fascinating details here and only $595 million to come back. Wowsers. Clare Sebastian, thank you so much for that.
All right, let me bring it up to speed with some of the other stories making headlines around the world. Now, to those devastating wildfires in
Greece persisting for more than a week.
The country's Prime Minister says Greece is facing a quote, "natural disaster of unprecedented proportions." There are nearly 600 fires that
ravaged the country, forcing thousands to flee and destroying homes and livelihoods, all as the nation boils under one if it's worst heat waves in
decades.
[09:15:11]
CHATTERLEY: CNN's Eleni Giokos is live on the island of Evia, which has been particularly hard hit and you remain there. Talk to us about where
specifically you are, Eleni, today and what you're seeing.
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: I'm still in northern Evia, and this is still a region that is defined as an active front in
Greece. Now you and I spoke yesterday, we were with firefighters trying to put out extraordinary flames and fires that were ravaging parts of the
forest, and the whole point was to try and stop its spread.
Today, we're seeing a big concern about the rekindling of fires, and I just want to show you here, you can see that it's still burning. This was put
out many days ago on this specific side of the island. But again, you're seeing smoke and it's a little bit like -- you've got a bit of a breeze
today, Julia, so that's the big risk that you're seeing a rekindling.
And if I just show you the extent of the devastation, this by the way, is just a small portion of the island, where you can see as far as I can see,
you've got forest that has been absolutely destroyed and decimated.
We're talking about hundreds and thousands of hectares of virgin forest that is gone. We're talking about agricultural land that has been
destroyed.
Now, the Prime Minister announced and almost $600 million relief package for Evia and Athens, those are the two regions of Greece that have been
most impacted by the wildfires. And importantly, he also spoke about remuneration for the victims, for households for businesses and for
farmers.
Now, if you speak to locals here, the damage can't be quantified because the forest is going to take decades to be restored. And then you're also
talking about livelihoods that were built over many years. So, that is the big concern.
We're also waiting for a press conference from the Prime Minister that is said to occur tomorrow. Many people have questions. Remember, he apologized
for the weaknesses in the response, so still anger and emotions are high, Julia. I can't tell you just the despair and the sadness and the trauma and
the shock that comes with this experience.
People tell us that they've never seen anything like this before. It is unprecedented, and they are scared about the future.
CHATTERLEY: Yes, money alone can't compensate for this kind of loss. Eleni Giokos, thank you for that report.
Okay, Taliban fighters in Afghanistan appear to have captured a ninth provincial capital this week. Local official says the City of Faizabad was
the latest to fall after government forces retreated. The Taliban have now seized most of the north and are trying to take the region's biggest city.
Still to come here on FIRST MOVE, a grocery Bolt on, the Estonian mobility group adds a new twist in a bid to deliver the super app variety. We speak
to the CEO.
And taxing for takeoff, the electric air taxi startup that's making its Wall Street debut in 15 minutes from now, we speak to Joby Aviation's
Chairman, coming up on the show. Stay with us.
(COMMERCIAL BREAK)
[09:20:45]
CHATTERLEY: Welcome back to FIRST MOVE. We've brought you merry merriment in France. What about the stock picture in the United States? Well, I can
tell you that's far from messy. U.S. futures pushing higher after an encouraging read on U.S. inflation. The red card though overall prices
rising 5.4 percent year-over-year, but early signs of some core inflation moderation and hopes that the recent spike in items like used car prices is
truly transitory, as the Federal Reserve repeatedly insists.
Airlines on the descent however, Southwest warning it may not be profitable this quarter due to fewer bookings and increased cancellations. JPMorgan
say spending on air travel fell almost 20 percent from its recent peak late last month due to COVID concerns.
Lisa Shalett joins us. She is the Chief Investment Officer at Morgan Stanley Wealth Management. Lisa, great to have you on the show, much to
discuss this morning. Let's hone in on the inflation data.
Investors seemingly taking heart from that read and some of the signs within it that we are seeing moderation. What's your take?
LISA SHALETT, CHIEF INVESTMENT OFFICER, MORGAN STANLEY WEALTH MANAGEMENT: Look, clearly the arithmetic suggests a little bit of deceleration in some
of the items that are certainly related to supply chain constraints like the dynamics in used cars, which as you know, filtered through from the
semiconductor shortages, which affects, you know, new manufactured vehicles.
But you know, our read is, you know, let's focus on the headlines, let's focus on the reality of the matter. And the reality of the matter, to your
point is headline inflation is still running at 5.4 percent, about the same as last month. While the core is cooled ever so slightly, we're still
talking about a number of 4.3 percent, which is meaningfully in excess of the two percent target that the Fed has set.
And so you know, we're really now starting to get into the zip code in our humble opinion, where the Fed is going to be tested about around their
framework of what it means what average inflation targeting really means, and what are the timeframes over which they're going to care about this.
Their preferred measure as we know is the personal consumption expenditure index, the PCE, you know, that tends to run a little bit below the CPI,
because it has a different mix of things like rents and wages.
But even that is going to probably, you know, show a number of 3.6 percent year-over-year in the core. So, our view is that this debate around the
urgency of what the Fed is going to do, the timing of the taper, and the resilience of their framework and the credibility of their framework really
is going to continue to be tested by these numbers.
CHATTERLEY: It's a fascinating isn't it? Investors are clutching at the signs that this is good and moderate, and therefore the Federal Reserve
won't have to move. They also hone in on signs of perhaps slowing growth, the concerns about delta. You're less worried about that, too.
And when you look at the overall headlines for U.S. growth, particularly relative to the rest of the world, growth is strong. I mean, the Federal
Reserve is looking at high inflation. It's also looking at solid growth. Let's be clear.
SHALETT: Yes, let's be clear. You know, one of the things that I think a lot of folks have lost touch with including, you know, some of the folks in
Congress who are, you know debating our current infrastructure bills, this is an economy that grew last quarter at six percent real with those
inflation numbers that we just talked about. It means a nominal growth in the economy of double digits.
You know, those are not levels we've seen since the early 1950s, and it looks like the third quarter could be another, you know, six percent real
GDP quarter with deceleration only to about four percent real in 2022.
And we just need to remind people, that's two times the rate of real growth that the U.S. economy experienced during the last and quote-unquote
"longest" expansion, that 12-year you know, post great financial crisis expansion where markets did spectacularly well.
But the economy really, you know, kind of plodded along and we're at a place where it looks like we're going to do quite a bit better than that
for a period of time.
[09:25:23]
CHATTERLEY: So, I can give you a whole list of reasons why you might want to be defensive. If you're an investor here, whether it's concerns about
the spreading of delta, the message that the bond market, perhaps is sending, with interest rates coming down, some of those fears of growth,
but you've sort of debunked them quite successfully, I think there, quite frankly; perhaps the Fed does decide to act and that it needs to cool
things down a little bit.
There are reasons to be defensive, if you believe they're coming, at least in the short term. Firstly, Lisa, what do you think? And if the choice here
for investors is to go into something like tech stocks for defensive purposes, is that really a good idea, too?
SHALETT: Yes. So you know, Julia, I know you follow our work and you know, that our concerns have been that increasingly, you know, the markets and
the indexes, which are heavily weighted to some of these, you know, mega cap tech names are quite vulnerable, and they're vulnerable, not only
because valuations are quite extended, but earnings expectations for next year are quite extended, and the dependency of those valuations on
extremely and in many cases, historically, low interest rates, has just continued to rise.
And so, when we sit a little bit more soberly and look forward at 2022, we see not only rising rates, you know, rates on the 10-year potentially
getting into the one six to one eight, even two percent range, but we see more regulation on these tech stocks, and quite frankly, higher taxes. And
none of that is factored in, and those three things in our humble opinion could be kind of the triple whammy for some of those perceived safe stocks.
And instead, you know, we would recommend if folks want to be defensive, maybe try those tried and true things like, you know, staples and utilities
again.
CHATTERLEY: Yes, it makes a lot of sense to me, quite frankly. And Lisa, you're completely right, I do follow your work very closely and I may be
guilty of leading the witness there. But that's sometimes how it works.
Great to have you on the show. Thank you so much for your wisdom today. Lisa Shalett, the Chief Investment Officer at Morgan Stanley Wealth
Management.
The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:30:40]
CHATTERLEY: Welcome back to FIRST MOVE and U.S. stock markets are up and running after another summer inflation scorcher. U.S. prices rising 5.4
percent last month, but there are some hopes that recent inflation data points may be transitory and that's pushing the Dow and the S&P to new
record highs.
The weight of the world though, the own parent company of Weightwatchers, shares of WW International shedding about a quarter of its weight after a
40 percent second quarter profit drop and soft outlook as subscription growth slows.
Energy in focus, too, the White House urging OPEC+ to boost production calling its gradual approach to raising output quote, "simply not enough."
Fuel prices have risen by almost 90 percent a gallon over the past year.
Okay, now to a startup taking on Uber with explosive growth. Estonia's Bolt is expanding at breakneck speed now with over 75 million customers
worldwide and a valuation nearing $5 billion. The backbone of the business's micro mobility with ride-hailing and scooters, then it took a
slice out of the food delivery market.
Now, Bolt is promising to deliver groceries to your door in 15 minutes. Markus Villig is the CEO and founder of Bolt, and he joins us now.
Markus, fantastic to have you on the show. You know, I've just been looking at some of your growth stats just between the beginning of 2020 and today,
if someone would have told you when the pandemic hit back in 2020 that you would double the number of cities to 300 that you were operating in, you'd
go from 35 countries to 45 countries and you'd go from 30 million passengers to 75 million customers over that time. What would you have
said?
MARKUS VILLIG, CEO AND FOUNDER, BOLT: That's something we were definitely hoping for. But absolutely, it was impossible to predict what's going to
happen, so we prepared for the worst.
CHATTERLEY: Yes, I mean, I agree. Talk to me about how you're achieving this growth.
VILLIG: Fundamentally, it comes down to what's the mission of the company, and what we want to build is an alternative to the private car. And we see
that especially in Europe and Africa, it's a far better opportunity to do that than in the U.S., because cities are generally denser, car ownership
is lower, and I think we can actually build a truly viable future here where people can use on demand transportation when they actually need it.
So that might be micro mobility with electric scooters or electric bikes; that might be ride hailing, that might be delivery products, and so instead
of people going to the store (AUDIO GAP). What sets us apart from every competitor out there is that we're far more frugal and operationally
efficient at what we do.
And we need to recognize that transportation and food are some of the largest consumer spending categories in the world. So, price really
matters. So this is not the traditional space where you can only focus on the software side of it, but you actually need real physical operations on
the ground as we have in 45 countries, and we do that better than anyone.
CHATTERLEY: Wow. Okay. There's so much in that. Let's hone in on grocery delivery to start and then we'll work backwards to the ride hailing because
I agree with everything that you said about the opportunities in terms of grocery delivery, but specifically in Europe, why the choice to go to
Europe when -- I mean, I was listing them, Getir, Gorillas, Weezy, Flink, Zapp -- there are so many competitors that all believe that they can have
an edge in this market.
Can you do it? And can you make money, Markus?
VILLIG: So, we're used to competitions. We're now about seven years old as a company. From day one, we've had competitors in every single product line
that we operate in. And what we see across the board, what makes sense, what gives us an edge over competitors is that we really focus on what
consumers care about.
And we've never heard a consumer say that they want the prices to be higher, they want the service to be slower, and the want the quality to be
worse. But we know exactly that all of those things are already true today, they will be true in 10 years. That we need to focus on speed, we need to
focus on pricing, and that's what really has set Bolt apart in every category. So that's the first one, that's the DNA of the company, really
being operationally excellent.
But the second one is that we now operate this ecosystem with five different products. So actually, each of those has a strong synergy with
each other. So consumers that already use us, and we have 75 million customers across Europe and Africa, they already know the brand. They
already have their payment in store, we already know their locations.
So, it gives us a big edge over any new entrant that's now trying to enter the space.
[09:35:05]
CHATTERLEY: I'll come back to that because that's an interesting point. But first, I was looking at just some of the data in the U.K. from the
lockdown that they had back in in January. And just 16 percent of the country's grocery spending, I believe, was online. So one six percent.
How big do you think is a proportion of their sales that were out there, no matter which country that we're talking about post pandemic is actually
going to be done online? Because it is more expensive to get a grocery delivery done. It doesn't feel like you're competing with sales at
supermarkets, it feels like you're competing with sales at convenience stores. And it is, let's be clear, far more expensive to get it delivered
this way than it is just to take a walk there or drive your car there and get the shopping yourself.
VILLIG: What we see is that it's very similar to where e-commerce was about 20 years ago, which is that the penetration was very low, and then it
was just compounding for the last 20 years, gradually growing and growing every single year. And we just see that in the grocery space, it's going to
take more time.
So today, yes, as you rightly said, we're starting off from the convenience side. So, relatively small basket sizes, focusing on the first 10 to 15
minutes, very quick deliveries. And then once we have already established the niche there, and we get the economies of scale in terms of the
suppliers, being able then to afford actually goods in a more affordable way to consumers, then we can see that we can start to move up market and
go over against these larger baskets and actually start to compete with supermarkets as well.
But that's going to be a five to ten-year journey for us and these other companies going after this space.
CHATTERLEY: Do you think there will be consolidation in the grocery delivery space, with so many players trying to tackle this?
VILLIG: I think -- absolutely, similar to the on demand mobility space, we've seen this wave now happened four or five times, which is that you
start off with a new industry, there's millions of investor funding pouring again for dozens of competitors. And then usually after five, six years,
the space starts to mature and consolidate, and we think we're just seeing this same cycle now repeat all over again in the on-demand process base.
CHATTERLEY: I'm sure you'd be the first person to argue that your business model is very different from Uber's, but do you think you can be bigger
than Uber one day?
VILLIG: We absolutely already are in many countries. So our focus is in Europe and Africa. We're already the largest European player, and in about
half the countries that we operate in, we are already the market leader in the ride-hailing side, on the scooter side, and now, soon, on the food
delivery front as well.
CHATTERLEY: Phenomenal. And in those markets, are you profitable?
VILLIG: In the mature markets, where we have the leading position, it's absolutely a sustainable business model. I can't say that for every other
player, but again, Bolt's entire focus from day one has been frugality, how to operate this in not only a great way on the technology side, but also
operationally how do we keep costs low? And I think that's something that really sets us apart. We can operate with far less external funding than
any other player out there.
CHATTERLEY: Wow. So you're saying -- and let's talk specifically very quickly about ride hailing in isolation. You are making this business model
work, because when we look at competitors, like Lyft, for example, we've just mentioned Uber, they're struggling to make money, they're still
struggling to make money. You're saying you can be profitable with the way that you're handling this?
VILLIG: Absolutely.
CHATTERLEY: Wow. So Markus, fast forward. Oh, have you frozen?
VILLIG: Actually, it is simple.
CHATTERLEY: Markus, we lost you there very briefly.
VILLIG: Am I back now?
CHATTERLEY: We can hear you. I think we can hear you again. Markus, fast forward two to three years. Where is Bolt?
VILLIG: Our goal is that for the medium term, we want to become the largest European technology company, and we see that the transportation and
the food space are some of the largest categories or industries out there. So by being the European leader in these, we can also be a hugely
transformative company for the whole European technology ecosystem.
And I think one of the second order effects from that is that talent can actually stay in Europe, grow in Europe, and it doesn't need to always
relocate to the U.S. or China to actually make a big impact on the world.
CHATTERLEY: Very quickly, Markus, because I have to let you go. You started this company at 19, and it wasn't that long ago. How does it feel
having a conversation like this about something that you've grown and is now all over the world?
VILLIG: It is more exciting than ever, and I just recall going on the streets of Berlin and signing up ex-drivers one by one just eight years
ago. Now, we have a team of two and a half thousand people and we're just getting started launching new products every year.
CHATTERLEY: I am glad we got that. You know, I was dying to ask that from the beginning of the interview. Next time, we'll know to ask it first.
Markus, it's great to chat with you. Stay in touch, please and we'll track your progress.
Markus Villig, CEO and founder of Bolt.
All right, up next, shares in electric air taxi startup, Joby Aviation trading for the first time this morning. We've got the executive chairman,
next.
(COMMERCIAL BREAK)
[09:42:32]
CHATTERLEY: Welcome back to FIRST MOVE and onto a Wall Street debut in more ways than one.
Electric air taxi startup, Joby Aviation begin trading on the New York Stock Exchange today, and as you can see great excitement there, ringing
the bell. And meanwhile, outside the NYSC as you can see here, too, the aircraft itself is on display for the first time ever. It is powered by six
electric motors. It takes off and lands vertically.
Joby is working on getting F.A.A. certification for the craft and hopes to offer ride hailing air taxi services by 2024.
Joining us now is executive chairman of Joby Aviation, Paul Sciarra. Paul, fantastic to have you on the show. Very quickly. How does this day feel?
PAUL SCIARRA, EXECUTIVE CHAIRMAN, JOBY AVIATION: Well, Julia, thanks so much for having us today. Obviously, part of this is really exciting for
the broader team. We've been working on this aircraft for the greater part of a decade, and even just in the past six months, we've had an opportunity
to prove things that people didn't think was possible, a fully electric aircraft that's able to travel 150 miles on a single charge, and also is
almost a hundred times quieter as a helicopter.
So we really think about today as an opportunity to celebrate that achievement. At the same time, it is also a real transition for the
company. As we're shifting gears from the company that's been focused on product development, to now one that needs to be squarely focused on
certification, production, and service. So, it's a really exciting day.
CHATTERLEY: You also now have to focus on investors, too, and I do want to talk about the technology because I'm incredibly excited, too. But I want
to talk about the decision to go public today and how you've done it.
There's been some real reticence about these SPAC vehicles, special purpose acquisition vehicles that are used to go public. Talk to me, Paul, about
what this means for longer term investors? Because I think one of the fears here is that going public this way is a way to get the early investors out
and get new investors in. And sometimes that can be quite expensive or at least volatile. What's the message to new investors in particular today?
SCIARRA: Yes, so we had an opportunity to actually structure this transaction in a really novel way, one that aligned the alignment of
existing investors, new investors in the management team for the long term.
So, our transaction is really different from others. There's as long as a five-year lockup for existing investors management and the SPAC sponsor,
and that I think differentiates the structure that we've taken versus some of the others in the market.
At the end of the day, we think about this as an opportunity. You know, this was not so much a question for us about sort of market timing. But
really, because we were ready, the technology was ready, the certification path was ready, and this gave us an opportunity to put the capital and the
resources in the bank to execute off for the next three to four years.
[09:45:22]
CHATTERLEY: Yes, I think it's very important for people to understand the difference in how you structured this. So thank you for answering that
question.
All right, so you said it. Look, we want to get people up there flying, perhaps there are taxis even as early as 2024. There are a lot of people
working on this, Paul. There's Boeing, Airbus. We've spoken to Volocopter as well. What differentiates you? And I guess you can tie that to, I know,
the conversations you've been having with the regulators for what -- the last three years?
SCIARRA: Yes. So I think there's really two ways to think about the different approaches that are out there. And I think the first is to think
about what sort of specifications the vehicle can deliver. We tried to build one aircraft that could deliver any trips between five and 150 miles.
So that's not just trips inside of cities, but that's connecting cities to nearby cities, and to some cases, cities to suburbs as well. And that
combination of trips, I think makes our vehicle a little bit unique.
I think the second thing that's worth noting is sort of where we are in the development of the technology and the path through certification. Joby has
been at this for a long time. We've had more than a thousand test flights on full scale aircraft. And we've demonstrated even in the last six months,
that we're able to hit the range and the noise targets that we set out to hit almost 10 years ago.
So, we feel really good about our positioning on the technology. And we feel like we've got an increasingly clear path through certification. And I
think that sets us apart from some of the other companies in the space.
CHATTERLEY: What about cost, Paul? I mean, can you give us a sense of what the cost of one of these flights is, and even just relative to a
helicopter, for example, in terms of running costs and initial purchase, because obviously, we're talking about something that's electric here, too,
versus fuel and operates very differently?
SCIARRA: Yes, you're right. And that's actually one of the principal things that we set out to do. We wanted to make sure that this brand new
mode of transportation wasn't something that was just exclusively for the wealthy in the way that helicopters are today. But because we're using a
fully electric power train, zeroing out the fuel cost, because there's improved maintenance relative to helicopters, we think we can deliver price
points that are affordable from day one.
So, we've talked about $4.00 per passenger seat mile when we start, essentially the cost of an Uber Black, moving down to almost $3.00 per
passenger seat miles. So, the cost of an UberX in just a few years. At those price points, we think about this mode of transportation is something
that people can use every single day.
CHATTERLEY: You know, again, I go back to the idea of the regulators, do you think actually the biggest challenge here perhaps is not convincing
them, it is going to be convincing people, particularly when we're talking about sort of autonomous flying of these things? It is perhaps overcoming
people's own concerns about what that means, perhaps the greater challenge?
SCIARRA: Yes, so we definitely thought about this question of kind of what is going to help for customer adoption. And actually, our approach is a
little bit different from some others in this front as well.
So we're starting with a trained pilot in seat, we're going to be certifying an aircraft, and there's going to be a trained pilot that's
sitting in it. And part of that is because there isn't a clear regulatory path for autonomy, but also because we think that's going to give customers
peace of mind as they get into a brand new vehicle.
And we think that's going to be really important in terms of getting people over the hump for what is something that's going to be a little bit
different than what they may be used to.
CHATTERLEY: What's it like, Paul, inside one of these things? Because clearly, I'm sure you've flown it, and I know you've done the test flight,
just what's it like?
SCIARRA: So, we have actually -- we're still in remote piloted testing for the product. So, we've had a thousand test flights all done on a remote
piloted basis. We're going to be transitioning to having test pilots in the vehicle relatively soon. But I can tell you that we've thought a lot about
what that experience looks like.
And from a passenger standpoint, it's going to feel a lot like sitting in an SUV. There are automotive style doors, seats that are comfortable, and
you don't have to wear headphones because the vehicle is so quiet.
So for all these reasons, we think we're going to get people touchstones that feel familiar, although of course, the aircraft is very different.
CHATTERLEY: And how confident are you that come 2024, I'm going to be able to go on the Uber app because I know there is a partnership there too, and
book a flight on one of these things, fully confident?
SCIARRA: Yes, so we hit a really important milestone in our certification effort last year, with our receipt from the U.S. F.A.A. of a G-1 issue
paper, that gives us the roadmap to walk down for certification, the set of tests that we need to do at the component level, and then at the vehicle
level to prove out the safety.
So the challenge ahead is really one of program management, making sure that we march through that checklist and get the work done that we need
with the F.A.A., and I can say we feel good about our confidence level when it comes to reaching that certification date in 2023, rolling out service
in 2024.
CHATTERLEY: Okay, let's hope that party fly down as opposed to walk down. I'm going to come down to the stock exchange later and take a look at it.
Paul, congratulations today and thank you for making time for us.
SCIARRA: Thanks, Julia. Appreciate it.
CHATTERLEY: Paul Sciarra there, the executive chairman of Joby Aviation. Thank you, sir.
All right after the break, "Star Wars" fanatics, prepare to be blown away with a new experience you're sure to love. Don't believe me? I find your
lack of faith disturbing.
(VIDEO CLIP PLAYS)
(COMMERCIAL BREAK)
[09:52:26]
CHATTERLEY: Welcome back to FIRST MOVE. There are less than two months to go until Dubai opens the doors of Expo 2020. The massive event could also
throw open big opportunities for two other nations, Israel and the UAE that only normalized relations a year ago.
For more, here is Nina dos Santos.
(BEGIN VIDEOTAPE)
NINA DOS SANTOS, CNN CORRESPONDENT (voice over): It started with a signature. The Abraham Accords have been a boon for business between Israel
and the UAE. Now, Israeli entrepreneurs like Yariv Cohen hope to see it flourish further at Expo 2020 Dubai, the first global event in the region
since that signature.
YARIV COHEN, CEO, IGNITE POWER: Dubai Expo for me represents the perfect combination of business sustainability and policy.
DOS SANTOS (voice over): Heading up a renewable energy company in Dubai, Cohen is particularly excited about the focus on sustainable technology and
the potential opportunities he can seize upon.
COHEN: This is the right place to be because the theme of the expo is sustainability, which is exactly what we do. We provide solar system on
homes that people that don't have power today, the policymakers in the world will come here. So we're looking for collaboration.
It's not just a networking event. It's a lot more bigger than that for us.
UNIDENTIFIED MALE: Very interesting. What a panoramic view of Jerusalem.
DOS SANTOS (voice over): Once finished, Israel hopes its pavilion, which recreates an old Middle Eastern tent, made up with LED panels will be the
home for partnerships, big announcements and deals.
UNIDENTIFIED MALE: So how are you getting ready for Expo?
COHEN: Oh, there's a lot to do. It will be a major event.
UNIDENTIFIED MALE: Well, hopefully it will be a successful one.
DOS SANTOS (voice over): In July, business between the countries reached $675 million. And for Israeli Ambassador Eitan Na'eh, Expo 2020 Dubai will
be a gateway for more.
EITAN NA'EH, ISRAELI AMBASSADOR THE UAE: We want to show Israel. We want to show our culture. We want to show our innovative spirit.
Cooperating is the way forward.
DOS SANTOS (voice over): That's Israel's mantra, literally.
NA'EH: Towards tomorrow, el hamahal (ph).
DOS SANTOS (voice over): Israel's Chamber of Commerce expects Expo 2020 to boost trade to $1.5 billion, bringing together each country's strengths in
several emerging sectors.
NA'EH: There is a great synergy whether it's agriculture, agro-tech, food security, cyber, artificial intelligence, everything tech -- medi-tech.
DOS SANTOS (voice over): That's music to Cohen's ears.
COHEN: If you have a global ambition, use the Expo as a jumping stone.
DOS SANTOS (voice over): Expo 2020 could cement the marriage of two countries sharing a love of commerce and of tech.
Nina dos Santos, CNN.
(END VIDEOTAPE)
[09:55:19]
CHATTERLEY: And finally on FIRST MOVE, if you can't afford a ticket on a rocket ship to space, here's an alternative back on earth. The Galactic
Star Cruiser is taking bookings. It's actually at Disney's new luxury "Star Wars" Hotel and it does come complete with light saber experiences and
"Star Wars" characters to interact with.
It will open at Disneyworld in Florida next spring and a two-night stay could cost a family as much as $6,000.00. May the force be with you and
your credit card.
That's it for the show. Stay safe.
"Connect the World" with Becky Anderson is next, and I'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
