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First Move with Julia Chatterley
Fitch: Evergrande Has Defaulted On Its Debt; New Studies Highlight Impact Of COVID-19 Booster Shots; UK Investigation Into Three Alleged Government Parties; Finnish PM Apologizes For Going To Club After COVID-19 Exposure; More Nations Join Diplomatic Boycott Of Beijing Olympics; Biden Hosts Global Virtual Summit To Promote Democracy; Italy's Antitrust Watchdog Fines Amazon $1.3 Billion; Instagram Chief Testifies About App's Impact On Children; Transformative Year For Lamborghini; Brazil's Nubank Goes Public In One Of 2021's Biggest IPOs. Aired 9-10a ET
Aired December 09, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:17]
JULIA CHATTERLEY, CNN ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE. And here's your need to know.
Debt default. China's Evergrande formally downgraded after missing key repayments.
Booster boost. More evidence for the third jab can help limit COVID effects.
And party probes. UK government now facing three Christmas event investigations.
It's Thursday. Let's make a move.
(MUSIC PLAYING)
And a warm welcome to another fast and furious FIRST MOVE.
And Evergrande debt default giving investors a crazy feeling in the UK. A Christmas party scandal has the government reeling. Don't forget the
finished PM, quote, "clubbing" instead of quarantining. She's young.
Better.com CEO scrooge says don't call him unfeeling. No chance.
At least the U.S. Congress has found a way to raise the debt ceiling.
For stocks, another day of wheeling and dealing. U.S. Features in European markets are softer but we're holding on to the week's gains.
The S&P 500 still on the brink of all-time highs. But as you can see, we're losing a bit of ground.
The catalyst, Omicron optimism, thank data from Pfizer and the small South African study that allayed some of the worst fears.
But fresh holiday restrictions in Delta scarred Europe could further dent growth there. Worrying comments too from the UK health secretary saying
Omicron could end up infecting some 1 million citizens by the end of the month. The critical question, of course, is how much pressure does this
ultimately place on health systems there and around the world. And for that, we just have to wait.
China and Hong Kong meanwhile gaining despite news after the close from ratings agency Fitch. Property giant Evergrande officially now in default
on its overseas debt after missing two key payments.
The mystery now therefore why China injected some $200 billion worth of liquidity into the financial system earlier this week. And I think the
expectation at least from an investor perspective is that authorities will continue to do so to maintain stability as required.
Let's get more on all of this in our drivers.
Selina Wang joins me now.
Selina, great to have you with us.
I think Fitch just confirming what investors and everybody else knew at this stage which was Evergrande was incapable of paying its debts. It's now
formally in default. What now, and what is the company saying?
SELINA WANG, CNN CORRESPONDENT: Yeah, exactly. Even though this makes it official, the markets have been waiting for this for a long time, for
months now. Evergrande has been scrambling to make deadline after deadline, struggling to pay back its lenders and raise that cash with its $300
billion in liabilities. Investors realized that it was only a matter of time before it ran out of cash and was unable to pay its bills.
Now it is unclear, Julia, what exactly the next order of operations are but the company has said that it plans to actively engage with offshore
creditors on a restructuring plan. The company also said earlier this week that it would set up a risk management committee.
On top of that, you also have the government getting involved on managing the company. The local government in Guangdong Province where Evergrande is
based has said that it would send a working group to help the company maintain normal operations.
So, the big question now is, what does Evergrande end up looking like after this restructuring which is going to be incredibly complex and intricate?
CHATTERLEY: As you've discussed and we've discussed in the past as well, the - and the top Central Bank I believe in China said it overnight too,
there's not going to be this spillover effect, and they will cushion at the core of this which is home buyers. I mean this is a property giant, but at
the base of this is people who bought their homes. And obviously, want those homes to be built and still around.
But it does represent a symbol I think of the broader challenges of what is an incredibly bloated and indebted property sector in China. And I think
that's one of the big questions going forward too.
WANG: Exactly. Evergrande has become the poster child as you say of this reckless barring, and the property sector which has supercharged China's
economy, causing property sector to be about 30 percent of China's GDP. But now the party sees that excessive borrowing and expansion as a threat to
financial stability.
The big fear a few months ago was that given how intertwined and complex and big Evergrande is, that a failure of this company could spell economic
disaster for the economy. Even though you have other property companies in China struggling to pay off its debts, it is clear that this is not China's
Lehman moment.
[09:05:00]
But, Julia, we've talked about this before, and the bigger implication of all of this is what it really says about China's economic model moving
forward. And economists say that this high growth model in China where you have the property sector pumping credit into the economy, fueling growth,
those days are over. So that means we may be entering into this era of slower, but what China would say is more balanced growth.
CHATTERLEY: Yes.
Selina Wang, thank you so much for that.
Let's move on.
Booster backup. Two new studies on the line of benefit of a third vaccine dose in the fight against COVID is really researched suggest people who
have had a Pfizer vaccine booster are 90 percent less likely to die than those with only two doses. The data also suggests that a booster reduces
the risk of infection tenfold.
Dr. Sanjay Gupta joins us now.
Sanjay, great to have you with us once again.
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Good morning.
CHATTERLEY: So, good news overall. If you have had a vaccine, important news if you are undecided about getting a booster. Vitally important if you
remain unvaccinated.
GUPTA: Yeah, I think that's exactly right, Julia. When you look at these trends, and this is really data, you'll look at what was going on overall
with cases in Israel and debts in Israel. And then you see at sort of the end of August is when they started giving boosters pretty widely.
And it is important to point out as you did that the numbers were still relatively small. So, when you look at the numbers there, even though you
see a significant uptick there, still small numbers that went up somewhat, got the boosters, and then they came down.
So, from a relative standpoint, it did decrease significantly the likelihood of developing a case. It also developed, really reduced the risk
of dying. But the two shots themselves were very effective. The boosters made it even more effective. And that you saw the biggest benefit in
vulnerable populations. People who are already at risk of developing severe illness.
CHATTERLEY: That is so important, Sanjay, because the skeptics I have and still have plenty of people around me say, but you can still catch COVID
even when you have had a vaccination or booster. You can still catch COVID, but that chart showed the number of cases after you've seen people once
again receiving the third shot of the booster shot. The number of cases per capita coming significantly lower. I think we have to emphasize this. You
can still catch COVID even if you have had a vaccination, but it does bring the likelihood down.
GUPTA: Yeah. That's right. I mean, Julia, nothing's perfect.
CHATTERLEY: Right.
GUPTA: So, I think that's exactly right. You can reduce the likelihood of getting infected in the first place. I think the confusion for a lot of
people, Julia, has been some studies that showed at some point that if you are vaccinated, and you do become infected, then for a period of time, you
can still transmit. You still develop a viral load high enough to transmit. That is true. But the likelihood of you becoming infected in the first
place lower, and the window of time that you might transmit, much shorter, narrower as well.
CHATTERLEY: So important. Final question. The director general of the World Health Organization said something yesterday which caught my attention. He
said that the highly mutated version of the variant Omicron that we spent so much time talking about in recent days might change the course of the
pandemic. He said the exact impact is still difficult to know. We know it's early days, but can you give us any sense of what he meant might change the
course of the pandemic?
GUPTA: Well, I think he's really talking about the fact that it might really prolong you know the period of time before we get control of the
pandemic.
CHATTERLEY: OK.
GUPTA: Because when you look at these mutations and the likelihood of transmission based on those mutations, it's of concern. I mean, one thing,
Julia, keep in mind, there's been thousands of variants since this pandemic began. Most of them you've never heard about because it never rose to the
level of the variants of interest. But for this one, the reason it's a variant of concern is because some of the mutations that it has or
mutations that are associated with increased transmissibility.
Now, one thing that is also starting to emerge although we don't know for sure, we'll need larger numbers, is that the people who have contracted
Omicron do appear as compared to previous variants. They do appear to have more mild illness as well.
Again, sometimes there's a lag period, right? We're still in the first couple of weeks of this. If people with severe illness, that typically
doesn't manifest until a couple of weeks later. So, we will know more when the next several days. But it is possible that this is a variant that is a,
more transmissible, but also causing less severe disease.
CHATTERLEY: I think we've come full circle. The ultimate answer to all of these questions is, if you remain unvaccinated, go get a vaccine. And if
you haven't been boosted yet and are eligible, please go do it.
GUPTA: The perfect message to leave it on, absolutely.
CHATTERLEY: Yeah. Sanjay, great to have you with us as always.
Dr. Sanjay Gupta there. Thank you.
OK. Let's move on.
UK party politics taking on a whole new meaning. The cabinet secretary now investigating three alleged parties held by government staff during
November and December of last year. It comes just as England prepares for a fresh round of coronavirus restrictions.
[09:10:05]
Scott McLean joins us now from London on this.
Scott, and then there were three alleged incidents. Can you just explain to us what the rules were back then so that we can understand for those not in
the UK what the government has allegedly done wrong here, and then we can talk about the investigations?
SCOTT MCLEAN, CNN CORRESPONDENT: Sure. Yes. So, the whole reason that this is controversial at all is because at the time, on the date of this party -
- alleged party in question, December 18th of last year, more than 500 people died in the UK, and in London specifically, indoor social gatherings
were banned altogether. And the very next day, the prime minister announced that those same rules would apply to the entire country, effectively
canceling Christmas for the year.
And the reason that we know about this in the first place is because of this leaked video involving the prime minister's former press secretary who
appeared to make light of you will of this. Johnson though continues to insist that there was no party, and that no rules were broken. But he's
calling or he has called or announced an investigation. Again, this is the prime minister announcing an investigation into whether or not a party was
held at his own residence.
He apparently was not invited to the one in December, but he was at the one at least allegedly in late November where he gave an impromptu speech. That
one is also been investigated. As for a London police investigation, they say that they will not look into the sighting real lack of evidence, but
they do say that if the political investigation here yields more substantial proof, they may take another look.
CHATTERLEY: Yeah. I mean this is all coming at a very awkward time. As I mentioned in the introduction, Plan B rules being announced yesterday. Some
tightening of restrictions. Funnily enough, they resonate with what we carry on living with on a daily basis in New York. Just out of interest,
but Plan B tied to restrictions, questions, ethical questions over expenses for the refurbishment of No 10 Downing Street. Scott, I've seen various
calls for a resignation from the prime minister. It comes at a very awkward time for him.
MCLEAN: Undoubtedly hurts his ability to sell this so-called Plan B, which involves indoor mask mandates and immunity passports for larger gatherings.
And you only have to look at Boris Johnson's signature messy hair to know that he is sort of branded himself as this everyman, which is why this
accusation of being potentially above the rules that are applying to the rest of the country may well hurt him more than previous blunders.
In fact, a new poll, Julia, shows that a majority of respondents said that the prime minister should resign over this, including a third of people who
voted conservative in the last election. You mention some other scandals. One announcement today from the Electoral Commission that there's a fine
against the conservative party for undisclosed donations involving the refurbishment of Johnson's apartment here on Downing Street, previous
lobbying scandal as well.
And so, politically, things probably couldn't be much worse for the prime minister. Personally though, they couldn't be better. Just this morning
according to the British Press Association, Johnson's wife, Carrie, gave birth to a healthy baby girl. That is the prime minister's seventh child,
Julia.
CHATTERLEY: Wow. Keeps him busy. But congratulations to the prime minister and to his wife, Carrie, as well. Yes. A new baby girl. A healthy baby girl
this morning. Very grateful and glad for that. But he's a busy man in other ways.
Scott McLean, thank you for that report.
OK. Meanwhile, the prime minister of Finland has apologized for going to a nightclub following an exposure to a minister who tested positive for
COVID-19. Sanna Marin admitted she also left her official phone at home and relied on aides reaching her on her personal mobile. In her apology, she
said she did wrong and should have considered the situation more carefully.
Yes, not good enough. But I think the decision and the response there is an apology which is important.
OK. A diplomatic boycott of the Beijing Winter Olympics is growing, and now it includes Canada, the U.S., UK and Australia. France says though it won't
join the boycott, but says it shares other countries' concerns that China was abusing its citizen's rights. For its part, Beijing is condemning the
boycotts and threatening reprisals.
CNN's Kristie Lu Stout reports.
(BEGIN VIDEOTAPE)
KRISTIE LOU STOUT, CNN CORRESPONDENT: As more nations join America's diplomatic boycott of the Beijing Olympic Games, Beijing is saying that
they, too, will, quote, "Pay the price."
On Wednesday, the British Prime Minister Boris Johnson announced a diplomatic boycott of the Winter Olympics, set to begin in February in
Beijing. The UK joins Canada, Australia and the U.S. in a diplomatic boycott of the games.
Now, this is not a full boycott, meaning that athletes will still be allowed to compete. We have also learned that France will not join the
diplomatic boycott.
[09:15:00]
On Monday, the U.S. announced its diplomatic boycott, saying it was a statement that gets human rights abuses in China, including the charge that
China is committing genocide of predominantly Muslim Uyghurs in the Xinjiang region, an allegation that Beijing denies.
And China said that the U.S. will "pay the price" for its diplomatic boycott and warned of, quote, "resolute countermeasures."
Now, today we heard from the ministry of foreign affairs spokesman. He said that the UK, Australia and Canada will also "pay the price."
(BEGIN VIDEO CLIP)
WANG WENBIN, CHINESE FOREIGN MINISTRY SPOKESMAN (through translator): The United States, Australia, United Kingdom and Canada used the Olympics for
political manipulation. It cannot win the hearts of the people and are isolating themselves. They must also pay the price for their mistaken acts.
(END VIDEO CLIP)
STOUT: And China has yet to articulate what the price would be.
Kristie Lu Stout, CNN, Hong Kong.
(END VIDEOTAPE)
CHATTERLEY: Let me bring you up to speed with some of the other stories making headlines around the world.
U.S. President Joe Biden hosting a two-day virtual summit for democracy from the White House. Government and civil society leaders from more than
100 countries will take part. President Biden told them efforts to fight corruption and authoritarianism and promote human rights are critical.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: This is the defining challenge of our time. Democracy, government of the people, by the people, for the
people, can at times be fragile, but also is inherently resilient. It's capable of self-correction and it's capable of self-improvement.
And as a global community for democracy, we have to stand up for the values that unite us. We have to stand for justice and the rule of law, for free
speech, free assembly, a free press, freedom of religion, and for all the inherent human rights of every individual.
(END VIDEO CLIP)
CHATTERLEY: He's got a busy day coming up. He's also expected to speak with the Ukrainian president Volodymyr Zelensky two days after Biden warned
Russian President Vladimir Putin against invading Ukraine.
Despite that warning, Ukrainian defense officials say there are now more than 120,000 Russian troops near the Ukrainian border.
Still to come here on FIRST MOVE.
When supercar worlds collide, how can Lamborghini please petrol heads and EV lovers. Well, we've got the CEO coming up and he'll explain.
And digital disrupters. A Brazilian fintech new bank going public at a $41 billion valuation that makes it Latin America's biggest listed bank.
That's coming up. Stay with us.
(COMMERCIAL BREAK)
[09:20:05]
CHATTERLEY: Welcome back to FIRST MOVE.
U.S. stocks set for a softer open this Thursday. The S&P 500 coming tantalizingly close to all-time highs in the previous session on Wednesday
as new scientific data helped ease Omicron fears. Companies that still have a lot riding on reopening like Norwegian Cruise Line, United Airlines and
AMC cinemas. All rallied 4 percent or more.
Airline stocks too gaining back virtually all they lost since the beginning of the Omicron omnipresence.
Tech meanwhile triumphed too with Apple hitting all-time highs. It's just points away now from achieving a mindboggling market cap of $3 trillion.
So, if Apple were a country, it would be the world's fifth largest economy right behind Germany. Reminds me of the conversation we had with Ian
Bremmer yesterday.
Speaking of tech giants, Amazon fined almost $1.3 billion by Italy's antitrust regulators. It's one of the biggest penalties imposed on an
American company in Europe.
Anna Stewart joins us now with all the details.
Anna, great to have you with us.
What exactly are they being accused of and fined for?
ANNA STEWART, CNN REPORTER: Yeah, Julia. It's hard to keep track frankly of all the different investigations and to all the big tech firms in Europe.
Now this one, as you say, relates just to Italy. It's Italy's regulators that are imposing this fine. And its investigation has been looking at
whether Amazon uses its dominant position within the country to unfairly pressure third party sellers into using its own logistic services which is
called Fulfillment by Amazon, FBA.
For instance, by linking the use of that with access to premium services like Prime which of course gets greater visibility, and often boosts sales
up for its sellers. Now, there is some overlap between this investigation and one by the EU. And I think what's going to be really concerning for
Amazon is the cooperation has been between the two, which of course suggested that EU could follow in these footsteps.
But also, the hefty fine, nearly $1.3 billion. And this is just for one marketplace. You've got to look at that and wonder how big a fine could the
EU potentially impose in the future.
Italy's regulator also saying they are going to impose corrective steps that will be subject to review by a monitoring committee, but Amazon
strongly disagree with all of this. They are going to appeal. Julia?
CHATTERLEY: Revenues for Amazon in 2020, $386 billion. Net income, $3.2 billion in the third quarter of this year. These fines are sizable. On a
relative basis, they are peanuts on an overall basis, but you raised a great point I think which is one, the coordination between the EU and Italy
on this point. And it reminds me to a remarkable extent of an investigation that the EU opened back in what? Late 2020 on a similar thing where giving
people rewards or benefits and using Amazon's pure logistics. It's perhaps anticompetitive. Just the thin end of the wedge, me thinks.
STEWART: I think so. I think it's very interesting that Italy went out on its own on this one, but with the blessing of the EU, and actually Amazon
tried to stop these parallel investigations from happening. They took the decision to court, and they lost last month which is why we're seeing this.
Now the EU actually has two big investigations into Amazon right now. One is on personal data, whether its access of data from independent third-
party sellers using its platform are then used to unfairly advantage its own retail. And then the other one is looking at whether preferential
treatment is given to their own retail, but also to those companies - these third-party companies that then use their logistics firms, their delivery
options and so forth. So, a lot of overlap there, and we're going to hear a lot more in the coming months. Julia?
CHATTERLEY: We certainly are.
Anna Stewart, thank you for getting your head around that. And I love those stories where I just could tell me what happened. I'll let you do all the
logistics.
STEWART: Any time.
CHATTERLEY: I know.
Anna Stewart, thank you.
The head of Instagram has been answering U.S. lawmakers' questions about the app's impact on children's mental health.
Adam Mosseri insisted the company was trying to address some of their concerns, but senators argued it hasn't done nearly enough.
CNN's Donie O'Sullivan reports.
(BEGIN VIDEOTAPE)
SEN. RICHARD BLUMENTHAL (D-CT): Self-policing depends on trust. The trust is gone.
DONIE O'SULLIVAN, CNN CORRESPONDENT (voice-over): The head of Instagram facing a disturbing picture of his platform and the harm it causes
especially among kids.
SEN. AMY KLOBUCHAR (D-MN): Do you view the kids as a feeder way for people to get into your product? Have you not done things to get more teenagers
interested in your product? Are you not worried about losing them to other platforms? You better tell the truth. You're under oath.
O'SULLIVAN: It is the latest round of tough questions from lawmakers for Meta, formerly Facebook, which owns Instagram.
BLUMENTHAL: Shouldn't children and parents have the right to report dangerous material and get a response?
[09:25:01]
ADAM MOSSERI, HEAD OF INSTAGRAM: Senator, yes, I believe we try and respond to all reports, and if we ever fail to do so, that is a mistake that we
should correct.
O'SULLIVAN: Instagram embroiled in controversy since whistleblower Frances Haugen leaked internal documents from the company about the harms of the
social media platform on young people, particularly teenage girls.
FRANCE HAUGEN, FORMER FACEBOOK PRODUCT MANAGER: Facebook's internal research is aware that there are variety of problems facing children on
Instagram. That are -- they know that severe harm is happening to children.
O'SULLIVAN: Mosseri today pushing back.
MOSSERI: I firmly believe that Instagram and that the internet more broadly can be a positive force in young people's lives.
I also know that sometimes young people can come to Instagram dealing with difficult things in their lives. I believe that Instagram can help in those
critical moments.
O'SULLIVAN: The Instagram boss being asked about research released this week that shows teenagers are easily able to find accounts advertising the
sale of drugs, like Xanax and Adderall, its algorithms even promoting these accounts to some users.
MOSSERI: Accounts selling drugs, or any other regulated goods are not allowed on the platform.
SEN. MIKE LEE (R-UT): Apparently, they are.
MOSSERI: Senator, respectfully, I don't think you can take one or two examples and indicate that that is indicative of what happens on the
platform more broadly.
O'SULLIVAN: Mosseri pledging the company will do more to protect young users, but it's too little too late for people like Ian Russell, who lost
his daughter, Molly, to suicide in 2017.
IAN RUSSELL, LOST DAUGHTER TO SUICIDE: There was no sign of any mental ill health in Molly before her death, and we couldn't work out what could
possibly triggered it.
O'SULLIVAN: Russell says he looked at his daughter's social media and was disturbed by what he saw on platforms, including Instagram.
RUSSELL: Having a glimpse of what Molly was exposed to, I think I now understand why she was pushed to do what she did.
O'SULLIVAN: Adding to the pressures on the social media giant recently a bipartisan group of state attorneys general, launched an investigation into
the potential harms of Instagram for children and teens. Meta claiming the allegations are false.
Donie O'Sullivan, CNN, New York.
(END VIDEOTAPE)
CHATTERLEY: And the market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:30:05]
CHATTERLEY: Welcome back to FIRST MOVE.
And ringing the opening bell today at the New York Stock Exchange, executives from the Brazilian fintech Nubank celebrating its NYSE listing.
We'll be speaking to the founder David Velez in just a few moment's time, but as you could see there, big smiles all around.
But first, a bit of a soggy start to the Wall Street trading day. That set the Nasdaq still up more than 3 percent this week so far. So, a bit of
consolidation, not unexpected. A better tone due to a variant optimism.
The key Central Bank challenges adjust over the horizon.
The U.S. Federal Reserve set to discuss a faster pullback of stimulus next week.
The Bank of England weighing in interest rate hike next week too.
Although we're now expecting a Q1 liftoff, Brazil's Central Bank's still attempting to tame its worsening inflation outlook. Policymakers raising
the benchmark interest rates by a formidable 1.5 percentage points yesterday. That's actually the seventh interest hike this year. And Central
Bank has poised a hike yet again even as Brazil's economy falls into recession.
In the 1980s every teenager either wanted one or knew someone that did. Just listen to that engine.
Immortalized the movies like "The Cannonball Run." For 50 years, the Lamborghini Countach has represented a powerful iconic brand. In a
transformative year, the supercar returned as a limited-edition hybrid and every single car built has been sold. And that contributed to a record-
breaking 2021 in the first quarter of this year.
Lamborghini sales rising 25 percent in the United States year and year. 17 percent in EMEA and up 28 percent in the Asia-Pacific region. And it's got
big plans for the coming decade too. Striking a balance between performance and reducing emissions.
Stephan Winkelmann is the president and CEO of Lamborghini. And he joins us now.
Sir, fantastic to have you on the show.
I know the record-breaking year that you are having is driven by a number of things but including the excitement over your new SUV offering as well.
Just talk us through what you have seen so far this year.
STEPHAN WINKELMANN, PRESIDENT AND CEO, LAMBORGHINI: We have had every month, more sales than car we could deliver. So, if you order one car today
of Lamborghini, you will get it in December 2022. So, we have a waiting time of one year which is a very healthy one. It's a good older bank. We've
seen a tremendous loss all over the place, and all our cars are performing on a very high level. And we're very happy about that. And we're looking
forward to our 2022 which could be on the same level if the demand is going on, and at the time it seems so.
CHATTERLEY: Yes. So, when you have to have patience too. I mean you and your customers represent some of the wealthiest people in the world, and
they are global citizens as well. Tell me why where the demand is coming from, and what proportion of these are repeat bias versus new.
WINKELMANN: You know when the Urus coming into the market, we have lot of new buyers. The average age went down. We have more female buyers, and also
due to the Urus, we have more people also, and updating one of our super sports cars, and the gross is coming a bit from all over the place. The
biggest market by far is the U.S., market number two is China. Then there's Germany. Then we have the United Kingdom, the Middle East, Germany, Korea,
Japan, Russia. These are more or less the top markets. We're having it equally spread into the major regions of this world.
CHATTERLEY: That is fascinating. What is the average age? Just approximately of the SUV, the Urus buyer?
WINKELMANN: The average age is below 45. The youngest customers we have in China with an average age of 37 on Urus. Then comes the U.S. and a bit
older than they are here in the people in Europe.
CHATTERLEY: Yeah. It's fascinating. It sorts of ties to my next question about the outlook, and the focus on hybrid vehicles and sustainability. You
said, look. The whole range will have a hybrid option by 2024. Full electric car on the market perhaps 2027, 2028. How would you define a
Lamborghini customer, and how would you define a hybrid EV customer, and are they ultimately the same thing as long as you can match performance?
[09:35:06]
WINKELMANN: Yes. So, a Lamborghini customer of today is mainly male. They're mainly male. We have over 90 percent male customers and they are
very much into the made in Italy. They have more cars in their garage, and they are a lot about design and performance. They are very much into
technology, and if we keep the promise to have more performance with the hybridization, by maintaining a very outstanding design. There would be no
reduction in the demand.
We're sure about that. We see it. We have spoken to a lot of customers. Based off the change in terms of duration, so the more the younger
generation, it's coming into the super sports car business, and able to buy one of our dream cars, the more they affect the price have to be
sustainable, it's a condition. They don't even ask. They see this as a prerequisite to sit at the table with us. So, there is a shift in
liberation and the promise is always the same. Better in performance and outstanding design.
CHATTERLEY: OK. So, performance first, design second and sustainability and an EV hybrid offering prerequisite too?
WINKELMANN: Yes, because we will maintain the -- with the hybridization, we will maintain the sound of the engine.
CHATTERLEY: Exactly.
WINKELMANN: So, the follow-up is (INAUDIBLE) which is our top market. We will have still an engine. So, the sound will stay. When we speak about a
full electric car which is then happening as you say between `27 and `28, we have enough time, and there is an -- there will also be a new generation
of batteries. And we will be driving a lot off of electric vehicles to test.
And I think that there is a lot of opportunity to do a lot of differentiations between a Lamborghini and other manufacturers. So, we see,
we are in good spirits that also at the end of this decade, an electric car will be accepted in a positive way as Lamborghini.
CHATTERLEY: Yeah, fascinating. We have to talk about the Countach because I think for anyone who understands anything about the brand, 50 years ago
this was -- it was so transformative I think for the essence of the brand whether it was technology or whether it was design, and you obviously did
this special edition and I believe it sold out incredibly quickly. And we're talking what a base price of $2.5 million, and they sold out like
this. And what's the wait time hypothetically speaking if I were wanting to get one of those, and what do I get for my money ultimately? Is this an
investment piece in your mind?
WINKELMANN: For sure. It's an investment for sure, but I would not see as the first idea to buy a car for the investment. It's for the job to ride,
you buy into something which is incredible. And you see design and technology is still part of the DNA of Lamborghini because the designs are
the front view, the technology with the (INAUDIBLE) engine and the back with the gear boats and the tunnels.
So, between the two seats, they kept a move forward. All this is something which we still have in our super sports cars, and this has not changed. We
have a let's say moment of the 21st century of this car we are building. Just 112, and as you said, they're all sold. And I think that everybody who
bought one of these cars will have something which is rising in value but first of all they have a fantastic car.
CHATTERLEY: Yes. I think if I start saving today, I might be able to afford one in 2077. So, we'll see what it looks like. We'll see what it looks like
by then. My director Bambam (ph) told me that he had two 7-foot posters of Lamborghinis in his bedroom wall when he was growing up. So, maybe I'll
borrow one of those in the interim.
So great to talk to you.
WINKELMANN: Goodbye.
CHATTERLEY: Thank you so much.
WINKELMANN: You're welcome.
CHATTERLEY: The president and the CEO of Lamborghini there.
Stephan, great to chat to you. Thank you.
OK. Up next, Brazil's Nubank going public. We speak to the CEO about the journey from startup to banking star. Stay with us.
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[09:42:17]
CHATTERLEY: Welcome back to FIRST MOVE.
The CEO of Better.com says he wants to Build Back Better for 2021. Corporate scrooge of the year is apologizing for his unvirtuous virtual
sacking of hundreds of employees.
Paul La Monica joins me now.
That's me calling him scrooge, no one else. But I think plenty of people share that opinion. He said he's deeply sorry and he blundered the
execution. I think that's the understatement of the year.
PAUL LA MONICA, CNN REPORTER: Yeah. This is obviously putting it extremely mildly, Julia. There were so many mistakes that were made during this zoom
call. So much so that CNN has reported now about three communications executives who are leaving the company as a result of this debacle.
CNN Business also spoke to several of the employees who were on the call and were stunned when the news was happening.
I mean, it's always difficult to lay people off at any time of the year, but around the holidays and to do it in such a cold and callous manner, it
really does beg the question, can Better really rebound from this? Because this is a company that was looking to go public through a SPAC deal. That
is reportedly now on hold. You have to wonder whether or not there's going to be a customer backlash. Are people who are looking to do mortgage
refinancing or get a new loan, will they still think that Better is a company that they want to do business with? Perhaps not.
CHATTERLEY: Yeah. And in a world where the consumer is the ultimate activist, you have to be very careful in making these kind of - these kinds
of errors. And your companies have to tighten up. Companies have to let people go. These are tough decisions that have to be made by a CEO, the
handling of these things is so important.
Does the name Adam Neumann ring any bells with anyone? The ousted WeWork CEO.
LA MONICA: Yeah.
CHATTERLEY: I don't know. You have big investors involved in this that may turn around and look at this and say, is this the right person to lead us
through an IPO, to lead the company in the future. This is not his first defiance.
LA MONICA: It is. There have been other, you know, issues of him being very callous in e-mails that have come up. And you mentioned, you know, WeWork
in Adam Neumann. And I think unfortunately, for SoftBank, they are the common denominator in this scenario.
CHATTERLEY: Yes.
LA MONICA: It seems like SoftBank always investing in or dare I say enabling some of these bad actors. You know that may not be fair to
SoftBank as it has a huge portfolio of course. But, you know, you do have to wonder, investors have to do their due diligence as well.
[09:45:04]
And as cheesy as it may sound, it's all about the people. When you meet a CEO, a corporate leader, you as an investor should be able to get a sense
whether or not you want to do business with this person, and perhaps there are lots of people that going forward will not want to do business with
Better.
CHATTERLEY: Yeah. If I've learned anything from one or two years now in business journalism, it's that culture matters. And it begins at the top.
So, whether you embarrassed them, or they embarrassed you, and he'd thrown that word around a lot, responsibility, culpability begins at the top.
Paul La Monica, thank you.
You're watching FIRST MOVE. More to come.
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CHATTERLEY: Welcome back to FIRST MOVE.
And a breakthrough for Brazil's banking disruptor Nubank. The fintech went public just moments ago valued at some $41.5 billion. That makes it Latin
America's most valuable listed bank.
Nubank was founded eight years ago with a mission to cut the red tape around banking in Brazil. It now has 48 million customers in Brazil, Mexico
and Columbia. Nubank estimates that 5 million of its users have never before had an account or credit card.
And joining us now is David Velez. He's the CEO of Nubank.
David, fantastic to have you on the show. Huge congratulations. You know I vividly remember our first conversation where you talked about the
challenges of opening a bank account. You are a long way from that today, my friend. How does this moment feel?
DAVID VELEZ, CEO, NUBANK: Thank you, Julia. Great having me again here.
It feels great. This is a great moment. We're here with family, with investors, with friends, with customers, and it's the end of one part of
the milestone, but also the beginning of a very big journey. So, we're very excited.
CHATTERLEY: Yeah. You're just beginning. You currently serve over 48 million customers across the network, and just to be clear with our
viewers, I believe that was 5.2 million people in 2018. I'm looking at my old figures. 35 million on a monthly active basis are actually using the
platform.
Can you sustain this kind of growth? LatAm is a big place, there's lots of people, but can you sustain that kind of growth?
VELEZ: Yeah. I think the growth has to be coming completely word of mouth, completely viral. We have especially over the past 16 months or so unlocked
the number of different segments of the population. I think before the pandemic, still kind of the main market, thought that the concept of
banking with a bank, with our branches, was actually scary.
Now, everybody has this really embracing this as the way forward. Especially because we gave a great user experience, we charge no fees,
lower interest rate. So, for consumers, it's a no-brainer. This is one of the best opportunities that they can have at the bank. And now we're
getting all of those consumers to come and tried us. When they started using Nubank, they don't go back. So, we think it's going to continue
growing for a while.
[09:50:00]
CHATTERLEY: Yeah. You and I talked about the audience, and the shared proportion of people across Latin America that remain unbanked and it's
just over 200 million people. So, did they remain the target audience ultimately in fostering those kinds of people and giving them financial
products, or are you prepared to start disrupting some of the bigger guys that still dominate the landscape in Latin America? The established banks
that for a long time have not been interested in these kinds of customers.
VELEZ: Yeah. So, growth has actually come from both. So, we initially get a lot of the banked customer, but we're in the hands of five of the big
banks. Generally, Latin America markets have about five banks that own 80 percent to 90 percent of all the lending, or the savings, or the credit.
Traditionally, there was very little competition, so bank consumers didn't have a lot of options, alternatives were scarce.
They were our first adopters trying to leave away from the big banks and embracing the user experience that we have. And now increasingly giving the
low costs platform that we have, we can really serve everybody, especially those 200 million customers that have no access to banking. Where sometimes
where you need to give them a $10 credit line to begin with or they have $10 that they want to deposit in a fixed income account or buy equities
with $10.
So, we're going to be able to serve them with a very low cost structure, so you can give them a good service, and ultimately be a product that serves
100 percent of population, really everybody.
CHATTERLEY: Talk to me about pricing credit risk as well. Because it's a different prospect when you are talking about those that have a banking
history to those that don't. And you're talking about relatively small sums there, but I mentioned earlier on the show the fact that the Central Bank -
- the Brazil Central Bank -- and we'll use that country specifically, as taking base rates from 2 percent earlier this year, to 9.25 percent. In a
world ray offering credit in particular, the price of credit just accelerated dramatically. What's that going to mean for your business,
David? The testing of the structure of the business and your pricing of risk.
VELEZ: From the business perspective, it actually doesn't change a lot. Under one end, we pay deposits. And we can increase the yield that we're
paying on the deposit holders. But on the other end, we can also increase the yield of the lending rights - of the lending products. So, we can work
kind of hedge from both sides.
Ultimately though, or it goes to use a lot the analytics and machine learning and efficient structure to try to bring down the cost of risk and
the cost of yield. And we're trying to price 20 to 30 percent below the incumbents. So, our product becomes increasingly much more attractive.
So, ultimately, if the interest has gone up, we're going to try to maintain it low. And in times of tough times, people become so much more sensitive
to paying fees, to not getting the type of interest rate that they want. So, ultimately, our valuable position come actually much more attractive
for a lot of people.
CHATTERLEY: Yeah. I mean you hedged on both sides as long as the people who borrow money pay the money back.
VELEZ: Yeah, that's right. And obviously, we're taking a lot of the credit risk, but, you know, we've started in 2014, and the only thing we've seen
unfortunately in the eight years that we have been as companies, Brazil had recession.
Brazil has contracted 8 percent since we started as a company. So, we always says that our credit models have never seen Brazil growing
unfortunately which means we've actually been battle-tested in really tough times through recessions, through pandemic and we have had a lot of
confidence in our credit and the riding abilities ultimately having lower losses than incumbents.
So, we feel very comfortable going forward, and navigating these turbulent waters.
CHATTERLEY: Yeah. That is such a great point. Coming into this, and I do want to talk about valuations and as you said in the beginning of this, so
we'll talk about it again. But you did decide just to lower the price slightly here. And you still raised a lot of money.
Do you think valuations perhaps in this sector have got stretched, there's a lot of competition, there's a lot of opportunity, but there's a lot of
competition? Do you think at some point we're looking at a future of consolidation? Whether it's on the digital side or again, for the
established banks?
VELEZ: It's a very, very, very large market. Just in Latin America, financial services, we're talking about a $1 trillion market, so it's very
large. And in some markets, they're shooting pretty significantly over the next five or 10 years as you bring out another 200, 250 million people into
the banking system.
So, ultimately if you believe that the advantages there, these players that caused, it would be very significant to compete with incumbent banks. The
opportunity is very significant for a lot of people to bank. The people that haven't even bank and ultimately take share for the people that
haven't really been able to transform their business.
CHATTERLEY: Yeah. The upside potential here is enormous. What are you going to do with the money, David?
VELEZ: We're profiting in Brazil. So, a lot of this money is really going to grow in Mexico and in Columbia which are our two key new markets. We're
very excited about the trend that we're seeing here if it's in there. I Mexico in September, we were already the largest credit card issuing in the
country. So, we see a lot of momentum.
In these new markets, we're excited to see that we're being able to replicate the Brazil model in new markets. So, we're using the money to
grow there, to establish ourselves as one of the leaders in financial firms. And we're also -- you're marking some money for MNA and perhaps some
consolidation over the next few years.
[09:55:08]
CHATTERLEY: Yeah. The sky is the limit. David, I know this is a huge moment for you and for your team as well. You've worked incredibly hard. What are
you going to do at the end of the day when you get through this other than catch up on some sleep, I'm sure?
VELEZ: We won't sleep at all. We have to go from here from New York to Sao Paulo tomorrow. We're ringing the bell in Sao Paulo stock exchange as we're
doing a listing.
CHATTERLEY: Yes.
VELEZ: So not a lot of sleep over the next few days but we're very excited about what we're doing. So --
CHATTERLEY: Yes. Lots to celebrate. Great to chat to you. Come back and talk to us soon please.
VELEZ: Absolutely.
CHATTERLEY: Safe journey.
VELEZ: Thank you Julia. Thank you for having me.
Bye-bye.
CHATTERLEY: Thank you. The CEO of Nubank there from the New York Stock Exchange.
And that's it for the show. If you missed any of our interviews today, they will be on my Twitter and Instagram pages. You can search for
@jchatterleyCNN.
In the meantime, stay safe as always. And "CONNECT THE WORLD" with Max Foster is up next.
I'll see you tomorrow.
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[10:00:00]
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