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First Move with Julia Chatterley
ECB Increases Benchmark Interest Rate to 1.5 Percent; More Clashes as Thousands Gather at Mahsa Amini's Grave; Volatile Start to U.S. Trading after Q3 GDP Rises 2 Percent; IEA: Global Oil Demand to Level Off in the Mid-2030s; How Netherlands is Nurturing Tech Start-ups; Tesla Shares Came Under Pressure Amid Twitter Saga. Aired 9-10a ET
Aired October 27, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to all our First Movers around the globe. Fantastic to have you with us for what can only be
called a super Thursday on the program or shall we say a "Meta First Move". The ECB announcing another huge rate hike the U.S. economy in growth mode
once again. And more mega tech earnings were even throwing in the kitchen sink.
Sink in the Tesla CEO and not yet official owner of Twitter visiting Twitter headquarters yesterday. Carrying a familiar household fixture as
you can see there and a big grin of course, a truly watershed moment ahead. But perhaps not too much kitchen sinking or actual kitchen sinking as
report suggests the billionaire is walking back on plans to chop 75 percent of the Twitter workforce.
And with the Twitter deal expected to close tomorrow it's seemingly too late for it to go down the drain Musk taking a sink to the office. But did
he still take a bath on the deal it remains to be seen.
In the meantime, over in Europe and at Credit Suisse steep job losses on the way it seems the troubled banking giant reporting a more than $4
billion quarterly loss. And looking set to raise a similar amount to finance its turnaround plans.
A lot of cash coming from the Saudi National Bank never mind Davos in the desert. This is more donations from the desert. Investors however far from
convinced that this plan can work. Credit Suisse stock down some 11 percent in trading this Thursday.
And misery too at Meta better known as Facebook a serious loss of face shares set to fall over 22 percent. As ad revenues weaken and dwindling
profits are being spent on things. Most people simply don't understand like virtual reality in the Meta verse, Meta's Virtual Reality division, in fact
losing some $9 billion.
So far this year Meta's results adding to Meta gloom in the tech sector overall following weak results from Microsoft and Alphabet this week. The
NASDAQ as you can see set for another lower open after Wednesday's 2 percent loss. But the blue chips set for a nice bounce bet as you can see
the DOW higher by some eight tenths of 1 percent.
And this is new economic numbers support claims that at least for now, there is no U.S. recession the U.S. economy growing at a stronger than
expected 2.6 percent annualized rate in the third quarter this of course, after two quarters of contraction on closer analysis.
However, we're still in some hot water. Let that sink in. Rahel Solomon joins us now. And she's been pouring through the depths of the water and
the detail on this one.
Keep those analogies going? Yes, there we go Rahel. Devil in the detail I just mentioned there. Talk us through what contributed to this positive
results and the jump in the third quarter.
RAHEL SOLOMON, CNN CORRESPONDENT: Well, I think that's a great place to start Julia. So the largest contributors to the growth that we saw for the
U.S. economy were things like net exports, consumer spending, let that sink. And we're going to toss back to that in just a moment.
Federal government spending for things like defense spending starting to see the first signs of infrastructure spending being spent there, and state
and local government spending and I think we can show you some of these drivers here state and local government spending.
And that in terms of compensation for salaries for workers so nice to see a nice little bump for some state and local workers here in the U.S now I
want to get back to consumer is spending.
Because Julie, as you knows, consumer spending is about 70 percent of U.S. GDP. And what we saw there still positive, but continuing to slow. As Mark
Zandi, the Chief Economist of Moody's just told me about 15 minutes ago; we talked right after the report cross.
He says, look, the consumer is still spending modest, but consistently, its encouraging consumers and businesses are hanging in there holding on. But
that's just about it, right? I mean, he said that it doesn't tell us much more about where we're heading. Although he says that if you were in the
camp that thought we were currently in recession, while this sort of dispels that.
CHATTERLEY: Yes, and that's a great point, though. This is backward looking data. We still don't really know where we're headed.
But we'll keep a focus on the jobs market in particular, because that was the outlier. Among this weaker data that we were seeing jobs market still
incredibly strong.
SOLOMON: Absolutely.
CHATTERLEY: Rahel, good job pouring over those numbers for us. Thank you so much. OK, in the past hour, the European Central Bank has again raised
interest rates to try and damp down the historic surge in inflation in the region. The main rate goes up by three quarters of a percent
Anna Stewart here to explain what it means not to be outdone of course, with what the Feds doing Anna but when you've got inflation at what 9.9
percent in the euro area.
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CHATTERLEY: They have to get moving and they have to do more. What did they say about that specifically?
ANNA STEWART, CNN REPORTER: In terms of inflation, it's nearly five times its targets. They certainly have to do more. And I think there are three
main areas we can look at.
First of all, of course, interest rates they've raised again today by 75 basis points. And they say they expect to raise interest rates further. 1.5
percent is kind of considered to have a neutral effect on the economy.
So any higher than that becomes restrictive. Of course, there are some that are concerned looking at economic growth in the Eurozone that we could see
a repeat of 2008 when ECB famously raised rates only to slash them a few months later.
Number two, quantitative tightening. And this is where the ECB is actually taking a very different strategy to the Bank of England. I was expecting to
see at least a signal about Q3 nothing here.
They're actually not even doing it passively. They will continue to reinvest maturing bonds. So I think that's the biggest surprise really of
today.
And the third area really is just ensuring that these rate hikes pass through, filter through to the real economy. And there's been a lot of
criticisms in recent weeks - for those that don't follow the ECB closely and don't have to forgive me tell Q3.
It was one of the lending programs introduced after the pandemic to encourage lending. And of course, banks essentially borrowed at zero
negative rates. And now they can part of that cash to the ECB with higher rates and get a little carry trade there.
That is something that needs to be wants to stop. So perhaps the most controversial part of today is the fact that they are going to adjust the
rate applied to Telstra 3 offer early repayment dates. That is something that banks may fight but in many ways that would shrink the balance sheet a
little.
CHATTERLEY: Yes, it's so important and the difficulties of setting monetary policy for 19 different countries when some countries have got room to
maneuver to provide fiscal support and others don't and the cost of credit, the cost of cash rising dramatically.
Anna thank you so much for that Anna Stewart there! OK, let's move on now to the Meta meltdown shares of the company behind Facebook plunging more
than 20 percent in pre-market trade after its earnings and forecasts disappointed.
Third quarter profit less than half of what it made a year ago and its Metaverse spending is expected to become an even bigger drain. Clare Duffy
joins us on this.
Clare, great to have you with us! I think the biggest problem for Investors is that the core part of the businesses is struggling or at least facing
difficult and challenging times. And at the same time they're ramping up the spending on things like virtual reality and the Metaverse. But most
people simply have no clue what it is. It's difficult for investors.
CLARE DUFFY, CNN WRITER: I think that's right. I think Investors are starting to get sort of fed up on all the money that Meta is spending in
this. Sort of future version of the internet, that's many years from being realized.
And it's not clear if consumers even want to be living with headsets on and walking around in a virtual world for much of their day. Reality labs, the
unit that covers their artificial and virtual reality efforts that are so key to this Metaverse lost $9.4 billion in the first nine months of this
year. And Meta says it's going to spend even more money on the unit next year.
And I think Investors are just sort of unsure of when this effort is going to pay out how this effort is going to pay out. And in the meantime, as you
say Meta's core business is facing numerous challenges. It's, you know, continuing to struggle with Apple's ad tracking changes that changed how
it's able to advertise to its users.
It is like all the tech companies struggling with this economic downturn, high inflation and decreased advertising budgets. And so it's not clear
that its core business is going to be able to cover these investments on this really sort of experimental side of the company.
CHATTERLEY: Yes, and we were just showing the longer term share price there as well. I mean, we're seeing what 23 percent drop pre-market. But the
share price has been under severe pressure and of course, the wealth of Mark Zuckerberg himself under pressure here too.
DUFFY: Yes, Mark Zuckerberg has lost about $60 billion in his wealth just this year. You know, it's really massive. But at the same time, you know,
I'm not sure how much he is going to care about that at this point.
Last night, during the earnings call with analysts, really sort of defended the company's legacy, said that people are going to look back on these
efforts that they're making to build the Metaverse and see what a big impact it had. And he's not sure that anybody else would be doing this
right now, if Meta weren't working on it.
CHATTERLEY: And he's probably right, but for Investors in the short term. Hold on to your seats and your hats. Clare, great to have you with us,
thank you Clare Duffy, there!
OK, we want to bring you now a CNN exclusive. Our international Diplomatic Editor Nic Robertson is on the ground in Ukraine at a power station
incapacitated by Russian forces. Nic, what can you tell us about what you're seeing and finding?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, the difficulty faced by the workers here is compounded by the fact that it is become one
of the main targets for Russia's attacks on Ukraine. All the power stations across the country have literally as we arrived here earlier in the day.
The air raid sirens went off and we went into the bunker with all the other workers here, which means they can't be involved in doing their repair
work. We were down there for quite a period of time.
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ROBERTSON: Everyone was comfortable there getting used to this sort of operation. That's a daily occurrence for them going into the bunkers. But
what we saw when we came out was quite extensive destruction of the equipment that is perhaps the most sensitive area in the power plant.
It is equipment that's based around the periphery of the plant, it is switching equipment. It is high voltage cabling, that is particularly
vulnerable to the missile strikes. And they've had two rounds of missile strikes here on they've had two rounds of missile strikes here on one
occasion.
Again, I think what I'll do here is not get into specifics. Because one of the things we're doing here is not giving specifics about the location. And
the number of strikes might give that indication.
But it's been hit by both cruise missiles and by drones over a period. But the destruction of the equipment is what makes the repair head difficult.
Things like pylons and cables can be fixed.
But some of this equipment isn't manufactured anymore, some of its specific to this location. So it will need to be ordered that takes time. It will
need to be perhaps scavenging from other power plants across the country.
And or even requested from international partners which is what the power generating company here wants to do right now. So the task faced by Ukraine
to keep power stations like this back on air is a daunting task. Because in essence, what they have to do is to be able to outpace with repairs.
The continuing and ongoing and attritional damage by the Russian forces and from what we've witnessed here today, that is a very steep hill to climb.
They insist that they will do their best.
But at this stage, I wouldn't want to stand here and say that this is something that they're going to be able to continue to keep on top of us.
They are at the moment that really an element of this depends on how much Russia increases those strikes. It is a particularly precarious position
that the country now faces from what we've seen here, just this one side.
CHATTERLEY: Nic, it's important for you to be there to help us understand the scale of the challenge. And of course what the Ukrainian people are
facing in the coming months too. Nic, thank you so much for that Nic Robertson there in Ukraine.
OK, straight ahead treating patients over Instagram in Iran. Some people are turning to social media for help. Fearing repercussions if they seek
help at home. We speak with one New York based doctor who's offering his help.
Plus, fast tracking the transition to green energies, I'm joined by the Director of the International Energy Agency later in the show. Stay with
us.
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CHATTERLEY: Welcome back to "First Move". For 40 days after 22-year old Mahsa Amini died in the custody of Iran's morality Police. Protesters
across the country gathered again chanting women life freedom.
Thousands of people gathered to Amini's grave despite tight security. And then the total internet blackout was reported in Iran's Kurdistan province
where Amini was from. Nada Bashir joins us now with more details. Nada, what more do you have?
NADA BASHIR, CNN REPORTER: We'll look Julia, six weeks on and these protests simply aren't losing steam. We're still seeing hundreds if not
thousands, taken to the streets across the country. Not only in remembrance of Mahsa Amini and the other young women who have died at the hands of
Iran's security forces and morality Police since September.
But now of course calling for regime change many of them are calling for their fundamental human rights to be upheld and respected. And we saw this
widespread protests yesterday, taking place up and down the country and of course, many of them gathering at Mahsa Amini's burial site.
And we are still seeing that violent crackdown by the Iranian security forces. Particularly today we have seen violence and clashes in the West
Azerbaijan province in the City of Mahabad. Following the funeral of a protester who was killed yesterday, following a funeral now, of course,
this is a growing concern for many across the country. And of course, internationally, as we see these violent clashes intensify. We've seen the
use of tear gas against protesters, shots being fired there.
It's unclear what is being shot to disperse these protesters. And of course, there are concerns around the rising death toll being reported by
human rights organizations. We've heard from Amnesty International today raising the alarm bell around the situation in Mahabad.
They say Iran security forces are unlawfully using firearms against thousands in Mahabad. Iran's authorities must immediately rein in security
forces. And of course, there are also concerns now around the possible intensification of that crackdown, following a terror incident in the
Southern City of Shiraz at the treasure shrine.
Yesterday on Wednesday evening where at least 15 people were killed and the Iranian authorities have long held that these protests that we're seeing up
and down the country. The unrest as they characterized it by rioters have been fueled and encouraged.
But we're why what they've described as foreign actors. And they have accused foreign nationals are all shooting at worshipers at the shrine on
Wednesday evening. And now there have been the sentiment from the authorities that this crackdown could intensify in response to that attack.
There are concerns from human rights groups, that this attack could set the pretext for an intensification of the crackdown for further violence at the
hands of Iran security forces in response to this incident, Julia.
CHATTERLEY: Nada Bashir there. Thank you so much for that update. Now doctors and other medical professionals in Iran also joined protesters on
Wednesday. One doctor who attended a peaceful protest outside a medical facility in Tehran taught our next guest "We had courage and we went to be
with our people. But they beat and arrested us.
Hundreds of injured protesters are turning to people like Dr. Kayvan Mirhadi, an Iranian American doctor based here in New York. They hope he
can connect them to doctors based in Iran who are willing to help and can also be trusted. Joining us now is Dr. Kayvan Mirhadi.
He's the Chief of Internal Medicine at Clifton Springs Hospital. Dr. Mirhadi, great to have you on the show! Just explain what you've been
hearing from colleagues back home this week.
DR. KAYVAN MIRHADI, CHIEF OF INTERNAL MEDICINE, CLIFTON SPRINGS HOSPITAL: The stories are very sad and heartbreaking. A lot of my friends were
physicians; they went out to protest the right to treat their patients essentially the wounded protesters. On the day, the day before arrival,
they receive text messages not to show up to this protest due to violence that was impending.
When they showed up, it was a peaceful protest and they started getting shot at. And we're talking about these are protesters and attendings that
they were beating them, they were arresting them, they were shooting at them. It was horrific stories and the videos that they sent to me.
CHATTERLEY: Kayvan, we actually have some images that you've shared on social media. That other people have seen of those that were injured this
weekend.
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CHATTERLEY: And I just want to show our viewers what those images are. And I know you know what we're looking at. Just tell me what we're seeing in
these images can you tell me what was used? What were these individual shot with?
MIRHADI: Yes, I get many of these images every day. The ones that you're looking at are from peaceful protesters. And the majority of injuries that
I see are pellet shots.
The one on the left that you see are multiple pellet shots that are likely birdshot. They are penetrating wounds they can cause damage to the nerves
to the vascular structures. And I try my best to give them firstly, the instructions how to take care of them.
But essentially, they have to go to the hospital and be treated in a hospital setting. But because of the presence of the authorities and the
Police, they're scared to go. That one on the right, you see larger wounds, larger round wounds, these are paint gun bullets.
But not the ones that are actually filled with paint or metal bullets that cause larger size wounds with necrosis around the side. These are non-
penetrating wounds, but they require care as well. And the X-ray you see was a young man who had multiple pellet shots in his face and lost his
vision. He could not go to the hospital, but was operated on by an ophthalmology fellow in suboptimal conditions, but he's now blind.
CHATTERLEY: I think part of the challenge here and these are graphic wounds. As you said, in certain cases, most cases not life threatening. But
if you can't, and you're afraid to go to the hospital, then the way that you treat these is clearly not as good as you would do in a hospital or in
those kinds of conditions.
And part of what you're facing now is that people are saying they're afraid to go to hospital. Because then it sorts of brands them as a protester. But
also, and we're not including the physicians that were injured and the attendings and people this week. But they're afraid to treat people because
they're not sure if the people necessarily are coming in are actual protesters; they may be some form of authority figure that's trying to
catch them out.
MIRHADI: Yes, it's very hard to tease out who is trying to get more information and who is actually seeking information and trying to get help.
And that's the challenge that I'm facing on my Instagram page where I get messages that are very suspicious for individuals trying to fishing for
information. Doctors in Iran are facing the same thing.
A lot of times they have to actually falsify diagnosis in terms of treatment. For example, many times doctors have told me that I had to put
removing a tumor from somebody's leg where they're actually removing pellets close to vital organs.
CHATTERLEY: Kayvan, we are in a situation now where there are accusations that individuals like yourself from outside of Iran. Press like CNN are
being accused of fueling these protests from outside of the country. What's your response to that? And what's your message based on what you're seeing
and hearing and discussing with people back in Iran?
MIRHADI: I would say you know, what we're saying Iranians that live outside of Iran, it meres what the Iranians inside Iran are saying. They're really
seeking basic human rights, for example, to be able to go to the hospital and get basic, you know, lifesaving treatment. That's not too much to ask
for to ask for their freedom, freedom of choice.
These are just basic things that every human will be asking for. So a lot of that, you know, I don't know what to say to that. But I'm just saying we
all are echoing each other's voice.
CHATTERLEY: For those that remain in the country and those of us that are watching and seeing what's going on? I know it's incredibly difficult for
you to do your best to help all the way in New York. But are you also concerned for your family, for your safety, for the fact that you're trying
to help but you're also in many ways, putting yourself at risk?
MIRHADI: Yes, I mean, we've thought about it many times. And you know our safety is not jeopardizing like the safety of the Iranian. There's always
some fear, but we're not as worried as they are. So we keep going we keep continuing to help them as much as we can.
CHATTERLEY: And we'll continue to have these conversations. Dr. Kayvan Mirhadi, thank you for the work that you're doing and for spending time
with us today. I know you're incredibly busy in your day job as it is. The Chief of Internal Medicine at Clifton Springs Hospital, sir thank you.
We'll have more after this break.
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CHATTERLEY: And welcome back to "First Move". We are Speedy Gonzales. So we are one and a half minutes before the market open today. But let me give
you a look at what we're seeing pre market.
And it's likely to be a pretty volatile start, I think to the trading date this Thursday. A stronger than expected read on U.S. GDP easing some of
those concerns that the U.S. economy was in fact in recession. Despite the arguments against that this firms are back in growth mode in the United
States in the third quarter.
But Tech still under pressure after Meta aka Facebook's weak results. Meta thinking some 23 percent in early trade, it's going to be interesting to
see. How that opens up in around one minute or so it's time?
Week Tech results but lots of profit in the energy sector total energies and shell to tile energies and shell both posting earnings of more than $9
billion in the third quarter. Thanks to higher oil and gas prices.
And Russia's war on Ukraine and the ensuing global energy crisis they're having a surprisingly positive impact on the transition to greener energies
that according to the International Energy Agency's annual outlook.
Despite concerns of a rush back to coal and oil use, we're also seeing record growth in the
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CHATTERLEY: The results CO2 emissions from fossil fuels - rise less than 1 percent this year. The IEA also says Russia, which is the world's largest
fossil fuel exporter will never recapture the market share it had pre- invasion the agency now expecting global emissions to peak by 2025 as it predicts coal use to fall within the next few years natural gas demand to
plateau by the end of this decade, and oil demand to level off in the mid- 2030s.
And joining us now I'm pleased to say the IEA's Executive Director Fatih Birol, great to have you on the show sir, as always! I have to say there's
plenty of great news in this including the surprisingly small rise in emissions this year and the record intensification of focus on solar and
wind energies. This is good news.
FATIH BIROL, IEA, EXECUTIVE DIRECTOR: I fully agree it is good news, especially when people were expecting that this year, global emissions
would grow substantially. If you look at the number which we do at IEA, we see that there is a major expansion of renewable around the world, in the
western part of the world, but also in China, in India in Southeast Asia.
As a result, we see that the global emissions increase only a fraction of what they did last year. And the coal, there was expectation of the major
growth of coal use and there was only muted increase less than 1 percent increase in coal use, mainly coming from China. But all, the news of the
emissions this year is not extremely good, but much better than many expected.
CHATTERLEY: Yes. And to your point, if we stripped China out of that, then the news would be even better in terms of emissions. I think the other
striking point about this report is that you're talking about peak emissions, actually in the dateline for what we're seeing there. And again,
this is positive, too. We've seen one of the side effects, the catalysts of the invasion of Ukraine being this acceleration of the transition to
renewable energies?
BIROL: Exactly. I think the we are all focused, rightly so the negative impact of this crisis, which I call the first truly global energy crisis,
we have, of course, negative impact on the economy, energy market, our lives, businesses and people.
But at the same time, but I think many of us can be missing with the government responses to this energy crisis in terms of huge amount of money
putting on the table to accelerate, clean energy technologies is huge.
Inflation Reduction Act from the United States $400 billion in terms of tax incentives in terms of subsidies for solar, wind, nuclear power, hydrogen,
electric cars. In Europe, there is also a similar plan, which we call the repower EU. In Japan, in China, India, governments are putting real money
on the table to accelerate the clean energy, not necessarily for environmental climate reasons, but mainly for energy security reasons.
They see that the clean energy renewable or nuclear power or electric cars are they aren't insurance for a big security. So another reason why we are
seeing so much money put on the table by the government's the public spending growing so much is that the government's want to make sure that
their economies are one of the frontrunners when it comes to the next chapter of the clean energy industry.
In terms of battery manufacturing, in terms of hydrogen in terms of the new nuclear technologies so putting all of these things together, we expect
that the fossil fuels, coal, oil and gas altogether, which were a continuously increasing since industrial revolution, year by year, we'll
make a peak in the next few years and start to decline at thereafter.
CHATTERLEY: Yes, and one of your other conclusions is that Russia, as a result, will never have the market share nor the influence on energy
security in the world ever to the same way that it had pre-invasion which is another important point.
The World Bank said today that they believe oil prices would fall 11 percent next year. I just wondered if you agree with that and whether we
can tie that to the recent decision by OPEC Plus to cut oil output.
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CHATTERLEY: They've said it wasn't politics it was down to economics, and a decision of lesser demand in the future. Would you agree with that, based
on what you're seeing, too?
BIROL: So first of all, one word about Russia. I think this is one of the key findings of our outlook we published today. Russia was as of 24th of
February, the day of invasion Russia was the number one energy exporter of the world by far oil, gas, coal.
But Russia's main, by far the main market was Europe a very good client gets oil gets gas and paid the money on time. And Russia lost this market
forever. And it will be very difficult - this Russian oil and gas find a new home is big as a Europe is looked at as Europe. And as a result we see
Russia's share in international oil and gas trade will be haft and Russia a will lose about $1 trillion in the next 10 years from it is oil and gas
export revenues.
Now coming back to the decision of the oil exporters cutting the production by 2 million barrels per day, I will say this is a very unfortunate
decision. Leave aside the political part of the decision. We have been following the decisions made by this group many, many years.
And I can tell you that it is the first time maybe where unprecedented when the global economy was on brink of a global recession they decided to push
the prices up therefore the inflation up and many countries, it is not only the U.S. or Europe or Japan, these are not the main casualties.
The main problem is with the developing countries, oil import in developing countries will suffer a lot from that.
So from that point of view, I find this decision unprecedented when I look at the future, and the past records of these countries and their decisions.
And also from a global perspective, which is really unfortunate.
CHATTERLEY: Bad for global economics and actually bad for global politics, then reading between the lines, Fatih?
BIROL: Thank you. You summarized very well.
CHATTERLEY: Sir very quickly, because I have one more minute. And this was another huge conclusion that I thought you came to scant evidence to
support claims from certain quarters around the world.
That the climate policies and net zero targets have created the run up in energy prices, what you're seeing actually is where there is more
renewables, that's actually lower electricity prices, an important point to make too?
BIROL: Exactly. We speak with data. I say always, data always wins, not political jargon, or this ended. When we look at the different markets
around the world, where you have the higher share of clean energy, clean electricity, you have to lower prices, values, so that the share of fossil
fuels, for example, natural gas is higher. You see higher electricity prices.
And I can tell you I talk with many, many governments. Up to now no government leader complained to me that, they have too much clean energy.
They in fact regretted in the crisis time they hit too little because they wish they had more clean energy. So therefore, the lasting solutions to our
energy security problems, in my view, go through having more clean energy in our energy mixes.
CHATTERLEY: No one's complaining about their clean energy investment at this stage. Sir well said always a pleasure and fascinating to talk to you.
Thank you so much and we'll chat again soon.
BIROL: Thank you.
CHATTERLEY: The Executive Director of the International Energy Agency there sir thank you.
OK, coming up after the break a groundbreaking accelerated it's helping the next generation of tech firms, His Royal Highness Prince Constantijn Van
Oranje joins to explain how?
[09:40:00]
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CHATTERLEY: Welcome back to "First Move"! This week slew of disappointing tech earnings are causing shares from Meta to Microsoft to plunge. And it
also raises all sorts of questions for the next generation of startups.
Firstly, how do other nations create an environment that produces big tech giants the way America has, but also shorter term provide more funding for
firms that typically rely on U.S. investors for future growth.
The Netherlands is one of Europe's biggest technology hubs with 2.6 times as many startups per million residents compared to the European average.
Yet, U.S. venture capital firm's account for 70 percent of total investment in those Dutch firms with even more American activity expected next year.
Tech Leap is a kind of tech ecosystem greenhouse nurturing the best and the brightest Dutch tech companies, matching them to venture capital and
helping promote innovation. The government back to organization currently helps 23 emerging tech firms in sectors including sustainability,
cybersecurity, ecommerce and marketing.
And his Royal Highness Prince Constantijn Van Oranje is Tech Leap's Special Envoy, he says he's on a mission to turn the Netherlands into a tech
unicorn nation, but still says there's a fair way to go. And His Royal Highness joins us now. Prince Constantijn fantastic to have you on the show
thank you so much for joining us!
There's great news and there's slightly concerning news I think in that just explain where the Netherlands is today and what your vision is?
HRH PRINCE CONSTANTIJN VAN ORANJE, NETHERLANDS: Yes. Well, first of all, thank you for that wonderful introduction. I think I'll record that. So I
think the best summary but thanks--
CHATTERLEY: Good try.
VAN ORANJE: Though, where the Netherlands is right now? I think where we are in Europe we're playing a bit of catch up with the kind of the big tech
nations like the U.S., especially in the total amount of value of venture capital available.
And I think we've seen a quite a notable shift to what we call frontier tech or new deep tech. So technologies that would really make an impact and
how we develop businesses around that to support the energy transition, food transition, and many other transitions that we're currently facing.
CHATTERLEY: I mean there were so many questions. Firstly, you've identified what helps take a startup to a scale up its levels of different funding?
What astonishes to me, actually, for Europe, one that Europe's never really managed to create the scale of the big tech giants that we've seen in the
United States but also that there's still too much reliance on U.S. money in order to grow them.
There are two big questions there but your experience and understanding of how we begin at least to tackle some of those challenges?
[09:45:00]
VAN ORANJE: Yes, I think it's actually one challenge. It's the capital. So, all depends about, you know, how big is your first round and how will
subsequent rounds be? And of course, if there are no resident funds that can actually supply that kind of capital, you have to look abroad.
So far, we actually think it's actually a good deal getting American funds to invest in European companies, because they bring a lot of experience in
scaling companies, they, most of our companies will eventually have to go to the U.S. to set up shop there so better start early, get investors on
board that can actually support you in that.
And so I think we are indeed playing catch up, but I see many very, very talented companies and entrepreneurs in Europe. And it's good that, you
know, the capital, it can go anywhere, actually chooses to invest in Europe and grow these companies. So I'm, I'm actually quite optimistic.
I do think that our institutional investors, like pension funds, are still far too hesitant to enter the venture capital asset class. So that's
something that we are concerned about, because once they the Dutch pension funds are over have over a trillion dollars in under management, if they
would only do say 0.1 percent in venture capital, we really would explode the venture capital sector in the Netherlands.
CHATTERLEY: And that's such a huge point. And then they benefit from the growth of these companies, too, which is arguably a far better return at
times, assuming that they do make it to a full company status or a scale up status, compared with investment bonds or equities.
VAN ORANJE: Yes, that's always the risky. But I think we also see that our pension funds are really concerned with impact, especially on climate. And
these companies - these startup scale ups, are actually the ones that are really driving forward these transitions. So if you are honest about your
impact ambitions, then you know venture capital and startup should be part of your portfolio.
CHATTERLEY: Yes, even if it's a small part, particularly when, with the firm's that you're looking at and helping with Tech Leap its
sustainability, big data helps cybersecurity. I mean, these are crucial elements to successfully functioning societies and economies so worthwhile
investment and potentially lucrative too.
What more is needed and what do these firms tell you even in the short term, whether it's talent, whether its government support, whether it's tax
incentives? There are plenty of roles that need to be played here. In the first place what's needed? If we talk about government, let's say, what
more can government do?
VAN ORANJE: Oh, governments can - I think they can do everything to create a climate in which these companies can thrive. So for instance, a fiscal
stimulus for early stage investments so that there will be more capital flowing into the very early stages of these companies so that they have a
better start of their ventures life.
Another really important element is share options to make sure that people - these companies can hire the best talent, nationally and internationally
and retain them and make sure that some of the capital if there's an exit will actually retained by these employees that will then be the next
generation of founders or next generation of angel investors start to really start growing that ecosystem.
I think they're called Mafias. So you had obviously the PayPal Mafia. We also see Uber, producing a lot of new angel investors and founders. We've
seen it also, at Spotify in Sweden.
We're seeing it a bit in the Netherlands of again, our Unicorn Payment Company. And that's really what you would like to see is this kind of
flywheel starting to go with people that think big, pay for it and give back.
CHATTERLEY: Yes, startups start to provide seed capital to other startups. And then we can all flourish. Yes, fantastic. Very quickly I know you've
been talking to a number of the smartest, brightest best startups in the Netherlands. Are you allowed to give me even just one name where you are
really excited about their prospects? It's an unofficial royal seal of approval, or is that asking too much?
VAN ORANJE: I'm really excited by Remote--
CHATTERLEY: OK.
VAN ORANHE: In 2019, it's now I think they have about 1200 people, and they were valued at 3.5 billion, so really rapid growth company with a very
impressive entrepreneur. So that would be my - just don't even know.
CHATTERLEY: That's the pick.
VAN ORANJE: --most people I've known have seen that too.
[09:50:00]
CHATTERLEY: I'm just asking for my guest's booker's. So they're going to be the one of the next tech startups that we get on the show. You're Royal
Highness thank you so much for your time! I look forward to continuing the conversation because it's such a crucial part of helping us generate
innovation technology and supporting startup growth in the future. Thank you for your time.
VAN ORANJE: Thank you very much for your interest.
CHATTERLEY: Great to chat. Thank you. OK, coming up porcelain promise; Elon Musk carrying an actual sink into Twitter Headquarters on Wednesday. What
it means though, for the future of the troubled tech firm next?
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move"! It's a sink or swim moment for Twitter, Elon Musk carrying a sink literally into Twitter Headquarters on
Wednesday, as his deal to buy the social media platform inches towards the finish line.
As Musk himself says let that sink in Elon, in fact with a sweeping mission statement on Twitter today detailing what he wants to do when he takes
control. Marc Stewart joins us now to discuss this. I do like the fact that he changed his Twitter profile to Chief Twit, but it's not officially
closed yet. What does that plan involve Marc? What more can you tell us?
MARC STEWART, CNN CORRESPONDENT: Hi, Julia. So it was just after nine o'clock this morning, actually that we got some new insight when Elon Musk
went to Twitter with a post simply titled dear advertisers. And in that post, he gave us a little bit of insight, more insight about what he views
the future of the company to be?
First of all, he used the phrase digital town square something we heard before. But he also got a little bit poetic. And I want to - I want to
point out one phrase in particular, he said I didn't do it referring to the sale because it would be easy. I didn't do it to make more money. I did it
to try to help humanity whom I love and I did so with humility, recognizing that failure and pursuing this goal despite our best ever it is a very real
possibility.
So a bit of a softer perhaps more prophetic side from Elon Musk but again, the stage is set for the sale to go forward on Friday. We heard from Dan
Ives, frequent guests of this program. He said that he expects this deal to take place by Friday, calling it "Cinderella finally getting the glass
slipper that fits".
He also pointed out that he believes the overhang on Tesla is now removed with Musk likely having, sold stock this week to round out the rest of the
Twitter deal. And Julia, speaking about Twitter stock back in the green this morning for again a likely sale sometime tomorrow morning perhaps.
CHATTERLEY: Fascinating and I agree with this statement actually. I do think that for all the noise around Elon Musk he was trying to help here I
think the danger is that the advertisers just felt like it was going to be some kind of vocal free for all which arguably given what we've seen on
other social media platforms doesn't help anybody?
[09:55:00]
CHATTERLEY: Investors well up 1 percent so not quite got that sinking feeling. Pretty quickly Marc, do you have a view on what you thought the
sink was about physically to be sink in there?
STEWART: Well, I think that Musk has been having some sour moments about this. I mean, obviously, this is a new - he's was almost boxed into the
sale. So I think he needed to have some fun to say I am in this. I'm behind it. That's kind of the takeaway I have from this.
CHATTERLEY: OK. No kitchen sinking 75 percent of employees. I'm sure they were pretty nervous when they saw him walking in with that sink. We shall
see. Marc Stewart, thank you so much for that. And that's it for the show.
If you've missed any of our interviews today, they will be on my Twitter and Instagram pages shortly. You can search for @jchatterleycnn. In the
meantime "Connect the World" with Becky Anderson is up next.
(COMMERCIAL BREAK)
[10:00:00]
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