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Quest Means Business

G7 Targets Russia's Export Revenue From Oil And Gold; Russia In First Foreign Debt Default; Europe Faces Energy Crunch As Russia Cuts Supply; U.S. Airlines Cancel Hundreds Of Flights Amid Staff Shortages; Wild Ride For Revlon Stock After Company Filed For Bankruptcy; HBO Max Docuseries Explores GameStop Phenomenon. Aired 3-4p ET

Aired June 27, 2022 - 15:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:30]

RICHARD QUEST, CNN BUSINESS ANCHOR: Start of a new week, and the market is struggling for direction. We had some good gains at the end of last week,

but now we're just a bit all over the place and this is what you would expect while we wait for further news information, some sort of guidance,

if you will, that tells us which way the market should travel over the next few weeks.

But the market down just 75 points, not worth really wasting too much time on that. The markets and the events of this new week.

The G7 leaders are targeting gold and oil as their attempts to further squeeze Russia's economy. There is the group picture.

And the EU's warning a possible serious disruption to gas supplies from Russia. Enel's CEO for Italy is with me tonight live.

And the seat that everyone's talking about, the CEO of Finnair avoiding Russian airspace and his new business class seat. It doesn't recline, but

he tells me it's very comfortable nonetheless.

We are live today in New York as always. It is Monday, it's June the 27th.

I'm Richard Quest, and I mean business.

Good evening.

Western leaders at the G7 have announced they are to target Russia's oil and gold as part of efforts to starve its economy of money. The heads of

the G7 gathered in Germany discussing new ways to isolate Moscow.

US National Security Adviser says talks on a price cap for Russian oil are headed in the right direction. The leaders easily agreed on banning the

import of Russian gold. Charles Michel, the European Council President says their ultimate goal is to stop Russia's war machine.

(BEGIN VIDEO CLIP)

CHARLES MICHEL, PRESIDENT, EUROPEAN COUNCIL: With G7 countries, we all share the same goals to cut the oxygen from Russia's war machine, while

taking care of our economies and the economies of our partners.

The EU will stand by the people of Ukraine for the long haul to defend its sovereignty and territorial integrity, and to strongly defend our common

democratic values.

(END VIDEO CLIP)

QUEST: That idea of continuing to support Ukraine for the foreseeable future, however, long that might be was raised again and again at the G7.

CNN's Fred Pleitgen is in Germany covering the Summit.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: You see the US, for instance, that is saying that they really want stricter sanctions, for

instance, an embargo on Russian gold, but then also as far as oil is concerned to put price caps on Russian oil.

Now, for the US, those are certainly things that seem to be attainable. However, if you look at some of the other G7 nations, particularly nations,

like Germany that are very dependent still on Russian fossil fuels, and that also, of course, have a geographic proximity to Russia as well, it

certainly doesn't appear as though it's that easy.

It is quite interesting, because this morning, I saw an interview with Olaf Scholz, the German chancellor, and you know, they put those two things to

him: What about that embargo on gold? What about the price cap on fossil -- on oil? And he really said that that's something that needs to be discussed

in the European Union.

Of course, we know the European Union is a body where it's very difficult to reach a consensus. They already tried to put an oil embargo against

Russia in place, and they really couldn't find much of a consensus with for instance, Hungary, saying that they want certain loopholes for themselves

to still be able to purchase Russian oil.

So putting that economic pressure on Russia really is something that's difficult. It was quite interesting, because about a week and a half ago, I

spoke with the spokesman for Vladimir Putin, with Dmitry Peskov and he said right now, quite frankly, the Russians believe that their country is simply

too big to isolate economically on the world stage.

They are already obviously managing to sell their oil to places like China, to places like India, and all sorts of other places around the world as

well as countries like the ones in Europe are buying less.

So it is very difficult, but at the same time, you do see that there is certain -- a steadfast approach, if you will, by these G7 countries, there

certainly was a lot of unity that was displayed as far as confronting Russia, continuing to supply weapons to the Ukrainians, accelerating those

supplies, and then also trying to put economic pressure on Russia, but again, trying to find a way to not have it backfire on some of these G7

economies.

QUEST: Fred Pleitgen in Germany, mentioning of course, the West trying to sever Russia's right revenue sources and here you see the three latest.

[15:05:04]

So the nations, the G7 have cut off gold revenues and now they want to target oil revenues with the so-called cap. Of course, there is natural gas

income, which is huge and many nations in Europe still rely on Russian natural gas, so that's not going to go.

And then of course, you have this other question of default. Western sanctions have pushed Russia into an historic default. Moscow, by sort of

Western definitions failed to pay its foreign debt for the first time since the Bolshevik Revolution in 1918.

Russia, for its part says, no so fast, they did pay. The money is stuck in a clearinghouse because of sanctions.

Clare Sebastian joins me now.

Before we get into the minutiae of the Russian default, off the three things that we talked about there, a price cap on oil, a ban on gold sales,

and the Russian default because of access to financial markets, which is the most significant?

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: So Richard, oil is definitely the most significant, if they can do it, if they can cap the price. That's

the most significant by far, I would argue.

Let's break it down: Gold, according to the UK government, Russia made in 2021 about $15 billion from its gold exports. It makes more than that, per

month right now, from oil. So that gives you a sense of perspective on the actual scale of the exports there.

In terms of the default, you know, it doesn't really make much difference right now. They were going to default at some point. The markets have

factored it in. They are already shut out of international financing. Yes, it's humiliating. Yes, it revives memories of 1998, which no one in Russia

wants, but it doesn't really make much practical difference right now.

But oil, if you can cap the price of oil, that could go some way to eliminating one of the biggest frustrations, perhaps even failures of the

current sanctions regime. The fact that Russia is selling less oil, potentially, but making more money out of it, because the disruption that

they've caused, their war in Ukraine has caused the market that sent the price up so much.

QUEST: Except, we're talking here about a price cap. Now, this is rather interesting. Here, we have the purchaser trying to cap the price of

something they wish to buy, lower than the market price.

What incentive would Russia have to go along with this cap? Surely, they would really try and sell that oil to China, to India, or elsewhere.

SEBASTIAN: Yes, but they can't replace all of their oil sales, at least, they haven't right now, to China and India. A lot of oil has already been

redirected, but not all of it. But the EU or the G7 or whoever ends up doing this price cap has to be extremely careful.

First of all, they have to set the cap at a level that still incentivizes Russia to produce oil because no one wants Russian oil to come off the

market because of course that sends the price through the roof.

The ideas out there about how to do it range from, you know, getting G7 companies to stop insuring cargoes that are sold above a certain price,

perhaps secondary sanctions on countries that are buying oil above a certain price, all of that does risk, Richard, putting friction into the

market and again, sending the price higher, thereby the sanctioners shooting themselves in the foot.

QUEST: And when we look at the default, so as I understand it, Russia says we paid the money. It is all stuck in the clearinghouses because they can't

send it on to you because of the sanctions. However, Russia is going to have a financing requirement. It has to rollover its existing debt. It

can't just sort of survive alone. So, what's it going to do?

SEBASTIAN: Well, they're going to pay in rubles going forward, Richard, that's what they said they're going to do. President Putin has signed an

order saying that that is allowed. The Finance Minister said last week, they really have no options left open to them because the National

Depository System that is basically the agent in Russia that funnels those payments to other clearinghouses around the world like Euroclear, the one

in question, that is under EU sanctions, they say that is why they can't anymore after this --

Well, this latest payment actually was in euros and dollars, but they can't do that anymore. They have to pay in rubles. So that is the plan from

Russia's perspective going forward.

As for this default, as I said, no real immediate practical impact, but does cement their status as a pariah in international markets, Richard, it

could make that you know, harder to recover from should we eventually see the end of this conflict.

QUEST: Clare Sebastian in London. Clare, thank you.

The EU Energy Commissioner now says it seems likely that Russia will cut gas supplies to Europe, and she said a serious disruption as a result,

possible. It follows the warning from three French energy companies.

In an open letter on Sunday, they urged people and businesses to take immediate conservation measures. And this is the only way to prevent an

energy crisis in the winter.

The Italian energy company, Enel is taking action of its own. It sold off its Russian unit, of course, because of sanctions. Joining me Francesco

Starace, the CEO.

Sir, it is good to see you.

FRANCESCO STARACE, ENEL, CEO: My pleasure.

[15:10:02]

QUEST: Are you expecting also a difficult winter, where conservation now will help forestall the worst later?

STARACE: But I think we need actually to accelerate the accumulation of gas in the storage and in that sense, I think, the French made the right

announcement. I wish this to happen everywhere across Europe.

This is going to be a difficult winter, and we need all the gas we can put in the storage, which is happening at this very moment and that is why we

should not waste time and energy in the same time.

So yes, I think it's going to be important.

QUEST: So assuming that Russia does either turn off the tap or restrict the supply. I mean, what does Europe do in that scenario?

STARACE: Well, I think there is different situations across Europe. Some member states have less of a problem, and others more. So if you look at

Europe as a whole, Europe will have a difficult year, if gas is cut all together, because the exposure of Europe to Russian gas -- piped Russian

gas -- is on the range of 30 percent of their own gas consumption of Europe. So it's huge.

And I think it's something that can be properly mitigated, but it will take more than just a winter. So, it has to be monitored and managed across

probably three or four winters before we can say we are completely out of the problem.

QUEST: And your decision, obviously, to sell your stake in your Russian unit, I mean, you're having to unwind business strategies that have taken

years to put together, aren't you?

STARACE: We had decided to leave partly -- or part of our business in Russia about three years ago and started doing that. So this has just

accelerated that decision. But we wanted to have a presence in Russia in renewable energy, which, at this point, is pointless, so we have to leave

altogether.

What we were doing is, Russia is what we're doing everywhere else in the world, so phasing out thermal generation and putting in renewables. At this

time, we just face that completely, that is it. That accelerated it more.

QUEST: Is this the impossible situation whereby, you know, the old traditional fossil fuels have been told, get rid of your refineries, start

cutting your production, don't do as much exploration, and now all of a sudden, it's exactly the opposite for completely understandable reasons. I

get it. But the price is rocketing and we are in a Catch 22.

STARACE: Well, if you want, there is even more than that. There is this incredible marriage being consumed between renewables and coal. Who would

have thought of that just a year ago?

So let's just not jump to conclusions. This is not changing the major trajectory, but clearly, you have to survive. So, these kinds of situations

are temporary and they need to be put in place in order for the whole economy to get out of this problem in the best possible way.

QUEST: As you look at the energy market at the moment, and these elevated prices, at the same time, as we have essentially stagflation in the major

economies, what concerns you most for the next six months?

STARACE: Like I said, I think there will be shocks and what concerns me more is the consequence of the shocks themselves. So we're looking at

speculation and pricing on some commodities that have little to do with supply and demand, and that is something that at the European level needs

to be fully understood, and I think it is. We're getting there, probably as all European things, a little later, but we're getting there.

This is, if you want, a war, and economies during the war need to go through certain particular moments that are not necessarily the same, that

are not necessarily regulated by the same laws that rule when there is peace.

So we have to understand that we are going to have to deal with regulation more than we were used to do before and this will last until the situation

is resolved.

QUEST: Francesco, it is excellent to have you on tonight's program. I'm grateful, sir, you've taken time in the evening in Rome. Sir, thank you.

STARACE: Thank you.

QUEST: Now to change in directions completely, literally and figuratively.

[15:15:00]

A completely new business class seat is quite a rare thing. Most airlines have versions of the same thing that they are offering, forward facing,

backward facing; herringbone, reverse herringbone -- you name it.

Finnair has done something completely different.

After the break, you'll hear the finance Chief Executive. It is a new -- it is a totally new cocoon-y business seat that some love and some are still

deciding. It's after the break.

QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: When the US Supreme Court overturned Roe versus Wade last week, it sent the legality of abortion and the whole issue of abortion back to the

individual states. As a result, a new patchwork of laws is being created, a legal minefield for corporations who operate in the various states.

More than 25 companies, including our own have pledged to cover the travel costs for those employees who have to go out of state for termination. The

list includes Microsoft, Disney Goldman Sachs and our parent company, Warner Brothers Discovery.

Some companies have already faced backlash from state lawmakers. A group of Texas Republicans has warned the rideshare company, Lyft against

implementing that policy.

Areva Martin is with me, CNN legal analyst, joins me from Los Angeles.

Areva, so I mean, just taking from my own example here at WBD, the announcement from Human Resources was almost immediately, within hours or

so, that expenses will be paid. This is now turning into something of a rubric for companies.

But that could be states were doing this would incur some legal arguably, criminal liability.

AREVA MARTIN, CNN LEGAL ANALYST: Absolutely, Richard.

This decision by the Supreme Court on Friday, overturning Roe v. Wade has created a disastrous chaos is the best way to put it, with, as you said,

this patchwork of laws that are being enacted by states many of which conflict with each other and some of which conflict with Federal laws.

And it is pitting corporations against GOP legislators, legislators that they are typically in alignment with. We're seeing in the State of Florida,

Marco Rubio, Senator Rubio has said he will introduce legislation to prevent Florida companies that pay the travel expenses for women who have

to travel out of state, preventing those -- the legislation will prevent those companies from claiming those expenses as an ordinary business

expense.

[15:20:16]

So we can expect to see lots of both civil litigation and perhaps even criminal litigation from those states that have criminalized acts of

abortion.

QUEST: And then we have this, which I was reading out in my weekend reading, this idea of the Commerce Clause in the Constitution that

basically says, if you do business in one place, cross state lines, you have to be allowed to do business elsewhere. It's a sort of a full faith

and credit type of part.

Could we see -- I'm thinking now, it would be pharmaceuticals, wouldn't it, and things like that that couldn't be sold in one particular state, but

could be in another? This is going to end up as being back before the Courts?

MARTIN: Absolutely, Richard. That's the kind of chaos that this decision has created. Yes, whether one state can stop or prevent another state from

providing abortions for residents that travel outside of that state. We also have the issue of telemedicine. We know during COVID, telemedicine

exploded in the United States.

So if an individual is sitting in Texas and is having a tele-visit with a physician in California, can that California physician then ship anti or

ship abortion pills to that woman in the State of Texas, because we also know that the mail in the United States is controlled by the Federal

government, not the state government?

So we expect to see lots of litigation over those kinds of issues, because as we know, more than 50 percent of abortions in this country are done by

abortion pills, not by surgical procedures in physical offices.

QUEST: So I mean, the Justices, obviously weren't concerned with this, they were concerned with a very specific question. But I can hear those

right to life people saying, well, yes, you may be right about all of this, but then it will just be solved in the Courts and the Courts are well used

to solving these complex issues. So, Areva, is this a greater confusion than we've seen before?

MARTIN: Oh, absolutely. Richard, no doubt about it. It is a greater confusion for women who are seeking to terminate pregnancies. For example,

Richard, some states won't have exceptions for women whose lives may be threatened by carrying a pregnancy. Some states won't have exceptions for

women who have been raped or who have been the subject of incest.

So can you imagine what those women must endure, to be forced to carry pregnancies by perhaps a rapist, and we also have this this issue of now, a

synagogue in the State of Florida, is suing saying that anti -- you know, these abortion restrictions violate their religious freedom, saying that

under their faith, women must be allowed to have access to abortions, because if a woman's life is threatened by the carrying of a child, she

must be able to avoid that child.

So they are making a religious protection argument against the Dobbs decision, and I expect to see many more religious organizations like the

synagogue filing similar claims.

So I don't think there is an end in sight, or at least at this moment, Richard, that we can see in terms of the amount of litigation that's going

to be filed by women.

Providers are also going to -- we should expect litigation from them because they won't know what exactly you know, constitutes an abortion that

is for the purposes of saving a woman's life, that may be legal in some states versus one that may not be legal.

So there is so much ambiguity with respect to how these anti-abortion laws can be enforced state by state.

QUEST: Grateful for your time. Thank you.

President Zelenskyy pleaded for Western leaders to help bring the war in Ukraine over by the end of the year. And in doing so, he pushed G7 leaders

for a major effort before winter.

He spoke to them, virtual, of course earlier on Monday and the pleas come through Ukraine continues to endure brutal attacks by Russian forces. There

is uncertainty over Ukraine's future.

And certainty of the war is plaguing businesses across Europe. The airline industry we know has been badly affected, perhaps no more so than Finnair.

Now before the war, it used Russian air space to fly in and out of Helsinki over the top into Asia. They made an entire hub on the basis of the

quickest way from Europe to Asia via Helsinki. This was January.

Now the map from this weekend shows the airline is avoiding the country entirely. It no longer has over flight over Russia.

[15:25:10]

Finnair's Chief Executive, Topi Manner told me Finnair has had to adapt.

(BEGIN VIDEOTAPE)

TOPI MANNER, CEO, FINNAIR: We are probably the most affected of European airlines in terms of the Russian air space closure.

You know, before the pandemic, we had carved out ourselves a niche of connecting Europe and Asia via the short northern route via our Helsinki

hub, and Russian air space was a big part of that, a big part of the shortest elapsed time for customers.

QUEST: There's unlikely to be a return to over flight of Russia in the near future, do you agree?

MANNER: Well, that remains to be seen. Unfortunately, there is no end in sight for the Ukrainian war at the present time and there is nobody who can

really say that how long the Russian air space closure will prevail. I mean, it can be two years, it can be five years, it can be 10 years.

We have taken the conclusion that we don't guess about that, we adapt to the reality of Russian air space being closed, which means that we will

need to renew our strategy.

QUEST: Exactly. What is the new strategy?

MANNER: So we are working on that. The first response from our perspective includes that we are pivoting our network to rest. We are increasing

flights to US, setting up new routes like Dallas, Seattle, also increasing in Southeast Asia; increasing, for example, in India, a new route to

Mumbai.

QUEST: So you have announced this new business class seat. It's not herringbone or it's not reverse herringbone or any of the others. It's a

fixed shell that doesn't recline.

MANNER: Correct. So there's a lot of comfort, a lot of privacy for our customers. It's called the air lounge. We are the launch carrier for that

one, together with Collins Aerospace who has created the seat.

And, you know, with cushions you can, you know, make yourself comfortable in the seating position. When you get the leg rest up, then you get full

180 degrees sleeping experience. It's beautiful. You need to try it.

QUEST: Yes. I'm looking forward to trying it. It's not the sleeping bit that I'm thinking of because you're going to be flat regardless. It's that

when you want to read or eat, that sort of gentle recline, just this far back, not all the way, but just enough to be in the lounging position while

you're eating or -- how do you do that on a fixed shell where it will cushion you, you'd be turning?

MANNER: No, no, no, no, no. That is not the way it works. I mean, first of all, it's designed beautifully. So you can you know, adjust your position

with pillows, and the beauty of the seat is that there is no mechanism, there's no motor, and it weighs less. So, it's a very sustainable solution.

QUEST: So when you decided to go into the market for this, what did you say to Collins to do them? I mean, what did you say about what you wanted,

that they were able to say, well, we will have to design something new from scratch?

MANNER: Well, a couple of years ago, we made the decision and we stated that we want to be a modern premium airline. We want to be authentically

Finnair. We want to be sustainable. We want to be different. We want to differentiate, and this is what we're doing with this seat. So it's a very

courageous choice.

(END VIDEOTAPE)

QUEST: Courageous choice, there is a thought. We'll certainly be giving it to the test over the summer actually. I believe there is an opportunity for

me traveling Finnair and we'll certainly put it to the test.

Now is the summer of discontent: Holiday misery as airlines cancel hundreds of flights in the US, same in Europe, critical staff shortages, we'll talk

about after the break.

QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

[15:30:00]

(COMMERCIAL BREAK)

[15:32:12]

QUEST: Massive shot staff shortages caused U.S. carriers to cancel hundreds of flights over the weekend. And more than 700 grounded earlier today. 800

cancellations. Delta United are amongst the airlines, the shortage of pilots, crew members and on the ground, it's a mess. The Fourth of July

holiday weekend is coming up next. You've also -- in the U.S. you've got the European school holidays underway.

It is a summer of travel chaos that will be hard to avoid. And yet despite the challenges, a major player says it's very much back on track, the

president of Emirates told me that cash on its balance sheet has been restored to pre-COVID levels. And so Tim Clark is optimistic about the

coming months. So Tim was at IATA in Doha as we were as well.

(BEGIN VIDEOTAPE)

TIM CLARK, PRESIDENT, EMIRATES: The decisions we took in the early part of last year to prepare ourselves, get ourselves to that advanced stage of

readiness for when it did come because we believe that he would have, we walked the talk. As a result of that we've got a lot of aircraft flying

completely full with very high yields, even notwithstanding the fuel costs as they are and we're making actually good money.

Now, that is a task that I set myself personally to see the business back into a sort of fighting capability again. The cash on the balance sheet has

been restored to pre-COVID levels now. And we're very, very confident unless there's something else that comes up that we will take the business

through to the end of the financial year in very good shape.

QUEST: As we look at the return to service and the recovery that's underway. The difficulties across the board. Where are you finding pinch

points? Where are you finding difficulties?

CLARK: Primarily in the countries within the Europeans (INAUDIBLE) with a supply chain problems, labor supply problems, airports not getting

themselves up to a state of readiness, which they've -- I think they've had ample opportunity to do but there we are. The reality is that we can't

operate. In fact, some of the places such as Heathrow yesterday told us to cut back our frequency by 10 percent giving us 24 hours notice to cancel

flights that are already full.

QUEST: Are you going to do that? And if so --

CLARK: Well, we really don't have much choice because otherwise you're going to get a continuation of what you've already seen with regard to the

way they handle baggage and everything else. It's not just procured at Heathrow, there have been other places where it's been difficult but not

impossible. And we are working around all of those things. In the Middle East, in Dubai, we don't have those problems. We opened all our five

terminals by October of last year, and they're up and running.

QUEST: You used to have parked quite a lot of planes, don't you? When do you have to bring them back in?

CLARK: Probably by the back end of this year, the first few months calendar next year.

QUEST: I mean, there's no difficulty bringing them back in --

CLARK: Crewing.

QUEST: Crewing. So all you have in crewing.

[15:35:00]

CLARK: Well, no, look. We -- the most important thing here is that we -- it's not a question of getting the people in -- back into the company. It's

a question of overstressing. The training facilities which we're not prepared to do. Otherwise, we'll never get the pilot -- pilots back to the

gold standard. So there's only a certain number of pilots, you can put through our training facilities in a month.

If we push it, it's about 50. We're actually getting about 30 through so - - which involves quite a lot of using 380s as training vehicles as well as the simulators. But we won't compromise on that.

QUEST: I guess whatever problems that one faces now, it pales compared to the problems two years ago. I mean, everything has to be seen in

perspective two years ago, when the whole thing just ground for --

(CROSSTALK)

CLARK: Yes. And I -- look, of all the disruptors that I've seen in my career, this probably takes the ticket. Now this is -- this was pushing 10

on the Richter scale. And so now we've got the aftershocks coming through the tremors, et cetera. But you know, when they finally the world crashed

in 2008, 2009, we all thought this was the end. Well, we bounce back out of that. And for many reasons. So what's going to happen here?

Do I look forward to a kind of resurgence of demand? We've seen that one, we said that would happen. I think I sent it to you last year. The bow wave

as I've called it, a lot of people were misbelievers or disbelievers. I shouldn't say that and now they're getting caught as a result. The Dow --

the byway will dissipate. But at what pace? So, what is going to be the first thing that's going to drag us down? Is it the difficulties in the

global economy or will they resolve themselves by the time the bow wave dissipates? I don't know.

My own view is that we're good to go both top and bottom, I.E., above the wing, below the wing until the end of next year beginning of 25. And that's

a bold move to say but I think we are.

QUEST: Wow. 25. By which time hopefully the economy's turned round.

CLARK: Well, we -- there's always that and, you know, I've seen it happen many times before. And I've -- whichever the nature of the disruption is,

but it generally gets itself back into good condition. Now, the only caveat to that is the Ukrainian situation.

(END VIDEOTAPE)

QUEST: So Tim Clark talking to me. Revlon, a once iconic brand and beauty is in vogue. It's a meme stock now. Shares have fallen after their surgery

more than 50 percent last Wednesday. Revlon filed for bankruptcy. Now we're down 13 percent. I mean, just looking at it, it's up 400 percent, down 400

percent all over the place. Investors are piling and the original meme stock of course is game stock was -- is down.

It still up overall since the meme frenzy began. And there you see it. The fascination with meme as the subject of a new HBO Max Docuseries on our

sister network that looks into the short selling of game stocks stock and the phenomenon around it. You'll recognize the narrator Kieran Culkin

channeling his character from succession as the voice of gaming Wall Street.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: GameStop.

UNIDENTIFIED MALE: GameStop.

UNIDENTIFIED MALE: GameStop.

UNIDENTIFIED MALE: Remember when you couldn't stop hearing about GameStop? Thanks to a bunch of nerds on Reddit. Its stock price raised to heights no

one could have ever imagined.

UNIDENTIFIED MALE: Because of all these hedge funds, shorting the stock, GameStop offers a undervalued player. So a lot of people are buying into

it, not even worrying that they lose all their money. It's more about a middle finger to the hedge funds.

UNIDENTIFIED FEMALE: There's this opportunity here to bet against what all the hedge funds did.

UNIDENTIFIED MALE: Finally, the underdogs had the upper hand.

(END VIDEO CLIP)

QUEST: Toby Deml is the director of Gaming Wall Street with me now. Toby, good to see. What do you make of it? I mean, you know, we -- I've worked in

this -- covered this industry for nearly 40 odd years. But for somebody like yourself, did you come away from gaming and memes, thinking it's

gambling that these are poor people who are just literally thinking they've got a -- they've got a handle on it, but actually they are the meat and the

sandwich?

TOBIAS DEML, DIRECTOR, GAMING WALL STREET: It's a great question. Generally, I would say there's always a component of gambling when it comes

to any meme anything. I think in the case of GameStop itself, it was much more powerful than just gambling, there was a really big idea both on a

thesis side, as well as on a social side, kind of let's stick it to the big guys and see who wins.

QUEST: My experience has been that the big guys inevitably win in the longer run. And that's what we've seen in the market over the last six

months. Would you agree?

DEML: I'd actually challenge you on this with a very recent development. So part of our documentary was about a practice called payment for order flow

that Robin Hood has become famous for him, has oftentimes come away with impunity like the big guys usually do. But as part of the documentary

rolling out, we teamed up with Dave Lauer for Urvin Finance, and we actually ran an impact campaign.

[15:40:01]

That now has 90,000 people behind it. 71,000 signatures went to the SEC. There was two meetings at the SEC and the SEC has been -- after about a

week and a half after those meetings announced relatively large reforms to the payment for to flow model, which is only benefiting the largest players

in the market. So, I think there's one case maybe the little guys won.

QUEST: Right. But they might have won on the payment on the order flow. But as the price collapses, I always feel you know, those who are slightly more

experienced manage to hold on. I've got to ask you, did you take a punt? Have you taken a punt on any of the memes (INAUDIBLE) Revlon, any of these?

You've not been tempted to put your own money in there just to have a go just to feel like gambling threesome.

DEML: So, I actually put my own money in GameStop, and an AMC and a few other team stocks back in 2021, which then allowed me to tell the story

kind of from an insight perspective, both from the retail insight perspective, what was it like, and also the Wall Street and set

perspective. And I would say 100 percent right. Like these stocks are just like other stocks, they can go up, they can go down, they behave in a

variety of ways that people have never seen before, necessarily.

So there's always a winner and a loser in the stock market. But the big picture is everything goes up if the economy does well.

QUEST: That's true. But I do often wonder what the meme stocks, the damage they did. Bearing in mind that it -- let's take an AMC, for example. There

are tens of thousands of employees in these companies, they're part of the real economy as well as part of this Reddit meme stock Robin Hood. Did you

come to any judgment on that?

DEML: Yes, it's hard, right? The employees are far removed so to speak from the actual stock price, but the stock price is a huge influence. Right? And

if you look at AMC specifically, if there wasn't this meme stock craze that happened, clearly, you know, a lot of people gain something, a lot of

people lost something. But if it wasn't for that craze, there's a high chance that AMC would have not made it financially, right?

And this swing in the secondary market and pushing up the price so much and AMC being able to take out billions and billions of dollars both inequity

and in loans allow the company to at least survive some longer, yes.

QUEST: Good to have you sir. Fascinating Docuseries. I'm very grateful. Thank you, sir, for joining us. That's QUEST MEANS BUSINESS are more at the

top of the hour, we'll dash to the closing bell together. World of Wonder is next.

(COMMERCIAL BREAK)

[15:59:17]

QUEST: Together the class -- the dash to the closing bell, we're just under a minute away. Markets are down slightly at the end of the second quarter

closes. The Dow is off just 87 points. But you can see it's bouncing around a triple stack shows a similar sort of smaller losses for the NASDAQ and

the S&P, they're both off as well. The rising energy price continues to rattle the markets, the CEO of Enil told me, other commodities could

follow.

(BEGIN VIDEO CLIP)

FRANCESCI STARACE, CHIEF EXECUTIVE OFFICER, ENIL: Like I said, I think there will be shocks and what concerns me more is the consequence of the

shocks themselves. So we're looking at speculation and pricing on some commodities that have little to do with supply and demand. And that is

something that at European level needs to be fully understood and I think it is. You know, we're getting there. Probably as all European things a

little later but we're getting there.

[16:00:07]

QUEST: Tomorrow join us for ongoing coverage of the January the 6th hearings. I'll be back with you on Wednesday when I'll be in London. Dash

to the closing bell. The closing bell is ringing. Whatever you're up to, I hope it's profitable.

END