♪ >> from bloomberg's weld headquarters, i am caroline hyde. joe: i am joe weisenthal. >> i am romaine bostick. joe: the question is, "what'd you miss?" caroline: the energy crisis is still front and center. in the u.s., it has knocked down the power for days for millions in texas and central parts of

the country with blackouts expecting to last until at least thursday, and oil production has plunged to nearly 40 percent. coronavirus vaccine the shipments, delayed. amazon closed facilities to illinois and the texas. the crisis leaves many questions about, how did we even get here, and what policy and new technology can be used to make sure this does not happen ever again? the data we are getting on the lack of power is remarkable. : joe it is -- joe: it is striking that we are in this crisis and it seems to be getting worse. this is a great chart that we have on the terminal looking at total electricity load in texas, and it is lower or several points yesterday and a little bit higher than it was, but this is not recovery. the story of today is continued

deterioration in the total energy grade right now in texas. an extraordinary cascading failure hitting all kinds of different industries, major humanitarian toll, just an ongoing situation. romaine: and the idea that a lot of folks had their power restored only to have it cut off shortly after that here, so definitely the issues have not been sorted out. joe: for more, i want to bring in anastasia who leads bloomberg analysis. one of the steps that i am not sure has sunk in for people, a third of u.s. oil production, now off-line. and that into context for us and even if things start to warm up in the next couple of days, what are the ripple effects of that? anastasia: we have seen estimates ranging between 3.5 million and 4 million barrels of

oil production off-line. that is a quarter of our u.s. supply. it depends, the question is how long will it take for it to come back? ? when it is freezing cold, the water vapor freezes and that makes it impossible to extract it from the ground, and process the gas out of the water stream, and as a result, oil and gas production has to halt. we are waiting for temperatures to warm up and once they warm up a bit, everything can melt and we can start reprocessing the oil and gas, and a lot of it depends on how quickly the weather changes, so we anticipate that hopefully oil production should be back to normal by february 25. but hopefully, sooner than that. it depends on where you are. and ramifications run downstream. major power outages because gas cannot reach the plants on

generators. and because they do not have power for the facilities, there have been halts to sending gas to industrial facilities and export terminals, because they want all of the gas that is available to be available for heating and power. that is one of the trade-offs as well. the little gas that there is has to make the decision of does it go to heating or to power. caroline: as we look, the blame game continues and much of it, false information being distributed. whether you look at wind are gas, and certain diversified ability of power over in texas, the planning is a freak set of circumstances, a perfect storm. for the grid operator, how are you thinking they are going to look in terms of the diversification going forward,

or changing the practice of being self sustaining in texas? anastacia: certainly. this has been an issue that in the circumstances, you have wind turbines freezing, but also, gas supplies halting. there is no real one sector that is responsible. you also have the grid operator, they under forecasted how much demand there would be, so any that were available, you have just exacerbated the problem. a live question to especially because texas is a unique power market where it is a very wholesale, free market set up, so there are a lot of questions of whether there will be a change or different operators or different to generators should be required to prepare their technology for a freeze like this.

that is a big question. that depends on do you believe this is going to be a normal occurrence. you look at areas like canada or the northern u.s., they do not have these problems because pipelines are insulated, they have anti-freeze, so the real question is, do you try and change the infrastructure, do you try and change the policy to make sure there is more capacity available, and no one has the answer, but there is a lot of talk about solutions. romaine: are we hearing from the companies themselves? are they looking for a change in the way the industry is structured in texas? anastacia: i have not heard too much from a company level, is a bit too early. they are so focused on trying to get operations back to normal levels, and even there, information is just starting to come in as to how much production is out, which operators are seeing

shut-ins, so it will take a couple of weeks. power prices have gone through the roof in texas at the moment, so if you are a power generator and you have the infrastructure in place to deal with cold, you are making a good amount of money right now, so perhaps this will be a market incentive to whether -- weatherize plants. romaine: anastacia dialynas with us. we will continue this conversation and underscore the fragility of the u.s. electric system. we will talk about opportunities with brett winton. this is bloomberg. ♪

♪ caroline: today, we have been focused on the current energy crisis by falling america. -- befalling america. it takes me back to the end of last year. in the u.k., they announced there would be a project to use giant tesla batteries to balance demand across the market. it shows how tiny the grid is in the u.k. in respect to the u.s., and it is not exactly a failsafe. nevertheless, this is a way of storing energy of thinking about how a new technology can ride to your rescue. joe: it always seems to come back to tesla in the end. which has not been doing that great lately, the original yolo

trade, down 5.5% in the last month. romaine: there are other players in this space, a lot of smaller companies trying to solve this problem. joe: joining us with more insight, brett winton. it is no yolo trade for your crew because you guys have been bullish on tesla, but it is interesting thing about them in the context of the stress on the grad -- grid. do you worry about this, is it an upcoming stress point, texas, california, this degree of demand we will be placing on the grid as cars go electric? brett: in short, no. we have done work to look at energy demand that will be

solicited by electric vehicles. we think 40 million electric vehicles will be sold by 2025. there will be more electric vehicles entering the marketplace. because of the daily fluctuation in power price where in the middle of the day where everyone is running air conditioners or in texas, when everyone wishes they could be running heaters, you end up with a higher demand than you do at other times during the day. what typically is middle of the day is higher demand, and the night's lower demand, and that night when electric vehicles are plugged in the grid, it is typically a slack time in demand. you do not need to introduce a lot of additional capacity to keep the fleet filled and operational. you are flattening the volatility that is otherwise in the demand cycle, you can end up with a net lower cost of energy, because baseload power that is

operating at these rates, you can levelize costs of that power at a lower level than a plant that is only supposed top or a few hours a day. that is exactly the energy arbitrage opportunity that a battery storage system seeks to address. you can think of the electrical -- electric vehicle fleet as a very distributed battery system that is taking power out of the grid at night when otherwise, you do not have a live demand, and then giving power back and running down those batteries when you have additional demand from air conditioners. romaine: when do we start to see more expansion of those energy storage options for cars in the driveway? brett: you can buy a battery system for your home and typically, that stretches for a certain number of hours, basically as those replacements

for buying a generator, potential you have charged up the battery and you lose power, and it kicks in and keeps you operating for some number of hours. one of the convenience factors is often times, power outages are not multi-day power outages like what is experienced in texas, but a couple of hours or a half day. there, the battery system is the perfect sweet spot where you will not even notice that the power is out in your particular neighborhood because you just fell over into the battery system. it is relatively inexpensive over time. you can buy those today. as you have more of those batteries getting installed in homes, there is the potential for utilities to be able to draw on that to resource in times of emergency.

there is a utility and vermont and i believe it is subsidizing purchase of home batteries. with the agreement that then they can pull on that power when they needed from the homeowner, so it is a way to centralize the power grid where you have more power distributed at the endpoints that then you can call upon when there is essentially a demand crisis or supply demand crisis. caroline: this crisis that we are seeing at this moment, you invest across disruptive properties. is this going to be inflection point -- will we see companies being born out of this crisis moment? do you think this is just tesla's right for the picking, or new company's born out of this moment? brett: you will see a number of new companies, and apologies for my video, but i think you will

see interest for the consumer's perspective in derisking for this kind of possibility. it is unclear to what degree the renewable energy space and the battery space is an interesting space for ultimate cash flow perspective. a tesla has a competitive advantage because they need to generate battery cells for their electric vehicle manufacturer anyway, and vehicle sales is naturally kind kind of not supplied constant curve. to keep their battery manufacturing fully utilized, they need to fill in other places where they can sell batteries, where someone who is going directly after the energy -- tesla should be able to price

batteries more competitively than someone who is only going after the renewable energy battery opportunity itself. it remains to be seen. there are a lot of players in this space and it is really hard to convince a customer to spend thousands of dollars they do -- on something they do not need immediately. trying to protect someone from a future event, that is a hard sale. it will probably lead to additional installs of solar and batteries and people psalms. caroline: brett winton, going to be sticking with us. and retail frenzy ahead of tomorrow's house gamestop hearing, and so much you can talk about. this is bloomberg. ♪

♪ ♪

romaine: at this time tomorrow, we will have two big events. we will find out if life is on mars and congress is going to solve all of the craziness that happened on wall street. big hearing tomorrow. you will hear from -- joe: all of the legends and investing. is he going to make his new pick? is he going to in vale -- i hope so -- unveil, i hope so. caroline: i like the stock. romaine: [laughter] thank you, caroline. we will tattoo that on our forehead. sorry -- i am introducing. joe: this is why we wake up in the morning. one of the most extraordinary stories ever, at least in financial media, but beyond that really. romaine: it was the spectacle no one could ignore. nurtured and whipped into a frenzy on reddit.

catching wall street veterans off guard. now u.s. lawmakers entered the fray. a congressional hearing and a chance to hear directly from the companies that took the heavily shorted she -- shares of gamestop. the fall back down to earth and volatility in between sparked an investigation into potential market manipulation. >> i understand that the administration is taking a look at what that is, but we will all be reviewing it. romaine: calls for more scrutiny of trading, social media, and broker liquidity. >> i would like to think that there is more enforcement, kind of a counterweight to the extreme dishonesty that has surged through the markets the past several years. caroline: the debate around investing circles is how to approach this new phenomenon. romaine: congress. wall street. and a new breed of retail

traders who show they are now forced to be reckoned with. joe: extraordinary times in the stock market and one aspect is the incredible obsession with the arc family of funds. we are still with brett winton, and great to have you back. it is a phenomenon, ark, director of research. the big question, what does it mean that you guys are so big? and the last time that bloomberg looked, 25 companies where you all and at least 10% of the equity, how does that change the fundamentals for you, now that you are the price setter for some of the smaller names? brett: if you look across the five disruptive technology platforms that we invest in, we believe there is roughly $14 trillion in attributable market cap. ai, energy storage, gene

sequencing and editing, robotics, cryptocurrency, and blockchain. some of that is not market cap, some of it is bitcoin. what -- but we believe there is $14 trillion attributable, but we think that will grow significantly over the next five years. our modeling, we think it is going to roughly double to almost $30 trillion. for us and the way that we look at the portfolio, we do not lack for opportunities in which to deploy the capital that we have. another aspect of the way that we actively manage the portfolios is we take a long-term view of valuation. within that rough doubling that we believe is going to accrue to these fundamental technologies, these disruptive technology platforms, there is probably going to be a lot of volatility

along the way. it is almost a certainty, and that volatility could be down or it could be up. if you look from our perspective historically, our five-year price targets are not nearly as volatile as the market's volatility. we tend to trade counter to market movements in the interim. we tend to sell it down, if it sells down on earnings, we tend to buy it. caroline: as you just volunteered, for example. and $14 trillion divided by, how many companies do you think and how many would you get into? it is interesting when you toggle between how many names you own, do you think as the $14 trillion opportunity gets bigger and bigger, you would just add

more and more names? brett: it depends on the cycle. if you look at historically, the way that we have managed the portfolio, the number of names when our style is more out-of-favor, and the growing we diversify the holding base as people suddenly believe that we know what is going to happen in the future. again, we have -- generally, even joe talking about how well known, that tends to suggest to me that a lot of people are focusing on the same kinds of things that we are focusing on. we are more cautious in some of our positioning, and as we fall out of favor, which inevitably, we will, than likely the folio will concentrate to some degree. that said, there is a lot incremental business creation in the spaces that we are focused

upon. if you were rewinding the clock five years ago and asked about the software space, there is no way that someone would correctly predicted the number of names that would be very liquid and interesting businesses addressing the opportunity. we think that is going to play out across the technology platforms that we are invested. joe: really appreciate you joining us, and learning more about your insight on the tech and the company. brett winton, ark investments, director of research. you can hear more from brett by listening to the podcast on apple or spotify. romaine: is it only on apple or spotify? joe: it is on a million other spaces. romaine: for those of us who are contrarian. caroline: what about clubhouse? romaine: [laughter] caroline: time to promote your

affiliations elsewhere. that doesn't from "what'd you miss?" romaine: daybreak australia is coming up next in asia. this is bloomberg. ♪

♪ >> i am emily chang in san francisco and this is bloomberg technology. coming up, we are watching two big events. the deep-freeze, that continues in texas causing problems across the state. plus, prepared testimony ahead of thursday's gamestop and just what will that be told to

er