Speaker 1: From the heart where Innovation, money and power Collie in
Speaker 1: Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3: And Caroline Heidet Bloomberg's world headquarters in New York and
Speaker 3: Iurmed Lovelow here in San Francisco.
Speaker 4: This is Bloomberg Technology.
Speaker 3: Coming up the tech rally ed is it exhausted? Strategists
Speaker 3: sour on the sector amid a muted reaction to Nvidia's results.
Speaker 5: Will break down the outlook of mid Jackson.
Speaker 6: Hall plus by now pay later company a firm beach
Speaker 6: revenue estimates in its fourth quarter results. There is an
Speaker 6: insane share reaction. We will speak to the CEO, Max
Speaker 6: Left Chin.
Speaker 3: And China's major one falls after warning that growth in
Speaker 3: its core meal delivery business it's going to slow. Mid
Speaker 3: economic turbulence. Will have that and so much more throughout
Speaker 3: this hour. But first let's check in the Powell result.
Speaker 5: And actually he.
Speaker 3: Manages to stick to his usual party line, no great surprises,
Speaker 3: A hawkish tone coming from the Fed chair over in
Speaker 3: Jackson Hole. We're looking at the NASDAK just off about
Speaker 3: a tenth of a percent. As we see bond wheels
Speaker 3: just push on the higher side, particularly at the front end,
Speaker 3: we're up about four basis points, maybe a bit less
Speaker 3: on the longer end of the tenure, but notably a
Speaker 3: little bit more of a hawkish tone, but not one
Speaker 3: that up ends the market entirely. Ed, I'm looking at
Speaker 3: bitcoin just off by about three tenths of percent. Dollar
Speaker 3: did track a little bit higher throughout that speech. But
Speaker 3: moving on to what the picture of the week has
Speaker 3: been because amid this volatility, amid these warriors of China,
Speaker 3: amid the macro sentiment turning sour, in fact, we hold
Speaker 3: onto gains through the Nasdaq one hundred.
Speaker 5: Throughout the five days, we're up six tens of percent.
Speaker 3: Remember the heavy heights we lifted into a head of
Speaker 3: Nvidia and posted videos results.
Speaker 5: But some of that's been starting to fade a little bit.
Speaker 5: But still a week again, Zed you got the micro Yeah.
Speaker 6: I would say that it's definitely pow that's impacting the
Speaker 6: technology sector.
Speaker 4: But we still have earning stories.
Speaker 6: Marvel Technology, a chip maker, we discuss less networking and
Speaker 6: hard disk controller maker down eight percent, biggest drop since
Speaker 6: last year, lowest level since May.
Speaker 4: An AI relevant story.
Speaker 6: That the profit outlook for this quarter was in line
Speaker 6: with estimates, and the street was basically like meth you know.
Speaker 4: And they've moved on.
Speaker 6: But it's interesting the psychological change for the market around AI.
Speaker 4: This is unbelievable.
Speaker 6: I don't do this often, but affirm you know has rebounded.
Speaker 6: There was a pretty normal earnings call. We'll get into
Speaker 6: the numbers with the CEO. It's up twenty eight percent.
Speaker 6: I don't normally do this, but I went on HRH
Speaker 6: on the Bloomberg terminal. It's a four standard deviations move.
Speaker 6: It's only happened once, so there is a big question
Speaker 6: of what.
Speaker 4: Is going on there.
Speaker 6: It is a popular name on Wall Street bets. Maybe
Speaker 6: that's a part of the story. We'll ask the CEO.
Speaker 6: Then I go back to Nvidia. The enthusiasm from Nvidia
Speaker 6: posts its earnings, which we know on this show we
Speaker 6: talked about them knocking out the park. We're now down
Speaker 6: four percent and it's caught up with the rest of
Speaker 6: the market. Maybe it's a kind of sell the news
Speaker 6: a day late kind of story, but that's pretty credible turnaround.
Speaker 6: Everyone has kind of said, you know what, let's move
Speaker 6: on from the Nvideo and AI story.
Speaker 3: Yeah, are they ready to and really We've had plenty
Speaker 3: of names big market analysis coming out just wondering whether
Speaker 3: this market rally is exhausted. Let's get Katherin Rooney Vera's take,
Speaker 3: chief market Struateturist over at stone xt Group and Kevin
Speaker 3: we've heard from the likes, for example of Mike Wilson
Speaker 3: over at August Stanley, just talking about how this signal,
Speaker 3: the fact that in video failed to boost really the
Speaker 3: overall market is a technical signal that this rally is exhausted.
Speaker 3: Are you, for one agreeing with that or not?
Speaker 7: Well, when you look at the chart of videos back
Speaker 7: to its seven year forward pe multiples, so that also
Speaker 7: tells us something at Stone Exit with our treating dusk desks,
Speaker 7: we have seen an increased interest since the past three
Speaker 7: weeks since I came out recommending the protection on the
Speaker 7: triple Q option with puts, either put spreads or naked puts.
Speaker 7: That has been remarkably profitable and our clients have benefited
Speaker 7: from that perspective. And that was because Caroline, we thought
Speaker 7: that tech was overdone with almost your date fifty basis
Speaker 7: points appreciation at that point. Now in the macro context,
Speaker 7: with the FED trying to persuade markets to believe it
Speaker 7: that it's not going to change its two percent target,
Speaker 7: that it's serious about its two percent target, that has
Speaker 7: a strict interpretation of its dual mandate. That to me
Speaker 7: says that twenty twenty four is unlikely to be as
Speaker 7: much of a boom for this sector as we saw
Speaker 7: it in twenty twenty three.
Speaker 4: You know, we're just a couple of hours postpoal.
Speaker 6: So where we've left it is that it's too early
Speaker 6: to declare victory on inflation. They're going to be careful
Speaker 6: about raising rates, but I think the conclusion is higher rates,
Speaker 6: steady for longer. To your mind, Catherine, how does that
Speaker 6: relate to the technology sector, How do we price that
Speaker 6: into the tech sector in public markets?
Speaker 7: It seems that the markets have not priced in that reality.
Speaker 7: Market's still priced in easing next year. So that tells
Speaker 7: us that currently priced into multiples is the best case scenario.
Speaker 7: So the soft landing, which is of course two percent
Speaker 7: inflation target attainment with no economic contraction, I think is
Speaker 7: unlikely to manifest unless the Fed does, in fact, either
Speaker 7: implicitly or explicitly change it's two percent average target. So
Speaker 7: if it's serious about that target, and it does have
Speaker 7: a strict interpretation of said target, then I think that
Speaker 7: twenty twenty four could be a difficult one for tech,
Speaker 7: and I would expect that the most intrast rate sensitive
Speaker 7: sector such as tech, such as consumer communications and consumer
Speaker 7: discretionary would have a tougher time. So I do like
Speaker 7: I think utilities is up today. Now, I think that
Speaker 7: we have to be more defensively positioned. I like cash,
Speaker 7: I like goal, I like sectors that are defensive going
Speaker 7: into twenty twenty four because the fen's going to be
Speaker 7: in a tough spot. Either go for that two percent
Speaker 7: target and maybe even have to hype further, which has
Speaker 7: been my long health contention, or change it explicitly or implicitly.
Speaker 3: I want to go back to this micro narrative though,
Speaker 3: because you paint a really clear macro picture. But there
Speaker 3: has been this almost ability for tech to outshine because
Speaker 3: of the productivity boost manufacturing into artificial intelligence. Now I
Speaker 3: know that that's been questioned the moment. I just want
Speaker 3: to go to what Steve Slsnak had to say on
Speaker 3: Blueberg Television a little bit earlier about well, the concern
Speaker 3: about lack of institutional buyers at this moment, just take
Speaker 3: a listen, Catherine.
Speaker 1: You didn't get the institutional follow through that I think
Speaker 1: you got, you know, from the from the first round
Speaker 1: of buying, and without follow through and with perhaps a
Speaker 1: little profit taking, you know, you up you end up
Speaker 1: with a messy, messy, kind of blah day that you had,
Speaker 1: that you ended up with yesterday.
Speaker 5: So I just returned back to it a little bit.
Speaker 3: Are there any names that are still the magnificent seven,
Speaker 3: for example, going to tread water because of AI?
Speaker 5: Or is that done?
Speaker 1: No?
Speaker 7: AI certainly has a long longevity and long path therein,
Speaker 7: but a lot has already been baked in in this
Speaker 7: euphoric AI. Now markets tried to price in ahead of
Speaker 7: time what's going to happen in the next five years.
Speaker 7: It's already been priced in, so AI has to deliver now.
Speaker 7: Certainly it is positive for productivity, but my concern, perhaps
Speaker 7: reverting back to that inflation story, is productivity at current
Speaker 7: levels would have to accelerate meaningfully in the near term.
Speaker 7: That means that AI would have to really deliver in
Speaker 7: the next year to really compensate for four percent inflation.
Speaker 7: In other words, productivity is not sufficient at the current
Speaker 7: growth rate over to make up for four percent inflation,
Speaker 7: so inflation stays around. AI is not there yet, and
Speaker 7: the Fed is going to have to stay on hold
Speaker 7: for the entirety of next year. Again negative tech or
Speaker 7: potentially even hype, because inflation is very likely to reaccelerate
Speaker 7: under the scenario of soft inflation. This is an economy
Speaker 7: based on consumption. The consumer is strong, real wagers are positive,
Speaker 7: and they're trending higher. That is not a good environment
Speaker 7: either for yes it's two percent target, or for rates
Speaker 7: coming down.
Speaker 6: You know, Caroline, I sit here on a Friday morning
Speaker 6: asking myself what happened?
Speaker 4: What weird week?
Speaker 6: Twenty four hours ago, JP from Franklin Equity Group told
Speaker 6: us that the nvideo results were like The Godfather Too,
Speaker 6: where the sequel is as good as the original, but
Speaker 6: on a two day basis the stocks down four percent.
Speaker 4: It's like it never even happened.
Speaker 3: Yeah, or you got it in within that And remember
Speaker 3: how far we've charged high more than two hundred percent
Speaker 3: gain on this name throughout the year, the key outperformer
Speaker 3: of choice. Maybe it is just this moment to profit
Speaker 3: take but I mean to that end, Catherine, it's really
Speaker 3: fascinating that you say sort of AI has got to deliver.
Speaker 5: Well, it kind of has been, at least in video.
Speaker 3: I mean, we've got currently earnings expectations to twenty twenty
Speaker 3: for their fiscal twenty twenty four, one hundred and seventy
Speaker 3: one percent growth for the next quarter that we're currently
Speaker 3: in one hundred and seventy eight percent revenue, so doubling
Speaker 3: even out until their first quarter of twenty twenty five
Speaker 3: their fiscal. So it certain what more do you need
Speaker 3: to see improof in the pudding that really AI is
Speaker 3: here and is driving revenue for not just in video.
Speaker 7: Yeah, I would have to see it flow through into
Speaker 7: the productivity numbers. So we have to get that boost
Speaker 7: in US productivity in a meaningful way. Remember, in the
Speaker 7: past six quarters, productivity was only positive three of them.
Speaker 7: So yes, the last quarter, I'm not mistaken, around three
Speaker 7: point seven percent annualized was positive. But I would like
Speaker 7: to see AI play into the real economy. Caroline, AI
Speaker 7: everyone's talking about it. You know, you go into the
Speaker 7: corporate earnings and guidance, and corporations are well intended, but
Speaker 7: maybe not all of them are deploying it. So I
Speaker 7: think deploying takes time, and certainly we're pricing that in today,
Speaker 7: but it has to flow through to the real economy
Speaker 7: of course, at the next five years to offset inflation.
Speaker 7: And na VIDIA very interesting and I think seven reverting
Speaker 7: back to its seven year multiple is great.
Speaker 2: I'm not saying, you.
Speaker 7: Know, sell all of your tech sectors, but what I
Speaker 7: am saying is that volatility to protect those positions is
Speaker 7: relatively historically cheap, So why not deploy it rather than
Speaker 7: go into a potentially volatile twenty twenty four. You know,
Speaker 7: for lack of a better word, Nick, if you want
Speaker 7: to be protected.
Speaker 6: You know, I'm so glad you asked that, Caroline, because
Speaker 6: we're at the tail end of earning season and it's
Speaker 6: almost September, and we'll be back in the next one
Speaker 6: and you wonder, do we go through the same expectation
Speaker 6: from an AI driven growth cycle that we did in
Speaker 6: the last three months? Extraordinary, Cafrine ruoneybera happy Friday to you,
Speaker 6: chief market strategist. As stonext Group good Way.
Speaker 3: A firm out with its earnings after the value yesterday
Speaker 3: and what a market reaction on the back of it.
Speaker 5: GMV ultimate transactions.
Speaker 3: Being made basically rising some twenty five percent. It's managing
Speaker 3: to bet on profitability as well, really guiding us and
Speaker 3: for a forward looking expectation that really many analysts felt
Speaker 3: was very solid.
Speaker 5: Here, look at the market reaction. Yes, you're up twenty
Speaker 5: eight percent.
Speaker 3: Now, I know, Eddie, you've been talking all about how
Speaker 3: many standard deviation moves this actually is. It is an
Speaker 3: enormous move, but actually he brings us back to where
Speaker 3: shares we're trading at back at the beginning of the month.
Speaker 3: So it just shows you the volatility that we've had
Speaker 3: amid rising interest rates. We've got to dig into all
Speaker 3: of this with Max Levchin, who of course is the
Speaker 3: CEO of a firm, and well notable move on your stock,
Speaker 3: notable reaction from some of the analysts tell us about
Speaker 3: how sustainable this is this transaction pickup?
Speaker 5: Does that last into the next quarter.
Speaker 2: Book.
Speaker 8: We did release scats for next quarter, so we're feeling
Speaker 8: thoroughly optimistic, as you can tell in the numbers. You know,
Speaker 8: as much as I'm enjoying the stock market reaction, we're
Speaker 8: very focused on the long term. So our goal here
Speaker 8: within a firm is to keep scaling. We're very excited
Speaker 8: to be able to deliver some excellent results this quarter.
Speaker 8: The fiscal year, we beat across the metrics, and so
Speaker 8: we'll just keep on doing what we're doing. We are
Speaker 8: definitely energized by the growth and in particular the growth
Speaker 8: of the card product. We work very hard for quite
Speaker 8: some time to deliver just the really innovative product with
Speaker 8: this firm card, and it's finally showing real signs of stickiness.
Speaker 2: And just very excited about that.
Speaker 4: Max.
Speaker 6: We note the guidance you know, listened in on the call.
Speaker 6: You know, respectfully, nothing out of the ordinary. Your stock's
Speaker 6: up twenty nine percent. Why do you think the stock
Speaker 6: is up so strongly?
Speaker 8: If I knew how to predict market movements of my
Speaker 8: own stock or any other stock, I'm sure I would
Speaker 8: have a different job. I just know how to build
Speaker 8: good products and write software, and that's what I'm going
Speaker 8: to do.
Speaker 5: Nice answer, I love that.
Speaker 3: But talk to us a little bit about that card
Speaker 3: you let us there, and the fact that people consumers
Speaker 3: in this moment are looking for different ways to be
Speaker 3: able to pay. Of course, they're able to pay in
Speaker 3: a normal debit transaction, but also then decide after the
Speaker 3: match whether or not they're going to be.
Speaker 5: Paying in installments.
Speaker 3: How is that pick up growing across the United States
Speaker 3: and North America.
Speaker 2: So there's a real generational shift.
Speaker 8: I think the notion of just put it on your
Speaker 8: plastic think about it later something that worked for the
Speaker 8: generation that came perhaps before mine, but the ones that
Speaker 8: are coming after mine are very differently minded. They do
Speaker 8: like to know when they're done paying off the things
Speaker 8: they borrowed for. And this idea of packaging it all
Speaker 8: into a single card where you have a very crisp
Speaker 8: choice between paying now or paying over time, having the
Speaker 8: opportunity to make the decision a priori or after the transaction,
Speaker 8: which is what our card allows you to do, and
Speaker 8: not having to learn too many new concepts.
Speaker 2: It's just really really powerful by not pay later.
Speaker 8: Of the last ten years we kind of started, the movement,
Speaker 8: really penetrated the younger generations, and yet still it's less
Speaker 8: than one.
Speaker 2: Percent of total addressable market.
Speaker 8: But no one's ever packaged it into a single elegant
Speaker 8: card that just allows you to transact the exact same
Speaker 8: way you always do, be it at a grocery store
Speaker 8: or online or where we're in between, and have full
Speaker 8: access to both buy now pay later functionality and a
Speaker 8: simple pay now functionality and that's what this card is,
Speaker 8: and the demand is great. So we can see that
Speaker 8: consumers are using a firm in store almost an order
Speaker 8: of magnitude more with.
Speaker 2: The card than before they get it.
Speaker 8: The transaction frequency is quality three x between the card
Speaker 8: and non card, and so it's just clearly the product
Speaker 8: market fit that we've been looking for.
Speaker 6: Max, your CFO, Michael Limford acknowledged that actually twenty twenty
Speaker 6: three has been really hard for a firm, that clearly
Speaker 6: things have improved and got better into the second half
Speaker 6: of this calendar year. What specifically has changed either in
Speaker 6: the environment, in the consumer or in your product?
Speaker 8: You know, I think we operate and think and act
Speaker 8: in longer increment than perhaps the impatient stock market wants
Speaker 8: us to. But we refuse to cave to the quarterly game. Instead,
Speaker 8: we think in years and ideally in decades. And we
Speaker 8: started planning for the results of today a year ago
Speaker 8: and the fact that we're able to deliver on them
Speaker 8: now is just a predictable perhaps but a huge response
Speaker 8: and result by our team. The volatility of the interest
Speaker 8: rates all through last year, the fact that they moved
Speaker 8: up as quickly as they did when unexpectedly made it
Speaker 8: difficult for our KAPA markets to decide cap market partners
Speaker 8: to decide how to price our product. Now that things
Speaker 8: are a little bit more stable, we're able to execute
Speaker 8: that much better.
Speaker 3: I'm just going to ask a poker bear one and
Speaker 3: then with Jeffreys coming out saying results are driven by
Speaker 3: a combination of higher interest income and in need lower expenses,
Speaker 3: so nothing to do with technology or growth, what do
Speaker 3: you say to that.
Speaker 8: I think people are welcome to judge our results, but
Speaker 8: they're pretty strong and so I think that that they
Speaker 8: speak for themselves. That said, I spent majority of my
Speaker 8: time worrying about our technology, staying up long hours working
Speaker 8: on the card, making sure the cards scales as well
Speaker 8: as it does, finding efficiencies in every place like customer service,
Speaker 8: to response time or our checkout. The only thing that
Speaker 8: makes this company tick is our excellence and technology. So
Speaker 8: I fundamentally disagree with nothing to do with technology.
Speaker 6: Firm CEO Max Levchin, just wonderful to have you on
Speaker 6: the program post earnings this Friday. Thanks for your time
Speaker 6: and we'll see you against you and I'm sure now
Speaker 6: coming up here on bloom bag technology. Remember when I
Speaker 6: took a fruit rides in way most drivers that was
Speaker 6: me there, I am well, not everyone in the well.
Speaker 6: This speaks to the story because I have to be honest.
Speaker 6: Not everyone in the bay has been a fan of
Speaker 6: autonomous vehicles. We're gonna have more on the growing backlash
Speaker 6: against ROWA taxis coming up next, plus SpaceX hit with
Speaker 6: another lawsuit from the Department of Justice. We're going to
Speaker 6: discuss the details of the suit and how Elon Musk
Speaker 6: and his company are responding. Things that drive on their own,
Speaker 6: things that get launched into space. Everything here on Bloomberg Technology. Okay,
Speaker 6: time for talking tech. First off, Ali Barber's cloud service
Speaker 6: says it is open sourcing it's QUENVL and QUENVL chat
Speaker 6: AI models for computer vision and conversation. The new models
Speaker 6: are intended to help interpret and extract information from visual
Speaker 6: data in both English and in Chinese. One can test
Speaker 6: out the new models on Ali Barber's model Scope or
Speaker 6: an AI platform.
Speaker 4: Hug and Face. Just on the show yesterday, And.
Speaker 6: India's newest unicorn is winning patrons over with its ultra
Speaker 6: fast grocery delivery service. Despite the nation's gloomy venture funding climate,
Speaker 6: Zepto has managed to raise two hundred million dollars of
Speaker 6: fresh funds at a one point four billion dollar valuation.
Speaker 6: It was founded by two twenty year old Stamford University dropouts, Classic,
Speaker 6: making them the youngest founders of any Indian Unicorn plus
Speaker 6: Cruise and Waimo are facing growing backlash here in San
Speaker 6: Francisco over traffic concerns caused by the robotaxis. A number
Speaker 6: of mishaps have occurred where cars of block traffic gotten
Speaker 6: stuck or even crashed into other objects. Tensions over driver's
Speaker 6: taxis are part of a broader conflict over the future
Speaker 6: of autonomous transport. Big story out from our team in
Speaker 6: SF and around the country.
Speaker 4: Carry check it out in dot com.
Speaker 3: Yeah, let's do a little different form of transport at
Speaker 3: least maybe in the future. And some fighting that's happening
Speaker 3: therein ED. We've got to talk SpaceX, haven't we under
Speaker 3: scrutiny at the moment Justice Apartment for discrimination.
Speaker 5: Now, this is something that's kind of resurfaces from time
Speaker 5: to time.
Speaker 3: This time it's claims that say SpaceX routinely discouraged refugees
Speaker 3: people granted asylum from applying to work at the company.
Speaker 3: I'm really please, say er johnsonbag New's Global Business Space
Speaker 3: editor is hey with us and Eric. I say this
Speaker 3: comes up time and time because it seems to be
Speaker 3: an ongoing narrative that Elon Musk himself pushes back against.
Speaker 3: Is that actually they're unable to hire people who aren't
Speaker 3: permanent residents of the US.
Speaker 7: Right.
Speaker 9: That's the thrust of the lawsuit filed yesterday with an
Speaker 9: administrative judge in Washington. The Department of Justice is alleging
Speaker 9: that for years SpaceX has discriminated against refugees and people
Speaker 9: who have been granted political asylum. You know, it's the
Speaker 9: latest high profile case brought by the Department of Justice
Speaker 9: against not just you know, Elon Musk's portfolio of companies,
Speaker 9: but also companies like Walmart and others who've been alleged
Speaker 9: to have engaged in discriminatory hiring practices.
Speaker 6: Eric, really quick, We've had some operational updates. SpaceX has
Speaker 6: had a lot going on this week, because some of
Speaker 6: it seems delayed.
Speaker 4: What's the latest.
Speaker 9: SpaceX has a lot going on. It's going to conduct
Speaker 9: a static fire engine test potentially later today to test
Speaker 9: its colossal starship rocket engines. You know, I'm sure you
Speaker 9: remember in April it's explosive debut. SpaceX has made a
Speaker 9: number of upgrades to the technology, in particular the launch pad,
Speaker 9: which was decimated by the launch. So they've got a
Speaker 9: water deluge system that they're going to test, which is
Speaker 9: essentially it must described it as a towerhead pointed up
Speaker 9: at the rocket to diffuse the energy from it, and
Speaker 9: a number of other technologies that they're going to test today.
Speaker 5: Fantastic.
Speaker 3: We'll keep an arrest of all the things that are
Speaker 3: happening in the world of SpaceX for Eric Johnson. Really
Speaker 3: nice to have you here on the show. Thanks for
Speaker 3: running us all through it.
Speaker 6: Welcome back to Blame It Technology. Ed Lovelow here in
Speaker 6: San Francisco.
Speaker 5: I'm Karen Hired in New York.
Speaker 3: Let's get a check on these markets as we have,
Speaker 3: of course a volume down kind of a Friday amid
Speaker 3: one is of course a summer week. But the key
Speaker 3: macro driver is one Jaypowe, who's been over at Jackson
Speaker 3: Hole discussing basically that they're still steadfast in they're focus
Speaker 3: on inflation, but actually managed about back higher. The hawkish
Speaker 3: tone had perhaps depressed and as that one hundred a
Speaker 3: little bit earlier, but now I'm looking at it up
Speaker 3: a tenth of a percent, so managing to tread water
Speaker 3: in the face of some of this more hawkish tones
Speaker 3: focus on fighting.
Speaker 5: Inflation with interest rates that are going to stay at
Speaker 5: these sorts of levels.
Speaker 3: In the US, I'm looking at a ten year that
Speaker 3: does react a little bit more, up about one basis points.
Speaker 3: The shorter end had been moving up about four basis points,
Speaker 3: but that knee jerk reaction just settling.
Speaker 5: A little bit ahead of the weekend. And I'm looking
Speaker 5: at Bitcoin, which.
Speaker 3: Had been lower versus a higher dollar, but maybe that
Speaker 3: just soothing a little bit post power. Let's digest what's
Speaker 3: happening on the micro as well, because if we settle
Speaker 3: back in to a trading range and that profround. I'm
Speaker 3: looking at the Warner Brothers Discovery down by three point
Speaker 3: three percent. This is we know that the striking actors
Speaker 3: and of course the writers has real world consequences on
Speaker 3: whether you can see the next installment of June of
Speaker 3: Godzilla of Lord of the Rings been pushed back into
Speaker 3: twenty twenty four, and so shares a rounder pressure. I'm
Speaker 3: looking at Work Day, they managing to outperform and back
Speaker 3: of its numbers. Some analyst seing some growth of subscriptions
Speaker 3: of up to twenty percent over the next twelve months,
Speaker 3: so managing to be a bit of a shining light
Speaker 3: on the day after its numbers, and in video though
Speaker 3: after its numbers.
Speaker 5: The euphoria the outperformance.
Speaker 3: We think, look, it's still up five percent on the week,
Speaker 3: when on the day we're down by almost four percent.
Speaker 5: So clearly a.
Speaker 3: Little bit of digesting of how far and videos run up,
Speaker 3: but also interesting what we've heard out of.
Speaker 5: China with them as well ed.
Speaker 6: That is the story in picture in technology markets. This
Speaker 6: is a technology story that you do not want to miss.
Speaker 6: Let's talk hacking and how an eighteen year old and
Speaker 6: a seventeen year old ended up being at the center
Speaker 6: of a seven week criminal trial in London for their
Speaker 6: role in a hacking group that's cracked the likes of
Speaker 6: Nvidia and Uber, and a group that cyber experts have
Speaker 6: called quote unique for its effectiveness, speed, creativity, and boldness.
Speaker 6: Bloomberg's Catherine Gemel has all the details. This was a
Speaker 6: fascinating read. Grand Theft Auto the video game at the
Speaker 6: heart of it. Just give me the basics here, help
Speaker 6: us understand.
Speaker 10: Yes, thanks for having me on So there was a
Speaker 10: seven week trial in London court this summer involving Arian
Speaker 10: Kurtash who's an eighteen year old and an unnamed seventeen
Speaker 10: year old who we can't name because he is a minor,
Speaker 10: and they were both accused of a twelve count indictment
Speaker 10: and that included hacks against a UK phone company called BT's,
Speaker 10: including hacks against Nvidia and then solely for Arion, hacks
Speaker 10: against gta's much anticipated sequel, GTA six, and Uber and
Speaker 10: UK fintech company Revolutes.
Speaker 5: So you know, they.
Speaker 10: Were accused of using a number of different techniques, included
Speaker 10: social engineering, pretending to be contractors in order to get
Speaker 10: into these company systems, steal data and then upload it
Speaker 10: onto the Internet, and also asked these companies for ransom.
Speaker 3: I mean, the whole story is absolutely fasting weed and
Speaker 3: the way in which you know, ultimately we're seeing the
Speaker 3: lawyers fight back. I really talk about how this is
Speaker 3: vulnerable individuals with severe neurodevelopment disorders, how they're treated by
Speaker 3: the police and the courts, and they're really focusing perhaps
Speaker 3: on the autism of one of the main players here,
Speaker 3: but I'm interested in more about the underlying desires of
Speaker 3: what lapses is up to the group that has been
Speaker 3: seen is just so effective efficient in the way in
Speaker 3: which they're managing to penetrate big businesses.
Speaker 5: Why are they doing it?
Speaker 10: Yeah, exactly, I mean, I think it's important to point
Speaker 10: out that it wasn't just added on and the unnamed
Speaker 10: seventeen year old two were involved in this lapse of
Speaker 10: hacker collective. Over the course of the trial, it was
Speaker 10: also agreed by the prosecution of the defense that there
Speaker 10: was other individuals involved in this group who who you know,
Speaker 10: authorities can't pen down. I mean some of their motivations
Speaker 10: where for money, for notoriety, you can get a lot
Speaker 10: of credit online and forums and such for these sorts
Speaker 10: of hackings, and also just laws. I think, you know,
Speaker 10: it's important to remember these are just teenagers and to
Speaker 10: be able to get you know, important clips of GTA
Speaker 10: would would be quite fun for them.
Speaker 6: So let's focus on a case study or an example
Speaker 6: that you reported, which is grand theft auto a rock
Speaker 6: Star Games title.
Speaker 4: What happened in that instance?
Speaker 10: Yes, so in the rock Star Games hack that was
Speaker 10: done solely by Curtaje and that was while he was
Speaker 10: on bail for previous hacking charges and what he did
Speaker 10: there was along with the other lapses collective. He used
Speaker 10: techniques called social engineering, which meant that they stole contractors
Speaker 10: information and used it to be able to sign onto
Speaker 10: rock Star system.
Speaker 5: They then downloaded videos and source.
Speaker 10: Codes of the new GTA game, and that included ninety
Speaker 10: live gameplay videos, and then they uploaded that onto a
Speaker 10: GTA forum and asked rock Star to contact them, assumably
Speaker 10: for a ransom.
Speaker 5: So that meant that, you know, on these forums.
Speaker 10: All of these never before seen clips of this game,
Speaker 10: we're just out there for everyone to faint.
Speaker 3: As it stands, we don't actually know whether any money
Speaker 3: was were given to these particular groups, but for now
Speaker 3: Katherin Gammel absolutely fascinating read. Thank you for bringing what
Speaker 3: has been quite the showdown in the courts. Meanwhile, let's
Speaker 3: turn to the showdown that is China's macro economy and
Speaker 3: some of its micro players made one. Of course, we
Speaker 3: mentioned it earlier, the firm falling on well, the turbulence
Speaker 3: being faced by the economy. We want to dive into
Speaker 3: all of this after its numbers and the digestion of
Speaker 3: it with Isabell Lee and Bloomberg's Henry Ren great to
Speaker 3: have you both here and before we go macro, just
Speaker 3: go micro for us, Henry, what did we hear? It
Speaker 3: seemed to be the forecasts that were worrying people.
Speaker 11: Yes, exactly. The results itself isn't bad.
Speaker 12: So the company recorded thirty three percent of revenue grows
Speaker 12: in the second quarter, so that was the fastest pace
Speaker 12: in two years. However, it was really the outlook that
Speaker 12: has been disappointing. The company set on the earning score
Speaker 12: that it's food delivery segment, which is it's cash CAW
Speaker 12: is going to it's your growth as well as auto
Speaker 12: growth will be missing analyst's previous expectations.
Speaker 11: And that's because of two reasons.
Speaker 12: One is because of the extreme weather, especially in the
Speaker 12: northern part of China, or because of the flooding issues
Speaker 12: in areas surrounding Beijing, but also as well as the
Speaker 12: macro slow down as you mentioned, because the worry is
Speaker 12: really about the Chinese consumers because of these macro issues,
Speaker 12: haven't been spending so much and that has been the
Speaker 12: key concern for the stock in Hong Kong trailing.
Speaker 6: There are loads of Isabelle competing forces in China. Right
Speaker 6: The story was we're coming out of that kind of
Speaker 6: delayed pandemic era reopening. Then the Chinese government started to
Speaker 6: pull back its regulatory crackdown on the technology sector, and
Speaker 6: the technology sectors in the early part of any season
Speaker 6: seem to suggest the Chinese consumer is strong, but they
Speaker 6: all kind of contradict each other, and those stories have
Speaker 6: moved on really fast as well.
Speaker 13: Yes, you kind of have to really keep a close
Speaker 13: track on the Chinese narrative because it can be a
Speaker 13: bit confusing. So in the beginning, the rebound didn't happen
Speaker 13: as people wanted it to. So now people were hoping, Okay,
Speaker 13: let's hope for some weakness, so we get stimulus, but
Speaker 13: then when the government still didn't want to give that,
Speaker 13: it's sort of a classic be careful with what you
Speaker 13: wish for case. In May Twan, as with other Chinese
Speaker 13: tech peers, is the barometer of the Chinese economy, and
Speaker 13: we're seeing that consumers are being hurt. We have prices
Speaker 13: in China falling, exports are struggling. One in five youths
Speaker 13: don't have jobs. So this is a clear sign that
Speaker 13: the consumers ahead won't be as well positioned as they
Speaker 13: are right now. Because Henry's right. This was a good report,
Speaker 13: but that was for the quarter ending in June, so
Speaker 13: ahead is a lot murkier, and we have heard from
Speaker 13: the CEO himself that it is kind of looking shaky
Speaker 13: for them.
Speaker 3: I mean, it does feel shakier in China and certainly
Speaker 3: the different central bank policy making that has to happen
Speaker 3: over there visa vd US, but it's a global theme.
Speaker 5: We don't know where the consumer is going.
Speaker 3: We're concerned about how much they're going to be spending
Speaker 3: on experiences, on going out isabell. That seemed to be
Speaker 3: what propped us up in the previous culture, at least,
Speaker 3: was the fact that everyone wanted to do things rather
Speaker 3: than spend on things tangible in.
Speaker 13: Nature exactly right. So for a while it was a monolith.
Speaker 13: The world was moving in lockstep. Everyone was recovering from
Speaker 13: the pandemic. But then we all recovered at different paces,
Speaker 13: so we looked at us closely. In America, consumers are
Speaker 13: spending way faster than people in Europe, for instance, or
Speaker 13: maybe even in China, so people are recovering at different paces.
Speaker 13: And the thing with China is consumers are largely domestic,
Speaker 13: so it's different for them so how Chinese companies are doing,
Speaker 13: how the tech sector is performing is kind of a
Speaker 13: clear sign of how the Chinese consumers are feeling, and
Speaker 13: how they're feeling isn't really that great.
Speaker 14: But we have news.
Speaker 13: For instance, China today it unveiled a further easing of
Speaker 13: its mortgage policies that kind of pushed a rallies so
Speaker 13: far in equities, but then it kind of pared back.
Speaker 13: So we can see China trying a little bit to
Speaker 13: boost spending, but for now it's not looking that good.
Speaker 6: Yeah, Henry Maytowan, Honestly, it's like one of the China
Speaker 6: technology names we discuss less often on the show. But
Speaker 6: like so many Chinese tech companies, it's multifaceted. It has
Speaker 6: many different arms growing unevenly. Was there any strength, any
Speaker 6: pocketar performance within may Ones Offering.
Speaker 11: Yes, definitely. So it's food delivery service.
Speaker 12: It's half of its business landscape, so it's definitely the
Speaker 12: most important one. Has been doing pretty well, but as
Speaker 12: we said, for the next quarter, it can be more
Speaker 12: difficult for them. It's a group grocery buying business, so
Speaker 12: that's a business of offering residents at their neighborhoods for
Speaker 12: them to pick up the groceries at the local or
Speaker 12: grocery shop. That business is growing very fast. However, there
Speaker 12: is a concern about competition. So the competition is from
Speaker 12: players like PDD or pindor Door. So these players are
Speaker 12: are crashing crashing in and trying to grab more market
Speaker 12: share from may Twan as well, but also from the
Speaker 12: other side. So for example, for the restaurant, table booking
Speaker 12: and these kind of low or services segment, it's also
Speaker 12: facing competition as well from Baydance from some other players.
Speaker 12: So these are the competitions that Matewa has been facing
Speaker 12: and that just added up to the micro concerns facing
Speaker 12: may Twan at this point.
Speaker 6: All right, fantastic team coverage Bloombergs Isabelle Lee and Bloombergs
Speaker 6: Henry Wren, thank you both. Sticking with technology in the
Speaker 6: Asia region, as we look at a tiny Japanese factory
Speaker 6: that's hand crafting eleven thousand dollars mics for some of
Speaker 6: the world's best vocalists. Sony Tayo, a subsidiary of the
Speaker 6: Sony Group, turns out some of its top audio products
Speaker 6: well giving people with disabilities a fair chance in the workplace.
Speaker 4: Listen to this.
Speaker 15: From Drake and Rihanna to Mariah Carey and doctor Dre
Speaker 15: The C eight hundred g studio mic used by top
Speaker 15: stars comes from one of Sony's most treasured places.
Speaker 16: This Sony factory in southern Japan is known at the
Speaker 16: heart of its audio business, where workers craft it's top
Speaker 16: of the line headphones, earphones, and microphones all by hand.
Speaker 15: To accommodate workers with various physical challenges, Sony created a
Speaker 15: so called cellular manufacturing system, where a single employee is
Speaker 15: responsible for a given product from start to finish. Koitikano
Speaker 15: has been making NDR headphones for the past seventeen years.
Speaker 17: Johats got I started here when I was eighteen and
Speaker 17: tasked with making the whole headset myself, so I feel
Speaker 17: personally responsible for it.
Speaker 15: The company says its revenues tripled after adopting this method
Speaker 15: in nineteen ninety nine. Sony Tayo serves as a rare
Speaker 15: example of hand craftsmanship winning in the age of mass manufacturing.
Speaker 15: It's also pushing forward the vision of Sony co founder
Speaker 15: in Masaru Ibuka, who wanted to give people with disabilities
Speaker 15: an equal chance to compete in the workplace.
Speaker 18: We Guardikio percent of employees with disabilities. We are contributing
Speaker 18: every day to both son and group and diversity influence
Speaker 18: in society.
Speaker 15: Now it's morphed into modern day proof of the enduring
Speaker 15: value of human skill.
Speaker 17: Theres We sometimes hear feedback after the products appear on
Speaker 17: TV or in magazines and online, when customers say they're
Speaker 17: glad they bought it or they enjoy a particular feature.
Speaker 17: It's like they're really noticing my work. That's rewarding.
Speaker 5: Well, a great story Bloomberg's career me maur there.
Speaker 3: Meanwhile, coming up, do you want to get instant care
Speaker 3: for your child's pediatrician? In just for fifteen minutes, we're
Speaker 3: going to be speaking with the CEO of telehealth Startups
Speaker 3: Summer Next on the state of healthcare their business. Also
Speaker 3: intrigued as to how chatchy BT is perhaps tempting some
Speaker 3: to think they've got all the answers themselves. From New York,
Speaker 3: From San Francisco, there's a Blomberg Technology. Let's focus in
Speaker 3: on the startup landscape for a moment and digital health
Speaker 3: in particular. Pediatric tell Her Health startup at Summer Health.
Speaker 3: It aims to make responses to common medical questions for
Speaker 3: children easily accessible through its platform in a matter of
Speaker 3: like fifteen minutes. The idea it seems to be resonating
Speaker 3: not only with users but investors too. We've got Sequoia, Capital,
Speaker 3: Box Group to name but a few standouts. I lend
Speaker 3: to Silver's with us right now, summer Health CEO and
Speaker 3: founder to talk about.
Speaker 5: And then the growth trajectory and what makes you different.
Speaker 3: I'm a mum who, of course has that panic in
Speaker 3: the middle of the night when a fever is going
Speaker 3: to a certain level and do you take your child
Speaker 3: into A and E or not. We luckily have access
Speaker 3: to telehealth through the benefits that I have here. How
Speaker 3: is what you're offering different from me getting my usual telehealth?
Speaker 19: Yeah, Caroline, thank you and so much for having me on.
Speaker 19: Summer Health is a pediatric telehealth platform that connects patients
Speaker 19: to providers in under fifteen minutes. It's a very human
Speaker 19: feeling experience, as you described, because you have kids.
Speaker 14: I have three kids of my own.
Speaker 19: There is this visceral feeling of bewilderment or panic when
Speaker 19: your child gets sick and you don't know what to do.
Speaker 19: Summer Health aims to turn your phone into its own
Speaker 19: doctor's office, and so with a simple text message in
Speaker 19: under fifteen minutes, we can connect you straight to a pediatrician.
Speaker 19: We're live in all fifty states, which makes it really
Speaker 19: easy if you're traveling to get that kind of care.
Speaker 19: We're different because we have a very human centered approach.
Speaker 14: While I understand that AI.
Speaker 19: Has become this big wave and this big face, we
Speaker 19: use that to power a lot of the back end
Speaker 19: and administrative work of providers so that they can get
Speaker 19: front facing and do what they love, which is helping patients.
Speaker 3: I'm still kind of questioning what exactly the differentiation is though,
Speaker 3: in that I can also get a person on a phone.
Speaker 3: Is it just that they're directly pediatricians slightly different hand, Yes.
Speaker 19: We've got licensed pediatricians in all fifty states who really
Speaker 19: get to know you. What we aim to do is
Speaker 19: not just urgent care, but rather whole human care. And
Speaker 19: so when you text us, it's not just that middle
Speaker 19: of the night, my child's throwing up, but it's also
Speaker 19: what should I pack my child for a nutritious lunch
Speaker 19: for school, or how can I deal with separation anxiety
Speaker 19: at the start of the school year. We offer a
Speaker 19: lot more than just urgent care, which is where I
Speaker 19: think a lot of telehealth platforms today have sort of faltered.
Speaker 6: Ellen, Good morning from San Francisco. You know, it's interesting
Speaker 6: you were backed by Lux Capital general partner Dinoshaki as
Speaker 6: somebody we know on this program very well, and at
Speaker 6: the time they did your seed round, they put a
Speaker 6: lot of emphasis on you a founder, like a lot
Speaker 6: of experience as a healthcare executive. My question is why
Speaker 6: did you think you needed to make this app and
Speaker 6: this company?
Speaker 4: What gap did you spot?
Speaker 19: Yeah, so I had the fortune of getting to build
Speaker 19: a very large telehealth platform prior to starting Summer Health.
Speaker 19: But from my own personal experience, I realized just how
Speaker 19: powerful I could feel as a parent knowing that my
Speaker 19: children were healthy if we had constant access to care
Speaker 19: that is not available in today's healthcare environment because there
Speaker 19: is a huge shortage of pediatricians. Two years ago, there
Speaker 19: was a survey done by the American Medical Association that
Speaker 19: one in three pediatricians were planning on leaving their practice
Speaker 19: within the next two years. And looking back two years later,
Speaker 19: we've seen that about thirty three percent of the pediatric
Speaker 19: workforce has left.
Speaker 14: And so what we're trying to do.
Speaker 19: Is increase the supply of pediatricians and make it much
Speaker 19: more accessible. It's something that no other telehealth company has
Speaker 19: really thought about, and we've leaned very heavily into this
Speaker 19: message based care to make that a possibility.
Speaker 6: I have lived in this country for almost six years,
Speaker 6: you know, a completely different healthcare system from the UK
Speaker 6: where I'm from, where insurance plays such a big role.
Speaker 6: What is your business model? Do you charge the consumer directly?
Speaker 6: Are you dependent on insurance coverage for your users?
Speaker 14: Yeah?
Speaker 19: Thankfully, Because we offer entirely message based care, we've been
Speaker 19: able to keep the cost rather low for our patients.
Speaker 19: Right now, Summer Health only costs twenty dollars per month,
Speaker 19: and that's for unlimited usage of the service. So we
Speaker 19: really aim to be accessible to a very broad swath
Speaker 19: of the population.
Speaker 3: I'm looking at your prior experience care with Hymns and
Speaker 3: Hers as one of the companies that stand out as
Speaker 3: your experience. You're also over at Twitter for four years
Speaker 3: at one point. Rip now X, I'm interested in when
Speaker 3: we are you talked about AI artificial intelligence and that
Speaker 3: pervades all of the companies that I just mentioned. How
Speaker 3: are you fighting parents desire to just get all their
Speaker 3: answers from chatchapt, from.
Speaker 5: Bard and make the feeling as though they've got it
Speaker 5: all their fingertips.
Speaker 14: Anyway.
Speaker 19: Yeah, we think about this a lot at Summer Health
Speaker 19: because I think there is a temptation to go to
Speaker 19: a service like chatchapt and just ask your questions, but
Speaker 19: chat SPT doesn't have a lot of the backstory that
Speaker 19: we get from those frequent touch points.
Speaker 14: We tend to know a lot more.
Speaker 19: About your child than even your own pediatrician because our
Speaker 19: parents come to us multiple times per month asking those small,
Speaker 19: in the crack style questions, and therefore we're able to
Speaker 19: give you extremely personalized care. But we're not doing a
Speaker 19: we're not shying away from AI, and we're not doing
Speaker 19: without it.
Speaker 14: We believe that there's a lot.
Speaker 19: Of power in powering the administrative work that our providers
Speaker 19: are doing. So a lot of the back end of
Speaker 19: Summer Health is still powered by artificial intelligence, but that
Speaker 19: you can get a very human touch the I can
Speaker 19: help you, and we have a lot of pediatricians who
Speaker 19: are parents on the platform and can give a lot
Speaker 19: of personal recommendation from their own experience as parents.
Speaker 5: Great to have some time with.
Speaker 3: You you've probably seen the Mugshop. There is a tweet an
Speaker 3: X that has come back from Donald Trump on that
Speaker 3: platform and is hitting one particular company hard Digital World acquisition.
Speaker 5: It's the SPAC that of course is looking to take
Speaker 5: Donald Trump's truth.
Speaker 3: Social public ed is a higher now by three point
Speaker 3: three percent.
Speaker 5: It was a lower because, of course.
Speaker 3: Many were questioning how much he was going to be
Speaker 3: using this platform in the run up to presidential elections
Speaker 3: that dive into all of this. Of course, we want
Speaker 3: to look at the significance of this Trump X with
Speaker 3: Ron tig Beckworth run what do you make of the importance?
Speaker 20: Well, I think for politically for Trump, there's a lot
Speaker 20: of downside risk to being back on Twitter. He's been
Speaker 20: posting a lot of things on true Social that are
Speaker 20: very similar to the things that he used to post
Speaker 20: on X formerly Twitter, But on X they're also being
Speaker 20: seen by people who don't like him, and they remind
Speaker 20: those people why they don't like him. So there's a
Speaker 20: lot bigger audience there. There's a lot more ability to
Speaker 20: drive the news cycle as he previously did when he
Speaker 20: was on there, but it's a lot less friendly audience
Speaker 20: than he's getting on truth.
Speaker 6: I think it's important to point out, Caro, the shares
Speaker 6: are higher. I think President former President Trump did post
Speaker 6: on truth social saying true social is my home, so
Speaker 6: maybe some confidence of that. Bloomberg's Ryan Teague Beckwick on
Speaker 6: the social media beat since Trump's time in twenty sixteen.
Speaker 3: Meanwhile, well that does it for this edition of Bloomberg Technology.
Speaker 5: For the Day.
Speaker 4: For the weekend, Wow, a mega week.
Speaker 6: Nvidia, the storing that just keeps giving but then fell away.
Speaker 4: Check out the podcast and recap. This is Bloomberg Technology