Speaker 1: From the heart of where innovation, money and power collid
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Chinese, San Francisco, and this is
Speaker 1: Bloomberg Technology. Coming up in the next hour. Elon Musk
Speaker 1: is now the biggest shareholder in Twitter. Why does he
Speaker 1: want it and what change will he push for? Or
Speaker 1: now that shares have shot up on news of his
Speaker 1: stake alone, could he just sell? We have discovered from
Speaker 1: all angles Claus. We will hear directly from Octa CEO
Speaker 1: Todd McKinnon in his first interview since that massive third
Speaker 1: party breach by the hacker group lacks lapses was disclosed.
Speaker 1: What really happened and how are they addressing customer concerns.
Speaker 1: We will have all the details in an exclusive interview.
Speaker 1: And coming out of crypto's breakout year of one, what
Speaker 1: trends should we watch for now that greater adoption is underway,
Speaker 1: from inflation to regulation. We'll speak with the top exact
Speaker 1: from the crypto platform, Gemini about their latest global report.
Speaker 1: All of that in a moment, But first to the
Speaker 1: biggest story of the day, and that is Elon Musk
Speaker 1: and Twitter. The Tesla and SpaceX CEO disclosing in a
Speaker 1: filing that he now owns a nine point two percent
Speaker 1: stake in Twitter, worth somewhere around three point seven billion
Speaker 1: dollars now, making him the company's largest shareholder. The big
Speaker 1: question how will he use this new power. Let's bring
Speaker 1: in Bloomberg's at Ludlow and the big question that is
Speaker 1: just how active is elon muskt going to be? Now
Speaker 1: it's the three point seven billion dollar question, isn't it?
Speaker 1: The devil's in the detail because the filing type he use,
Speaker 1: you're only eligible to do so if you have no
Speaker 1: intention of changing or trying to control the operations of
Speaker 1: the issuing company. In other words, you're a passive investor
Speaker 1: in investor and not an activist investor in any event.
Speaker 1: Look at the board gain on Twitter, the best and
Speaker 1: performing stock in the SMP five hundred on a day
Speaker 1: where we saw very muted moves across financial markets, various
Speaker 1: asset classes not moving strongly in either direction. But that
Speaker 1: gain in Twitter having a real effect on other social
Speaker 1: media stocks really pushing then has that one hundred to
Speaker 1: show some outperformance When it comes to techno, the technology
Speaker 1: set of broadly coming me to my boombo terminal, and
Speaker 1: let's just put some size and scope on this. This
Speaker 1: is the biggest jump in Twitter stock since November two
Speaker 1: thousand thirteen, in other words, the biggest jump Twitter's experienced
Speaker 1: since listing day. And then I know that you were
Speaker 1: there right in two thousand thirteen. You witnessed that I
Speaker 1: p O the massive surge in Twitter shares, and as
Speaker 1: you look at that chart in your screen, we haven't
Speaker 1: had many days like that for Twitter since over the
Speaker 1: last decade. This is a stock that was under performing
Speaker 1: year today that it's now in positive territory year to date.
Speaker 1: But you know, things have kind of lost momentum right
Speaker 1: since any thirteen, it has. Indeed, I was on there
Speaker 1: on the floor of the New York Stock Exchange when
Speaker 1: Twitter went public. Thank you, Ed. I want to stick
Speaker 1: with Twitter now as I had set a social platform
Speaker 1: gaining the most since trading debut. In joining us to
Speaker 1: discuss Katie Stanton, founder and general partner of Moxie Ventures
Speaker 1: and an early Twitter employee, as well as Bloomberg so
Speaker 1: our Fire, who covers the company for us, Sarah, I'll
Speaker 1: start with you the big question, why did Ellen buy
Speaker 1: this steak? Well, I think that that he has hinted
Speaker 1: a bit at why in the past few days among
Speaker 1: his his beefs with Twitters that he thinks that they
Speaker 1: aren't doing well on free speech. Well, you know new
Speaker 1: celon Twitter does not have a free speech commitment commitment
Speaker 1: under the First Amendment. They're just a private company. But um,
Speaker 1: I do think that with this influence, with this power,
Speaker 1: even if it's a passive steake, he can exert some,
Speaker 1: um some behind the scenes influence over Twitter. Um. Now,
Speaker 1: we don't know exactly what he's going to do, but
Speaker 1: it might have something to do with their constant moderation efforts. Katie,
Speaker 1: you worked at Twitter for almost six years until and
Speaker 1: you tweeted today. Maybe pick a nine percent of one
Speaker 1: of the top US greenhouse gas emitters like Chevron or
Speaker 1: Xon and accelerate their paths to clean energy. What is
Speaker 1: your initial reaction to ellen buying mistake. Yeah, well, I
Speaker 1: think it's a very expensive way to get yourself an
Speaker 1: edit button. Um. I think it's a very interesting move. Um.
Speaker 1: Elan is obviously a power user. He knows a product well,
Speaker 1: he knows that Twitter is the place for the world's conversation.
Speaker 1: But for Twitter, I think It's really tricky in two ways. First,
Speaker 1: as Sarah mentions, it's it's really difficult. Elon has been
Speaker 1: very vocal about making Twitter an unfettered free speech platform,
Speaker 1: and this is part of the founding ethos of Twitter,
Speaker 1: but it's not an absolute and it's really hard on
Speaker 1: social media and we've seen the consequences of what happens
Speaker 1: when there's no accountability for when disinformation spread. It's so
Speaker 1: it's complicated. And second, I think it's tricky because it
Speaker 1: comes it becomes another distraction for the Twitter team. But
Speaker 1: I have full confidence in the Twitter team because they're
Speaker 1: used to all kinds of distractions. It's basically what we
Speaker 1: would have called them Monday. So on that note, Twitter
Speaker 1: shares have languished for years despite all of this activity.
Speaker 1: You know, President Trump on the platform, so many ups
Speaker 1: and downs when you look at just what happens on
Speaker 1: Twitter on a daily basis, you know, what do you
Speaker 1: make of the strategy that the current Twitter chief team
Speaker 1: is taking Without Jack Dorsey, they're under new leadership of
Speaker 1: Parague Aggrawall Ned Seagal, the CFO. I'm a big fan.
Speaker 1: I think Jack has hired extremely well. I have worked
Speaker 1: side by side with Vite the chief legal officer, with
Speaker 1: Kevon big Poor, the chief product officer. They're excellent. They're
Speaker 1: excellent what they do, They're thoughtful, they're ethical. I didn't
Speaker 1: work as closely with Parogue, but I know he's very
Speaker 1: well respected by the team. He's well prepared, He's been
Speaker 1: at Twitter for a long time. He's technical, he has
Speaker 1: at the engineering team. So I'm very bullish and I'm
Speaker 1: very confident that the Twitter team will continue to evolve
Speaker 1: and protect the platform, Sarah. Elon Musk, the way that
Speaker 1: he disclosed this indicates that he's not intending to be
Speaker 1: very active or join the board. I mean, maybe he
Speaker 1: just wants an expensive edit button, as Katie is alluding to.
Speaker 1: But how active do we expect him to be? Knowing
Speaker 1: that Elon Musk doesn't just sit back and let things happen, well,
Speaker 1: and I think the most interesting thing will be any
Speaker 1: criticism he makes of Twitter. Now, anything he says on
Speaker 1: Twitter about the company might move the stocks, So we
Speaker 1: could be in for a few very volatile months ahead.
Speaker 1: But there's also the question of whether Twitter will feel
Speaker 1: that they can moderate Elon Musk. Now if should he
Speaker 1: violate the rules, would they take down their biggest shareholder.
Speaker 1: That's a question I have. We're so witing to hear
Speaker 1: if if the company and Elon Musk have talked at
Speaker 1: all about this. I think that that it's worth keeping
Speaker 1: in mind the with Twitter, what Katie just said, this
Speaker 1: is a company that has been through a lot of drama.
Speaker 1: The reason that parrogacy eo right now is because Jack
Speaker 1: Dorsey was was looking into a succession plan under the
Speaker 1: activist activity by Elliott Management just in the last year
Speaker 1: or so. And this is a company without a founder,
Speaker 1: voting control. So it's unlike Facebook, unlike Google, unlike Amazon,
Speaker 1: unlike Snap, this is a company that is very vulnerable
Speaker 1: to takeovers, to m and a speculation, and to activist investors,
Speaker 1: to all of that. Um So, I think that that
Speaker 1: Elon Musk, whatever whatever he plans to do or even
Speaker 1: hints that he might do, we know how much people
Speaker 1: follow what he says on Twitter. Now it could actually
Speaker 1: move Twitter stock every time. Katie, what is your take
Speaker 1: on his you know, potential opinion that maybe a new
Speaker 1: platform is needed. You know, you're a venture capitalist. Now
Speaker 1: you're placing on you know, what could be or what
Speaker 1: you believe will be the next big thing. Do you
Speaker 1: think there's room or opportunity for a new social platform.
Speaker 1: I don't really think that the world needs another centralized
Speaker 1: social media platform. Um. I think we have more urgent
Speaker 1: needs if it's climate change, if it's health innovations and
Speaker 1: healthcare and economic mobility. But they do think that there's
Speaker 1: a lot of room for improvement to make sure that
Speaker 1: the platforms that we connect on are healthier, that they're safer,
Speaker 1: and that we're doing a better job of reducing a
Speaker 1: lot of the toxicity and the heat that tends to
Speaker 1: spread uncontrolled on a lot of these platforms. Jack Dorsey
Speaker 1: and Elon Musk Sarah have had some interaction on Twitter.
Speaker 1: When Ellen posted that question about whether the Twitter algorithm
Speaker 1: should be open source, Jack responded saying the choice of
Speaker 1: which algorithm to use or not should be open to everyone. Um.
Speaker 1: And then a few years ago he actually said directly
Speaker 1: that he likes how Elon Muski uses Twitter, that he's
Speaker 1: focused on solving existential problems, sharing is thinking openly. I
Speaker 1: respect that a lot, all the ups and downs that
Speaker 1: come with it. And yet we haven't heard from Jack
Speaker 1: yet today. Sarah, what do you make of that? I mean,
Speaker 1: I think It's it's almost like did Elon go out
Speaker 1: of his way to defend his his friend who is
Speaker 1: no longer CEO of Twitter. I mean, it seems like
Speaker 1: they have a bit of a friendly relationship, but it's
Speaker 1: unclear now what happens. It's also there are a lot
Speaker 1: of of um liability issues now. If if there's some
Speaker 1: some public discussion about what might happen next, it could move,
Speaker 1: like I said, move the stock change things. And so
Speaker 1: I think everyone's just trying to be very careful about
Speaker 1: what they're going to say, if anything, about what happens next.
Speaker 1: And I'm I'm really waiting to hear what what Jack
Speaker 1: wants to do. He has talked about decentralization of social media.
Speaker 1: The other day he actually tweeted that he regretted what
Speaker 1: he built. He regretted being a part of of contributing
Speaker 1: to this very centralized viral media ecosystem. So so I
Speaker 1: think that there's some soul searching that Jack Dorsey has
Speaker 1: done in in maybe lawn Musk has been a part
Speaker 1: of that, or at least listening as as he tweets
Speaker 1: about it. Katie, what do you make of that? I mean,
Speaker 1: what do you think Jack is thinking Now, I have
Speaker 1: no idea. Yeah, I have no idea what he's thinking.
Speaker 1: I'm a big Jack fan. Um, I'm sure he's very
Speaker 1: thoughtful um and thinking through what the future hold and
Speaker 1: what this new development may or may not how it
Speaker 1: impacts the product and the team. But UM, I have
Speaker 1: no idea what Jack is thinking. Well, we all want
Speaker 1: to know. Uh. Katie Stanton, founder and general partner of
Speaker 1: Moxi Ventures and an early Twitter employee, thank you. Along
Speaker 1: with Bloomberg's Sarafier. Coming up the Octa third party breach,
Speaker 1: we will be joined by Actice, the EO and co
Speaker 1: founder Tod McKinnon in an exclusive interview, his first since
Speaker 1: the breach was disclosed. Just what happened and what have
Speaker 1: they learned? That is next? This is Bloomberg Octa in
Speaker 1: focus after a security breach at one of its third parties.
Speaker 1: The breach happened in January, but Octa didn't disclose it
Speaker 1: until about two months later, and after the hacker group
Speaker 1: LAPS has claimed responsibility for the attack and posted screenshots
Speaker 1: of alleged customer accounts on Telegram. Octa and it's CEO
Speaker 1: Tom McKinnon say he's since spoken to hundreds of customers
Speaker 1: about what happened, and joins us now here in an
Speaker 1: exclusive interview, his first since disclosing the breach. Thank you
Speaker 1: so much for joining us and for being here in person.
Speaker 1: Thanks for having so Look. I know you've been investigating
Speaker 1: the incident, You've been talking to a lot of customers.
Speaker 1: What can you tell us right now about what exactly
Speaker 1: happened and how much damage was done? So to put
Speaker 1: it in context, as you know, ACTA is the trusted
Speaker 1: identity provider for over fifteen thousand companies, so big, small governments,
Speaker 1: private companies, and so anytime something like this happens, it's
Speaker 1: a big deal. And we'll talk about details and what happened,
Speaker 1: but I want to be really clear that we're responsible
Speaker 1: so third parties this and third party that it's our
Speaker 1: responsibility to make sure this doesn't happen. And the big
Speaker 1: takeaway there are many takeaways from us, but the big
Speaker 1: takeaway is, as we've done before, we're gonna learn from
Speaker 1: our mistakes and we're gonna be transparent about what we're
Speaker 1: doing differently in a concrete way, how we're going to
Speaker 1: prevent this from ever happening again. So, how did it happen.
Speaker 1: So what happened was, as you mentioned, there's this third
Speaker 1: party call center and they do inside this call center,
Speaker 1: there's about forty people that are support agents that work
Speaker 1: on behalf of Octa to provide low level support to
Speaker 1: our customers and correct. Yeah, and the hackers broke into
Speaker 1: this site. So they use some vulnerabilities and actually the
Speaker 1: competitor software to break into the site. And when they
Speaker 1: were in the site, they were able to take screenshots
Speaker 1: of what the support agents were doing on their computers
Speaker 1: and that's what they posted on Twitter a couple of
Speaker 1: weeks ago. So how many customers were actually compromised? You said,
Speaker 1: initially as many as three. Yeah, And this is really
Speaker 1: important because through this whole process, we're trying to be
Speaker 1: as transparent and as conservative and our impact analysis as possible.
Speaker 1: So what we did is we said we looked at
Speaker 1: every possible customer that had any kind of support interaction
Speaker 1: over the five days in question, and that is the
Speaker 1: list of potentially impacted customers. Now, everyone is very concerned
Speaker 1: about this, and as they should be. Oct as critical
Speaker 1: infrastructure for fifteen companies, so they everyone assumed the worst
Speaker 1: and we did as well. But the actual technical impact
Speaker 1: two companies in terms of what they need to do
Speaker 1: is near zero. Is near zero, but it's it's it's
Speaker 1: incumbent upon us. What do you mean by that technical impact?
Speaker 1: The actually what they need to do as a response
Speaker 1: to this, what disclosures they need to make, so actually
Speaker 1: they need to change. It's actually near zero three hundred
Speaker 1: sixty six companies. How many actually were compromised, you know,
Speaker 1: yet potentially impacted? Three six? So we're drawing that line
Speaker 1: very conservatively. But because of the nature of how our
Speaker 1: system worked and our product, the Octave security technology worked
Speaker 1: well in this case, and the way our processes really
Speaker 1: limit what a support agent can actually do on these systems,
Speaker 1: the impact is near zero. So how many of those
Speaker 1: three D sixty six customers do you believe we're impacted?
Speaker 1: It's it's not exactly clear because the hacker was essentially
Speaker 1: looking over the support agent shoulders and looking at what
Speaker 1: was happening. So what we've done is we want to
Speaker 1: work with our customers to have a detailed analysis of
Speaker 1: what actually happened. So we've shared with all of these
Speaker 1: three D sixty six companies detailed click by click support
Speaker 1: logs so we can work in conjunction with them to
Speaker 1: truly verify that the impact was zero. This investigation is
Speaker 1: open and it won't be closed until we get every
Speaker 1: customer or to agree with our assessment. You faced a
Speaker 1: barrage of criticism, including from your own customers, about the
Speaker 1: timeline with with this was disclosed. Why did you wait
Speaker 1: almost two months to share this with the public, and
Speaker 1: only after screenshots were shared by presumably last Yeah, I've
Speaker 1: talked to hundreds of customers and this comes up over
Speaker 1: and over and it's unacceptable and we're accountable for it.
Speaker 1: The facts that when I tell people the facts, they
Speaker 1: started to get a better understanding the facts. While we
Speaker 1: knew something happened in this time period in January, what
Speaker 1: we actually knew was that an account takeover attempt actually
Speaker 1: failed and we detected it and there was no It
Speaker 1: wasn't clear the impact. We didn't know the extent of
Speaker 1: the forensics report. It certainly didn't contain screenshots. So, for
Speaker 1: all intents and purposes, the first time we knew about this,
Speaker 1: the severity of it, and the and what the hackers
Speaker 1: actually got was on March when they publicly the information. Now,
Speaker 1: your initial statement also stated that OCTA itself was not breached,
Speaker 1: and this was in the middle of a lot of
Speaker 1: conflicting and confusing information, not just for your customers, but
Speaker 1: for the cyber community, for journalists like myself. How do
Speaker 1: you regain the trust of the enterprise community after this?
Speaker 1: And for customers prospective customers, we're saying why should we
Speaker 1: use OPTA? Well, I think it's very important. We are
Speaker 1: we are a trusted brand, and that trust has been damaged,
Speaker 1: and we do take accountability for all the mistakes we've made,
Speaker 1: and we have made mistakes, and one of them, as
Speaker 1: you mentioned, is the communication was not as clear as
Speaker 1: it should have been. So we're trying to communicate more openly,
Speaker 1: more transparently, more consistently, and more more and ultimately more clearly.
Speaker 1: And I think when customers and conversations like this understand
Speaker 1: the facts, how they unfolded and what we knew when,
Speaker 1: and more importantly, as we share how we're going to
Speaker 1: do better in the future to make sure this doesn't
Speaker 1: happen again, To make sure customer support environments aren't put
Speaker 1: in an insecure place, to make sure that the communication
Speaker 1: is more timely, to make sure that the communication is
Speaker 1: clear and there's no question about what was breached and
Speaker 1: wasn't breached. That's what we're committed doing better next next time.
Speaker 1: What's your sense of how the business will be impacted
Speaker 1: by this? Have you lost customers as a result of this? Well,
Speaker 1: it's it's very early, so our focus has been on
Speaker 1: talking to customers and talking to prospects. And when I
Speaker 1: have those conversations and people on the management team have
Speaker 1: those conversations, what's very clear is a lot of these
Speaker 1: same same questions come up, which is why I'm so
Speaker 1: grateful for you allow me to talk about this today.
Speaker 1: But when we address these concerns and we talked most
Speaker 1: importantly about how mistakes were made, we're taking responsibility and
Speaker 1: how we have concrete plans to to remediate this and
Speaker 1: make sure it doesn't happen again. They're in a much
Speaker 1: better place at the end of the conversation than when
Speaker 1: they started the conversation. Now, Bloomberg has reported that the
Speaker 1: alleged mastermind of this group is a sixteen year old
Speaker 1: who lives with his mom in England. What do you
Speaker 1: make of the fact that a teenager may have pulled
Speaker 1: this off. It's it's interesting, but ultimately, Emily it doesn't matter,
Speaker 1: because we have to protect customers against everyone, teenagers and
Speaker 1: adults and nation states and people that have various different motives,
Speaker 1: and it's incumbent upon us to make sure this never
Speaker 1: happens again. And that's including learning from all the mistakes
Speaker 1: made and more importantly, collaborating with the broader cyber community
Speaker 1: to share open and transparent information about what happens. One
Speaker 1: of the biggest weaknesses in cyber response is people are
Speaker 1: afraid to share what happened. If you look time after
Speaker 1: time again, even this subcontractor to Octa, they were hesitant
Speaker 1: to share what they knew. Why because they're afraid of litigation,
Speaker 1: they're afraid of being suited, and they're afraid of reputational damage.
Speaker 1: If you look this, this hinders our response as a
Speaker 1: community over and over again, and we have to get
Speaker 1: better at that, and we're trying to lead the way.
Speaker 1: We're trying to be a leader, be open and transparent.
Speaker 1: And if you look back at the facts we've disclosed,
Speaker 1: they're they're all consistent. We haven't had to change anything,
Speaker 1: and so we're proud of this front footedness and this
Speaker 1: transparency despite the mistakes we've made. Are you worried about
Speaker 1: or are you facing any or bracing for potential regulatory
Speaker 1: scrutiny as a result of what happened, or be the
Speaker 1: timeline with which you disclosed it. Well, I'm very confident
Speaker 1: with the facts and how we've behaved in light of
Speaker 1: those facts. But I think your question is should there
Speaker 1: be more regulation to to somehow try to get this
Speaker 1: log jam broken of people disclosing things. So, I know
Speaker 1: the SEC is working on things, the federal government is
Speaker 1: working on things, and we would welcome that because we
Speaker 1: think the best thing to happen is to be there
Speaker 1: more openness and more transparency in these kind of matters.
Speaker 1: Have you been talking to law enforcement about the incident itself?
Speaker 1: Authorities in the UK? This is so, this is an
Speaker 1: ongoing investigation and we have been working with law enforcement,
Speaker 1: and I think they're doing a good job in this case.
Speaker 1: So what will you be doing differently going forward? Well,
Speaker 1: like I said, there's many learnings, and we're committed to
Speaker 1: not only taking those learnings, doing a deep analysis, and
Speaker 1: proactively putting things in place to make sure that these
Speaker 1: problems never happen again. We're going to publish this report
Speaker 1: to our customers and they can collaborate and and have
Speaker 1: input into this retrospective. So the first thing is just
Speaker 1: to make sure that no customer support information is ever
Speaker 1: placed in an insecure environment. Now, ironically, here the problem
Speaker 1: with this site is while they used Octa to log
Speaker 1: into these support systems, didn't use Octa to protect their
Speaker 1: own front door as a company. And it was a
Speaker 1: competitor product, and the competitor product was at fault for this,
Speaker 1: for this breach. And we're going to make sure that
Speaker 1: these companies that are third parties to us use Octa
Speaker 1: among many other things, to ensure that their technical controls
Speaker 1: are up to the snuff that we would we should require.
Speaker 1: So this is side tell do you no longer work
Speaker 1: with sidetel? We no longer work and what's the product
Speaker 1: that they were using? That's them. Look, the Biden administration
Speaker 1: has warned of a heighten threat of cyber attacks in
Speaker 1: the midst of what's going on between Russia and Ukraine.
Speaker 1: It's my understanding this didn't have anything to do with that,
Speaker 1: not our understanding it or not yet. But how would
Speaker 1: you describe the environment in cyberspace right now? Is their chaos?
Speaker 1: It is there a greater risk of any kind of
Speaker 1: cyber attack happening given the activity a couple of couple
Speaker 1: of things. First of all, all of our information shows
Speaker 1: that this was not or indicates that this was not related.
Speaker 1: But like I said, we're very diligent and we're checking
Speaker 1: every possible scenario, and we're is focused on protecting all
Speaker 1: of these kind of kinds of things, remember happening. But
Speaker 1: everyone knows that the power of technology is so great
Speaker 1: and with that power comes risk, So everyone has a
Speaker 1: general heightened awareness and a heightened investment to stop these
Speaker 1: kinds of things from happening. In addition to that, this
Speaker 1: what's happening geopolitically has everyone on edge, which explains partially
Speaker 1: why people were so concerned and there's so much stress
Speaker 1: and strife. What ultimately has turned out to be something
Speaker 1: that's very very minor technical technical impact. Optics CEO and
Speaker 1: co founder Tomikin, thanks for joining us, Thanks for explaining
Speaker 1: what happened. We appreciate it. Thank you all Right. Coming up,
Speaker 1: Apple employees are pushing back on returning to the office
Speaker 1: after two years at home. More on what some are
Speaker 1: calling the iPhone makers inflexible work policies. Next, this is
Speaker 1: Bloomberg a few other stories. We continue to watch. Workers
Speaker 1: at Apple are pushing back on returning to the office
Speaker 1: after two years working from home. The company's relatively inflexible
Speaker 1: remote work policies, some employees say, are inspiring them to
Speaker 1: look elsewhere. Workers are required to be back in the
Speaker 1: office at least once a week by April eleven, twice
Speaker 1: a week by the end of the month, and on Monday's,
Speaker 1: Tuesdays and Thursdays by May. Plus. A Hong Kong based
Speaker 1: digital media and e commerce company back by celebrity investors
Speaker 1: listing on NASDAC via s back it is called Height
Speaker 1: East investors including Tom Brady and tennis champion Naomi Osaka.
Speaker 1: We'll be back with more of Bloomberg Technology and Elon
Speaker 1: Musk's big steak in Twitter after the break. This is Bloomberg.
Speaker 1: Welcome back to Bloomberg Technology. I'm Emily changing San Francisco.
Speaker 1: Let's get back to our story of the day. A
Speaker 1: surge in Twitter shares after Elon must disclosed a two
Speaker 1: steak and boost in some of its social media rivals
Speaker 1: as well. Are at Ludlow back with the movers, not
Speaker 1: just Twitter. How yeah, it was interesting you did see
Speaker 1: the likes of Meta, the parent company of Facebook, of course,
Speaker 1: snack Google which zones or alphabet the parent company of Google,
Speaker 1: and also YouTube Mate gains kind of caught up in
Speaker 1: this optimism and interest during the market's day Monday in
Speaker 1: social media stocks. But you know that surge in Twitter
Speaker 1: raises the question is this a positive movie on must
Speaker 1: taking a nine point two steak in Twitter? What will
Speaker 1: happen next? Will he affect change? Were a little earlier
Speaker 1: we heard from Kaffee Would, of course, the CEO and
Speaker 1: CEO of arc whose flagship innovation ETF actually shed Twitter
Speaker 1: shares earlier this year. This is what she had to say.
Speaker 1: I will say this could be setting up for another
Speaker 1: leadership change at Twitter. You never know. Then, I'm not
Speaker 1: jumping to this conclusion automatically. I'm saying it's one of
Speaker 1: many possibilities. It'll either be argal changing the policy of
Speaker 1: the company to you know, really open source the the
Speaker 1: censorship or or call people out on censorship, or it
Speaker 1: will be a management change. I don't know what's going
Speaker 1: to happen. So Cathee would say she's not sure what's
Speaker 1: going to happen, but this could be a shot across
Speaker 1: the bow for the Twitter CEO paragag Roy. Of course
Speaker 1: it could be a warning from Elon Musk. What was interesting.
Speaker 1: She also kind of talked a bit about the landscape
Speaker 1: for social media stocks, which of course have not been
Speaker 1: great to see if you come into my bloombow terminal.
Speaker 1: Just a quick point though, that that jump in Twitter
Speaker 1: shares that we saw during Monday session actually took Twitter
Speaker 1: pretty positive, firmly into positive territory where you have the
Speaker 1: likes of Facebook down more than thirty percent year today
Speaker 1: and Snap still down more than ten percent year today.
Speaker 1: So there hasn't been much love for social media stocks.
Speaker 1: Does this put more attention on the space them, well,
Speaker 1: have to see, that's mention. Indeed we will see. Thank
Speaker 1: you well. Friday mark the first time ever that the
Speaker 1: software company Palentteer entered space. During SpaceX's Falcon nine launched
Speaker 1: last week, Pvalentteer's Edge AI enabled satellite was deployed, a
Speaker 1: milestone that could significantly speed up the delivery of data
Speaker 1: sent back to Earth. Joining me now, CEO of Palentteer,
Speaker 1: A Sham sank Our Sham, great to have you back
Speaker 1: with us. So what exactly is this satellite? Doing right now. Well,
Speaker 1: thank you for having me back, Emily. So you know,
Speaker 1: we are so excited to have our edge AI technology
Speaker 1: in the satellite bus of a satell Logic New SAT satellite.
Speaker 1: And what this allows us to do is quickly moved
Speaker 1: AI models right next to the satellites camera itself. So
Speaker 1: you think about the pictures were taking videos that you
Speaker 1: can get from space. These are massive files and it
Speaker 1: takes so long to bring that data down to Earth
Speaker 1: and it really introduces tremendous latency in terms of how
Speaker 1: long it takes you to leverage insights that happening in
Speaker 1: the real world given that downlink delay. By moving the
Speaker 1: AI inferencing to space, you can do that in seconds
Speaker 1: and you can get the information down to Earth in
Speaker 1: less than a minute. And that is a fundamental game changer.
Speaker 1: So can you serve some examples of what will improve
Speaker 1: because you have this capability when we move so commercial
Speaker 1: space has exploded over the last decade. Now we are
Speaker 1: drowning in collection. But if you think about it from say,
Speaker 1: for example, a military commander's perspective, they're not interested in saying,
Speaker 1: when can I get the next picture over this region,
Speaker 1: perhaps a region in the Ukraine or Russia. You're they
Speaker 1: want to know how many tanks are there, how many
Speaker 1: transport elector erector launchers are there. They have a mission
Speaker 1: questions and how often can I revisit that? I need
Speaker 1: that information every hour And with this capability you can
Speaker 1: now reduce all of the latency that provide real time insights,
Speaker 1: that provide real deterrence as we've seen in the conflict
Speaker 1: in Ukraine, and real insight into what's happening in the
Speaker 1: world now. The war on Ukraine has sparked backlash against
Speaker 1: Russia's continued dominance in space, and you've got a lot
Speaker 1: of companies looking for partners as a result. Has Palace
Speaker 1: here seen any new business because of that. We have
Speaker 1: really mobilized our entire company against the invasion Ukraine and
Speaker 1: the consequences of that. I think in many ways we
Speaker 1: believe this situation was foreseeable, and you know, at the
Speaker 1: time of our listening, we talked quite publicly about how
Speaker 1: we would not work with the Russian government and actually
Speaker 1: with Russian companies given the overall context there. But now
Speaker 1: our software is being used to power refugee operations from Romania, Poland,
Speaker 1: Lithuania across all of Europe. I've talked before about how
Speaker 1: supply chain is really a software problem, and our software
Speaker 1: here is helping, just like we do with the World
Speaker 1: Food Program. It's helping match all of the goods that
Speaker 1: are coming in, the beds that are available, everything that's
Speaker 1: coming from the hands of the donors to the hands
Speaker 1: of the refugees and those who need it, and doing
Speaker 1: that as efficiently and effectively as possible given the incredible
Speaker 1: scale millions and millions of refugees that need help in
Speaker 1: this moment. Similarly, we are helping commercial companies with their
Speaker 1: supply chains. There are a lot of automotive parts that
Speaker 1: are made in Ukraine. We've helped BMW ensure the continuity
Speaker 1: of their Munich facilities and production plans by being it
Speaker 1: dynamically changing their production plans to respond to the changing
Speaker 1: supply chain shocks that are occurring. And of course, most obviously,
Speaker 1: we have been deeply involved in helping with the military response,
Speaker 1: not just in the US but across European nations who
Speaker 1: are on a fundamentally different footing from a defense and
Speaker 1: security posture since the invasion. How are you helping them?
Speaker 1: We're helping them gain insight into what's happening on the ground.
Speaker 1: A lot of that is coming from space, A lot
Speaker 1: of that is coming from reports that are happening through
Speaker 1: different fused information sources. There's a lot that's happening on
Speaker 1: social media right now that kids you fundamental insight and
Speaker 1: and helping drive coordination around the logistics. Uh and a
Speaker 1: lot of that plays into refugee operations. How many folks
Speaker 1: are we expecting? How do we plan for the capacity
Speaker 1: of the folks that we need to to provide housing,
Speaker 1: board betting for there are in enormous number of orphans.
Speaker 1: I'm sad to say that that we're helping provide a
Speaker 1: housing and shelter for essay come across the border. Now.
Speaker 1: You have talked about supply chain trends in the past
Speaker 1: food shortages, and I'm curious, given your unique view and
Speaker 1: all of the data that Palentteer has, you know, how
Speaker 1: is the supply chain crisis at this moment? Is it easy?
Speaker 1: And especially when it comes to food, which in so
Speaker 1: many parts of the world we're short on. Yeah, I
Speaker 1: wish I could say it was easy. I think it's
Speaker 1: actually getting worse right now when I look at what's
Speaker 1: happening with inflation. We had inflationary pressure from COVID, we
Speaker 1: had inflationary pressure from from Ukraine. But now it's it's
Speaker 1: kind of it's you know, we have inflationary pressure as
Speaker 1: it relates to energy, as it relates to food. And
Speaker 1: what we're seeing is that companies that have a granular
Speaker 1: transaction level enterprise profitability data asset are the ones that
Speaker 1: are going to thrive here. They have a better ability
Speaker 1: to do revenue management, They have a better ability to
Speaker 1: find substitutes in their supply chain and be more competitive
Speaker 1: and offer the lowest price that their customers going forward.
Speaker 1: And those that don't are really struggling to understand what
Speaker 1: this means not only for their own profitability, but how
Speaker 1: they should be reacting and pricing the market. So I
Speaker 1: think I think the greater challenges lie ahead of us
Speaker 1: here for the commercial world. What do you think is
Speaker 1: gonna happen with the markets? So, I mean Palenteer shares,
Speaker 1: you know, along with the rest of bid tech, have
Speaker 1: taken a nose dive since the first part of the year.
Speaker 1: Though Palenter actually since the war started actually trending upwards.
Speaker 1: We had a very strong revenue growth with twenty percent
Speaker 1: adjustice free cash flow and this environment, investors were very
Speaker 1: excited to see that combination of strong revenue growth and
Speaker 1: profitability in cash on the cash generation basis. UH the
Speaker 1: U S Commercial business doubled for the second year in
Speaker 1: a row. The Government Business Group sent you over year,
Speaker 1: so I think, you know, we came out of our
Speaker 1: Q two three earnings call really thinking, well, we're so
Speaker 1: excited about the business. It's clear from the feedback that
Speaker 1: investors are mixed. They don't quite see every think we're seeing.
Speaker 1: We went into the to the end of year call,
Speaker 1: the Q four call really breaking a lot of detailed
Speaker 1: co words out, which allowed investors to see what we
Speaker 1: were seeing in the business and why we were so
Speaker 1: excited about the performance of the key growth areas, US commercial,
Speaker 1: government business, and I think the market's reacting to that.
Speaker 1: Shum Sankar, CEO of Palatier. Always good to have you
Speaker 1: on the show, Sean, thank you. Coming up, it was
Speaker 1: crypto's breakout year. We're gonna talk with Gemini CEOO no
Speaker 1: Approlment about their new report on global crypto trends and
Speaker 1: what's to come in This is Brumberg time for our
Speaker 1: Crypto Report. Now with crypto markets looking like they are
Speaker 1: rallying and with Bitcoin not the lead here, so Lana
Speaker 1: and Tera are among the biggest gainers in the crypto
Speaker 1: universe in the last week, a sign of a broadening
Speaker 1: rally in digital tokens, while Bitcoin over the same period
Speaker 1: remains a little changed and still trading within a tight range.
Speaker 1: I want to talk about all this and much more
Speaker 1: with Noah Perlman, chief operating officer of the crypto platform Gemini. Noah,
Speaker 1: great to have you with us. What's your take on
Speaker 1: what's happening in crypto markets at the moment given all
Speaker 1: of the buzz and activity we've seen around crypto specific
Speaker 1: to the war on Ukraine. UM, Emily great to be
Speaker 1: back on the show and thanks so much for having
Speaker 1: me on to discuss Gemini's Global report and all things crypto. UM,
Speaker 1: you're right, there has been so much buzz about crypto
Speaker 1: over the past year, and we were really excited to
Speaker 1: dig into the actual data to uncover trends and adoption,
Speaker 1: barriers to entry and general attitude stards crypto. And our survey,
Speaker 1: which did looked at respondents across twenty countries, we found
Speaker 1: four four key findings. So first increased adoption globally. One
Speaker 1: really was a breakout year. We saw crypto ownership nearly
Speaker 1: double in several key geographies, including the US. That means
Speaker 1: basically about half of the people bought their first crypto
Speaker 1: in UM. Second, and interestingly, we saw that in addition
Speaker 1: to increased ownership, it was a real broadening of the
Speaker 1: base of crypto investors, with more women and more diverse
Speaker 1: investors coming into the space. UM. Third, we saw that
Speaker 1: respondents were really tuned to inflation and the responses demonstrated
Speaker 1: that inflation is a significant driver of demand in the space. UH.
Speaker 1: And finally, finally, consumers worldwide, they continue to seek out
Speaker 1: more education and regulatory clarity concerning digital assets. We're looking
Speaker 1: at India, Hong Kong, Brazil looks like they had some
Speaker 1: big uptick. Where are you seeing the most adoption right now, Well,
Speaker 1: we're seeing the most interest in uh developing countries where
Speaker 1: UH there is historic currency instability UH and so where
Speaker 1: we see that. Our theory is that look where your
Speaker 1: where your currency is stable, UH, crypto maybe a nice
Speaker 1: to have helps diversify your portfolio, But where we see
Speaker 1: currencies that have been devalued against the dollar, we've found
Speaker 1: that people are five times more likely to buy crypto,
Speaker 1: and there the theory is that crypto there is not
Speaker 1: a nice to have, but it need to have. Bitcoin
Speaker 1: has been trading between thirty four and forty four THOU
Speaker 1: dollars for most of two fairly narrow arranged. Do you
Speaker 1: think that's going to change? I talked to my traders
Speaker 1: about that. We do think that we're poised for continued
Speaker 1: to continued growth UH and price increase UH this year,
Speaker 1: and a number of things are driving it, certainly UH inflation,
Speaker 1: which you know, we've seen that worldwide where there is inflation,
Speaker 1: it's a driver of demand. And obviously we've got inflationary
Speaker 1: pressures here in the US UM and also the war
Speaker 1: in Ukraine has demonstrated UH some interest in UH ensuring
Speaker 1: that countries are taking a look at their currencies and
Speaker 1: making sure that they aren't as dependent on world events.
Speaker 1: And we've seen crypto as a mechanism of easing friction
Speaker 1: for cross border payments UH. And so we'll see if
Speaker 1: that increases UH price movement here. UH. What headwinds are
Speaker 1: you bracing for? Is it regulation? Regulation continues, Regulation and
Speaker 1: education continue to be the head winds. So despite the
Speaker 1: fact that we've the crypto markets continue to have m
Speaker 1: a tremendous info of investments and we saw look we
Speaker 1: saw more than ten and a half billion in investment
Speaker 1: in the space in the fourth quarter of one alone.
Speaker 1: We still have regulatory uncertainty uh and a lack of clarity. UH.
Speaker 1: And look, this is not just in the US, it's worldwide.
Speaker 1: We have the sense that government's regulators know that they've
Speaker 1: got to do something. Often they don't know what to do,
Speaker 1: so they'll make statements that aren't always helpful to industry.
Speaker 1: You'll see things like a plan for a plan, or
Speaker 1: we're going to study it. And as you know, what
Speaker 1: the markets want is certainty, tell us what they are.
Speaker 1: We are more than happy to work with our regulators
Speaker 1: and we do UM and so we can get some
Speaker 1: clarity and can move forward, no problem in CEO of
Speaker 1: GEM and I Noah, good to have you back, exactly
Speaker 1: all right. Coming up more on Elam Musk's big Twitter sake.
Speaker 1: What does he plan to do with it? That is next.
Speaker 1: This is bloomerk. Let's get back to the story of
Speaker 1: the shares of Twitter soaring after Elon must announced he's
Speaker 1: taken a nine point two percent steak in the company,
Speaker 1: the largest of any investor. Natasha Lamb of Varginia Capital
Speaker 1: joins us now to discuss Natasha as an activist investor yourself,
Speaker 1: what do you make of this? Um? Well, I mean,
Speaker 1: it's it's hard to say. I think that I believe
Speaker 1: that Elon musk critique is that social media companies need
Speaker 1: to be better managed. H That's something we've been saying
Speaker 1: for years. They need better governance. But it's so interesting
Speaker 1: because I don't see Elon Musk as you know, a
Speaker 1: golden child of good governance. Um. Even if you just
Speaker 1: look at Tesla, where he inhabited the role of CEO
Speaker 1: and chairman originally, you know that was bad governance on
Speaker 1: O one. Tesla's struggled with allegations of racial discrimination. They
Speaker 1: could certainly look to improve the diversity of their board. UM.
Speaker 1: And in fact, Musk has gotten trouble, gotten in trouble
Speaker 1: on Twitter before with the Securities and Exchange Commission, the
Speaker 1: SEC for saying that funding was secured to take Tesla
Speaker 1: public when it wasn't. Um. Was that free speech or
Speaker 1: was that a regulatory violation? But as part of the
Speaker 1: sec settlement. He actually had to step down his chair
Speaker 1: of Tesla's board. Again, we don't think he should have
Speaker 1: been in both roles anyway. Um. And you know we've
Speaker 1: seen the same with Mark Zuckerberg, who you know, I
Speaker 1: guess now another social media mogul struggled to learn that lesson. Um,
Speaker 1: that unchecked power. You know, that unchecked power has been
Speaker 1: detrimental to Facebook or Meta. Um. I think that Musk
Speaker 1: has the ego in the capital. And I say this,
Speaker 1: you know, in the best way possible he's got that.
Speaker 1: You go in the capitol to launch a new social
Speaker 1: media company to try to reform Twitter. Um, but I
Speaker 1: don't think he has the X or tease uh in
Speaker 1: terms of how to actually make that happen. Interesting, Well,
Speaker 1: you brought up the funding secured tweet which sent shares
Speaker 1: of Tesla up. You know, he can tweet about dose
Speaker 1: or bitcoin and then sell a bunch of it tomorrow.
Speaker 1: He could turn around and just sell this Twitter stake
Speaker 1: and he would have made a lot of money in
Speaker 1: a single day. Is there something wrong with that? Um? Yeah,
Speaker 1: because that sounds like manipulation, um, not free speech. Uh.
Speaker 1: And I guess the question, the big question Mark is
Speaker 1: what are Must's intentions for Twitter? Um? You know, based
Speaker 1: on his tweet, it appears that Must beef with Twitter's
Speaker 1: free speech. But what is really needed is upholding free
Speaker 1: speech while dealing with the rampant manipulation of social media platforms.
Speaker 1: And it's not just saying, you know, I like the
Speaker 1: stock where I don't are making jokes and um, you know,
Speaker 1: playing games like that. It's the misinformation, the disinformation, the
Speaker 1: likes of which we've seen from Russia, voter suppression, it's racism, sexism,
Speaker 1: abuse along those lines. Violence. Um, you know, think about
Speaker 1: the mass killings in El Paso, christ Church, New Zealand,
Speaker 1: not to mention the insurrection on our capital. Um. And
Speaker 1: all of those issues need to be dealt with in
Speaker 1: a mosaic. Um. So I think, you know, I think
Speaker 1: Musk might be might be simplifying things in a way.
Speaker 1: Um that that just isn't possible. Now, are gin a capital?
Speaker 1: Still has a small steak in Twitter as I understand it,
Speaker 1: but smaller than it once was. Why is that? I mean,
Speaker 1: take a look at the stock right, So I wonder
Speaker 1: if couldy Lon Musk being good for Twitter shareholders? He
Speaker 1: you know one thing about you know, Elon Musk is
Speaker 1: he's a brilliant engineer and he's assistants thinker UM, but
Speaker 1: I don't think he's a human or civil rights expert,
Speaker 1: which is really what's needed. So if you look at
Speaker 1: Silicon Valley, they continue to fall over their shoelaces figuring
Speaker 1: out how to deal with all of the issues. I
Speaker 1: just mentioned this huge mosaic UM, but I don't see
Speaker 1: anything in Musk's background that make him the man for
Speaker 1: the job UM. I would like, however, to see Must
Speaker 1: support stronger governance at Twitter as now an outside shareholder,
Speaker 1: and that could be in the form of board members
Speaker 1: that do have human and civil rights expertise to address
Speaker 1: free speech. So, you know, we've stepped back our positions
Speaker 1: in Twitter because of you know, all of the issues
Speaker 1: it's had, UM, but you know, we do still own
Speaker 1: some Twitter and we actually have a proposal going to
Speaker 1: a vote on May asking Twitter to add UM board
Speaker 1: members with human and civil rights expertise. That gets exactly
Speaker 1: to muscus point. Interesting free speech, that's what you know,
Speaker 1: that's what it's about. So maybe the best outcome is
Speaker 1: that Must can throw his weight behind that proposal and
Speaker 1: support some effort to improve Twitter's board. Now, of course,
Speaker 1: Jack Dorsey left fairly abruptly last year, left s CEO,
Speaker 1: left the board, but it is still a fairly large shareholder,
Speaker 1: has two point three percent Stave. We haven't heard from Jack.
Speaker 1: You know, what was your experience in dealing with him
Speaker 1: as an activist investor? And what do you imagine he's thinking.
Speaker 1: I think, you know, I think it's a tough job, right, um,
Speaker 1: And it was tough for Jack Dorsey, who was also
Speaker 1: splitting his time. I think he was a well intentioned
Speaker 1: individual that tried to do the right things at Twitter. Um,
Speaker 1: and you know, and took some steps to do that.
Speaker 1: And you know, of course, because it's such a huge mosaic,
Speaker 1: you're going to get criticism from both sides. Um. I
Speaker 1: think it was the right choice for him to step
Speaker 1: down and you know, have the new CEO have this
Speaker 1: full time job. But there's still work to be done
Speaker 1: to make you know, to to transform the town square
Speaker 1: if that's what this is. Um. You know, a lot
Speaker 1: of people spend a lot of time on Twitter, but
Speaker 1: it's a small, um chunk of the population, and the
Speaker 1: manipulation that's happening over these platforms is really unfortunate. Um,
Speaker 1: so you know, we'll see what happens. But there there's
Speaker 1: there's room for improvement and and maybe must can be
Speaker 1: part of that. Indeed, all right, Natasha lam a lot
Speaker 1: of open questions. Thank you so much for weighing in
Speaker 1: and trying to answer some of those. Natosha Lamb of
Speaker 1: Argina Capital, thank you as always. And that does it
Speaker 1: for this edition of Bloomberg Technology. We are back here tomorrow.
Speaker 1: We're gonna be joined by Christian Smith, executive director of
Speaker 1: the Blockchain Association, and we'll also have an exclusive conversation
Speaker 1: with Johnny Price of we Funder. Don't forget to tell
Speaker 1: back out our new podcast as well. Find it anywhere
Speaker 1: you get your podcasts. For the daily Bloomberg Tech news
Speaker 1: round up, I'm Emily Check in San Francisco. This is
Speaker 1: Bloomberg