Speaker 1: From the heart of where innovation, money and power Colli
Speaker 1: in Silicon Vallet and beyond. This is Bloomberg Technology with
Speaker 1: Emily Chany. Welcome to a special edition of Bloomberg Technology
Speaker 1: and Emily Chang at the National Association of Broadcasters Conference
Speaker 1: in New York City. Coming up in the next hour.
Speaker 1: Mixed results. Tesla falls following its earnings reports, saying battery
Speaker 1: supply constraints will be the biggest hurdle going forward. We're
Speaker 1: gonna have all the details. Plus Clarin Up is rolling
Speaker 1: out a new product to make it easier to shop
Speaker 1: on the platform. But the buy now, pay later giant
Speaker 1: facing headwinds with consumer confidence plummeting corner CEO with us
Speaker 1: later this hour, and how has the direct consumer trends
Speaker 1: survived potential recession? The co CEO of the eyewear Darling
Speaker 1: Warby Parker. We'll talk to us about the evolution of DTC.
Speaker 1: I don't continue with Tesla now, and for that we
Speaker 1: bring in Dan. I'ves of what but security. Dan is
Speaker 1: so good to see. Thanks for coming down. All right,
Speaker 1: what's your takeaway from the results we just saw old
Speaker 1: I think clearly the three Q deivery miss you know
Speaker 1: there was an expectation that revenues could be light. I
Speaker 1: think margins will be a focus came in light there.
Speaker 1: The street was hoping ultimately for a better marginal performance,
Speaker 1: but I think really the head one sticking to the
Speaker 1: underlying fift growth for the year in terms of delibrious.
Speaker 1: So the conference call is going to be key in
Speaker 1: terms of are they back and away from that, clearly
Speaker 1: they're not. It shows that China growth story still continues
Speaker 1: to be there, and that's really gonna be the bull
Speaker 1: bear to be coming out of this call. So let's
Speaker 1: talk about the demand story you see and what do
Speaker 1: you see as the difference between the US and China.
Speaker 1: I know there's been some concerns of about weight times
Speaker 1: in China shrinking, which you know, counterintuitively is maybe in
Speaker 1: a not good sign. I think in China productions ram
Speaker 1: three acts. So if you look at weight times, what's
Speaker 1: happened there that's going to start to stabilize, but ultimately
Speaker 1: the production out of China continues to really increase. It. Look,
Speaker 1: that's the hearts and lungs of the Tesla bull story
Speaker 1: in terms of China. Now, if you look what's happening
Speaker 1: from a macro perspective. You know, clearly we're seeing softness,
Speaker 1: but we believe what we're seeing in Tessa's much more
Speaker 1: logistics driven rather than demand driven, and that, in my opinion,
Speaker 1: is why you know, I think this is just more
Speaker 1: massive speed bumps they're navigating. But ultimately from Musk it's
Speaker 1: a moment of truth. I mean, this is the time
Speaker 1: to sort of navigate through the turbulence because investors seeing
Speaker 1: white knuckles. Are you about the battery situation? Look, I'm
Speaker 1: concerned about it, but ultimately, as we go into first
Speaker 1: half of next year, I believe that does start to stabilize.
Speaker 1: I still believe demand is out strip and supply for Tesla,
Speaker 1: and that's why it's all about ken they fulfill two
Speaker 1: million units in terms of going two thousand and twenty three,
Speaker 1: if they can then testas the stock that they might
Speaker 1: opinion could be from these levels. But in this backdrop,
Speaker 1: this report, in my opinion, it's most the most important
Speaker 1: conference call probably in the last two and a half
Speaker 1: three years. It might also be the last conference call
Speaker 1: before he buys Twitter. Right, a deal could be sealed
Speaker 1: in a matter of days, and we've seen test La
Speaker 1: shares very much intertwined with what's happening with Twitter. Are
Speaker 1: you expecting a potential negative impact from that deal? Me
Speaker 1: and you've talked about. I mean that's where the albatross
Speaker 1: around the Tesla story, because ultimately the worry is the
Speaker 1: financing in this market starts to fall through a bit.
Speaker 1: Does he have to come up in more capital? Do
Speaker 1: you see form fours? Does he sell an incremental five
Speaker 1: ten billion dollars of Tesla stock to fund Twitter? And
Speaker 1: that's why the frustration now for the TESTSA investors is
Speaker 1: it feels like Musk has jogging allowed to balls. You've
Speaker 1: got the Twitter situation and right now he's continuing to
Speaker 1: trade cave are for two hours slice of pizza in
Speaker 1: terms of Twitter style. Are you worried about the ball juggling?
Speaker 1: That's a lot of well, I think that's that's one
Speaker 1: of the biggest problems is that Musk is the key
Speaker 1: to the Tesla story. He's ultimately really the reason that
Speaker 1: Tessa has been able to get in this position, and
Speaker 1: I think he really needs to ultimately give investors confidence
Speaker 1: that he's there pilot on the plane and you're not
Speaker 1: ultimately going to see shortfalls as we go into Q four,
Speaker 1: and especially as going two thousand and twenty three in
Speaker 1: such a pivotal year for evs, What do you want
Speaker 1: to see and what do Tesla investors want to see
Speaker 1: in terms of his management approach to Twitter, like not
Speaker 1: managing Twitter at all? Well, I think part of it
Speaker 1: as a testa investor. You want to ultimately see him
Speaker 1: navigate this and ultimately give the reins to social media
Speaker 1: experts that could ultimately be the ones that could try
Speaker 1: to turn Twitter around. From Musk, the easiest thing was
Speaker 1: buying Twitter. The hardest part is going to be fixing it.
Speaker 1: That's gonna be an everse like uphill battle from Musk
Speaker 1: in terms of fixing Twitter. But is a testa investor
Speaker 1: at such a crucial time, you need steady hands. And
Speaker 1: that's really why this conference call the next few quarters
Speaker 1: are just so crucial. What I believe is in the
Speaker 1: history of the test of story well, and it may
Speaker 1: be for honestly almost every company given the macroeconomic conditions
Speaker 1: that we're facing, and you know, Musk will potentially only
Speaker 1: now multiple companies that are facing these macro economic conditions.
Speaker 1: What's your outlook over the next six months as we
Speaker 1: potentially head into a recession and a downturn that could last.
Speaker 1: Some people are telling me to to three years. Yeah, well,
Speaker 1: I think in terms of disruptive technology, who are going
Speaker 1: to be the winners over the next two three years,
Speaker 1: Tesla's front and center, along with Apple and banful names
Speaker 1: like Microsoft. When you look at Tesla as we went
Speaker 1: back three years ago, look how they navigated through what
Speaker 1: I view is almost historic challenges. Musk the challenges, not demand,
Speaker 1: its logistics, and if you go China, I believe this
Speaker 1: will ultimately be a period of time that Tesla is
Speaker 1: able to navigate. And I do believe the multiple starts
Speaker 1: to re rate, you start to ultimately see margins start
Speaker 1: to come back. And I think we look at this
Speaker 1: is just a blip on the radar over and over
Speaker 1: and overall called five six years. Cybertruck, What do you
Speaker 1: want to hear? Ok, I think you want to hear
Speaker 1: that's coming in two thousand and three because you got
Speaker 1: all the Detroit stalwarts that are ready to get those
Speaker 1: trucks out there. Also you have Rivy and others. This
Speaker 1: is gonna be an arms race in terms of pickup trucks.
Speaker 1: For e V need to make sure it doesn't keep
Speaker 1: continue to get delayed. But it goes back to your
Speaker 1: navigating SpaceX Tessa now Twitter, and there's you know, ultimately
Speaker 1: which kid you love the most? And that's gonna be
Speaker 1: the issue from Musk because the Golden Child continues to
Speaker 1: be Tesla. We hear so much about one shot well
Speaker 1: at SpaceX. How deep is the bench at Tesla? If
Speaker 1: his attentions are divided. It's so different if if Judge
Speaker 1: and Stanton we're not playing for the Yankees, you got
Speaker 1: you got a bench there. But ultimately Musk is continue
Speaker 1: to key to the test of story. They have navigated
Speaker 1: a bit of a bench. But let's just be clear.
Speaker 1: I mean that is the biggest worry right now in
Speaker 1: the story. And of course Tom's taken next Friday, that's
Speaker 1: when the Twitter deal is supposed to close. Otherwise Wen
Speaker 1: into a game of Thrones in Delaware. All right, I'm
Speaker 1: gonna let you get away with that Yankees comparison. Just
Speaker 1: because we're in New York, Dan Ives Bush, so good
Speaker 1: to see you here in person. Thank you looking at me,
Speaker 1: Welcome back. I'm Emily Changing of the National Association of
Speaker 1: Broadcasters conference in New York, and I want to look
Speaker 1: more broadly now at Investment Sentiment consumer facing investments. In particular,
Speaker 1: Ben Lair is Lara Hippo managing partner, which manages twelve
Speaker 1: billion dollars and has invested in companies from All Birds
Speaker 1: to Warby Parker, which will be on the show later.
Speaker 1: Casper and more Than also had some interesting job transitions recently.
Speaker 1: So you came back to Lara Hippo full time? Or
Speaker 1: how how should how should we we talk about your kind?
Speaker 1: So I was doing two jobs for a long time.
Speaker 1: I was operating and investing, and uh, we sold the
Speaker 1: operating company in March and so now on full time
Speaker 1: and Lyric Group Media to Box. Yes, let's talk about
Speaker 1: the media space first and and and then we'll move
Speaker 1: on because there's just so much disruption there. There's contraction there.
Speaker 1: You know, what is the future of the media business?
Speaker 1: Really cool? I think it's a tough market. Um, you know,
Speaker 1: my perspective has changed a lot. We were very active
Speaker 1: at Lara Hippo investing in media and we're the first
Speaker 1: investors in BuzzFeed and Business Insider and wonder Ee and
Speaker 1: Axios and a lot of stuff that that did well.
Speaker 1: We do almost no media investing anymore. I don't really
Speaker 1: think it's a venture category, so I think there's not
Speaker 1: growth to be had. I think that social media has
Speaker 1: massively screwed up the industry. I think TikTok more than
Speaker 1: even Facebook before. It is sucking away attention in ways
Speaker 1: that we never could even imagine would be the case,
Speaker 1: and the advertising industry is really challenging. I think that
Speaker 1: there are going to be winners in the digital media space.
Speaker 1: I think Fox, which acquired our company, is one of them. Um,
Speaker 1: But uh, I don't think there's a lot of venture
Speaker 1: money to fund new businesses, and I think there's going
Speaker 1: to be more and more consolidation. You've seen it at
Speaker 1: you know in traditional media, You're going to see it
Speaker 1: continue to happen in digital. Okay, so let's walk that
Speaker 1: out a little bit. How does that play out? Where
Speaker 1: do you see the condult solidation and do you see
Speaker 1: media product path to being destroyed? I don't know that
Speaker 1: I would say seeing a path to being destroyed. I
Speaker 1: think people want content, and I think that, you know,
Speaker 1: news media is in a really particularly dark place with
Speaker 1: what's happened to trust of media in the country, and
Speaker 1: the business model of news I think is very challenged.
Speaker 1: There's a few organizations that are doing a good job,
Speaker 1: but one of the big problems is advertiser is don't
Speaker 1: support news media. Um, it's the most important area to
Speaker 1: put your dollars, but they don't want to be around
Speaker 1: Donald Trump, they don't want to be around the war
Speaker 1: in Russia, they don't want to be around horrible stories,
Speaker 1: and so you see, uh, the the industry really suffering.
Speaker 1: And then I think entertainment media is uh generally moving
Speaker 1: in the direction of the creator, and so YouTube and
Speaker 1: TikTok and platforms that empower lots of people to create
Speaker 1: reams of sort of generally lower quality and less expensive
Speaker 1: content are eating up advertising dollars that used to go
Speaker 1: to premium content creators. And it's challenging at stake here,
Speaker 1: I mean really, I think I think on one level
Speaker 1: that by the way, I don't think the truth is
Speaker 1: at stake. I think the truth is. I think that's
Speaker 1: already gone for the moment, I mean, there is it.
Speaker 1: We're in a really, really, really bad situation. I have
Speaker 1: little kids, and I am terrified for the way that
Speaker 1: they're going to get truthful information. And the problem is
Speaker 1: that it's right now not good business to invest in
Speaker 1: the news category and that has to change, and I
Speaker 1: think it will. The pendulum always shifts. Uh, there's a
Speaker 1: lot of people who want to fix this problem, and so, um,
Speaker 1: we continue to be interested in meeting companies that are
Speaker 1: doing that. So where do you think responsibility live? Is
Speaker 1: it advertisers? Is it with social media companies? At the
Speaker 1: end of the day, we live in a you know,
Speaker 1: capitalist society. I think it's hard to make this about responsibility.
Speaker 1: I think we have to find business models that make
Speaker 1: it that work for everyone. Uh, No one is going
Speaker 1: to do what's you know, some people will do it's
Speaker 1: right for the world, but most people are gonna do
Speaker 1: what's right for their wallet. And so uh, I think
Speaker 1: at the end of the day, the the social media companies,
Speaker 1: a huge opportunity was missed twenty years ago to regulate
Speaker 1: these companies. Uh this all started. I've been sort of
Speaker 1: learning more about this, how this started around in September eleven. Actually,
Speaker 1: where I think there's a great opportunity to regulate some
Speaker 1: of these companies that didn't happen, and we're now, uh
Speaker 1: in a world where they've been allowed to run amuck
Speaker 1: and they're their you know their monopolies and they've made
Speaker 1: a really challenging so by the way, it's not too
Speaker 1: late at all, and there are amazing brands that do
Speaker 1: great journalism. Um, and again I will say I continue
Speaker 1: to be, as a Vox board member, biased but also
Speaker 1: incredibly impressed with the quality of journalism, the quality of
Speaker 1: these communities, the diversification of revenue that these companies are generating.
Speaker 1: But um, it's hard when you see the you know,
Speaker 1: Discovery and Warner needing to consolidate and CBS and biocomp
Speaker 1: needing to consolidate. Well, what is that due to smaller
Speaker 1: independent brands who want to continue to be independent when
Speaker 1: when the top of the food chain is joining forces
Speaker 1: because they're feeling that the pressure from social media. Okay,
Speaker 1: so let's talk about capitalism. You are continuing to invest absolutely,
Speaker 1: how bad is this downturn, how bad is it going
Speaker 1: to get? How long is it gonna last? And are
Speaker 1: you finding places to put your money or is it? Yeah,
Speaker 1: so are you just waiting on the sideline? So we're
Speaker 1: not absolutely not waiting on the sidelines. Our model is
Speaker 1: to be first money in and we're backing founders who
Speaker 1: want to change the world. And there's still plenty of
Speaker 1: great founders that want to change the world, and so
Speaker 1: most of the companies that we back today are going
Speaker 1: to be raising money in the future in different markets.
Speaker 1: The you know, markets go up, markets go down. I
Speaker 1: do think that this downturn is going to be significantly prolonged.
Speaker 1: I think the public markets have experienced a lot of
Speaker 1: the pain, certainly not all of the pain. I think
Speaker 1: the private markets talk about experiencing the pain. But the
Speaker 1: reality is, I think we're probably a year or two
Speaker 1: years away from really seeing what this looks like once
Speaker 1: a bunch of companies that have raised capital start to
Speaker 1: run out of money. Last year, everyone got capitalized. You know,
Speaker 1: let's see what the back half of next year, even
Speaker 1: the next year looks like. And uh, I think it's
Speaker 1: gonna be rough. So they are gonna be some casualties.
Speaker 1: There's gonna be a lot of casualties. Good companies are
Speaker 1: still going to be just fine. And in fact, I
Speaker 1: think all the money that's on the sidelines is going
Speaker 1: to start consolidating around the better companies. And you're actually
Speaker 1: gonna see You're not gonna see the valuations go down much.
Speaker 1: You're gonna see fewer companies get funded. So where do
Speaker 1: you think we're going to see the wreckage and where
Speaker 1: are you placing your best I think you're going to
Speaker 1: see the wreckage pretty much everywhere. But but it's healthy.
Speaker 1: This is healthy wreckage. And when you build companies in
Speaker 1: an environment where money feels free or cheap, you build
Speaker 1: companies that are not necessarily as strong with some of
Speaker 1: the wrong disciplines. And right now we're going to build
Speaker 1: a new generation of companies that are gonna get built
Speaker 1: the right way. And I'm incredibly optimistic about early stage investing.
Speaker 1: Right now. I feel frankly more excited than I ever have.
Speaker 1: And there's tons of data why well, there there's just
Speaker 1: you know, there's so much data that supports the idea
Speaker 1: that investing when times are tough produces great companies. I
Speaker 1: know Neil from Warby's coming on. Neil is a founder
Speaker 1: who we back as a seed investment ten years ago,
Speaker 1: coming right out of the financial crisis, and is a
Speaker 1: perfect example of a company that was built in a
Speaker 1: tough time, that built an extraordinary business. And I think
Speaker 1: you're going to see a new generation of great companies
Speaker 1: get built, just like you do in every downtain if
Speaker 1: it's going to be worse than the financial crisis, though
Speaker 1: I don't know, and honestly I wasn't enough of a
Speaker 1: fully formed human during a crisis to really have perfect
Speaker 1: context for it. But I think this is gonna be hard.
Speaker 1: But knowledge is still enabling unbelievable things. Just look at
Speaker 1: the way that we were able to weather the last
Speaker 1: two years survive. If that says anything, it says that technology,
Speaker 1: even while it's being used in a bunch of weird ways,
Speaker 1: is ultimately uh an incredible thing in a place where
Speaker 1: we can continue to feel good about. All Right, Well,
Speaker 1: that was a reality check. I say thank you for
Speaker 1: having La, thank you for giving it to us. Strange
Speaker 1: and sugarcoat anything. Lara have Boe, managing partner of Been
Speaker 1: lare going to see you again. All right? Coming up,
Speaker 1: the risks of speaking of social media, TikTok user data
Speaker 1: leaking to China still likely even if the Biden administration
Speaker 1: forges that security agreement with the video platform. We're gonna
Speaker 1: have details on that a new Bloomberg analysis next. This
Speaker 1: is Bloomberg. Personal data for millions of US TikTok users
Speaker 1: would still be at risk even if the Biden administration
Speaker 1: reaches a security deal with the platform's parent Bye Dance.
Speaker 1: That's the findings of a new Bloomberg News analysis. Joining
Speaker 1: us now with the details Bloomberg's and bloodlow Ed explained. Yeah,
Speaker 1: I mean this is based on interviews with dozens of
Speaker 1: experts across the fields of data security, those that have
Speaker 1: negotiated these types of deals before. When it comes to lawyers,
Speaker 1: and as you say, the top line is this that
Speaker 1: in every scenario, even if it deals reached, there's runner ability.
Speaker 1: A big part of it is that there's always going
Speaker 1: to be a human component. Right, this is a business
Speaker 1: that was built in China, and even if you separate
Speaker 1: off the US assets so to speak, it's largely going
Speaker 1: to be somebody in China and Chinese personnel that potentially
Speaker 1: could fix any issue. You know, TikTok has been transparent
Speaker 1: or relatively so that there are personnel in China to
Speaker 1: have access to public information from the platform, and even
Speaker 1: if not private, but basically the range of concerns are worrying.
Speaker 1: And even if they do reach a deal such as
Speaker 1: the control of Siphius and the administration that you know,
Speaker 1: even if they cannot hold TikTok's act and responsible responsibly,
Speaker 1: they just pull the plug on any deal. Ticktok currently
Speaker 1: handle US user data. Yes, so this is a really
Speaker 1: key point. Currently all user data is effectively siphoned through
Speaker 1: the United States through servers that are owned by Oracle
Speaker 1: and hosted in the United States. The data is housed
Speaker 1: here and process the United States for US users. But again,
Speaker 1: the vulnerability that the concern is here is well, what
Speaker 1: if something goes wrong, who is the actual human being
Speaker 1: in in charging, in control and able to make a fix.
Speaker 1: And the answer is that person is probably in China.
Speaker 1: What is TikTok's position on this. The position is that
Speaker 1: while they won't comment in talk about talks to the
Speaker 1: US government, in a statement to Bloomberg, they think they
Speaker 1: can reach a deal. You know, they've tried a number
Speaker 1: of mechanisms over the years, including selling a stake of
Speaker 1: the company to reflect the US user ship to the
Speaker 1: likes of Oracle and Walmart. That did not go well.
Speaker 1: But what you see in your screen is the company's position.
Speaker 1: They're trying to get this done and they're hoping that
Speaker 1: the data management process through Oracle and ideas like supervision
Speaker 1: from various US government bodies can get it done. Thanks
Speaker 1: for breaking that one down. This is Little Brook Technology
Speaker 1: and Emily Chang at the National Association of Broadcasters conference
Speaker 1: in New York City. By Now Pay Later, Giant Clara
Speaker 1: has unveiled client Clara Spotlight, a new search tool that
Speaker 1: will compare prices across thousands of retailers and even enable
Speaker 1: shoppers to filter by color, size ratings. Clarna CEO Sebastian
Speaker 1: Schemiakovsky is with me now in person. So good to
Speaker 1: see you in person, maybe for the first time. You
Speaker 1: say this will usher in a new era of shopping.
Speaker 1: How so good questions, Well, I think it's really exciting
Speaker 1: to see. One fun aspect of this is just that,
Speaker 1: you know, due to the dominance of one of the
Speaker 1: biggest retailers in the world in the US, it's almost
Speaker 1: like put a little bit stop to development of great
Speaker 1: services on the shopping side because they were so dominant,
Speaker 1: and in Europe that wasn't really a case. So what
Speaker 1: we've taken here is a service that has been highly
Speaker 1: appreciated by consumers in Europe, which is about comparison, finding products,
Speaker 1: finding prices and all this and then basically you know,
Speaker 1: taking into the US markets. I'm super excited. Can you
Speaker 1: give us any details, not just how successful for a
Speaker 1: Spotlight has been in Europe and what makes you think
Speaker 1: you can challenge us big US tech giants. Yeah, well
Speaker 1: you have to try to start. We'll see if we can.
Speaker 1: But you know, I think the it's huge in the
Speaker 1: sense that in a lot of the countries where the
Speaker 1: service has existed, it is the starting point for people
Speaker 1: shopping experience. So they go there, they start there, they
Speaker 1: find the products, you know, they get, they learn about it,
Speaker 1: and then they go further to the retailers. So it
Speaker 1: is really the starting points is really really big. And
Speaker 1: you're also integrating shoppable video now gen z Loves. What
Speaker 1: do you think the impact of that can be? I
Speaker 1: think I mean to us to be honest right now,
Speaker 1: is the marketing side of our services has grown tremendously.
Speaker 1: We actually do now business with half from the top
Speaker 1: one US retailers for marketing services. And the problem we
Speaker 1: have is our demand is much hiris four or five
Speaker 1: times higher to supply. So one of the ideas here
Speaker 1: is just to see how can we get the audience
Speaker 1: that we already have in the thirty million Americans are
Speaker 1: using the app, How can we provide it with more
Speaker 1: interesting content so that we can also grow, you know,
Speaker 1: offer more supply for everyone who wants to market in
Speaker 1: that environment. So let's take matters specifically. Obviously, they've got
Speaker 1: Facebook and Instagram and they have some of these features
Speaker 1: built into their apps. What makes you think you can
Speaker 1: compete with them specifically? Well, I think there will be
Speaker 1: multiple places to entertain yourself. But I think to some degree,
Speaker 1: you know, if you look at an Instagram experience, you're
Speaker 1: doing a lot of things there, You're maybe you know,
Speaker 1: watching kitten videos, You're maybe doing like following different type
Speaker 1: of things. Here, it's very much more around shopping, right,
Speaker 1: it's very concentrated aroound that. So it's different experiences, But
Speaker 1: I think there would be multiple channels where people to
Speaker 1: have explore content. Inflation is that record has interest rates
Speaker 1: are changing. How is Karna navigating a rising rate environment?
Speaker 1: How is it impacting your business model? Well, what's interesting
Speaker 1: about it is that we are a bank fully licensed
Speaker 1: in Europe, so we have deposits um that are funded
Speaker 1: in the European interesting rate environment where interest racing on
Speaker 1: Marx is so fairly low, so it actually gives us
Speaker 1: a fairly nice competitive advantage of some of the US
Speaker 1: players from a cost perspective. But in addition to that,
Speaker 1: also what we are seeing and is integrade, is it
Speaker 1: actually increasing the amount of our product because if you
Speaker 1: think about it, our consumers in the US have saved
Speaker 1: over a hundred million dollars in interest feest, late feast
Speaker 1: and so forth by using our products because their interestry
Speaker 1: and so forth. Right, So we talked about the paying
Speaker 1: for the short term installment trying to products and so
Speaker 1: there's more themand for that in an you know, in
Speaker 1: an in an interest rate environment that's racing, so we
Speaker 1: see higher demand and then we have a very efficient
Speaker 1: cost structure. Exident, are you taking any action to mitigate
Speaker 1: potential losses from the mp L? For sure? And we've
Speaker 1: already done that, right, So we did tighten our underwriting
Speaker 1: both already back in jan and a little bit more
Speaker 1: additionally in April and May, because there's obviously a different
Speaker 1: environment that we're going into, so you have to be
Speaker 1: cautious about it. Now. At the same time, people are
Speaker 1: complaining that they're purchasing power is decreasing, Can you explain
Speaker 1: how you set purchasing power and how if you're reconsidering
Speaker 1: how you set back given these changing conditions, Well, I
Speaker 1: think the big thing to remember is that when people
Speaker 1: use our product, the average out stending balance is seventy
Speaker 1: five dollars. On the credit cards, maybe like one five
Speaker 1: minutes dollars, right, so, and the different things. Also, a
Speaker 1: credit card gives you a limit and then they push
Speaker 1: and push that limit into your face for you to
Speaker 1: spend more than you should. Watch you know, watch Netflix
Speaker 1: Money explains creit cards to explain you see exactly what
Speaker 1: they're doing. So the difference with us, we don't do that.
Speaker 1: We're very mindful. Yes, you can find out about your
Speaker 1: purchase power, but we're fun mindful of showing it to
Speaker 1: you so you don't overspend. And then in addition to that,
Speaker 1: we take a new decision every time you make a transaction.
Speaker 1: Right so, on a credit card, you just can spend
Speaker 1: as much as you can. They just want you to
Speaker 1: max out on your credit card because that how they
Speaker 1: make money. For us, we're taking a new decision on
Speaker 1: every purchase. So actually that's why our losses are below
Speaker 1: credit card industry standards. Do to that, now you've been
Speaker 1: doing restructuring and you've been pretty upfront about this. Are
Speaker 1: you are you doing more of that? Are you going
Speaker 1: to have more cuts before the end of the year.
Speaker 1: How many employees will you have at the end of
Speaker 1: this year, and how much of that is in the
Speaker 1: US where I know you were growing quickly. No, I
Speaker 1: mean the big restructure that we did was back in May.
Speaker 1: There's always been obviously before that and after that, minor
Speaker 1: changes to the organization and so forth, but that was
Speaker 1: the big one. And I think as much as it
Speaker 1: was very painful and hard and it's it's obviously a
Speaker 1: very sad thing to see amazing colleagues need um, but
Speaker 1: at the same point of time, what I'm what I
Speaker 1: think is what was good about it was we did
Speaker 1: it early on. We took the decision, and I'm now
Speaker 1: hearing from a lot of people that like they're coming
Speaker 1: to those decisions now. So I'm still proud about the
Speaker 1: fact that we we we faced the fact that times
Speaker 1: have changed, and we acted on it. And I think
Speaker 1: in the end that that agility it was is what
Speaker 1: sets to your part, How are you thinking about the
Speaker 1: I p O potential fundraising the changing environment? To some degree?
Speaker 1: You know, I got that question a year ago. Obviously, no, no, no,
Speaker 1: for sure, and but I think then I said, look,
Speaker 1: I don't like the volatility of this environment. I felt
Speaker 1: it was a hype environment that we were in, and
Speaker 1: now it's a little bit different than my dream has
Speaker 1: always been to I pod company, where it's in a
Speaker 1: similar fashion. When Google did it into thousand five was
Speaker 1: kind of a perfect market. It wasn't like overhyped, it
Speaker 1: wasn't underhyped. It was like it was stable. And you also,
Speaker 1: we have so much growth left left in the US.
Speaker 1: We're still growing percent. You know, we see tremendous success
Speaker 1: here and so like I want to, I feel when
Speaker 1: there's still that amazing upside left like Google also had. Obviously,
Speaker 1: we're now thinking about the I think the market cap
Speaker 1: is billion dollars when they you know, so you want that.
Speaker 1: So I think we're getting close to that spot. So
Speaker 1: I won't have to ask you this question next. Okay,
Speaker 1: um smashing is so great to have you, CEO of Karna.
Speaker 1: Good to see you here in person. Thank you for
Speaker 1: having me. All right, coming up, is this bear market
Speaker 1: going to be the best opportunity to invest in crypto
Speaker 1: for the long term? Some banks seem to think maybe
Speaker 1: we will discuss next Mrs Boomberg for a quaint it's
Speaker 1: about the macro, but for the rest of crypto, right
Speaker 1: the ethery and ecosystem and all the other you know,
Speaker 1: layer one and layer two, the block chains being built
Speaker 1: and what'spilled on top of them. That's a march, an
Speaker 1: inevitable march to starting to change how we actually operate.
Speaker 1: And there's a tremendous amount of venture capital that continues
Speaker 1: to come into space. Five billion last quarter and nine
Speaker 1: billion the quarter before that. If you look at from
Speaker 1: Citadel to JP Morgan, to Bank, the Bank of New York,
Speaker 1: black Rock, the biggest players in traditional finance are actually
Speaker 1: making huge investments in and around this architecture. That was
Speaker 1: some of Galaxy Digital Mic novograts interview earlier on Bloomberg Television.
Speaker 1: Kavia Gupta is the founder of the Delta Blockchain Fund
Speaker 1: and investor in Webb three focused startups and joining me
Speaker 1: now here um at the NAV conference. So do you
Speaker 1: agree or disagree with Nomograts? There a pot of it it, yes, right,
Speaker 1: because all these institutional money is coming into crypto. The
Speaker 1: point is is it coming at the thick site? Is
Speaker 1: it coming hedge fund crypto micro side. Some of the
Speaker 1: hedge funds are directly going only for internal dashboats. They
Speaker 1: are not really contributing to build an economy as we
Speaker 1: call it on the tech side. But yes, is that
Speaker 1: affecting cryptoprises good and bad? Yes. But at the same time,
Speaker 1: institutional banks like Jimmy Morgan or Golden Zacks, I think
Speaker 1: are taking dual bets. They are going both on the
Speaker 1: crypto U now partnering with coin base and other platforms
Speaker 1: to be enable to have their private wealth managers to
Speaker 1: have that asset class. But they also are investing in
Speaker 1: like Circle and Figure, like a bunch of other technical
Speaker 1: technology companies too. So is now the time to invest?
Speaker 1: Should everyone? By the deep um? Is it a dip
Speaker 1: though we have to me? Or maybe it's gonna go
Speaker 1: further down, or maybe it's stable as this here I
Speaker 1: my personal opinion, and it's a financial Yeah, it's not
Speaker 1: a financial advice. I want to make that very clear.
Speaker 1: But my personal opinion is it's not the bottom yet.
Speaker 1: I stick to my prices, which a couple of months
Speaker 1: back I said, I still find what might further ye
Speaker 1: in my personal opinion, if I would be buying it
Speaker 1: I'm still holding my personal capacity. I am going to
Speaker 1: go into ether somewhere between six hundred eight. I'm going
Speaker 1: to go into bitcoins somewhere between twelve to fourteen K
Speaker 1: and I still think December to March we're going to
Speaker 1: see that it's not there yet. That's what we're telling
Speaker 1: our investors and our investor up. Okay, so let's say
Speaker 1: you you come in at that at those prices. How
Speaker 1: long are you going to have to wait to see
Speaker 1: some games? How long is this downturn gonna last? How
Speaker 1: tied to the downturn is crypt out I feel like
Speaker 1: crypto is a very unique case. It does go down
Speaker 1: when the whole market is going down. It also sometimes
Speaker 1: is the one of the first commodity or the security
Speaker 1: to go down. But if you look at last time
Speaker 1: during COVID, it was also one of the first asset
Speaker 1: class that started going up. So I do believe that
Speaker 1: two thousand twenty four is going to be good for crypto.
Speaker 1: We're gonna see all time high maybe summer on May, June, July.
Speaker 1: I don't think we have to be in the dip
Speaker 1: for more than fourteen bounds starting from January. Okay, what
Speaker 1: areas of the blockchain do you think come back first
Speaker 1: or are going to be the best pats for let's
Speaker 1: say next year. Infrastructure? A lot of indexing, cross chain analytics,
Speaker 1: a lot of hardcore institutional adoption problems. What happened to
Speaker 1: blockchain and supply chain, what happened to blockchain into mortgage securities,
Speaker 1: a lot of Web two problems where blockchain came and said, hey,
Speaker 1: we're gonna revolutionize it, but then the bullish market came
Speaker 1: and everybody was excited about defy and n f T
Speaker 1: like the whole crypto native use case, I feel like
Speaker 1: the dep market is where the builder's gonna come out,
Speaker 1: and the billion dollar institutional adoption, not with respect to crypto,
Speaker 1: but technology in the real infrastructure problems are going to
Speaker 1: take taken care of. Looking forward, what are your biggest concerns?
Speaker 1: What should investors or people who are thinking about becoming investors,
Speaker 1: retail or tech investors, both crypto investors. I love saying
Speaker 1: by the day, stay in the space, experiment with some
Speaker 1: of that crypto in the real use cases, and if
Speaker 1: you want to have an exit, have an exit. Uh.
Speaker 1: For the thick investors, I would say builders are going
Speaker 1: to continue to build. So people who go through the
Speaker 1: British market and build their product and come up in
Speaker 1: the Bullish market are the founders you want to stick to.
Speaker 1: So I'm very excited about this all right, Kamira Gupta,
Speaker 1: Delta blockchain founder, going to have you on the show
Speaker 1: and see you in person. Thank you for stopping by.
Speaker 1: With the pandemic prompting a big shift towards e commerce,
Speaker 1: retail companies are rethinking everything from the customer and the
Speaker 1: employee experience online and off to just how many physical
Speaker 1: stores to open. That's the challenge facing Warby Parker and
Speaker 1: it's clo ce O'Neil bluementhal with us now. So I'd
Speaker 1: love to hear how your strategy is involving in a
Speaker 1: post pandemic world. You obviously have this thriving online business.
Speaker 1: You would to close a D and twenty stores during
Speaker 1: the pandemic, but now you've opened almost two hundred. How
Speaker 1: do you find the balance of how many and how much? Yeah,
Speaker 1: you know, I think the key is to have a
Speaker 1: multi channel approach and to constantly meet customers where they
Speaker 1: want to be met. And we know that customers are
Speaker 1: shopping as they live physically and digitally UM, and thankfully
Speaker 1: because we're directed consumer, because we have those direct relationships
Speaker 1: with our customers, were able to get feedback and hear
Speaker 1: from them, and that helps us, you know, our e
Speaker 1: commerce business helps us dictate where we should open up stores. Similarly, UM,
Speaker 1: you know, we're able to invest in I exams and
Speaker 1: virtual vision tests that then make it easier for people
Speaker 1: to buy online or in in store. Enough consumers are
Speaker 1: paying more for everything from gas to groceries, how are
Speaker 1: you evolving to meet their needs in a high intuation environment.
Speaker 1: You know you talked about feedback. What feedback are you
Speaker 1: getting and how are you responding to that? Yeah, we're
Speaker 1: hearing from customers that value is super important, and we
Speaker 1: always think about value as that price to quality ratio.
Speaker 1: So being able to sell n glasses instead of you know,
Speaker 1: the four or five dollars that they would call elsewhere.
Speaker 1: What we've seen is competitors UM, but also other retailers
Speaker 1: and other categories right over the last year or two
Speaker 1: raise prices now only to you know, do heavy discounting
Speaker 1: as they've established a large inventories. You know, we've been
Speaker 1: able to be more consistent with our customers and keep
Speaker 1: pricing like as it's been over the last few years.
Speaker 1: So that way we can have simple, unified pricing, just
Speaker 1: make it easy for our customers. And we think that
Speaker 1: we continue to deliver exceptional value, will continue gain more
Speaker 1: and more and more good share. So let's talk about
Speaker 1: what's the main strategic driver of market share gates. You know,
Speaker 1: are you going to keep focusing on the US? I
Speaker 1: think more broadly, so we'll continue focus on the U.
Speaker 1: S will continue to open up stores, will have opened
Speaker 1: forty stores this year, while investing in our online experience,
Speaker 1: you know, in particular our virtual Vision UH tests, which
Speaker 1: enables people to renew their prescription online through our i
Speaker 1: OS app or our virtual try on UM. We've also
Speaker 1: been really investing in contacts UM and that's a business
Speaker 1: that's been growing over a year for us. So we're
Speaker 1: finding our customers really want to come to us for
Speaker 1: a one stop shop for a holistic vision care experience.
Speaker 1: So talk to us about the criteria to reopen stores
Speaker 1: or to open new stores, I should say, given the
Speaker 1: potential for the footprint to be what, yeah, so where
Speaker 1: are these going to be? Are they in malls? Are
Speaker 1: they elsewhere? They're in malls? Their street location, transportation, and hubs.
Speaker 1: Throughout the pandemic, right, we saw massive sort of shifts
Speaker 1: in in traffic as people's routines change, and we saw
Speaker 1: you know, traffic increase in our suburban locations and big
Speaker 1: deltas between sort of urban and suburban locations. We're seeing
Speaker 1: that start to narrow now, especially after Labor Day, as
Speaker 1: you know, a lot of offices have reopened and a
Speaker 1: lot of folks have started to return to sort of there,
Speaker 1: you know, pre pandemic routines. Um. You know, for us again,
Speaker 1: we're opening up stores close to our customers, so whatever
Speaker 1: is easiest for them to shop at, that's where we'll
Speaker 1: reports the trends. So what's a little disturbing if I
Speaker 1: was just visiting some stores in the Bay Area and
Speaker 1: we have customers coming in asking for Jeffrey Dahmer glasses
Speaker 1: because of the Netflix series, which is just sick, right,
Speaker 1: the guy was a monster. Um, but I guess it
Speaker 1: might be having you know, some fashion anything else. Let's
Speaker 1: send on a happier note, people want to wear right now.
Speaker 1: Aside from that, I think people are looking for some
Speaker 1: bright colors and just some some happiness. Over the last
Speaker 1: two years, right, which has been really tougher from US Americans.
Speaker 1: So monster or bright colors that trap. Okay, Neal woman
Speaker 1: Thokoso Barden Parker, good to see you, Thanks for thanks
Speaker 1: for having me. I want to go back to Tesla now.
Speaker 1: Bloombergs and Ludlow has been listening into the call, and
Speaker 1: what are you hearing from Ellen? Hearing a lot from Ellen.
Speaker 1: Apparently is going to be an epic d to the year.
Speaker 1: The fourth quarter will have record breaking deliveries. But actually
Speaker 1: we've got some more granularity on that from CFO Zack Corker,
Speaker 1: Zack kirkcorn You said that actually, even if production is
Speaker 1: an annual growth rate of fifty all told, by the
Speaker 1: end of this year, delivery will fall just short of fifty.
Speaker 1: Ellen's talking about the idea of a buy back, which
Speaker 1: has been really important for investors. He said at five
Speaker 1: to ten billion dollar buyback is possi next year, pending
Speaker 1: board approval. It's something that a lot of investors have
Speaker 1: been calling for. And the kind of big one that
Speaker 1: jumped out out of nowhere was that Elon sees a
Speaker 1: path for Tesla to have a greater market cap than
Speaker 1: Apple and in the long run twice the market cap
Speaker 1: that Saudi Aramco has, So that shows his confidence in
Speaker 1: where this company is going. Quite a proclamation, even from
Speaker 1: someone like Elon Musk. Are we expecting to hear anything
Speaker 1: from him about the potential Twitter deal or for him
Speaker 1: to take questions about what this would mean for Tesla investors?
Speaker 1: So just like in previous quarters, Tesla started by taking
Speaker 1: questions from retail investors that have voted on on the
Speaker 1: same platform. Right, So that hasn't come up yet, but
Speaker 1: you would expect it, I think, not just the issue
Speaker 1: of whether Elon Musk has to sell Tesla stock to
Speaker 1: fund the purchase of Twitter, but there's also this idea
Speaker 1: of key man risk, Right, how distracted would an Elon
Speaker 1: must be? Who is CEO of Tesla SpaceX And we
Speaker 1: don't know what role he might take it Twitter, but
Speaker 1: it's something to add to the to a very busy manner.
Speaker 1: Would say a number of names in the street have
Speaker 1: come out of late to say test has become a
Speaker 1: pretty well or machine. Zach Kirk on the CFO is
Speaker 1: demonstrating on this call that he has commanded the numbers
Speaker 1: and that he's got a pretty clear vision of what
Speaker 1: the head winds that tester is facing our What he
Speaker 1: said so far about the supply story seems like it's
Speaker 1: not so much of a demand story anywhere as it
Speaker 1: is a supply story. Yeah, he really actually underlined that
Speaker 1: the demand is there. They think they can sell every
Speaker 1: vehicle they build, particularly in the fourth quarter. The demand
Speaker 1: is there. On the supply side. One third of all
Speaker 1: the vehicles delivered in the third quarter came in the
Speaker 1: last two weeks. We know about the mad scramble. They're
Speaker 1: trying to smooth that out. We should boost the cost
Speaker 1: per vehicle. But this is how Elon must put it.
Speaker 1: There were no boats, there were no trains, and there
Speaker 1: were no carriers when they got to the end of
Speaker 1: the quarter, and that's why a number of vehicles were
Speaker 1: in transit. That's why the third quarter of delivery numbers
Speaker 1: fell short of estimates. And it seems like that's why
Speaker 1: they missed on the top line for the first time
Speaker 1: since the third quarter of last year. All Right, i'd
Speaker 1: love low. Thanks for breaking it down. We'll continue to
Speaker 1: look to you for more headlines. And that does it
Speaker 1: for this edition of Bloomberg Technology. We've got a great
Speaker 1: show coming up Thursday. Arianna Huffington's will be with us
Speaker 1: to talk about what she calls the productivity paradox, where
Speaker 1: employees work more but get less done. M and don't
Speaker 1: forget to check out our podcast. Wherever you get your podcast,
Speaker 1: I'm Emily Changing in New York. This is Bloomberg