Speaker 1: From the heart of where innovation, money and power COLLI
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Check in San Francisco, and this
Speaker 1: is Bloomberg Technology. Coming up in the next hour. The
Speaker 1: chips are down. Shares of semi conductor companies plunging to
Speaker 1: start the week after new US curbs on China's access
Speaker 1: to American technology. Where is the industry's downturn headed We
Speaker 1: will discuss. Plus, it's not just chip stocks at risk.
Speaker 1: Both the I m F and the World Bank are
Speaker 1: warning of a potential global recession. This as tech earnings
Speaker 1: kick off next week, We're gonna preview what to expect,
Speaker 1: and the markets are spoken about the Twitter deal as well.
Speaker 1: Investors seem to see about a six chance that Elon
Speaker 1: Musk still closes by October. What will become the social
Speaker 1: media platform once that happens. We will explore that this hour.
Speaker 1: All that in a moment, but first I want to
Speaker 1: stick to the chip story. Now, chip stocks down their
Speaker 1: lowest since joining US. Now wugin Hoe Boomberg Intelligence, Senior
Speaker 1: analyst for Hardware and Networking, So a disappointing start Wuginhoe
Speaker 1: ahead of you know what could be a potentially difficult
Speaker 1: earning season. We've already already had these warnings from A
Speaker 1: m D and from Samsung. Where is this going? Sure?
Speaker 1: I thank thanks simily so so UM. I think the
Speaker 1: A m D as well as the stamp sub warnings
Speaker 1: UH is a precursor to what we may potentially see
Speaker 1: for earning season. For the upcoming earning season, I think
Speaker 1: that the risk here is is not on the consumer side.
Speaker 1: I think the consumer concerns on the PC side UM
Speaker 1: has already been factored in. I think the bigger risk
Speaker 1: going through into earning season is this going to affect
Speaker 1: the enterprise side on this chip side. We haven't seen
Speaker 1: that yet, but if we look at the m D
Speaker 1: data center numbers, they weren't as strong as people as hoped.
Speaker 1: They were more in line than anything else. And and
Speaker 1: the concern is that it's going to affect more chip
Speaker 1: makers on the data center in cloud side. So is
Speaker 1: the chip downturn far from over? I mean, is it
Speaker 1: just starting? But it potentially could be. Right if we
Speaker 1: start thinking about enterprise bending going going forward, UH, if
Speaker 1: there is a downturn going to three, then then there
Speaker 1: is that risk of downward learnings revisions to reflect the
Speaker 1: weakness on the enterprise side of the ledger. Right, UM,
Speaker 1: I still don't have a good crystal ball on where
Speaker 1: the PC sector is going to bottom out, and I
Speaker 1: think we're gonna have to start seeing, uh where the
Speaker 1: the enterprise side is gonna flesh out as well. Now,
Speaker 1: of course, these you know, new round of of American
Speaker 1: curves on China's access to US technology. How that, um,
Speaker 1: you know, potentially make a bad situation worse and and
Speaker 1: how does that play out over the longer term. Sure,
Speaker 1: I don't think it's going to be a near term
Speaker 1: impact if if anything, it's gonna be a longer term impact.
Speaker 1: The band or the curbs on the AI side. Isn't
Speaker 1: there anything new? This is something that m D as
Speaker 1: well as in video hinted at at one of the
Speaker 1: a K filings U back in September. And this makes
Speaker 1: it more official than anything else. And I believe I
Speaker 1: am D as well as in video said the impact
Speaker 1: will be minimal because they could still sell lesser um
Speaker 1: lesser powered AI chips to to China. Now, now that
Speaker 1: being said, I do think that the the U S
Speaker 1: do does want to send in broader curbs UH to
Speaker 1: slow down China's development of not only the use of
Speaker 1: AI chips, but also the manufacturer of AI chips. There
Speaker 1: were some developments by by Smike of introducing seven animator chips.
Speaker 1: I think that put a scare UH and into the
Speaker 1: US and they want to slow down anything that China
Speaker 1: can do to develop some of these higher powered UH
Speaker 1: chips going forward. So it doesn't sound like you think
Speaker 1: we're heading towards a total ban, but you know, is
Speaker 1: that a possibility. Well, let's let's use UM. Well, let's
Speaker 1: use whahwah as an example of as well as et EU.
Speaker 1: There is an entity list that they're on UH and UM.
Speaker 1: At the end of the day, whilwah is a smart
Speaker 1: phone business. Essentially has UM pretty much died, all right?
Speaker 1: If if there there is a an entity list that
Speaker 1: the US has started to beef up and we might
Speaker 1: start seeing H some of these lesser known Chinese memory
Speaker 1: companies as well as chip manufacturing companies UH fall into
Speaker 1: that entity. If that's going to be the case, then
Speaker 1: then there might be a dent into the China China's
Speaker 1: chip manufacturing UH initiatives going forward. So I mean, we'll case,
Speaker 1: we still have to see where this will go, but
Speaker 1: that still may happen. All right, Well, a lot of
Speaker 1: rad for chips to start the week. U Jin Hobe,
Speaker 1: Bloomberg Intelligence senior analysts, thank you so much for stopping by. Now.
Speaker 1: Speaking of China, we're following the COVID situation there as well,
Speaker 1: tally's rising and fears of a potential lockdown returning once again.
Speaker 1: The country reported one thousand, eight hight seven cases for Sunday,
Speaker 1: the highest since August. In Shanghai posted the most new
Speaker 1: local infections in almost three months, official saying anyone traveling
Speaker 1: to Shanghai will need a negative COVID result within twenty
Speaker 1: four hours of arriving in the city, and we'll have
Speaker 1: to do three tests in three days. Coming up a
Speaker 1: bit more than a coin tossed Cowan analysts pricing in
Speaker 1: a sixt chance that Ellen Musk's deal with Twitter gets
Speaker 1: done by the deadline. We're gonna dig into the odds next.
Speaker 1: This is Bloomberg. The glimpses we've had of Elon Mask's
Speaker 1: vision for Twitter include potentially becoming part of what he
Speaker 1: calls X the Everything app, which brings to mind the
Speaker 1: Chinese app we Chat. Quick takes out were talked to
Speaker 1: us about the obstacles Twitter will face if it tries
Speaker 1: to become while like we Chat. Take a listen. Elon
Speaker 1: Musks billion dollar deal to buy Twitter is back on
Speaker 1: and it comes with an interesting wrinkle, turning the social
Speaker 1: media company into a so called super app. Now, this
Speaker 1: is what the Chinese company we Chat has really pioneered.
Speaker 1: It's a portal in China for everything from dating apps
Speaker 1: to paying your bills, ordering food and getting taxis. But
Speaker 1: it hasn't really succeeded in Europe and the US, and
Speaker 1: there are often three obstacles. Firstly, you need to have
Speaker 1: a payment layer, something that connects all of the apps
Speaker 1: together and makes it easy to pay in one quick action. Secondly,
Speaker 1: you need to have a lot of developers. Twitter has
Speaker 1: about two million users, but there are about one point
Speaker 1: eight billion active users of Apple devices and three billion
Speaker 1: active users of Android devices. If you're a developer or
Speaker 1: a company looking to build a product, it's pretty clear
Speaker 1: which of those three services you're likely to prioritize. And finally,
Speaker 1: there is the regulatory consideration. If you are a company
Speaker 1: that leverages its strength in one service, to build strength
Speaker 1: in a different one. That is not something that regulators,
Speaker 1: particularly in Europe, look too kindly upon. But it also
Speaker 1: comes with a slight problem. Either you are not big
Speaker 1: enough for developers to have the scale that they want
Speaker 1: to build apps and services for your product, or if
Speaker 1: you do have the scale, you're going to attract that
Speaker 1: regulatory attention. Perhaps Ellen is the person who can make
Speaker 1: this happen, but it does come with a lot of obstacles.
Speaker 1: Cutics alex Web, they're sticking with Twitter merger arbitrage strategists
Speaker 1: a cow and say the mark is pricing in just
Speaker 1: a bit more than the odds of a coin. Tash
Speaker 1: that Ela Musk still with Twitter, will close by the
Speaker 1: court issued deadline of October. Here tell us more about
Speaker 1: the latest Bloomberg's Kurt Wagner, who has has of course
Speaker 1: been covering this whole pograah for us. We're gonna get
Speaker 1: to the weach that thing in a moment, Kurt. But
Speaker 1: what do you make of this whole six chance thing,
Speaker 1: especially given it has been a short thing to this point. Yeah,
Speaker 1: I was trying to think of something clever about form
Speaker 1: me once, you know whatever, But to me it feels
Speaker 1: higher than sixty simply because you know, both sides are
Speaker 1: showing up. They want the same deal, right, They want
Speaker 1: the same price, at least that's what they say, And
Speaker 1: now a judges said, okay, you have until to do
Speaker 1: this and a lot of the stuff getting debt financing
Speaker 1: in order, for example, getting shareholder approval, that's all done. Right,
Speaker 1: So they say they want the same deal. They say
Speaker 1: that all the stuff that they need to do to
Speaker 1: get that done is essentially done. So I feel like
Speaker 1: it's got to be higher than sixty pc, Emily, But
Speaker 1: you know what, what do I know? I feel like
Speaker 1: we've been talking about this for six months and it
Speaker 1: keeps changing. So right, what do any of us know? Well,
Speaker 1: Elon Musk knows, or at least he has said he
Speaker 1: wants to make Twitter part of this Everything app vision.
Speaker 1: What does that mean to you? How do you interpret that?
Speaker 1: Does it sound to you like we chat? It sounds
Speaker 1: a lot like we chat um. And it's not necessarily
Speaker 1: a bad idea because we chat is incredibly popular in
Speaker 1: China and we've seen other companies, mostly Facebook, try to
Speaker 1: do this as well. Where I think it's an issue
Speaker 1: is that, as Alex said in kind, of the intro
Speaker 1: you showed, Twitter just doesn't have the scale that's needed
Speaker 1: for for something like this, right. And most of what
Speaker 1: makes we chat so valuable, I think, is that it's
Speaker 1: also the place where people do all of their communication. Right.
Speaker 1: It's not just where you get your Uber or you
Speaker 1: order your food delivery. It's where you're talking with mom
Speaker 1: and dad and grandma and your boss and your cousins.
Speaker 1: And like, Twitter is not that place right there. It
Speaker 1: is not a place that people are hanging out. And
Speaker 1: so for me, the idea of suddenly turning into a
Speaker 1: place where everyone is hanging out and suddenly doing their shopping,
Speaker 1: it just doesn't really make sense. Again, I like the
Speaker 1: idea and concept because it's see it clearly works in China.
Speaker 1: I just don't think that this is going to happen
Speaker 1: for Twitter now. It is ambitious and if anyone can
Speaker 1: do it right, you would say, all right, well maybe
Speaker 1: Elon Musk is that person. But Mark Zuckerberg's trying to
Speaker 1: met a few times and it's not happening there either.
Speaker 1: So speaking of scale, how are you thinking about potential
Speaker 1: staffing changes once Musk presumably takes over the company. You know,
Speaker 1: is there going to be a mass exodus. Is there
Speaker 1: going to be an influx of of you know, Elon
Speaker 1: Musk's fans who want to work for him. You know,
Speaker 1: clearly the size that the company is can't necessarily handle,
Speaker 1: like you said, the scale of a social media platform,
Speaker 1: the size of wei chat. Well, I can tell you
Speaker 1: what I know, and then I can speculate a little bit.
Speaker 1: What I know is that a lot of people inside
Speaker 1: Twitter are currently worried for their jobs. Right. They expect
Speaker 1: Ellen to come in and do laughs. They expect them
Speaker 1: to essentially kind of clean the executive ranks um you know,
Speaker 1: certainly Ceo Pragaga Waal, probably the head lawyer Vigionatti and
Speaker 1: you know, this is something that happens a lot of
Speaker 1: times during an acquisition, but I think especially now because
Speaker 1: Ellen has basically said he doesn't have competence or faith
Speaker 1: in those leaders. Right, So this is this is what
Speaker 1: people are bracing for now. What he does next is
Speaker 1: going to be a good question. Is he going to
Speaker 1: trim the company down and simply keep it sort of
Speaker 1: the engineers bare bones folks who are going to build product,
Speaker 1: or if he wants to do this kind of super
Speaker 1: apt thing he's talking about he's gonna need partnerships people,
Speaker 1: He's gonna need probably content people like moderation people, right,
Speaker 1: which is is something that he has kind of shied
Speaker 1: away from. And so that's where I think things get
Speaker 1: a little tricky, is you know, the financial vision for
Speaker 1: the company seems to be let's cut everything back and
Speaker 1: and maybe you know, get healthy, as he likes to say, um,
Speaker 1: but the vision is much more ambitious than that, and
Speaker 1: I'm not sure that Surly works with that small of
Speaker 1: his staff. All Right, lots continue to follow a Kurt,
Speaker 1: I know you'll be all over it. Thank you for
Speaker 1: the updates. I want to get a quick check on
Speaker 1: another story that we're following, which is several airport websites
Speaker 1: in the US we're knocked offline by a pro Russia
Speaker 1: activist group. Chicago's O'Hare and l a X among the
Speaker 1: websites hacked. The group, called kill Net, has been linked
Speaker 1: to a series of cyber attacks against Western targets, including
Speaker 1: disruptions to some state government websites last week. Curology, the
Speaker 1: cosmetics company that provides prescription skincare customized to patient skin,
Speaker 1: has grown at lightning speed over the last few years.
Speaker 1: With revenue projected over two million dollars. The company is
Speaker 1: now profitable and announcing changes to its c suite to
Speaker 1: prepare for the next phase. Dr d with Larger, co
Speaker 1: founder of Curology, stepped down as CEO to pass the
Speaker 1: torch to Heather Wallace, who was most recently president at Revlon.
Speaker 1: They're both joining me now for more on the transition. So, David,
Speaker 1: I want to start with you give us some background
Speaker 1: on the transition here and who popped the question and
Speaker 1: how oh thank you Emily. That would be me who
Speaker 1: popped the question. And the reason is that the skills
Speaker 1: you need to successfully found the company are just very
Speaker 1: different than the skills you need to take an established
Speaker 1: company like cure Ology and grow it to its full potential.
Speaker 1: And so you know, right now the company is in
Speaker 1: this incredible position for the future because um, like you said,
Speaker 1: we became profitable and we really have the ability to invest.
Speaker 1: And so my goal is just to find someone to
Speaker 1: help take us to that next level. And I just
Speaker 1: couldn't be more excited to be able to found Heather here. Heather,
Speaker 1: given what you learned recently at Revlon, what's your vision
Speaker 1: for the company and you know what you know about
Speaker 1: what's going on in in the beauty world, especially given
Speaker 1: that we are moving into potentially a pretty pronounced down
Speaker 1: to earn. So I mean a couple of things. One
Speaker 1: is I'm so sorry excited to be joining Curology, and
Speaker 1: Carology is actually doing what many baby companies are talking about,
Speaker 1: which is personalization. So it's truly personal personalized skincare. We
Speaker 1: are connecting people with dermatology providers that create custom formulas
Speaker 1: and we can service those consumers and really help them
Speaker 1: have better skin outcomes. And so people, your face is
Speaker 1: the way that you face the world, and so how
Speaker 1: you look and how your face looks really has a
Speaker 1: big impact on your confidence, on how you feel um
Speaker 1: and and truly a big impact in your life. So
Speaker 1: I'm excited about that with the Ology. Now. You know,
Speaker 1: as terms of what's happening with the economy, I think
Speaker 1: where we all are concerned about that this is an
Speaker 1: incredibly resilient category um and I do expect us to
Speaker 1: be able to do very well during this time period.
Speaker 1: I want to agree that good skincare is vital, but
Speaker 1: how much do you think people are really going to
Speaker 1: be spending on themselves right now when they're spending more
Speaker 1: on everything from gas to groceries. I mean, isn't that
Speaker 1: the first thing to go you It's actually not. Um.
Speaker 1: There are many things that go before skincare. So I've
Speaker 1: actually seen data over time on UM what happens during
Speaker 1: challenging economic times, and skincare is one of the most
Speaker 1: resilient categories. The end of the day, as you say,
Speaker 1: you know you're going to work, you're in front of
Speaker 1: friends and family, You're putting your best face forward, and
Speaker 1: it is very important, and so I do expect consumers
Speaker 1: to still spend in this area. David. The cult of
Speaker 1: the founder is so strong, and especially in Silicon Valley,
Speaker 1: and I'm wondering if you've You've been pretty straightforward about
Speaker 1: why you're doing this in now, do you think too
Speaker 1: many founders stay too long and that more founders should
Speaker 1: leave potentially sooner. Every company is different, but but I
Speaker 1: do believe that you know, the decision to pass the baton,
Speaker 1: as you say to someone like Heather, should actually be
Speaker 1: made a lot more commonly, because ultimately what we care
Speaker 1: about is getting our business to that next level, and
Speaker 1: the same person to successfully found a company isn't necessarily
Speaker 1: the right person to get you to that next level.
Speaker 1: So so I do think there's um um there. There's
Speaker 1: a lot of merit in that um Heather, I know
Speaker 1: that Revlon recently filed for bankruptcy. They're talking about supply
Speaker 1: chain issues. Curious if you're expecting to deal with some
Speaker 1: of those similar issues at cure Ology, especially as it
Speaker 1: pertains to the supply chain and what you learned there
Speaker 1: that you can potentially apply here and head off some
Speaker 1: of these challenges. Yeah, so I think when it comes
Speaker 1: to cure Ology, our supply chain is really focused in
Speaker 1: the US, and so it's much more simple. We are
Speaker 1: providing products end to end, but it's a much more
Speaker 1: simple supply chain. So the other thing I know is
Speaker 1: that just keeping us focused, so keeping us focused on
Speaker 1: the right and the core of the products and being
Speaker 1: able to continue to do our personalization and our customized
Speaker 1: formulas at scale is going to be where the focus is.
Speaker 1: So let's talk a little bit more about that. What's
Speaker 1: your hope for the next chapter of growth given the
Speaker 1: rise in direct consumer skincare, the rise in personalization, as
Speaker 1: you say, the rise in subscription services, but also the
Speaker 1: fact that we're you know, some people might be paying
Speaker 1: for a few different script subscription services. Um, you know
Speaker 1: at one time, how do you how do you see
Speaker 1: balance consumers balancing all of that, and curology winning out.
Speaker 1: So the company was founded on the mission of access,
Speaker 1: that consumers should have access to the kind of skincare
Speaker 1: solutions that the best dermatologists can provide. And so as
Speaker 1: we think about growth in the future, it's all going
Speaker 1: to be about continued awareness and access to those providers.
Speaker 1: And the more access and awareness that we can create,
Speaker 1: the more consumers we can bring in. Where the the
Speaker 1: largest player in the personalized skincare space, but we are
Speaker 1: relatively small at this point compared to the twenty billion
Speaker 1: dollar facial skincare market in the US. David, what are
Speaker 1: you hoping to see in this next chapter and how
Speaker 1: involved will you be? I will be stepping into the
Speaker 1: position of board chairperson, and you know, ultimately the most
Speaker 1: important thing is that Chology succeeds, and so I'm going
Speaker 1: to be helping in every way that any way that
Speaker 1: I can. UM But you know, the biggest thing for
Speaker 1: me is that we have this this really huge opportunity
Speaker 1: in front of us because I think if you talk
Speaker 1: to almost anybody who's used cure Ology, they will tell
Speaker 1: you there's no way I'm going back to using what
Speaker 1: I use before. But when you take a step back
Speaker 1: and look at the market, about plus percent of people
Speaker 1: are still using non personalized, less effective skincare. And so
Speaker 1: what I really do hope to see is just us
Speaker 1: being able to continue to spearhead the market shifting towards
Speaker 1: the more effective, personalized type of skincare that the best
Speaker 1: dermatologists provide. And speaking of the market, Heather, I mean,
Speaker 1: are you thinking about an I p O. You know,
Speaker 1: in terms of the next phase of growth? You know,
Speaker 1: who knows what the future will bring. I think we're
Speaker 1: going to be focused on profitable growth and reaching more
Speaker 1: consumers with our fantastic customized solutions UM and the better skin,
Speaker 1: the more better skin outcomes, that will just unlock the
Speaker 1: future possibilities. All right, Heather Wallace, the new CEO of Curology,
Speaker 1: and Dr David Lusher, co founder of Curology, moving into
Speaker 1: the role of chair. Thank you both for joining us.
Speaker 1: Welcome back to Bloomer Technology. I'm emily changing San Francisco.
Speaker 1: I want to turn back to the marcus As, heads
Speaker 1: of the I m F and the World Bank warn
Speaker 1: of a rising risk of global recession. This with advanced
Speaker 1: economy slowing down and faster inflation forcing the Fed to
Speaker 1: keep raising interest rates. What does it mean for tech
Speaker 1: stocks and tech earnings coming up? I want to break
Speaker 1: that all down with Michael Casper of Blue Brig Intelligence.
Speaker 1: So what do you make of the macro environment, what's
Speaker 1: happening here and what it means for tech stox? Michael, Yeah,
Speaker 1: the macro environment is still somewhat strong for what it
Speaker 1: is a technical reception right now. Um, just to give
Speaker 1: you some context around the SMP earnings at large, we
Speaker 1: were looking at about a two point five percent expansion
Speaker 1: in three Q. It's still an expansion, UM, and that's
Speaker 1: gonna be a the trough, or at least looks like
Speaker 1: it's gonna be the trough, at least according a consensus
Speaker 1: um for this earning cycle, and specifically with tech stocks,
Speaker 1: Tech is looking to have about a seven point five
Speaker 1: percent earngas contraction. That's only second worst to communications and financials,
Speaker 1: which are tied with the twelve point one percent to
Speaker 1: client um. And some of the tech stocks are specifically
Speaker 1: some of the industries look to be under pressure here
Speaker 1: given the rising dollar and some of the supply chain
Speaker 1: concerns that linger. Now the World Bank is saying there's
Speaker 1: a real danger of worldwide contraction. You've got Jamie dime
Speaker 1: In saying market is going to fall another twenty percent.
Speaker 1: What's your own research showing, well, we're seeing much lighter contraction. Right,
Speaker 1: So if you use our fare value model and use
Speaker 1: September slow as the price and try to back into
Speaker 1: what earnings contraction was priced by the market, you're looking
Speaker 1: at about a five to EPs to climb that was
Speaker 1: priced in by that September. And the varying scenarios have
Speaker 1: to do with the different rates that drive ps, right,
Speaker 1: So if you get a five percent expansion or five
Speaker 1: percent interest rate, you're looking at about a five percent
Speaker 1: earning strop to accompany that. And by the way, that
Speaker 1: would be pretty much right in line with the narrowest
Speaker 1: earning strop that we've had across all the recessions historically
Speaker 1: back to UM, in line with that recession, which coincidentally
Speaker 1: was a very inflationary period as well. So we've got
Speaker 1: a raft of tech earnings coming out next week. Uh,
Speaker 1: Netflix will be kicking us off. Of course, we've got
Speaker 1: you know, all the big tech penning's quickly to follow.
Speaker 1: What are you looking at and what are you expecting?
Speaker 1: I'm looking at the outlooks for companies, especially the makencaps.
Speaker 1: Right now, the makacaps are expected to have about a
Speaker 1: two earnings increase on medium to the top five tech
Speaker 1: and tech related stocks test slide through Tesla in there
Speaker 1: um and that would be the worst going back to one.
Speaker 1: So I'm watching the outlooks on those make acap stocks
Speaker 1: within tech. I think Semmy's is particularly interesting given given
Speaker 1: the chip news today. UM limiting exports to China and
Speaker 1: that's industry is forecast for about fourteen percent to clients,
Speaker 1: so there's still lingering supply chain issues there. There's the
Speaker 1: pressure from the latest announcement from the Biden administration, and
Speaker 1: Semmis looks to be under some considerable pressure here. You know,
Speaker 1: how do you think whatever we see from these earnings
Speaker 1: could set the tone for the rest of the year.
Speaker 1: I mean, given what we're seeing in chip stocks good
Speaker 1: so far, if we continue to get some more bad signals,
Speaker 1: I mean, you know, does that spell doom and gloom? Yeah?
Speaker 1: It wouldn't necessarily be good, especially considering if you're looking
Speaker 1: at the SMP five hunder as a whole tech in
Speaker 1: discretionary stocks, you're supposed to lead the way out of
Speaker 1: this kind of mild earnings reception that we're having right now. Um.
Speaker 1: And you know, if if that doesn't materialize, at least
Speaker 1: on the tech side, which is a huge driver. I mean,
Speaker 1: we're talking about indexes in those top five stocks. If
Speaker 1: we're looking at some weakness and tech stocks, it will
Speaker 1: translate overall weakness in the SMP five d um. But
Speaker 1: so far, I will say, at least on the earnings front,
Speaker 1: companies have done a pretty good job making the best
Speaker 1: out of a bad situation with margins. All right, Michael, Well,
Speaker 1: thanks for giving us your view, and good to hear
Speaker 1: someone who's a little bit more optimistic than other Michael
Speaker 1: cast Bar of Bloomberg Intelligence, appreciate it. Meantime, another story
Speaker 1: that we are watching, shares of Riveant declined after the
Speaker 1: e V makers that at a recall about thirteen thousand
Speaker 1: vehicles delivered to customers after discovering a minor structural defect
Speaker 1: with a nut that could loosen fully in quote rare circumstances.
Speaker 1: The company said it's recalling almost all vehicles delivered to customers,
Speaker 1: even though the issue was discovered only in seven out
Speaker 1: of an abundance of caution. And speaking of evs, Amazon
Speaker 1: just announced it will spend a billion euros over five
Speaker 1: years to electrify it's delivery fleet in Europe. That money
Speaker 1: will be used to double the number of evs in
Speaker 1: Europe to ten tho vans and fift electric heavy goods
Speaker 1: vehicles or so they call them. Bloomberg. Spencer Soper, who
Speaker 1: covers Amazon for US, is here with more. So what
Speaker 1: is Amazon hoping to accomplish, Spencer with this announcement? Yes,
Speaker 1: so basically Amazon sending a message to the market, Uh,
Speaker 1: you know, start producing more EV vehicles because uh, Amazon
Speaker 1: can't find enough of them. Um and you recently that
Speaker 1: You're segment that you just had about Ribby in particular,
Speaker 1: shows they don't like to be wholly dependent on one
Speaker 1: particular company as well. So they buy from Ribbian, they
Speaker 1: buy from Mercedes. They want more people in the market
Speaker 1: producing these things, and they just want more of these
Speaker 1: electric vehicles produced. Uh you know. As as a bottom line,
Speaker 1: how do electric cars fit into Amazon's plans to get
Speaker 1: to uh net zero. Yes, so Amasa really hasn't said
Speaker 1: precisely how it's gonna do. This's a very lofty goal,
Speaker 1: you know, net zero emissions by but the most visible
Speaker 1: thing has been electric vehicles. They're on the road, you
Speaker 1: see them, um, And they're going to have to address
Speaker 1: a lot of other things in their company like uh,
Speaker 1: you know, airplanes and ocean liners and those sorts of
Speaker 1: things that are still very fuel heavy, but they're electric vehicles.
Speaker 1: Is really the predominant part piece of their of their
Speaker 1: push so far, and so talk to us about the
Speaker 1: other parts of the other potential parts of their push.
Speaker 1: How else are they going to get to that zero? Yeah,
Speaker 1: there there were some interesting things in this announcement in
Speaker 1: Europe where they even talked about making deliveries you know,
Speaker 1: on electric bicycles and even by foot. And they also
Speaker 1: talked about expanding their network in Europe, their warehouse network
Speaker 1: in Europe. And I think there's also setting a message
Speaker 1: with that as well that they want to make sure
Speaker 1: that is particularly it's a delivery station, they want to
Speaker 1: make sure that it's equipped with charging stations for any
Speaker 1: type of of you know, non or low emission vehicles
Speaker 1: that they that they might be using. They want to
Speaker 1: make sure that the infrastructure that they have, not just
Speaker 1: the vehicles they have, but the infrastructure they have is
Speaker 1: capable of charging these things. And how is what they're
Speaker 1: doing in Europe compared how does it compare to what
Speaker 1: they have done so far in the United States? I
Speaker 1: mean it pretty much is the same is the same model, um,
Speaker 1: you know, just a big investment in electric vehicles. But
Speaker 1: this is the biggest announcement they've made by far in Europe.
Speaker 1: So they're trying to send a message to Europe, say, listen,
Speaker 1: what we've been doing in the US, We're going to
Speaker 1: be doing the same thing, same thing in Europe and
Speaker 1: following the same playbook. All right, Spencer, soaper always good
Speaker 1: to have you with us. Thank you Spencer for those updates.
Speaker 1: Thumbs up. All right? Coming up the long crypto winter?
Speaker 1: How much longer is it going to lask and what
Speaker 1: do we make of all the recent crypto CEO and
Speaker 1: other executive departures. Would have talked about that and more
Speaker 1: with Hunter Horsley bit Wise Asset Management CEO. That's next.
Speaker 1: This is Bloomberg time now for our Crypto report. And
Speaker 1: as global markets are awaiting US inflation data Thursday, I
Speaker 1: want to take a look at the global wave of
Speaker 1: monetary tightening to fight inflation and how it's spurred a
Speaker 1: near six slide in bitcoin this year. Will bitcoin break
Speaker 1: it's twenty dollar mark anytime soon? I want to ask
Speaker 1: Hunter hoares Ley about that and more. He's the CEO
Speaker 1: of bit Wise Asset Management. Hunter. Good to have you back.
Speaker 1: So let's start on markets. What's your read as we
Speaker 1: head into the fourth quarter, and there seems to be
Speaker 1: just more and more bad news. Yeah, it's been. It's
Speaker 1: been a tumultuous year in markets broadly, and certainly certainly
Speaker 1: in crypto. I think the current you know, recent numbers
Speaker 1: this year, the NASDACS down, O smps down, and cryptos
Speaker 1: down or thereabouts. It's changing every day. So the story
Speaker 1: of this year is definitely a bear market. Uh. Nevertheless,
Speaker 1: we've seen increased interest from from our our client base,
Speaker 1: and I think that the backdrop for many crypto investors
Speaker 1: investors is that they're historically have been four year cycles. Uh.
Speaker 1: And while there are opportunities to make money in many
Speaker 1: moments of the crypto market, bear market moments of the
Speaker 1: moments where fortunes can be made, and so there are
Speaker 1: some that are positioning themselves in the current bear market
Speaker 1: UM and UH and coming into the space. Now, So
Speaker 1: what do you think it'll mean for crypto ultimately? Does
Speaker 1: bitcoin break that mark for example? Yeah, you know, I
Speaker 1: can't say for sure about about twenty UM and certainly
Speaker 1: it's a space with with quite a bit of allatility.
Speaker 1: But the historical pattern of cryptover the data we have
Speaker 1: about twelve years of a journey, is that we get
Speaker 1: four year cycles. We get three years of bowld markets
Speaker 1: with growing momentum, and then we get a bear market year,
Speaker 1: so the market down almost, the market down north and
Speaker 1: this year obviously the market down around. The expectation if
Speaker 1: the market you know, continues its historical trend would be
Speaker 1: that we begin a new cycle next year. And so
Speaker 1: wherever we wind up this year, a lot of investors
Speaker 1: are thinking about how that positions them for the next cycle.
Speaker 1: You're out with a new Web three fund that will
Speaker 1: give retail investors exposure to companies across Web three, UH, finance,
Speaker 1: the metaverse, the creator economy. As we barrel into a recession,
Speaker 1: what makes you think investors are going to jump on board. Yeah.
Speaker 1: So at bid wise, we view our role as helping
Speaker 1: investors understand and access the opportunities in crypto. And certainly
Speaker 1: there are a wide range of important things going on
Speaker 1: in the world today outside of this space. It's our
Speaker 1: job to stay focused on this space. Specifically, we've been
Speaker 1: doing it for five years. We work with over a
Speaker 1: thousand financial advisors, branches, UH and institutions. And what we
Speaker 1: saw with the web was an emerging category of opportunity
Speaker 1: around the established innovators, established companies who are positioned to
Speaker 1: benefit from the rise of Web three, from the environment
Speaker 1: created by crypto and so we view it as our
Speaker 1: job to recognize worthwhile opportunities and open up access to
Speaker 1: those UH and so that's why we we introduced we
Speaker 1: introduced the Web three product. And in general today there's
Speaker 1: there's quite a wide aperture of different areas that investors
Speaker 1: see opportunity in the crypto markets, quite different from you know,
Speaker 1: even even when when we started the firm and the
Speaker 1: story was mostly just about just about bitcoin. Now there's
Speaker 1: been a number of high high profile crypto executive departures
Speaker 1: see es. The CFO of open Sea recently left. What
Speaker 1: do you thinks behind all of this. You know, I
Speaker 1: think zooming out it's a it's a difficult time in
Speaker 1: the economy, and crypto is not bigger than that, It's
Speaker 1: not excluded from that. And in fact, you know, crypto
Speaker 1: is more volatile in general, and so I think it's
Speaker 1: natural to expect that you would see that you would
Speaker 1: see turnover and that you would see adjustments with the
Speaker 1: firms in the space. We've been around for five years,
Speaker 1: UH and in that period of time alone have seen
Speaker 1: many many of the players change. UM. I think it's
Speaker 1: a healthy part of the progression and the maturation of
Speaker 1: the space. But in thinking about what it means the
Speaker 1: average UH, the average investor who's interested in the space
Speaker 1: doesn't have a ton of time to UH to focus
Speaker 1: on on everything that's going on day today. I think
Speaker 1: that the real the real learning OFO is that it's
Speaker 1: starting to really matter who you work with, or what
Speaker 1: platform you use, or what app you use, and not
Speaker 1: all of these things are created equal. I think in
Speaker 1: there's a sense that if you invested in something, it
Speaker 1: didn't really matter where you bought it or how you
Speaker 1: bought it. You had it. You had a shot at
Speaker 1: at a great return. I think this year, what's becoming
Speaker 1: more clear is that it matters. It matters who you're
Speaker 1: working with or what service you're using to invest. So
Speaker 1: I think that that is the implication of this for
Speaker 1: most investors is paying attention to to who you're working with. Now,
Speaker 1: I'd love for you to put your social media hat
Speaker 1: on for a moment. You used to work at Facebook
Speaker 1: and Instagram earlier in your career. I'm sure you've been
Speaker 1: following the Twitter Musk saga to a certain extent. Elon
Speaker 1: Musk and Jack Dorsey we now know from their text. Uh,
Speaker 1: you know talked about making Twitter and open source protocol. Uh.
Speaker 1: What do you think about a decentralized vision for Twitter
Speaker 1: and if something like that is really possible? I think
Speaker 1: it's possible. I think it's exciting, and I think it's
Speaker 1: an experiment we're going to see a play out in
Speaker 1: the next in the immediate term future. Uh. In fact,
Speaker 1: there's a there's a project called Forecaster that's already attempting
Speaker 1: to build a Web three version of Twitter where you
Speaker 1: can have a similar communication experience. Um, but you don't
Speaker 1: worry about the sort of corporate policy and the moderation
Speaker 1: policy because the information is on a blockchain, and then
Speaker 1: the app just pulls information from that blockchain. So I
Speaker 1: think the game is a foot on this one, and
Speaker 1: I think zooming out it's it's sort of indicative of
Speaker 1: the moment we're at in the crypto space and with
Speaker 1: Web three, which is there are now a huge amount
Speaker 1: of developers, there's great funding, UH, there's proven technology, and
Speaker 1: I think over the next two years you're gonna see
Speaker 1: a big wave of attempts to build UH in sumer applications,
Speaker 1: to build services that people use UM. And I think
Speaker 1: I think the Twitter scenario is front and centers as
Speaker 1: one of those in Web three. So it sounds like
Speaker 1: you see this pretty clearly. Can you explain what this
Speaker 1: actually looks like and how how do how do things
Speaker 1: change for the average Twitter user? What happens to Twitter,
Speaker 1: for example, if everything is decentralized. I think, you know,
Speaker 1: some people just don't understand, like what are they what
Speaker 1: do they really mean? Here's here's the mental model i'd offer.
Speaker 1: In the current world, your followers, your your your audience
Speaker 1: is only available on Twitter. So whatever Twitter does is
Speaker 1: law UH, and sometimes that that is is a downside
Speaker 1: for certain users. The decentralized Web three version. I don't
Speaker 1: know exactly what it will look like, but it will
Speaker 1: look something more like the way you think about your email,
Speaker 1: which is, if you're not happy with Gmail, you can
Speaker 1: move to a Well. If you're not happy with AO
Speaker 1: well and you want certain features, you can move to
Speaker 1: Superhuman uh and so on and so forth. You can
Speaker 1: take your email address, you can take your your your
Speaker 1: contact book with you, uh, and you can go somewhere
Speaker 1: else if you don't like the way that the app
Speaker 1: is being built or the policies of the app. And
Speaker 1: so that's that's what people are striving for here. When
Speaker 1: you hear people say a Web three version of something
Speaker 1: similar to the dynamic and power structure that exists with email,
Speaker 1: they want to introduce that to more parts of our life. Uh.
Speaker 1: And so you know, I think you could use that
Speaker 1: as an analogy for how uh it might change certain
Speaker 1: services like Twitter. Interesting. Well, thanks for humoring us there,
Speaker 1: Hunter Horseley, CEO. If it wise, Asset Management would love
Speaker 1: to have you back sooner rather than later. Hunter, thank
Speaker 1: you for stopping by. Apple is set to shift from
Speaker 1: the lightning charging port on the iPhone and other devices
Speaker 1: to USBC to abide by a new European law. What
Speaker 1: does this mean for the company's wireless first future. Let's
Speaker 1: bring in Mark German for more. So, let's let's rewind
Speaker 1: a little bit, because when they change that lightning charging port,
Speaker 1: it was a little traumatic for some people. What exactly
Speaker 1: is Apple doing now and what does it mean for
Speaker 1: iPhone users? That's right, Emily so for most the two
Speaker 1: thousand's right, Apple had what was called the thirty pin
Speaker 1: iPod connector that worked on all their main iPods, and
Speaker 1: it was also the connector that was on the iPhone
Speaker 1: until the iPhone five. With the five, Apple moved to lightning.
Speaker 1: It's much smaller, it's reversible, it's all digital. It made
Speaker 1: sense as things were shifting more wirelessly, right, But now
Speaker 1: we're getting to the point where USBC is taking over
Speaker 1: the tech industry, and now the European Union is pushing
Speaker 1: USBC because it's interoperable between Android devices from Samsung, from
Speaker 1: Google as well as Apple to ices. Right now, the
Speaker 1: iPhone still uses lightning. That means you can't use the
Speaker 1: same charg or to charge your iPhone as you can't
Speaker 1: even with your iPad pro or your maclopro or your
Speaker 1: Android device. So, because of some prodding from the European
Speaker 1: Union and because it just makes sense for consumers in
Speaker 1: its ecosystem, Apple will move to USBC next year in
Speaker 1: three with the iPhone fifteen. They'll also move it to
Speaker 1: some of their math accessories that still use lightning, some
Speaker 1: of their iPhone accessories like the mag Safe battery that
Speaker 1: use lightning, and probably most critically, the air pods, which
Speaker 1: also still use lightning. So overall, it's a very good
Speaker 1: move for consumers. I think what does it mean though,
Speaker 1: given that Apple really wants us ultimately to not have
Speaker 1: to use any wires at all. Yeah, no, that's a
Speaker 1: good question. So about five years ago, Apple announced the
Speaker 1: device called the air Power. What that was was a
Speaker 1: three device charging matt from the company. It was announced
Speaker 1: in seen was supposed to go on sale and it
Speaker 1: would allow you to inductively charge an iPhone, air pods,
Speaker 1: and the Apple Watch at the same time. Many technical
Speaker 1: issues I won't be labor right now, that never launched,
Speaker 1: but Apple still wants to push users towards wireless charging.
Speaker 1: The latest MacBooks they all use Mac Safe charging, right.
Speaker 1: You don't stick an actual cable into the device, but
Speaker 1: it uses somewhat of a magnetic inductive charger called mag safe.
Speaker 1: The iPhone has mag Safe charging, the Apple watches mac
Speaker 1: Safe charging, the AirPods have max Safe charging. So while
Speaker 1: the lightning connector and the iPod thirty pin connector before
Speaker 1: that both last at about ten eleven years for the
Speaker 1: respective ecosystems, I think USBC is going to be the
Speaker 1: Apple connector for the next five years, and then we'll
Speaker 1: see a much bigger push to inductive charging, mag safe
Speaker 1: and wireless in tropical boat inter propability. All right, Boomer
Speaker 1: smart German, always appreciating you keeping us update on all
Speaker 1: things Apple. Thank you so much for that. And that
Speaker 1: does it for the sedition of Boomberg Technology. Do not forget.
Speaker 1: You can check out the podcast anywhere you get your podcasts.
Speaker 1: I'm Emily in San Francisco. This is Bloomberg