WEBVTT - A Better Twitter Deal and Terra's Collapse 0:00:03.680 --> 0:00:07.040 From the heart of where innovation, money and power collive 0:00:07.800 --> 0:00:12.319 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:12.400 --> 0:00:28.479 Emily Jay I'm Taylor REGs in New York and for 0:00:28.520 --> 0:00:31.639 Emily Chang, this is Bloomberg Technology coming up for the 0:00:31.680 --> 0:00:35.120 next hour, getting a better deal. Elon Musk now saying 0:00:35.360 --> 0:00:38.160 that he might try to renegotiate the sale price for Twitter, 0:00:38.440 --> 0:00:41.480 causing this doctor ball even further, as many questions remain 0:00:41.560 --> 0:00:45.880 over how viable this takeover actually is. Plus billions wiped 0:00:45.920 --> 0:00:48.920 out in Terra USD in that crash, why can we 0:00:49.000 --> 0:00:50.720 learn from it? What does it mean for the future 0:00:50.760 --> 0:00:53.360 of stable coins. We'll discuss all of this and more 0:00:53.440 --> 0:00:56.760 with John Woo from Eva Labs and while Doctor Strange 0:00:56.800 --> 0:00:59.960 in the multiverse of Madness, it talk box office record 0:01:00.080 --> 0:01:03.200 here for the second straight week our movie theaters back. 0:01:03.440 --> 0:01:06.440 Are there still head winds ahead? More on that later 0:01:06.520 --> 0:01:08.560 this hour. But of course, and we cannot go on 0:01:08.760 --> 0:01:11.119 for at least two minutes into this show without talking 0:01:11.120 --> 0:01:13.760 about the latest drama between Elon Musk and of course 0:01:13.800 --> 0:01:17.440 his takeover and the proposed takeover of Twitter. Really interesting 0:01:17.440 --> 0:01:20.200 comments coming out of Elon Musk today hinting that he 0:01:20.280 --> 0:01:22.640 might want to renegotiate the deal at a lower price, 0:01:22.720 --> 0:01:25.320 saying that it quote wouldn't be out of the question. 0:01:25.680 --> 0:01:28.679 And these latest comments, of course coming from Elon Musk 0:01:29.000 --> 0:01:32.560 via a video conference at a summit over down in Miami, 0:01:32.800 --> 0:01:35.399 and it was hosted by a podcast called all In 0:01:35.959 --> 0:01:38.640 for more on these comments, of course, where the deal stands. 0:01:38.680 --> 0:01:40.440 I'm so pleased to be joined here by our very 0:01:40.440 --> 0:01:43.440 own mandage seeing of course over from Bloomberg Intelligence and 0:01:43.520 --> 0:01:46.240 Kurt Wagner joining us from Bloomberg News. Kurt, can I 0:01:46.280 --> 0:01:48.920 just start with you from someone who's been following and 0:01:48.960 --> 0:01:51.559 covering this company and of course Elon Musk and solve, 0:01:51.880 --> 0:01:53.520 how do you think just sort of the way that 0:01:53.560 --> 0:01:55.720 this has played out in the drama that it's putting 0:01:55.720 --> 0:01:59.280 really on the company too? I Mean, doesn't this just 0:01:59.360 --> 0:02:02.720 feel like the mos Twitter thing of all time to happen? Right? 0:02:02.880 --> 0:02:05.960 It's just, uh, this deal that just continues to be 0:02:06.320 --> 0:02:09.720 a roller coaster um and the fact that we now 0:02:09.760 --> 0:02:13.000 have Ellen kind of coming out today and suggesting, Hey, 0:02:13.040 --> 0:02:15.840 I might be you know, interested in negotiating a lower 0:02:15.840 --> 0:02:18.120 price for this deal, even though I just offered something 0:02:18.160 --> 0:02:20.799 else a few weeks ago. It just all feels like 0:02:21.280 --> 0:02:24.320 this is kind of cascading in a negative way for Twitter. 0:02:24.760 --> 0:02:27.840 I always have said that the worst case scenario for 0:02:27.880 --> 0:02:29.639 them would be that this deal falls apart and they're 0:02:29.720 --> 0:02:34.200 kind of left standing there without anybody to come acquire them, 0:02:34.280 --> 0:02:36.320 And it feels like that's becoming more and more likely 0:02:36.400 --> 0:02:38.400 every day. And man, Deep, let me bring you in 0:02:38.440 --> 0:02:40.920 on that, because, similar to what we just heard from Kurt, 0:02:41.000 --> 0:02:43.000 I was hearing from Dan Eves over a web butch 0:02:43.040 --> 0:02:46.680 earlier saying again, serve this worst case scenario, they're going 0:02:46.680 --> 0:02:49.000 to be left at the altar alone. Right. How do 0:02:49.040 --> 0:02:51.200 you think about the lack of no bidders and is 0:02:51.240 --> 0:02:55.840 this Elong's way of negotiating down in price. I do think, 0:02:55.880 --> 0:02:58.239 you know, he doesn't have a way out of paying 0:02:58.280 --> 0:03:02.080 that billion dollars and breakup termin NTIONC in case he 0:03:02.120 --> 0:03:05.040 wants to walk away. But at the same time, the 0:03:05.080 --> 0:03:08.160 odds of the deal happening are higher than they were 0:03:08.200 --> 0:03:10.919 probably three weeks back when the deal was announced. And 0:03:10.960 --> 0:03:13.240 the reason I say that is because at least he 0:03:13.280 --> 0:03:16.520 has six point five billion in commitments from you know, 0:03:16.639 --> 0:03:20.280 co partners, and what he really wants to do here 0:03:20.360 --> 0:03:23.320 is to you know, move away from that margin loan. 0:03:23.520 --> 0:03:27.320 So right now he doesn't have about you know, trolls 0:03:27.400 --> 0:03:31.760 to thirty billion dollars in financing. He has already sailed 0:03:31.760 --> 0:03:34.079 a bunch of sold a bunch of stock, so that's 0:03:34.120 --> 0:03:37.200 about you know, eleven billion. He's got six point five 0:03:37.240 --> 0:03:39.920 billion in commitments, so it really wants to move away 0:03:39.920 --> 0:03:43.480 from that troll flowing five billion margin loan. And that 0:03:43.960 --> 0:03:47.280 is what I think he's looking to renegotiate here to 0:03:47.360 --> 0:03:50.480 bring that price flaw. Very interesting and Curt, I think 0:03:50.480 --> 0:03:52.680 at the heart of this issue comes down to the 0:03:52.720 --> 0:03:56.680 percent of users that are represented by bods when you 0:03:56.720 --> 0:03:59.880 think about Twitter, whether that number is five or relative 0:03:59.920 --> 0:04:02.839 to meta, snap TikTok, I mean sort of the other 0:04:02.920 --> 0:04:06.920 social media covers companies that you cover. How does that 0:04:06.960 --> 0:04:11.400 bought relationship fit into this narrative. Yeah, he talked a 0:04:11.480 --> 0:04:14.400 lot about that today. He was at a conference in Miami. 0:04:14.680 --> 0:04:17.640 Are Bloomberg reporters. My colleagues were not at the conference, 0:04:17.640 --> 0:04:19.800 but we're able to listen in to the conference as 0:04:19.839 --> 0:04:22.400 it was happening, and he brought this up. You know, 0:04:22.520 --> 0:04:25.000 he was saying, Hey, this is an issue. Um, I 0:04:25.000 --> 0:04:27.719 don't believe that the bots are less than five percent 0:04:27.760 --> 0:04:29.520 of the total user base, which is what Twitter says, 0:04:29.520 --> 0:04:32.320 and earnings and there are and Facebook says something similar. 0:04:32.360 --> 0:04:37.320 To be clear, this is not a unique situation for Twitter, um, 0:04:37.360 --> 0:04:39.680 but Ellen has had an issue with bots. He has 0:04:39.720 --> 0:04:41.880 made it part of his kind of campaign of how 0:04:41.880 --> 0:04:43.680 he's going to clean up the service and what he's 0:04:43.680 --> 0:04:45.960 going to do to change Twitter. And he's saying he 0:04:46.000 --> 0:04:48.040 believes it's to be a lot higher. And we saw 0:04:48.120 --> 0:04:50.719 CEO Parague Augura Wall from Twitter kind of going back 0:04:50.720 --> 0:04:54.200 and forth with Ellen today trying to explain, Hey, here's 0:04:54.200 --> 0:04:58.600 how we measure bots, and Elon replied with a poop emoji. Right. 0:04:58.680 --> 0:05:02.960 He clearly was not int listed in Auger Wall's explanation here, 0:05:03.000 --> 0:05:05.440 and I think that's a big sign as to why he's, 0:05:05.640 --> 0:05:07.880 you know, saying this is on hold. He wants more answers. 0:05:08.000 --> 0:05:10.240 You're not allowed to use that emoji with me, Kurt, 0:05:10.360 --> 0:05:13.680 Neither is Mandy. Never. I would never do that, Mandy. 0:05:14.040 --> 0:05:16.839 You've been commenting on this. Similarly, you take a look 0:05:16.880 --> 0:05:20.280 at the bottom up analysis of these companies, the actual 0:05:20.360 --> 0:05:24.919 fundamentals user growth, revenue growth, profitability, How, MANDYEP do you 0:05:24.960 --> 0:05:27.640 think about the percentage of boughts at the impact on 0:05:27.680 --> 0:05:31.080 the health of this company all. So clearly it's a 0:05:31.120 --> 0:05:34.240 bigger problem with Twitter. And when you take out let's 0:05:34.279 --> 0:05:37.320 say five of the users are bought, so the e 0:05:37.440 --> 0:05:40.360 v per user goes up that Elon is paying with 0:05:40.400 --> 0:05:42.960 this deal. And when you look at a complex Snapchat 0:05:43.080 --> 0:05:45.719 or Pinterest right now, the e v per user is 0:05:45.760 --> 0:05:48.440 close to a hundred dollars there, as with the four 0:05:48.440 --> 0:05:52.480 billion deal, it comes down to around two hundred dollars 0:05:52.480 --> 0:05:55.160 for Twitter. And look, could have had this problem of 0:05:55.400 --> 0:05:59.000 you know, basically exaggerating their user numbers and they had to, 0:05:59.400 --> 0:06:02.120 uh enough, come out and say that the actually using 0:06:02.200 --> 0:06:05.120 numbers are lowers. So it's not a new problem. But clearly, 0:06:05.160 --> 0:06:07.800 if you're valuing a company based on the total number 0:06:07.800 --> 0:06:10.159 of users, then you have to think about, you know, 0:06:10.240 --> 0:06:13.120 revising the price lower because the actual number of users 0:06:13.160 --> 0:06:16.280 are lawer Amand it just a follow to you on this. 0:06:16.520 --> 0:06:19.000 I think we're having a broader discussion, and this broader 0:06:19.000 --> 0:06:23.120 discussion is underway about if that price target set a 0:06:23.200 --> 0:06:26.320 floor for how we think about valuing these companies. And 0:06:26.320 --> 0:06:28.359 the broader market is telling you, at least today in 0:06:28.400 --> 0:06:32.279 the last few weeks, we're rethinking valuations on every level, 0:06:32.320 --> 0:06:35.320 not just because yields are higher on the discount rate falls, 0:06:35.360 --> 0:06:38.599 but the big valuations of growth at any cost. How 0:06:38.720 --> 0:06:41.440 then sort of is this played out in the also 0:06:41.520 --> 0:06:43.920 thinking about the way that we're valuing these companies and 0:06:44.000 --> 0:06:48.159 these tech companies. Well, so clearly, you know, social media 0:06:48.240 --> 0:06:52.000 companies aren't really growth companies anymore. If you have to 0:06:52.000 --> 0:06:55.360 think about you know, growth, really it has to the 0:06:55.400 --> 0:06:57.720 next leg all social media would be more on the 0:06:57.720 --> 0:07:01.720 meta word side right now. Valuation have gone down everywhere, 0:07:01.760 --> 0:07:05.440 But I think Twitter isn't a high growth company anymore. Yes, 0:07:05.520 --> 0:07:09.560 it can sustain it EBITDA, but we're not talking about 0:07:09.600 --> 0:07:13.200 forty growth even if it goes private. So that is 0:07:13.240 --> 0:07:15.920 where you know, you have to really think about which 0:07:15.960 --> 0:07:19.120 is actually growth going forward as opposed to what can 0:07:19.200 --> 0:07:22.120 generate pre cash flow to pay off the you know, 0:07:22.200 --> 0:07:25.360 interest payment and current come back in here, I think 0:07:25.400 --> 0:07:27.760 as you think about pushing this story forward, what do 0:07:27.800 --> 0:07:29.760 you want to see next? What are you looking for 0:07:29.920 --> 0:07:32.840 if what can we do private that we couldn't do public? 0:07:32.880 --> 0:07:34.680 What do you want to see in terms of leadership? 0:07:34.720 --> 0:07:38.040 What are you really looking for to understand if this 0:07:38.080 --> 0:07:41.680 company really can turn it around. Well, I think the 0:07:41.720 --> 0:07:44.560 best way to grow the business is not going to 0:07:44.600 --> 0:07:48.800 be to abandon advertising altogether, which is what it feels like. Ellen, 0:07:49.560 --> 0:07:51.640 what kind of wants to do? He's talked about a 0:07:51.640 --> 0:07:54.800 subscription product. I think that's fine, but really I think 0:07:54.880 --> 0:07:56.560 what you need to do if your Twitters, you need 0:07:56.600 --> 0:07:58.440 to figure out how to get the kind of user 0:07:58.560 --> 0:08:02.320 data that works with targeted ads, that works with direct 0:08:02.440 --> 0:08:05.680 response ads, right. That is what Facebook and Google do 0:08:05.800 --> 0:08:08.000 really well. It's something that Twitter has always struggled with. 0:08:08.040 --> 0:08:11.600 They already have an ad business, They have advertisers who 0:08:11.640 --> 0:08:14.600 are interested. They just need more granular data in order 0:08:14.600 --> 0:08:17.200 to do that direct response type stuff. And now it's 0:08:17.240 --> 0:08:19.760 easier said than done. But I think that's the one 0:08:19.840 --> 0:08:21.440 thing that if they can figure that out, I think 0:08:21.440 --> 0:08:26.160 the business could really benefit from that. Mandy, do you agree, Well, clearly, 0:08:26.280 --> 0:08:29.240 I think subscriptions is part of the story here, and 0:08:29.320 --> 0:08:33.040 but we've seen subscription businesses aren't easy. Look at Netflix. 0:08:33.080 --> 0:08:35.280 You know Netflix is moving into adds. Do you really 0:08:35.320 --> 0:08:39.640 need a combination of ads and subscriptions? Moving away completely 0:08:39.679 --> 0:08:43.000 from ads would be a mistake. Really appreciate that both 0:08:43.000 --> 0:08:47.920 of you great insight fundamental analysis. So appreciate the conversation 0:08:48.000 --> 0:08:50.600 Mandy seeing of course, and our very Kurt Wagner out 0:08:50.640 --> 0:09:03.320 there in our beautiful San Francisco office. We want to 0:09:03.320 --> 0:09:05.560 talk now about a new social media law out of 0:09:05.559 --> 0:09:08.720 Texas that has many in the tech world fearful of 0:09:08.760 --> 0:09:11.400 what might be allowed to flow on your feed all 0:09:11.400 --> 0:09:15.600 in the name of censorship. Groups representing Twitter, Facebook, and 0:09:15.640 --> 0:09:19.360 YouTube warned the Supreme Court that unless this Texas law 0:09:19.520 --> 0:09:22.920 is blocked, anything from Russia propaganda as well as neo 0:09:23.000 --> 0:09:26.559 Nazi post denying the Holocaust could show up. Insiders of 0:09:26.640 --> 0:09:29.480 course now warning that these extremest views could cause social 0:09:29.520 --> 0:09:33.400 media companies to lose millions in advertising for more. I'm 0:09:33.440 --> 0:09:37.640 joined back Techonomy founder David Kirkpatrick, who thankfully you've been 0:09:37.640 --> 0:09:39.520 sort of all over this and I am curious to 0:09:39.600 --> 0:09:42.560 think about. I believe a Supreme board who can decide 0:09:42.640 --> 0:09:44.800 what cases they want to hear and what cases they 0:09:44.840 --> 0:09:47.800 want to rule on. What at the heart of this 0:09:47.840 --> 0:09:51.719 issue really is going on for some of these tech companies, Well, 0:09:51.760 --> 0:09:55.800 thanks Taylor. Basically, what the tech industry is asking the 0:09:55.840 --> 0:09:59.959 Supreme Court to rule that a tech that a federal 0:10:00.000 --> 0:10:03.160 appeals courts ruling last week which allowed this law to 0:10:03.200 --> 0:10:06.960 take effect, was it must be removed and vacated because 0:10:07.360 --> 0:10:11.520 the impact that it would have on tech companies is 0:10:11.600 --> 0:10:14.800 so extreme that it would almost make it impossible to 0:10:14.880 --> 0:10:19.720 operate any kind of website where there is conversation if 0:10:19.760 --> 0:10:22.600 that site has more than fifty million users. It's a 0:10:22.640 --> 0:10:30.920 truly inane, idiotic and illogical and crazy effort to change 0:10:31.040 --> 0:10:35.120 the rules for what seems to be just partisan advantage. 0:10:35.720 --> 0:10:38.040 It talks us about the advertising, of course, that we 0:10:38.080 --> 0:10:42.000 mentioned in the introduction. The companies, of course benefit from 0:10:42.000 --> 0:10:46.120 the advertising. What would stop sort of that flow of advertising? 0:10:46.160 --> 0:10:49.960 In your opinion, well, that's a great question, because obviously 0:10:50.040 --> 0:10:54.800 advertisers only want to appear in an environment that's rational 0:10:55.000 --> 0:10:59.000 and makes their products look good in contexts. If if 0:10:59.400 --> 0:11:02.960 websites are prevented from taking down any kind of extreme 0:11:03.000 --> 0:11:06.640 statement by any user, it could really make these sites 0:11:07.160 --> 0:11:12.040 much less kind of culturable for advertising, and I could 0:11:12.080 --> 0:11:14.560 see it having an effect, although the problem is even 0:11:14.600 --> 0:11:18.800 more basic than that. Essentially, the companies are being told 0:11:18.880 --> 0:11:21.720 by this Texas law, if it were to really take effect, 0:11:22.160 --> 0:11:25.000 that they can't make any real decision about what kind 0:11:25.040 --> 0:11:29.120 of contact flows. Content flows across their own networks. But 0:11:29.200 --> 0:11:32.560 these are commercial companies who built these commercial websites for 0:11:32.559 --> 0:11:35.880 commercial reasons. They have every right under the Constitution to 0:11:35.960 --> 0:11:38.720 operate their sites as they see fit, and this law 0:11:38.960 --> 0:11:42.000 attempts to remove that right from them, which is just 0:11:42.120 --> 0:11:46.480 plain wrong and and on constitution clear, Let's talk about 0:11:46.559 --> 0:11:48.640 something else I'm reading here in your notes. It really 0:11:48.679 --> 0:11:51.480 speaks out to me that it allows people to also 0:11:51.600 --> 0:11:55.480 sue these companies as well if they're censored for their viewpoints. 0:11:56.000 --> 0:11:58.080 How does this sort of open up and I know 0:11:58.160 --> 0:12:00.160 that we're not lawyers here to sort of open the 0:12:00.200 --> 0:12:02.720 floodgates for these potential lawsuits as well. And then the 0:12:02.760 --> 0:12:06.280 impact that has on businesses and consumers. Well, there's so 0:12:06.320 --> 0:12:09.240 many crazy aspects to this law, but one way to 0:12:09.280 --> 0:12:12.240 think about it is that that companies wouldn't be able 0:12:12.280 --> 0:12:14.960 to do well no matter what they did. They would 0:12:15.000 --> 0:12:16.840 be damned if they do and damned if they don't, 0:12:17.080 --> 0:12:21.480 because the law allows anyone who's viewpoint, which is the 0:12:21.600 --> 0:12:24.520 term they use, has been used as a basis for 0:12:24.559 --> 0:12:28.240 removing their content, to sue the company. Okay, however, if 0:12:28.280 --> 0:12:33.720 those viewpoints are hateful, racist, uh, show some kind of 0:12:33.760 --> 0:12:37.120 libel or whatever. They will then probably which they're but 0:12:37.160 --> 0:12:40.600 they're prohibited from taking them down. Remember, people who are 0:12:40.640 --> 0:12:44.280 affected by those posts will almost certainly then sue the 0:12:44.480 --> 0:12:48.800 sites because they are being affected by these posts that 0:12:48.840 --> 0:12:52.120 have not been removed. So in effect, the sites can't 0:12:52.160 --> 0:12:56.959 win either way. It just underscores yet again how fundamentally 0:12:56.960 --> 0:13:00.600 illogical the law is. But it's worth remembering. It seems 0:13:00.679 --> 0:13:03.319 like the whole point of these laws, and there was 0:13:03.360 --> 0:13:06.080 an attempt at a similar law in Florida, is to 0:13:06.400 --> 0:13:12.000 get back at the website, particularly Facebook, YouTube, Twitter, etcetera, 0:13:12.320 --> 0:13:15.360 because they're perceived to have an anti conservative bias. And 0:13:15.400 --> 0:13:19.760 the conservative majority in the Texas legislature has passed this 0:13:19.880 --> 0:13:23.400 law and the conservative Texas governor has signed it. But 0:13:23.559 --> 0:13:27.800 the fact is it simply cannot work, and it's it's 0:13:27.920 --> 0:13:32.679 being done for pure political partisanship and and and without 0:13:32.880 --> 0:13:37.400 enough thought. David, it's interesting you mentioned Meta of course 0:13:37.440 --> 0:13:41.320 formerly we knew that as Facebook, you mentioned YouTube. We're 0:13:41.360 --> 0:13:43.439 talking a lot about Twitter of course right now when 0:13:43.480 --> 0:13:45.920 in the sitegeist with Elon Musk of course stepping in 0:13:46.040 --> 0:13:49.839 and giving a price potentially to take private of all 0:13:49.880 --> 0:13:52.960 the companies you've been studying for decades over the years, 0:13:53.080 --> 0:13:56.360 who would be most impacted and who is most susceptible 0:13:56.520 --> 0:13:59.199 to getting a hit? Of course from this, well, the 0:13:59.240 --> 0:14:01.160 law is meant to a li to any company that 0:14:01.240 --> 0:14:04.080 has fifty million or more users, But it really is 0:14:04.120 --> 0:14:07.960 intended it's aimed at Facebook and Twitter primarily and YouTube 0:14:08.280 --> 0:14:11.280 because those are the sites where speech, so to speak, 0:14:11.520 --> 0:14:15.760 is most frequently taking place, and they do frequently make 0:14:15.840 --> 0:14:22.800 judgments when pate speech or political incitement or violence is 0:14:22.920 --> 0:14:26.880 endorsed or whatever to remove posts now, but it would 0:14:27.160 --> 0:14:30.360 it could affect any site that has over fifty million users, 0:14:30.560 --> 0:14:34.840 which could be for example, Netflix or Disney Plus if 0:14:34.960 --> 0:14:37.720 if there's any kind of content or conversation, well, I 0:14:37.760 --> 0:14:40.400 guess those are probably not good examples. But any site 0:14:40.440 --> 0:14:43.760 that has any kind of dialogue, say the Near Times 0:14:43.880 --> 0:14:47.680 or any kind of Bluebird for that matter, if if 0:14:47.680 --> 0:14:50.200 the number of users is big enough, there will be 0:14:50.280 --> 0:14:55.560 no allowance for moderation. In effect, so it's it's taking 0:14:55.600 --> 0:14:58.840 away a fundamental right for any company that is attempting 0:14:58.880 --> 0:15:05.200 to foster a safe and rational conversation online. David, what 0:15:05.240 --> 0:15:06.880 do you think is you think about sort of the 0:15:06.920 --> 0:15:10.680 next step pushing the story forward. Do you want to 0:15:10.760 --> 0:15:15.560 see changes to the fundamental businesses so that this isn't 0:15:15.840 --> 0:15:18.120 an issue. We we talked a lot about Twitter having 0:15:18.280 --> 0:15:21.040 its crisis that it's going through right now. What are 0:15:21.040 --> 0:15:24.440 you really looking for as you look to these companies, Well, 0:15:24.480 --> 0:15:29.200 there are really big questions, and the reason the situation 0:15:29.240 --> 0:15:32.960 has arisen does flow in part from the failure of 0:15:33.080 --> 0:15:37.120 management by these companies. I don't think that Facebook in particular, 0:15:37.320 --> 0:15:40.640 or any of the social media companies for the most part, 0:15:40.680 --> 0:15:43.840 although some extent I'd leave Snap and maybe even TikTok 0:15:43.920 --> 0:15:46.680 out of this. But certainly Facebook and Twitter have not 0:15:46.840 --> 0:15:49.400 done as good a job as they should have of 0:15:49.520 --> 0:15:52.760 articulating what is allowed and what is not allowed and 0:15:52.840 --> 0:15:56.360 sticking to very clear standards. From the beginning. They let 0:15:56.400 --> 0:15:59.600 themselves get into a place where there's a sense of 0:15:59.680 --> 0:16:01.600 k us and I think part of it was they 0:16:01.640 --> 0:16:04.680 were trying to placate the Trump administration and didn't want 0:16:04.720 --> 0:16:07.760 to seem to be anti conservative, and they really allowed 0:16:07.840 --> 0:16:10.840 a lot. I think they allowed a lot of inappropriate 0:16:10.880 --> 0:16:15.000 content that was supposedly conservative but was really inciting um. 0:16:15.160 --> 0:16:17.920 But now because they took down enough of it that 0:16:17.960 --> 0:16:21.160 it got the right angry there are legislators all over 0:16:21.200 --> 0:16:24.640 the country trying to take these rash moves against them, 0:16:24.640 --> 0:16:28.720 really out of partisan dislike. But I think the long 0:16:28.880 --> 0:16:33.400 term issue is the companies have to establish clear standards 0:16:33.400 --> 0:16:37.880 for what is and is not allowed, and communicated clearly 0:16:38.160 --> 0:16:41.200 and stick to it. It's very, very hard. I don't 0:16:41.200 --> 0:16:43.720 think most of these companies anticipated when they got into 0:16:43.720 --> 0:16:47.000 these businesses how complicated the decisions they'd have to make 0:16:47.040 --> 0:16:49.880 would become. But that's where they are, and that's just 0:16:49.920 --> 0:16:52.880 the fact a complicated issue. We're grateful that you're here 0:16:53.040 --> 0:16:56.320 to give us your expert analysis and insights to Economy 0:16:56.320 --> 0:16:59.520 founder David Kirkpatrick really appreciate it, and we're going to 0:16:59.600 --> 0:17:01.760 have more to come, of course, including a report on 0:17:01.800 --> 0:17:04.680 the impact of well the China lockdowns. What that means 0:17:04.680 --> 0:17:32.359 for us, This is Bloomberg. China's economy is paying the 0:17:32.400 --> 0:17:36.000 price for the government's COVID zero policy, with industrial output 0:17:36.119 --> 0:17:39.040 and consumer spending sliding into the worst level since the 0:17:39.080 --> 0:17:42.760 pandemic began. Our very own Bloomberg Stephen Eagle has more 0:17:44.480 --> 0:17:49.040 clear sign China's economy contracted sharply in April as continued 0:17:49.119 --> 0:17:54.679 COVID zero lockdowns hammered industrial and consumer activity nationwide with 0:17:54.840 --> 0:17:58.719 its too wealthiest cities, though Shanghai and Beijing under COVID 0:17:58.760 --> 0:18:03.359 restrictions read tails. Sales nationwide plummeted a worse than expected 0:18:03.480 --> 0:18:06.520 eleven point one percent last month as tens of millions 0:18:06.520 --> 0:18:10.440 of people were confined to their homes. Factory output two tanked, 0:18:10.720 --> 0:18:14.360 falling two point nine percent, the largest and only second 0:18:14.440 --> 0:18:18.000 year of a year monthly contraction of industrial production in 0:18:18.200 --> 0:18:23.080 thirty two years. Yes, since n now, the consensus estimate 0:18:23.200 --> 0:18:26.600 was for a modest rise, but clearly China's industrial might 0:18:26.720 --> 0:18:30.000 was slowed by the lockdowns and those supply chain issues. 0:18:30.359 --> 0:18:34.480 China's nationwide jobless rate also taking up to six point 0:18:34.560 --> 0:18:37.879 one percent now. Shanghai has been in lockdown for nearly 0:18:37.960 --> 0:18:40.919 two months, but this week is starting to relax some 0:18:41.000 --> 0:18:44.720 of the most strict curbs as COVID caseloads and inter 0:18:44.800 --> 0:18:49.840 community infections start to fall. Now. Beijing has signaled policymakers 0:18:50.200 --> 0:18:53.239 will step up support for the economy, as evidenced by 0:18:53.280 --> 0:18:57.159 the PBOC on Sunday, cutting mortgage rates for first time homebuyers. 0:18:57.400 --> 0:19:02.080 China's National Bureau of Statistics, also admitting that COVID outbreaks 0:19:02.240 --> 0:19:05.399 in April had a big impact on the economy, but 0:19:05.480 --> 0:19:08.919 claims that the negative effect will be short term and 0:19:08.960 --> 0:19:14.240 that economic activity should start recovering gradually. Still, the economic 0:19:14.320 --> 0:19:18.360 shocks from she dimpaying zero tolerance approach to virus containment 0:19:18.400 --> 0:19:22.840 are obvious, pushing China's ambush ambitious full year growth target 0:19:22.840 --> 0:19:25.679 of around five and a half percent further out of reach. 0:19:26.240 --> 0:19:31.280 Stephen Engel, Bloomberg News, Hong Kong are very on Bloomberg 0:19:31.280 --> 0:19:33.920 Steve Nigle. Now, of course, talking about those supply chains 0:19:33.920 --> 0:19:36.520 ahead of the port of Los Angeles, cargo flows from 0:19:36.600 --> 0:19:39.719 China to the busiest port in the US appear consistent 0:19:39.840 --> 0:19:43.240 despite that ongoing pandemic. Here's some of what Jean Siroka 0:19:43.359 --> 0:19:47.680 told Bloomberg. This is gonna take some time. There's an 0:19:47.720 --> 0:19:50.639 episode just about every day that impacts us in the 0:19:50.680 --> 0:19:53.680 supply chain, whether it's on the ground, the atrocities in 0:19:53.840 --> 0:19:59.600 Ukraine impacting energy and agriculture goods flow, the lockdowns in Shanghai, 0:20:00.119 --> 0:20:04.920 point three percent inflation, producer prices going up eleven All 0:20:04.960 --> 0:20:10.520 of this is in the supply chain equation. Soroka says 0:20:10.520 --> 0:20:12.359 that there are no imminent signs of course of a 0:20:12.440 --> 0:20:15.600 slowdown in demand from American consumers based on the number 0:20:15.600 --> 0:20:19.119 of full shipping containers that they are seen arrived in 0:20:19.240 --> 0:20:22.600 the port. Coming up. We're still on that theme. Inflation, 0:20:22.720 --> 0:20:25.440 of course, still on the rise, interest rates climbing, tech 0:20:25.480 --> 0:20:28.240 stocks falling. What's next on the horizon, We have all 0:20:28.320 --> 0:20:46.560 of that more and next. This is Bloomberg. This is 0:20:46.600 --> 0:20:49.240 Bloomberg Technology. I'm Taylor Regg's in New York and for 0:20:49.320 --> 0:20:51.720 Emily Chang. Let's get an update now on the markets. 0:20:51.760 --> 0:20:54.440 The sell off, Katie of course still joining us now, 0:20:54.640 --> 0:20:57.320 Katie Greifeld. It just continues. I mean, we're looking to 0:20:57.359 --> 0:21:00.280 attack in the NAZAC one hundred often addition a one 0:21:00.320 --> 0:21:03.639 percent today hard to catch a break. Absolutely, Friday's bounce 0:21:03.720 --> 0:21:05.880 it came, and it went very quickly, of the SMP 0:21:06.000 --> 0:21:09.080 five hundred, ending four tenths of percent lower. Big tech 0:21:09.200 --> 0:21:11.919 felt even bigger. You have the NASZAC one hundred finishing 0:21:12.160 --> 0:21:14.520 well one point two percent lower. And that was even 0:21:14.560 --> 0:21:16.840 as some of the steam came out of treasury yields, 0:21:16.880 --> 0:21:19.840 the ten year treasury yield falling about four basis points 0:21:19.920 --> 0:21:22.920 or so on the day. And you have bitcoin it's 0:21:23.040 --> 0:21:25.200 rally a little bit after hours, a little bit of 0:21:25.240 --> 0:21:28.960 a nudge. But yesterday or this current day, Monday, it 0:21:29.119 --> 0:21:32.360 fell over three percent. You can see it's below that 0:21:32.440 --> 0:21:36.080 thirty thou dollar per coin mark. And what called my 0:21:36.200 --> 0:21:39.439 eyes that you actually saw the cbo ET Volatility Index, 0:21:39.480 --> 0:21:41.800 the VIX. It actually fell a little bit today it's 0:21:41.840 --> 0:21:46.520 mac below thirty. That's still above its one year average 0:21:46.520 --> 0:21:49.159 about twenty one, but still a little bit of a 0:21:49.200 --> 0:21:51.840 breath there today even as you did see that sell 0:21:51.840 --> 0:21:54.200 off resumed. But the question becomes, I mean, how much 0:21:54.320 --> 0:21:58.080 can volatility really fall as stocks continue to fall. If 0:21:58.080 --> 0:22:00.479 you look year to day, you can see the NAZAC 0:22:00.520 --> 0:22:03.920 one hundred down about twenty five per cent, so big tech, 0:22:04.000 --> 0:22:06.359 those growth names really taking the brunt of the selling. 0:22:06.560 --> 0:22:10.320 The SMP it continues to flirt with that bear market 0:22:10.320 --> 0:22:13.960 again that is at it's getting closer tailor at about 0:22:14.080 --> 0:22:17.239 six year today losses. And of course Katie were so 0:22:17.280 --> 0:22:20.080 excited to have you tomorrow joining us on Bloomberg markets. 0:22:20.119 --> 0:22:22.760 I can't close from two to five pm. It is 0:22:22.800 --> 0:22:25.520 our pleasure, so really appreciate that. Katie gry felt, of 0:22:25.520 --> 0:22:27.840 course joining us here with more on these markets and 0:22:27.880 --> 0:22:30.480 then sort of leads us right into our next conversation. 0:22:30.520 --> 0:22:32.440 We've talked a lot about this sell off. What does 0:22:32.440 --> 0:22:35.680 it mean for a new round of fundraising? Right when 0:22:35.680 --> 0:22:37.879 you think about all the belt tightening around the corner, 0:22:38.119 --> 0:22:40.720 does that cascade into another big problem? Doesn't mean to 0:22:40.840 --> 0:22:44.200 slow down in enterprise technology spending? Does this drive down 0:22:44.240 --> 0:22:47.679 another leg in the industries earnings outlook? Well, if you 0:22:47.720 --> 0:22:50.720 have earnings, that's the first problem with some of these companies. 0:22:50.920 --> 0:22:54.359 Be Capital co founder and managing partner Raj Gongly of 0:22:54.400 --> 0:22:56.920 course joining us here for more. Can we just start 0:22:57.000 --> 0:22:59.680 big picture when you think about just the pressure of 0:22:59.720 --> 0:23:03.160 broad based on these valuations, maybe it's risk of recession, 0:23:03.200 --> 0:23:06.560 maybe it's rising yield. How are you thinking about portfolios 0:23:06.560 --> 0:23:09.160 of some of these new companies and well, the pressure 0:23:09.160 --> 0:23:11.359 now they may not be worth what we thought they were. 0:23:11.840 --> 0:23:14.720 I think that it's the exact right question that everyone's 0:23:14.760 --> 0:23:18.159