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. Texas
Speaker 1: Governor Greg Abbott says the gunman who killed nineteen children
Speaker 1: and two adults used Facebook to talk about his plants,
Speaker 1: but the social network clarifies, claiming the posts were actually
Speaker 1: private messages. We will bring you the very latest as
Speaker 1: we learn more about this horrific turn of events, plus
Speaker 1: lessons learned from Twitter's annual shareholder meeting, investor's voicing concerns
Speaker 1: about Elon Musk's blooming takeover, and just after the meeting wraps,
Speaker 1: Musk files to change the balance of equity and debt
Speaker 1: in the deal. Our own at Ludlow will join us
Speaker 1: live from the ground, and Meta and Amazon holding their
Speaker 1: annual meetings as well. It's the first one for Amazon
Speaker 1: CEO Andy Jassey, how he addressed growing concerns about worker
Speaker 1: safety at the company's market cap threatens to dip back
Speaker 1: below one trillion dollars. All of that in a moment,
Speaker 1: but first let's get a look at the market, stocks
Speaker 1: climbing after a volatile trading day and the tech having
Speaker 1: NAZAC one hundred outperforming blooming. Waga Gupta has the latest Whittica.
Speaker 1: Why the turn from yesterday, Yes, Emily is quite interesting
Speaker 1: that we do see stocks finishing the day in the green,
Speaker 1: and as you mentioned, NAZAC one hundred really outperforming here
Speaker 1: and a lot of it, Emily, down to some of
Speaker 1: those heavyweights you apple your Amazons in particular, leading that
Speaker 1: index higher. But I will point out that a lot
Speaker 1: of the impetus, that momentum really started gaining after the
Speaker 1: Fed minutes. We're starting to see traders kind of pairing
Speaker 1: back their expectations of just how aggressive the pace of
Speaker 1: rate hikes. Maybe that's on some of those owth fear
Speaker 1: So you didn't see much change in that tenure year,
Speaker 1: but the two year yield, which is more sensitive to
Speaker 1: Fed policy changes, just ticking up a little higher. And
Speaker 1: then I do have to touch on end Video. They
Speaker 1: just had their earnings out. You see that stock down
Speaker 1: as some seven percent in after hours trade. They mere
Speaker 1: the analysts estimates. They've been expecting some robust profit and growth.
Speaker 1: But this stock on a year to date basis down
Speaker 1: some forty or so. I mean, it's quite surprising. Just
Speaker 1: back in November we were talking about it being close
Speaker 1: to a one trillion dollar market cap valuation. But this, Emily,
Speaker 1: is a story broader in the chip space. If you
Speaker 1: think back to last year, we saw chips surging off
Speaker 1: the chip shortage, but what we're seeing this year is
Speaker 1: that momentum has really started to wane. An end video
Speaker 1: mentioned the key issue there really about the supply chain
Speaker 1: issues from those COVID China lockdowns, but it's also about valuations, Emily,
Speaker 1: because investors have been shunning some of these high pe
Speaker 1: stocks that we've seen in the text based particularly in
Speaker 1: this chip makers. And really I do want to get
Speaker 1: to these annual general meetings are happening today, many of
Speaker 1: them intact, Twitter, Amazon, and Meta. We were all following
Speaker 1: these What were key takeaways? Yes, Emily, we'll staff with
Speaker 1: Twitter that one very closely watched a lot of the
Speaker 1: buzz because of course the drama surrounded by the Elon
Speaker 1: Musk takeover drama, but that vote actually set to happen
Speaker 1: at a later date. We did get the news the
Speaker 1: founder Jack Dorsey stepping down off the board and a
Speaker 1: key director also failing his re election bid. Let's move
Speaker 1: it on to Amazon though, because the shareholders rejecting all
Speaker 1: of the proposals that were in place to make the
Speaker 1: conditions better for the the workers. This company has come under
Speaker 1: a lot of scrutiny because of those conditions for workers,
Speaker 1: as we know, and also the stock split being approved
Speaker 1: by shareholders at twenty two one that's set to take
Speaker 1: place in June. Emily all right, Rodko Gupta, thank you
Speaker 1: for that round up. Meantime, were learning new details about
Speaker 1: the deadly and devastating shooting in Uvaldi, Texas. Texas Governor
Speaker 1: grab Abbott saying the eighteen year old gunman who killed
Speaker 1: nineteen children and two teachers at rob Elementary School posted
Speaker 1: about his plans on Facebook in the minute before the attack.
Speaker 1: As of this time, the only information that was known
Speaker 1: in advance was posted by the government on Facebook approximately
Speaker 1: thirty minutes before reaching the school. The first post was
Speaker 1: to the point of he said, I'm going to shoot
Speaker 1: my grandmother. The second post was I shot my grandmother.
Speaker 1: The third post, maybe less than fifteen minutes before arriving
Speaker 1: at the school, was I'm going to shoot an elementary school.
Speaker 1: Facebook spokes versus Andy Stone. However, verified and direct replies
Speaker 1: on Twitter that the messages the governor described were private
Speaker 1: one to one text messages that were discovered after the
Speaker 1: tragedy occurred. I want to bring in our Bloomberg Technology
Speaker 1: executive editor Tom Giles to discuss, so what exactly do
Speaker 1: we know about these messages. There is a big distinction
Speaker 1: between a public post and a private message, absolutely major distinction,
Speaker 1: and what a horrific set of developments. What we know
Speaker 1: is that once when these things happen, there's always a
Speaker 1: question about what roles social media played in either broadcasting them,
Speaker 1: glorifying them, Was social media involved in any way? Could
Speaker 1: this have been prevented? Those questions always arise. In this instance,
Speaker 1: what Greg Abbott said was taken to mean that somehow
Speaker 1: he was publicizing his intentions, that he had made this
Speaker 1: in a public setting. When you say post on Facebook,
Speaker 1: that makes it sound like he's putting it out there
Speaker 1: for everyone to hear, suggesting that maybe could this have
Speaker 1: been prevented? Maybe was Facebook in some way involved in
Speaker 1: this terrible way. Quickly Facebook comes out and says, wait,
Speaker 1: these were private one to one message is not the
Speaker 1: kinds of things that could have been seen by the public.
Speaker 1: We are trying to get clarification from Abbott's office as
Speaker 1: we speak to determine what he meant by that. Was
Speaker 1: he referring to some public or semi public part of Facebook,
Speaker 1: maybe in groups? Was there something out there that we
Speaker 1: could have seen? Now, none of us has seen anything
Speaker 1: publicly on Facebook. Obviously that would be blasted all over
Speaker 1: social media. If somebody had used the public news feed
Speaker 1: on Facebook to talk about this kind of thing. We
Speaker 1: don't have any evidence of that. We're seeking clarification from
Speaker 1: Abbott's office as we speak, but thus far Facebook has
Speaker 1: been like this was private one to one ket Can
Speaker 1: we confirm though, that these were on a Facebook platform
Speaker 1: private because Facebook doesn't have text messages if you will,
Speaker 1: there are direct right, there's the direct there's m there's WhatsApp,
Speaker 1: there's the kinds of communications that you can use you
Speaker 1: can use Instagram for But how much of that does
Speaker 1: does Facebook have access to? Now? In a case like this,
Speaker 1: if the shooter or the alleged shooter was a Facebook user,
Speaker 1: Facebook would have justification for going into his private messaging,
Speaker 1: but we don't know which platform on Facebook. If it
Speaker 1: was in fact a Facebook platform that he used well.
Speaker 1: And Andy Stone also says in this Twitter message that
Speaker 1: they are coordinating cooperating with law enforcement in their ongoing investigation.
Speaker 1: So Facebook is now somehow involved in this investigation. Um,
Speaker 1: what do you make of the way that Facebook is
Speaker 1: communicating this though through direct replies on Twitter not maybe
Speaker 1: put a statement statement? I mean will in fairness, in
Speaker 1: fairness to Facebook, I mean in Meta right, Twitter is
Speaker 1: an official platform, I mean it is recognized. As a
Speaker 1: way of getting the statement out there, I would like
Speaker 1: Facebook Meta to be more clear about which messaging platform
Speaker 1: they're talking about here. And remember, you know, in cases
Speaker 1: like this, law enforcement will will want to move very
Speaker 1: very quickly to get any private communications. They use power
Speaker 1: of subpoena, they use court orders. They're able to get
Speaker 1: access to these kinds of things that ordinarily big tech
Speaker 1: does not want to share. But in this instance, obviously
Speaker 1: Meta has a great interest in helping law enforcement and
Speaker 1: the greater public get to the bottom of how its
Speaker 1: platform may have been used, and incredibly important that we
Speaker 1: do get to the bottom of it, given the gravity
Speaker 1: of this situation. Tom Giles, our executive editor, thank you
Speaker 1: so much for sharing we know now with us Jack
Speaker 1: Dorsey is off Twitter's board. That is just one of
Speaker 1: a few developments from Twitter's annual shareholder meeting. His departure
Speaker 1: was announced earlier this year, but it's still notable since
Speaker 1: it is the first time since two thousand six that
Speaker 1: he has had no formal role at the company. No
Speaker 1: new details on Elon Musk's takeover deal were shared, but
Speaker 1: his shadow loomed large. CEO Paragua Agrawal opened his remarks
Speaker 1: by addressing concerns about misinformation and bias. More broadly, we're
Speaker 1: constantly improving our product, our policies, and our processes in
Speaker 1: order to earn more trust. We believe Twitter is a
Speaker 1: place for different voices and perspective to be. Our rules
Speaker 1: are enforced objectively on content and accounts, and our policies
Speaker 1: remain neutral too political identity and ideology. Our own and
Speaker 1: bloodlaw joining us now has been following the meeting all
Speaker 1: day and no vote ed on the Elon Musk deal.
Speaker 1: But just how big was his shadow over this meeting today? Yeah?
Speaker 1: You know, shareholders found a way to get the references
Speaker 1: in there, right. There was one proposal from our Junia Capital,
Speaker 1: which you know really well, and on having a new
Speaker 1: board member with a high level of expertise in human
Speaker 1: and civil rights. And the point that Natasha Lamb and
Speaker 1: our Juna made was had Twitter had a better track
Speaker 1: record in human civil rights, they'd have a better track
Speaker 1: record on free speech and freedom expression, and we would
Speaker 1: not be where we are with the world's richest man
Speaker 1: trying to take the company private to fix the issue
Speaker 1: of freedom of speech, which of course is one of
Speaker 1: the big rationales behind his decisions by the company. He says, Now,
Speaker 1: just after the meeting ends, Elon Musk files a new
Speaker 1: uht D where he boosts the equity portion of the
Speaker 1: deal but deuces the dead portion of the deal. Can
Speaker 1: you explain why this is significant? Yeah, it is significant.
Speaker 1: So where the equity portion is now at thirty three
Speaker 1: point five billion dollars, he's essentially removed altogether the margin
Speaker 1: loan component. That's significant because the margin loan component had
Speaker 1: the loan to value ratio of so Elon Musk had
Speaker 1: to stump up a big number of Tesla shares to
Speaker 1: meet the dollar value as collateral. That's gone. He in
Speaker 1: turn currently concurrently is adding another six point two five
Speaker 1: billion dollars of exit financing. But as part of the filing,
Speaker 1: we learned he's talking to existing shareholders about rolling their
Speaker 1: public shares into the private entity, something he'd stated previously
Speaker 1: he would do. Jack Dorsey is among those shareholders that
Speaker 1: he's speaking to. Significant because it essentially de risks the
Speaker 1: entire thing, right and interested to hear or your next
Speaker 1: guest has to say on that point. But it will
Speaker 1: be also interesting to see who he brings in because
Speaker 1: he's talking about even though he's added at six point
Speaker 1: two five billion dollars Vexty financing that he's backing, who
Speaker 1: else might join this and really interesting names already there right,
Speaker 1: Larry Ellison being one. The big question I have is like,
Speaker 1: is this just Elon Musk searching for cash or are
Speaker 1: the strategic elements here in terms of the people he's
Speaker 1: bringing in for a new look private Twitter. Interesting, Okay,
Speaker 1: at Ludlow outside Twitter headquarters there in San Francisco. I
Speaker 1: want to bring in that next guest now, Ross Gerbert
Speaker 1: of Guru Kawasaki CEO and president. They're also a Twitter shareholder. Look,
Speaker 1: there was no vote taken on the Musk deal today, Ross,
Speaker 1: but if you could have voted, are you four or against? Oh?
Speaker 1: I mean I can't wait for it to happen. I
Speaker 1: think Elan is going to do a phenomenal job fixing
Speaker 1: this wonderful asset. So have you increased your Twitter position
Speaker 1: since the sell off and are you continuing to boost
Speaker 1: it ahead of this deal? Absolutely? Absolutely. The fact that
Speaker 1: people don't believe that Elon is serious about taking this
Speaker 1: company over just proves how many people don't really understand
Speaker 1: Hellan after all these years. So he's dead serious on
Speaker 1: completing this deal. Um, and it is at a price
Speaker 1: of over fifty four dollars and there is no renegotiation
Speaker 1: going on, and so you know, I very much believe
Speaker 1: he's going to complete the deal. So look, some shareholders
Speaker 1: are excited like you. Some shareholders are skeptical, Natasha lamb
Speaker 1: As I've mentioned, very skeptical about how Elon Musk will
Speaker 1: handle free speech, human rights, civil rights issues. What do
Speaker 1: you think about those more nuanced and very complicated issues. Well,
Speaker 1: I think that it's silly to think that Elon musk
Speaker 1: is new job is going to be the arbitrator of
Speaker 1: free speech on Twitter. That's not his call in taking
Speaker 1: over the company. I think what he's trying to do
Speaker 1: is put in a management team and a transparent system
Speaker 1: so that the users of Twitter fully understand what in
Speaker 1: what isn't allowed on the platform. What I think most
Speaker 1: people are upset about, including myself, with Twitter, is just
Speaker 1: the sort of arbitrary nature that decisions are made and
Speaker 1: the lack of transparency. And I think by bringing transparency,
Speaker 1: which He's already been pushing really hard on Twitter, at
Speaker 1: Twitter to get more transparency, I think will be very
Speaker 1: beneficial for the users of Twitter. Now, interestingly, we heard
Speaker 1: parag agerol weiterate the company's mission to serve a diversity
Speaker 1: of views. But earlier this month, Elon Musk announced that
Speaker 1: he will be voting Republican. How does that strike you?
Speaker 1: Is that good for Twitter? You know, Elon and I
Speaker 1: are in the same camp here. We're both ex Democrats,
Speaker 1: and I'm never going to be a Republican because I
Speaker 1: can't stand them. But but you know, I'm I've become
Speaker 1: an independent voter, and I think what Ellen is saying
Speaker 1: is true. I worked very very hard to get Joe
Speaker 1: Biden and as president, and I'm a very big believer
Speaker 1: in the values that the Democrats represent, and they've achieved nothing.
Speaker 1: They've achieved none of the agenda that they set out
Speaker 1: to achieve, and they've really disappointed big supporters like myself
Speaker 1: and especially entrepreneurs who they've attacked and constantly saying that
Speaker 1: we don't pay our fair share when we do. And
Speaker 1: so it's just they've pushed the do you know, especially
Speaker 1: successful entrepreneurs of the out of the Democratic Party and
Speaker 1: and I'm one of them too. Well, speaking about a
Speaker 1: big time entrepreneur who is now out at Twitter, Jack Dorsey,
Speaker 1: the era of Jack Dorsey is officially over. We knew
Speaker 1: this was coming. No formal role at the company now,
Speaker 1: but you know, we can assume he will still have
Speaker 1: some influence. His tweets will carry some influence. What do
Speaker 1: you think is the significance of Jack leaving? Well, I
Speaker 1: think he'll be back. I think he'll be back. Well,
Speaker 1: I think he's going to I think he's in with
Speaker 1: this Zelon stuff. I mean, I would be surprised if
Speaker 1: he's not working with Elon at all. Um, he seems
Speaker 1: to be on Twitter, you know, sort of jumping on
Speaker 1: the arguments that Elon's are making and seem to be
Speaker 1: defending Elon's positions. Um, So I'm not really sure what's
Speaker 1: next for Jack Um, I think he's really focused on Square,
Speaker 1: which as a Square shareholder, I want him to be,
Speaker 1: and I think he'll play a role in the new Twitter. Meantime,
Speaker 1: silver Lakes Egon Durbin didn't get enough votes. Shareholders did
Speaker 1: not re elect him to the board. What's your reaction
Speaker 1: to that. Um, it's hard to understand, you know, why
Speaker 1: certain shareholders are on the board and not on the board,
Speaker 1: especially when they have large states in the company where
Speaker 1: that might have changed. UM. So, you know, I find
Speaker 1: that to be significant because silver Lake is a major player.
Speaker 1: But I think it has to do with the changing
Speaker 1: nature of what's going on. So there might be some
Speaker 1: conflicts of interests involved as well. Maybe they're involved with
Speaker 1: the new takeover, so they don't want to have a
Speaker 1: conflict by having somebody on the board. So it's just
Speaker 1: really hard to tell why these moves are being made.
Speaker 1: Meta also held its shareholder meeting today. Peter Till no
Speaker 1: longer on the board there, so that's also the end
Speaker 1: of an era. He's going to work more on the
Speaker 1: Trump agenda. I'm curious for your thoughts on Twitter versus Facebook.
Speaker 1: I know you don't you don't you have a miniscule
Speaker 1: position in Facebook, you know, also versus Snap, especially given
Speaker 1: social media stocks getting pummeled and Snap coming out saying
Speaker 1: they're gonna miss their guidance, right, And We've spent a
Speaker 1: good day looking at Snap and I have friends that Snap,
Speaker 1: so you know, I was trying to figure out what
Speaker 1: the hell is going on there, And these are three
Speaker 1: different stories and I think that they're playing out differently.
Speaker 1: So Snap is just getting eaten by TikTok. You know,
Speaker 1: there's not much more to it. TikTok is like a
Speaker 1: vacuum of young people's eyeballs and it's just Snapchat hasn't
Speaker 1: been able to compete and there's nothing more to it
Speaker 1: than that. Meta and you know, Facebook and Instagram are
Speaker 1: also suffering from the TikTok thing and the Apple privacy changes,
Speaker 1: which are really affecting Instagram and Facebook um and their targeting,
Speaker 1: but also a lot of ad you know, people are saying, hey,
Speaker 1: you know, you need to boot some of your instament
Speaker 1: grand budget to TikTok, and that's what's happening. So that
Speaker 1: puts pressure on Facebook and Meta not to mention, you know,
Speaker 1: there really hasn't been any innovation there in a long time,
Speaker 1: and the younger generation isn't using Facebook. And then with Twitter,
Speaker 1: it's really, to me the news, so it serves a
Speaker 1: completely different demographic than the Snapchat, Instagram, Facebook demo, and
Speaker 1: it really serves people who are looking for information, and therefore,
Speaker 1: to me, it's a much more powerful and valuable platform.
Speaker 1: And in fact, Twitter is probably the most valuable you know,
Speaker 1: information platform you know in the world, and if you
Speaker 1: look at the depth of the global leaders and users, um,
Speaker 1: there really is nothing like it. And as an investor,
Speaker 1: I I can't even imagine trying to be an investor
Speaker 1: and not used Twitter. So I think Twitter has a
Speaker 1: lot more intrinsic value than the other platforms. All right,
Speaker 1: Les Garber, President and CEO of Gerbert Kawasaki, always love
Speaker 1: having your views here, Ross, Thank you. Coming up, Twitter,
Speaker 1: as we said, not the only one holding its shareholder
Speaker 1: meeting today, Meta as well and Amazon. It was Andy
Speaker 1: Jase's first as CEO. Will get an update on how
Speaker 1: it all went down. Next. This is Bloomberg Amazon also
Speaker 1: holding its annual shareholder meeting, the first for CEO Andy Jase.
Speaker 1: I'm joined now by Bloomberg Spencer Soaper, who of course
Speaker 1: covers Amazon for Spencer, what were the big takeaways and
Speaker 1: Andy Jase's responses to some of these resolutions, Well, the
Speaker 1: UH a big one. There were several regarding worker treatment
Speaker 1: and Jesse really had to respond to that and just
Speaker 1: these high injury rates. Amazon was hiring a lot of
Speaker 1: people through the pandemic, and Jesse was trying to explain
Speaker 1: that there are a lot of them are new to
Speaker 1: industrial work environments. Therefore injury rates climbed even though Amazon
Speaker 1: made the pledged to UH, you know, to make it
Speaker 1: you know, the best place to work and to to
Speaker 1: really target reducing the injury rates. So he's definitely like
Speaker 1: trying to buy some time there by explaining the unique
Speaker 1: circumstances around the pandemic. Then there was also an advisory
Speaker 1: vote on pay and it was a big deal because
Speaker 1: you have Jasse, who was promoted into this role as CEO,
Speaker 1: is you know, not not someone who built the company himself,
Speaker 1: but was you know, promoted into succeed Jeff Bezos. Um.
Speaker 1: You know, some influential advisory firms saying that Jesse and
Speaker 1: to other executives, their pay is not linked strongly enough
Speaker 1: to company performance. They want to see if they're going
Speaker 1: to be paid substantial amounts of money that it better
Speaker 1: be more more directly tied to the performance of the company.
Speaker 1: So quickly on that, you've got Amazon shares dipping nearly
Speaker 1: below a trillion dollars UH in market cap. How concerned
Speaker 1: our shareholders about that? Quickly? That did come up uh
Speaker 1: and Jasse addressed it. And one of the questions shareholders
Speaker 1: shareholders had was he know, you're you're firing in so
Speaker 1: many directions, You've got so many things going on. You
Speaker 1: know what if you're more focused with that make the
Speaker 1: company more profitable. And Jesse's response to that was, you know,
Speaker 1: we'll look at we had Amazon Web Services and when
Speaker 1: it was in its gestational period and infancy stage, you know,
Speaker 1: people were very critical of that or had a lot
Speaker 1: of questions about that sort as a big gamble, and
Speaker 1: we turned into this huge, you know, multibillion dollar business.
Speaker 1: So I guess he's trying to make the case that
Speaker 1: you can't afford to not invest in things even when
Speaker 1: even when profitability is down. All right, Bloomberg Expense or soaper,
Speaker 1: thank you for giving us the round up on it.
Speaker 1: Jesse's first a g M Welcome back to Bloomber technology
Speaker 1: and Emily Chang in San Francisco. Get back now to
Speaker 1: the markets and hone in on social media stocks where
Speaker 1: it could take it away. Yes, Emily, well, I'll start
Speaker 1: off with the broader markets, which we did see moving
Speaker 1: higher today, and it was now like one that out performed.
Speaker 1: It was some of you a heavier weight. It's your
Speaker 1: your Amazon, your Tesla, and even your Apple pushing that
Speaker 1: index up higher today. And that impetus that really started
Speaker 1: to come out after those FED minutes. It was this
Speaker 1: idea that maybe Fed policymakers one as aggressive as the
Speaker 1: market was expecting. You didn't see much changes in the
Speaker 1: ten ye yield, but the two year yield has more
Speaker 1: sensitive to FED policy changes. That did take just a
Speaker 1: touch higher. And I also point to the vix that
Speaker 1: is ak that big age. This was lower today and
Speaker 1: this is as we get a bit more of a
Speaker 1: risk on field today. And speaking of risk on you
Speaker 1: mentioned it, Emily, those social media stocks that plunged yesterday,
Speaker 1: we are seeing them get We saw them get a
Speaker 1: big bid today, Snap actually bouncing back up some nearly
Speaker 1: eleven percent. But we know that these stocks behind me,
Speaker 1: I mean, perhaps investors thought they were a little bit
Speaker 1: oversold yesterday and they're swooping in on some bargains, but
Speaker 1: on a year today basis, they've all been down in
Speaker 1: the double digits. It's concerns of a slowdown what that
Speaker 1: means for ad revenues. But it isn't Emily just social
Speaker 1: media companies that are stuffed ring this year. That's represented
Speaker 1: by the orange line there on my chart. They're down
Speaker 1: some thirty seven on a year to date basis, but
Speaker 1: it's also your Spack Index, it's also your I p
Speaker 1: O Index, it's also the r g TF and then
Speaker 1: that's that Golden Dragon Index, which houses Chinese tech. Arguably
Speaker 1: has its own regulation challenges, but you can see clearly
Speaker 1: investors shunning some sort of speculative or more risky assets
Speaker 1: and honing in on some of those relatively more safe
Speaker 1: place Emily alright, Ritica, thank you. And while we did
Speaker 1: see that slight rebound in social media and tech stocks
Speaker 1: and general, big concerns still looming about the future of
Speaker 1: digital ads. Joined now by Mark Mahaney's senior managing director
Speaker 1: and head of the Internet research team at evercre Mark. Yes,
Speaker 1: Snap bounced back a little bit today, but remember they
Speaker 1: lost for yesterday so regained about about ten percent of
Speaker 1: that today. You know, how concerned are you about Snap?
Speaker 1: I think I share most of the market's concerns. The
Speaker 1: open question is how much of this is mac growth,
Speaker 1: which is impacting all which therefore impacts a whole bunch
Speaker 1: of these names were particularly ad names, and how much
Speaker 1: of this is Snap specific. And I guess I started
Speaker 1: off thinking this was largely macro. I was taking the
Speaker 1: company at at face value. Um, But you know, there
Speaker 1: is a track record here and this company has had
Speaker 1: a couple of surprises along the way, including in the
Speaker 1: September quarter last year when they had said they wouldn't
Speaker 1: have any impact from Apple and then they said they did.
Speaker 1: So there's a bit of a there's a bit there's
Speaker 1: a greater credibility issue here at Snap. Now. I assume
Speaker 1: that they are seeing a lot of macro pressures. This
Speaker 1: company has a lot of exposure to brand advertising that
Speaker 1: would be the first to get cut in a recession.
Speaker 1: They also have substantial exposure to Europe, which I think
Speaker 1: is a reasonably one could reasonably assume that's going to
Speaker 1: see pressure first before the US does. So a lot
Speaker 1: of what they're seeing probably is a broader read due
Speaker 1: to add names. But you know, this is a couple
Speaker 1: of times that this has happened, so maybe it's not
Speaker 1: terribly surprising this doc gets taken down more than the
Speaker 1: other ad names. So how much of this could be
Speaker 1: TikTok eating snaps lunch specifically? Look, you you're asking the
Speaker 1: right question. If it isn't mackerel, what could it be?
Speaker 1: Or if in addition to Mackerel, what are the other
Speaker 1: could what could other factors could there be? Um, it
Speaker 1: could be TikTok, It could well be ad budgets that
Speaker 1: slipped over to um Snap and awake of the Apple
Speaker 1: privacy changes slipping back to Facebook. Um, it could be
Speaker 1: additional Apple privacy changes. I mean, there's a serious series
Speaker 1: of things that Apple could still do to kind of
Speaker 1: tighten screws on the add ecosystem. That could be having
Speaker 1: an issue on on Snap. And then there could just
Speaker 1: be that this company is much more exposed to brand
Speaker 1: advertising than the market realizes. And again that's the probably
Speaker 1: the part of Internet advertising in a in a in
Speaker 1: a downturn, that gets hit first, and what would get
Speaker 1: had black hit last? With the performance marketing channels of course, Google,
Speaker 1: but a lot of Facebook that would be hit last
Speaker 1: because it's more performance marketing based. So anyway TikTok's an issue,
Speaker 1: There's a couple of these other things that could all
Speaker 1: be kind of piling up on Snap. Now it's just
Speaker 1: us surprised to have that guidance change in just a
Speaker 1: month period. So it's probably macro, but it could well
Speaker 1: be a few other factors. So there's a big question
Speaker 1: what this means for other social media companies, even though
Speaker 1: they're all in the middle of some fairly different narratives. Twitter,
Speaker 1: for example, just wrapping their a g M today. You know,
Speaker 1: no vote on Elon Musk, but of course, you know
Speaker 1: concerns excitement about the deal looming large over that meeting today.
Speaker 1: You know, what's your take on what direction this is
Speaker 1: gonna go? We just saw Elon Musk raised his equity
Speaker 1: portion of the deal. Well, I assume he's not going
Speaker 1: to walk away from the deal. I assume that he'd
Speaker 1: love to get a lower price. Whether he can get
Speaker 1: it or not will really come around to whether those
Speaker 1: shareholders that he talked with and I think convinced that
Speaker 1: he would be a good fire of their stock at
Speaker 1: with a price, whether they would be really still willing
Speaker 1: to sell it to him at forty five or forty
Speaker 1: or some lower price. And I don't know who has
Speaker 1: the most leverage in that in that environment. Um, maybe
Speaker 1: he does. I assume he really still wants to have
Speaker 1: this asset, that he really doesn't want to waste a
Speaker 1: billion dollars. And uh, of course I would take Twitter's
Speaker 1: shares down, but I think at the end of the day,
Speaker 1: Elon Musk wants to own Twitter. So my guess is
Speaker 1: that this gets negotiated, maybe at a lower price, or
Speaker 1: we're gonna be spending a lot of time in courts
Speaker 1: for the next year, which would be unfortunate for everybody involved.
Speaker 1: And how insulated do you think Twitter and Facebook are
Speaker 1: from the problems that Snap is facing or are are
Speaker 1: they really in the same boat? Yeah, Emily, I don't
Speaker 1: think they're insulated at all. But I'm sorry, I don't
Speaker 1: think Twitter at all is insulated. I think Twitter has
Speaker 1: got relatively material exposure to Europe, and uh, it's very
Speaker 1: heavily into brand advertising. Again, that's probably the weakest part
Speaker 1: of the Internet advertising ecosystem, and that's seventy of Twitter's
Speaker 1: total revenue. So if that's what's being hurt at, and
Speaker 1: that's what's taking down Snap. It would be taking on
Speaker 1: Twitter in dro of. I think there's also probably gonna
Speaker 1: be a lot of dislocation and Twitter, well, this was
Speaker 1: a hostile takeover. What do you expect? I mean, you
Speaker 1: get you disenfranchised, your disincentivized, that's probably the better word.
Speaker 1: A lot of the employees you've had turnover, a lot
Speaker 1: of uncertainty over you know, whether people are going to
Speaker 1: keep their jobs. So of course, almost certainly it's going
Speaker 1: to lead to poorer or less or suboptimal execution, although
Speaker 1: that's gonna pile up and probably hurt Twitter's fundamentals near term. Anyway,
Speaker 1: this doesn't help what the issues that Snap talks about.
Speaker 1: If in fact they are seeing loss of ad budgets
Speaker 1: to Twitter, if they're seeing macro pressure on their display advertising.
Speaker 1: Twitter is going to see all of that. Facebook much
Speaker 1: less so, but they'll see a smidgen of that, and
Speaker 1: Google the least of all those. But just remember, go
Speaker 1: through these major recessions. You and I watched this. Google
Speaker 1: went uh growth rate crater to only three percent year
Speaker 1: of rear during a great financial crisis, and then during
Speaker 1: the COVID quarter it went negative. So Google is not
Speaker 1: immune to you know, full blown advertising recession. Well, and
Speaker 1: let's talk about another big tech company where you know,
Speaker 1: the gains from the pandemic have been completely erased, and
Speaker 1: that is Amazon. We're seeing Amazon's market cap get close
Speaker 1: back to that one chillion dollar mark. Amazon also holding
Speaker 1: their annual shareholder reading today. It's Andy Joss's first one
Speaker 1: at the helm. You know what we are takeaways from
Speaker 1: what we heard there, and you know whether Amazon can
Speaker 1: turn it around. The one I'm sure Amazon can turn
Speaker 1: it around. I look at Amazon is kind of what
Speaker 1: I call a d h Q dislocated high quality stock.
Speaker 1: It's the most successfully diversified tech asset that I followed.
Speaker 1: I don't follow Apple, but it's the most successfully diversified
Speaker 1: in terms of advertising, cloud, retail, and then I think
Speaker 1: there's a couple of other targets that they can go after,
Speaker 1: including logistics and business supplies, et cetera. And I think
Speaker 1: groceries that probably falls into retail, but I think I
Speaker 1: think that's a new that's a that's a big area
Speaker 1: for them. So I'm not worried about the long term
Speaker 1: outlook really for Amazon. I think they can execute their way.
Speaker 1: I think they've got some good growth initiatives that the
Speaker 1: nuance I picked up from today at least from the
Speaker 1: headlines and we have them all up yet is the
Speaker 1: focus on cost efficiencies and so yeah, I think the
Speaker 1: company um company did something where I don't recall Emily
Speaker 1: Amazon ever coming out and saying we overbuilt. But that's
Speaker 1: what they said on the March quarter earnings call that
Speaker 1: they that they made it a mistake and they over
Speaker 1: extrapolated when they were making their CAPEX plans, their distribution
Speaker 1: center build up plans at the end of twenty and
Speaker 1: beginning of twenty one, the over extrapolated trends. I don't
Speaker 1: blame it for doing that. I think I probably did
Speaker 1: that too. I think the market obviously did that too.
Speaker 1: But Amazon did that, and now they've got excess capacity,
Speaker 1: both on the labor force side and on the physical
Speaker 1: plant side. And the investor question is how long will
Speaker 1: it take you to work through that? And will what
Speaker 1: if we're going into recession, Well, that's just gonna make
Speaker 1: that that that that could pass utilization build back up
Speaker 1: time longer and longer. But I think they'll get through this,
Speaker 1: and and I think if I look at the stock
Speaker 1: right now. You're a long term investor, not a trader,
Speaker 1: but an investor that you should be buying at least
Speaker 1: taking partial positions in Amazon on here today. Well, certainly
Speaker 1: it will be interesting to watch how Andy Dasey steers
Speaker 1: this ship. E recours at Mark Mahaney. Always good to
Speaker 1: have you, Mark, Thank you. We're probably going to hit
Speaker 1: eight thousand dollars before what was that number? Eight thousand
Speaker 1: until we totally flush. I mean, if I were I'd
Speaker 1: be short. Could Bitcoin follow as low as eight thousand dollars?
Speaker 1: That was Googenheim Partners chief investment officer Scott Minored. They're
Speaker 1: speaking in Davos. He's a known skeptic on crypto, though
Speaker 1: at one point a couple of years ago, he was
Speaker 1: optimistic enough to predict bitcoin would hit four hundred thousand dollars.
Speaker 1: Of course we're still far from that. I want to
Speaker 1: bring into well Atchison now for her perspective. She's the
Speaker 1: head of market insights at Genesis Trading, a digital currency
Speaker 1: prime broker. Noel, what do you think eight thousand dollars?
Speaker 1: What's going to come first? That? Or four hundred? Well
Speaker 1: between eight and four there's certainly quite a right range.
Speaker 1: I think you know the saying, if you're going to predict,
Speaker 1: predict with very wide ranges. Right. Thank you so much
Speaker 1: for having him. I do have to say that anything
Speaker 1: I say or my opinions not those of my employer,
Speaker 1: and of course nothing I say is investment advice. And
Speaker 1: first of all, huge respect to Mr Minard. He was
Speaker 1: one of the first institutional investors, one of the early
Speaker 1: ones to look at bitcoin, and he did do his
Speaker 1: homework back in the day. But later on in this
Speaker 1: interview that you showed a part of, he did say
Speaker 1: that his predictions of eight thousand was based on technicals
Speaker 1: because there's nothing else like more or less quote there,
Speaker 1: and that is overlooking the growing adoption and the fixed supply.
Speaker 1: This is something that many people tend to forget that
Speaker 1: no matter how high the bitcoin price, for how large
Speaker 1: the demand, the supply remains fixed. That's a fundamental feature
Speaker 1: right there. Bitcoins demand, which is growing could multiply by
Speaker 1: a thousand times the suppliable and rain fixed. Its price
Speaker 1: could go up by tech x the suppliable raine fixed.
Speaker 1: That's a pretty compelling investment case right there. On me,
Speaker 1: I want to ask you about some of the wreckage.
Speaker 1: In the wake of this terror disaster, they now have
Speaker 1: a new plan that's been approved to split the Terror
Speaker 1: blockchain into Terror Classic and Luna Classic. What do you
Speaker 1: make of this as a path forward? Well, you can
Speaker 1: imagine crypto Twitter today is having a field day with this.
Speaker 1: I must say that anything that gives those that lost
Speaker 1: a lot of money a chance to get some of
Speaker 1: that money back should be entertained. I mean that would
Speaker 1: be a very good development. That said, a lot of
Speaker 1: trust has been broken here, a lot of trust needs
Speaker 1: to be recovered, which is how many when you come
Speaker 1: to think of it, it it is quite ironic that trust
Speaker 1: is still such a firm component of a system that
Speaker 1: was designed to not need centralized trust to be able
Speaker 1: to have a decentralized trust mechanism. Shows that we can't
Speaker 1: get rid of the trust component after all. Well, so
Speaker 1: I wonder what the path forward is then? Also for regulators,
Speaker 1: we know that the house can be on financial services
Speaker 1: is going to be talking about digital assets. For example,
Speaker 1: could up FED you know, FED central bank digital dollar
Speaker 1: so to is bay possible? It's certainly possible, and in fact,
Speaker 1: in some parts of the world we already are seeing
Speaker 1: central bank digital currencies, and my opinion is that yes,
Speaker 1: we will see central bank digital currencies be quite commonplace
Speaker 1: within five years, and the form that this will take
Speaker 1: is still being hotly debated. It has many potential efficiency features,
Speaker 1: there are also some risks. We need to be careful.
Speaker 1: But what is most interesting, and going back to what
Speaker 1: you mentioned earlier about the terror implosion, is that this
Speaker 1: will accelerate regulatory clarity not just about crypto assets, but
Speaker 1: about stable coins, their potential use in global trade, their
Speaker 1: potential convenience for consumer services as well. It's a as
Speaker 1: a meeting field and standing here and right in the
Speaker 1: middle of it where it's all happening, watching what is
Speaker 1: arguably one of the most profound transformations of how we
Speaker 1: transact with each other as entities, as individuals, as sovereigns.
Speaker 1: Even it's it's an exciting time to be looking at
Speaker 1: this space now. Someone who is optimistic is Andreas and Harrow.
Speaker 1: If they just announced a record for an half billion
Speaker 1: dollar crypto fune, what do you make of the influence
Speaker 1: that andreason Horowitz has on the cryptos ecosystem. More broadly,
Speaker 1: They've got quite a bit of money at Stakecare. They
Speaker 1: have a lot of money. They have a lot of money,
Speaker 1: and that's their main influence. But what they have announced
Speaker 1: today is a reminder of just how much money is
Speaker 1: still sitting on the sidelines. We've had a frothy time
Speaker 1: of it in the crypto markets recently, certainly not because
Speaker 1: of the price, but valuations have been very high, Hiring
Speaker 1: has been very accelerated. I know of many investors who
Speaker 1: have been accompla with this. They're sitting it out because
Speaker 1: they think the valuations are crazy. I know of many
Speaker 1: and burners that have walked out of initial pitch meetings
Speaker 1: with signed term sheets, and many other investors and itcdotally
Speaker 1: have told me that if they don't come up with
Speaker 1: the term sheet after the first meeting, they're out of
Speaker 1: the deals. That's kind of a crazy time. That's frothy,
Speaker 1: not because of price, Unlike other frothy markets that we've had.
Speaker 1: What happened in the market crash the week of maybe
Speaker 1: eleventh is a cold, cold job of water, a j
Speaker 1: are cold water on the entire system has knocked a
Speaker 1: lot of the froth out. So the vast amount of
Speaker 1: money that has been sitting on the sidelines, but a
Speaker 1: lot of it coming from and recent horrowitz and their
Speaker 1: funds will now have better opportunities in which to invest,
Speaker 1: will be able to take their time and really do
Speaker 1: some due diligence and perhaps be more careful. That's another thing.
Speaker 1: The terror implosion reminded all of us that which we
Speaker 1: do need to be careful and really think things through.
Speaker 1: The regulators also, no doubt, are going to be taking
Speaker 1: a more careful look at some of the stable coins
Speaker 1: and some of the other projects, because protection is part
Speaker 1: of their part of their role. But now that the
Speaker 1: froth seems to have a slightly different tone, I expect
Speaker 1: us to see different kinds of investment deals. There's a
Speaker 1: lot of money out there, a lot of belief in
Speaker 1: the potential of the crypto industry to transform not just finance,
Speaker 1: but many other aspects of our culture, and it's going
Speaker 1: to be exciting. I wonder quickly, and I think about
Speaker 1: a company like micro Strategy, how do you think these
Speaker 1: massive price fluctuations are going to impact institutional sentiment quickly?
Speaker 1: One thing that needs to change is the accounting principles
Speaker 1: for companies like micro Strategy has a very different issue.
Speaker 1: Institutional sentiment has taken a hit, but it is certainly
Speaker 1: not gone away. This is something that we see a
Speaker 1: Genesis every single day. We are still talking to them,
Speaker 1: they are still investing, they are still trading, but a
Speaker 1: bit more caution is definitely the tone that we're seeing.
Speaker 1: All right now, I'll act to send Genesis trading. Thank
Speaker 1: you for sharing your thoughts. Thank you very much. Money
Speaker 1: coming up, the future of AI and keeping people safe
Speaker 1: on the role then promoting fuel efficiency. I'll chat with
Speaker 1: the CEO. Let's trying to make that happen. Let's talk
Speaker 1: now about the future of AI and helping to make
Speaker 1: driving safe. Motive, the tech company formally known as Keep Chucking,
Speaker 1: just raised a new funding round at nearly three billion
Speaker 1: dollar valuation, and it's planning to invest in artificial intelligence capabilities,
Speaker 1: including dash cams that can identify unsafe driving. For more.
Speaker 1: I'm joined by Motive co founder and CEO Showing mccani Showy.
Speaker 1: Thank you so much for joining us, so talk to
Speaker 1: us about how the technology works, specifically the dash cams.
Speaker 1: Thanks for having me. Yeah, it's great to be here.
Speaker 1: Uh So, really a motive our mission is to unlock
Speaker 1: the potential of the physical economy. We we serve industries
Speaker 1: like construction, energy, transportation, agriculture. UH. And what we do
Speaker 1: is we build technology that allows them to improve safety,
Speaker 1: UH and productivity of their operations. One of our products,
Speaker 1: as you mentioned, is the AI dash Camp, which is
Speaker 1: really a market leading technology that helps our customers understand
Speaker 1: how their drivers are performing on the road and actually
Speaker 1: in real time improved driving performance by observing the driver
Speaker 1: and and alerting them of unsafe behaviors. UM. You know,
Speaker 1: in in our analysis, we've we've observed almost a twenty
Speaker 1: two percent reduction in accidents and road fatalities for our
Speaker 1: customers who deploy this technology. Who are your customers and
Speaker 1: one of the growth opportunities you see ahead? Yeah, we
Speaker 1: we we serve really what we call the physical economy. UM.
Speaker 1: These are industries that move things, build stuff, serve customers
Speaker 1: in the physical world, industries like construction, agriculture, transportation, logistics. UH.
Speaker 1: And and really it's a segment of the economy that
Speaker 1: has been underserved from a technology perspective. UM. These industries
Speaker 1: haven't had a modern technology to drive the efficiency gains,
Speaker 1: the productivity gains that are necessary for them to keep
Speaker 1: up with what is a continuously expanding demand for their
Speaker 1: output and so we we built technology that enables these
Speaker 1: businesses to drive. So let's talk about what you're gonna
Speaker 1: do with this funding. You know, do you have expansion
Speaker 1: plans in mind, perhaps beyond the United States? Yeah? We
Speaker 1: well so, so you know, we were definitely investing in growth. Uh,
Speaker 1: monitoring the macro environment and the health of our customers
Speaker 1: closely to make sure that we're taking the right actions
Speaker 1: and make sure we can we can build great products
Speaker 1: for them. But but also uh, you know, react to
Speaker 1: what is it evolving market condition? Uh importantly, you know,
Speaker 1: our customers are facing incredib inflationary pressures. Uh. The cost
Speaker 1: of their inputs is is rising. Uh, and and our
Speaker 1: technology and that sense actually can be fundamentally deflationary. If
Speaker 1: we deliver on our promise of driving safety, productivity, helping
Speaker 1: them actually reduce their fuel costs, their maintenance cost we
Speaker 1: can help these businesses be more efficient and to thrive
Speaker 1: no matter what happens in the macro environment. Um. And
Speaker 1: so so we were very much investing in growth. Uh.
Speaker 1: There's three really key areas that we're doubling down. Number one,
Speaker 1: AI powered automation. We think the source of operating leverage
Speaker 1: for the physical economy is going to come through productivity
Speaker 1: gains that are happy that happens through automation. UM number two. Uh,
Speaker 1: we're investing in fintech. Uh. So we recently launched the
Speaker 1: Motive Card. It's a zero fee corporate card that helps
Speaker 1: our customers save on fuel, maintenance, tires, the things that
Speaker 1: they spend money on. UM, but also uh, you know,
Speaker 1: give them controls to be able to reduce fraud and
Speaker 1: reduce excess spend. And so we're be doubling down there
Speaker 1: and then also going up market serving larger and larger customers.
Speaker 1: All Right, Showy mccannie, co founder and CEO of Motive,
Speaker 1: We'll keep watching you. And that does it for this
Speaker 1: edition of Bloomberg Technology. We are back here tomorrow Thomas
Speaker 1: Carrie and the CEO of Google Cloud. We'll be with us.
Speaker 1: You don't want to miss it, and don't forget to
Speaker 1: check out our podcast. You can find that anywhere you
Speaker 1: get your podcast. To get your daily Bloomberg Tech ground up.
Speaker 1: I'm Emily Changing in San Francisco. This is Bloomberg's eight