1 00:00:02,400 --> 00:00:05,800 Speaker 1: From the heart of where innovation, money and power collive 2 00:00:06,519 --> 00:00:11,080 Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with 3 00:00:11,119 --> 00:00:27,920 Speaker 1: Emily jay I Ed Ludlow in San Francisco in for 4 00:00:27,960 --> 00:00:31,159 Speaker 1: Emily Chang. This is Bloomberg Technology coming up in the 5 00:00:31,200 --> 00:00:35,919 Speaker 1: next hour. Tech tumbles, retailers sinks stocks. This is concerns 6 00:00:35,920 --> 00:00:39,000 Speaker 1: around earnings adds to fed anxiety. We speak to a 7 00:00:39,080 --> 00:00:43,680 Speaker 1: seasoned investor who sees opportunity in the drop. Plus it's 8 00:00:43,720 --> 00:00:46,760 Speaker 1: not just tech stocks. Cryptocurrencies are in the gutter this 9 00:00:46,840 --> 00:00:49,720 Speaker 1: year too, and the meltdown shows no signs of easing. 10 00:00:49,800 --> 00:00:52,600 Speaker 1: Then again, some coins are holding up better than others. 11 00:00:52,600 --> 00:00:55,920 Speaker 1: Will have all the details and Elon Musk is at 12 00:00:55,920 --> 00:00:59,560 Speaker 1: it again. Twitter's board says it's committed to the billionaires 13 00:00:59,560 --> 00:01:04,120 Speaker 1: original takeover deal despite elons Bok concerns. The Tesla ceo 14 00:01:04,240 --> 00:01:07,800 Speaker 1: also using the social media platform to vent frustrations on 15 00:01:07,880 --> 00:01:10,560 Speaker 1: the ev maker getting yanked from a key e s 16 00:01:10,600 --> 00:01:13,360 Speaker 1: G index. All of that later this out we'll get 17 00:01:13,360 --> 00:01:14,959 Speaker 1: to at a moment, But first let's get a look 18 00:01:15,000 --> 00:01:18,360 Speaker 1: at market's pain for stocks. The SMP five hundred suffering 19 00:01:18,440 --> 00:01:21,319 Speaker 1: its deepest one day drop in almost two years, Bloomberg's 20 00:01:21,440 --> 00:01:25,920 Speaker 1: data here with the latest Riddika consumer retail tech all 21 00:01:25,959 --> 00:01:28,600 Speaker 1: in the red, all in the red, indeed ed and 22 00:01:28,640 --> 00:01:31,319 Speaker 1: this today has been nothing short of brutal. When you 23 00:01:31,360 --> 00:01:34,800 Speaker 1: have the SMP five closing down some four the now 24 00:01:34,880 --> 00:01:37,600 Speaker 1: ZACK one hundred being weighed down even more, down some 25 00:01:37,760 --> 00:01:40,600 Speaker 1: five percent. You have those heavy weights like Apple and 26 00:01:40,680 --> 00:01:44,600 Speaker 1: Amazon also down today over five percent in today's session, 27 00:01:44,600 --> 00:01:46,720 Speaker 1: and really big tech not even being helped out by 28 00:01:46,760 --> 00:01:49,320 Speaker 1: the fact that we did have lower yields today on 29 00:01:49,440 --> 00:01:52,960 Speaker 1: that tenure it was down some eleven basis points for 30 00:01:53,040 --> 00:01:56,000 Speaker 1: that really not helping the market out today as we 31 00:01:56,040 --> 00:01:59,120 Speaker 1: saw that flight into safety and treasury is really getting 32 00:01:59,120 --> 00:02:00,520 Speaker 1: a bid. And of course, one we talk about that 33 00:02:00,600 --> 00:02:03,160 Speaker 1: risk off sentiment, we've got to talk about bitcoin ed 34 00:02:03,240 --> 00:02:08,080 Speaker 1: below that thirty thousand dollar threshold there of course, if 35 00:02:08,080 --> 00:02:10,760 Speaker 1: you actually think a bitcoin in the may alone down 36 00:02:10,800 --> 00:02:14,440 Speaker 1: more than that collapse and stable coin last week not 37 00:02:14,520 --> 00:02:17,720 Speaker 1: recovering those losses, but for today at least, that pressure, 38 00:02:18,000 --> 00:02:21,920 Speaker 1: that's selling pressure really accelerated after those target earnings, so 39 00:02:22,000 --> 00:02:26,959 Speaker 1: amiss on those analysts expectations and that profit outlook being 40 00:02:27,000 --> 00:02:29,960 Speaker 1: cut to six percent from eight percent. Now, this is 41 00:02:30,000 --> 00:02:32,959 Speaker 1: not about sales. This is not about revenues. It was 42 00:02:33,000 --> 00:02:36,480 Speaker 1: about higher freight costs, it was about higher inventory levels. 43 00:02:36,760 --> 00:02:38,600 Speaker 1: All of that really weighing on the stock. And it 44 00:02:38,639 --> 00:02:41,280 Speaker 1: was a similar story that we saw with Walmart. Walmart 45 00:02:41,280 --> 00:02:44,200 Speaker 1: stock now down over the past two days and Target 46 00:02:44,200 --> 00:02:47,280 Speaker 1: of course having its worst day since the nine seven. Now, 47 00:02:47,360 --> 00:02:49,000 Speaker 1: let us flip up the board because when we talk 48 00:02:49,000 --> 00:02:51,240 Speaker 1: about margins, when we talk about those coming under pressure, 49 00:02:51,480 --> 00:02:54,720 Speaker 1: let's look at those Cisco earnings that we just got 50 00:02:54,800 --> 00:02:57,560 Speaker 1: after the market closed, and you see that stock absolutely 51 00:02:57,560 --> 00:03:00,840 Speaker 1: plunging down from their percent here. They got hit with 52 00:03:00,880 --> 00:03:04,920 Speaker 1: those China COVID lockdowns, the supply chain issues really coming 53 00:03:04,919 --> 00:03:06,720 Speaker 1: to the forefront. They also got hit by the Russia 54 00:03:06,840 --> 00:03:09,880 Speaker 1: Ukraine war and of course inflation playing a key part. 55 00:03:09,919 --> 00:03:12,600 Speaker 1: Will that way on customer demand or will set back 56 00:03:12,639 --> 00:03:15,600 Speaker 1: to Cisco after those earning fat stock after hours punging 57 00:03:15,639 --> 00:03:19,959 Speaker 1: some head. Yes, Cisco a real bell weather of corporate spending. 58 00:03:19,960 --> 00:03:22,519 Speaker 1: Our thanks to Bloomberg's Ridika goot To and let's stick 59 00:03:22,520 --> 00:03:24,880 Speaker 1: with markets. I want to bring in mel like a Messino. 60 00:03:25,000 --> 00:03:27,680 Speaker 1: She's the CEO of WE Family Offices, which has more 61 00:03:27,880 --> 00:03:31,760 Speaker 1: than fourteen billion dollars in assets, under management. Mel You've 62 00:03:31,760 --> 00:03:33,880 Speaker 1: seen a lot of markets. What do you make of 63 00:03:33,919 --> 00:03:36,560 Speaker 1: a daylight today? Well, I think we're going through a 64 00:03:36,640 --> 00:03:39,880 Speaker 1: paradigm shift. You know, we're going through a regime change, 65 00:03:40,040 --> 00:03:41,920 Speaker 1: and I think the markets are getting used to the 66 00:03:42,000 --> 00:03:46,400 Speaker 1: fact that the very drivers that droves this fantastic investment 67 00:03:47,000 --> 00:03:49,000 Speaker 1: environment for the last ten years, it's not going to 68 00:03:49,080 --> 00:03:51,840 Speaker 1: be there anymore. We're not going to have low inflation, 69 00:03:51,920 --> 00:03:54,120 Speaker 1: we're not going to have low interest rates, we're not 70 00:03:54,160 --> 00:03:57,600 Speaker 1: going to have globalization, We're not going to have frankly, 71 00:03:57,680 --> 00:04:01,560 Speaker 1: very benign geopolitical markets. So so I think that a 72 00:04:01,600 --> 00:04:04,520 Speaker 1: lot of the things that lead to wonderful markets over 73 00:04:04,520 --> 00:04:06,360 Speaker 1: the last ten years are going to change, and so 74 00:04:06,480 --> 00:04:08,480 Speaker 1: I think the market is trying to figure out what's 75 00:04:08,520 --> 00:04:10,760 Speaker 1: the new paradigm gonna look like, what's it going to 76 00:04:10,840 --> 00:04:13,920 Speaker 1: be in the next ten We'll look here a chart 77 00:04:13,960 --> 00:04:17,839 Speaker 1: on the Bloomberg terminal evaluations on the NASTAC one hundred, 78 00:04:17,880 --> 00:04:21,000 Speaker 1: we're getting nearer to ten year average on that price 79 00:04:21,120 --> 00:04:25,360 Speaker 1: projected profit right, and we're getting nearer too pre pandemic levels. 80 00:04:25,960 --> 00:04:30,800 Speaker 1: Do you sense opportunity in a daylight today? Absolutely? Absolutely, 81 00:04:31,200 --> 00:04:33,000 Speaker 1: because I think a lot of the things that are 82 00:04:33,040 --> 00:04:36,880 Speaker 1: worrying the corporates, a lot of the supply chain issues, 83 00:04:37,760 --> 00:04:40,760 Speaker 1: lower profit margins, inflation cre How are you going to 84 00:04:40,800 --> 00:04:43,520 Speaker 1: solve it? You're gonna solve it through technology. So I 85 00:04:43,920 --> 00:04:46,120 Speaker 1: think that the name of the game is going to 86 00:04:46,160 --> 00:04:49,159 Speaker 1: be productivity, and what's going to drive productivity. It's going 87 00:04:49,200 --> 00:04:52,440 Speaker 1: to be technology. So I think there's a tremendous opportunity 88 00:04:52,480 --> 00:04:56,600 Speaker 1: that's happening right now. Now. You're the former CEO of 89 00:04:56,680 --> 00:04:59,919 Speaker 1: JPMorgan Private Bank, You've been in the market's a long time, 90 00:05:00,000 --> 00:05:02,880 Speaker 1: and there's a lot of take on board inflation, the 91 00:05:02,920 --> 00:05:06,600 Speaker 1: outlook for higher rates, supply chain issues, China. Can go 92 00:05:06,640 --> 00:05:08,960 Speaker 1: on and on if you'd like me to. What's driving 93 00:05:08,960 --> 00:05:13,320 Speaker 1: the psychology of this market. I think it's inflation. I 94 00:05:13,520 --> 00:05:16,400 Speaker 1: think it's it's really the fact that for those of 95 00:05:16,520 --> 00:05:19,599 Speaker 1: us who remember, and I do remember, once inflation starts, 96 00:05:19,640 --> 00:05:22,040 Speaker 1: it's really hard to get it under control. And we 97 00:05:22,080 --> 00:05:26,560 Speaker 1: really have been blessed with this unbelievable investment climate over 98 00:05:26,600 --> 00:05:29,000 Speaker 1: the next ten years, over the last ten years, and 99 00:05:29,040 --> 00:05:31,000 Speaker 1: I think people are trying to figure out how we're 100 00:05:31,040 --> 00:05:33,320 Speaker 1: going to be able to bring down inflation. What is 101 00:05:33,360 --> 00:05:35,120 Speaker 1: it going to look like over the next ten years? 102 00:05:35,160 --> 00:05:37,799 Speaker 1: What is it gonna take? And again, I'm not a trader. 103 00:05:37,839 --> 00:05:39,960 Speaker 1: I'm more of a long term investor, so I really 104 00:05:40,000 --> 00:05:43,040 Speaker 1: look at the next ten years. A few things caught 105 00:05:43,080 --> 00:05:44,880 Speaker 1: my eye when you and I were talking the markets 106 00:05:44,880 --> 00:05:48,320 Speaker 1: throughout the day. You see opportunities in particular sectors and 107 00:05:48,400 --> 00:05:53,400 Speaker 1: subsectors talking about artificial intelligence, cybersecurity, some perhaps those long, 108 00:05:53,640 --> 00:05:59,520 Speaker 1: longer duration software stocks. Where do you see that opportunity specifically? Well, 109 00:05:59,680 --> 00:06:02,640 Speaker 1: would the opportunity around all of the sudden you think 110 00:06:02,680 --> 00:06:06,760 Speaker 1: about all of the areas their productivity is really going 111 00:06:06,839 --> 00:06:10,320 Speaker 1: to change the new paradigm. Uh, it's it's really going 112 00:06:10,360 --> 00:06:12,599 Speaker 1: to be. For example, let's take the health care sector 113 00:06:12,640 --> 00:06:15,200 Speaker 1: and take a look at the demographics on the United 114 00:06:15,240 --> 00:06:18,320 Speaker 1: States technology. I think it's going to make a huge 115 00:06:18,360 --> 00:06:20,560 Speaker 1: difference in the healthcare and I think you have to 116 00:06:20,640 --> 00:06:24,080 Speaker 1: play it across the equity spectrum. You have to play 117 00:06:24,080 --> 00:06:26,839 Speaker 1: an adventure, you have to pay play it in girls, 118 00:06:26,880 --> 00:06:28,560 Speaker 1: you have to play it in the private markets on 119 00:06:28,600 --> 00:06:31,839 Speaker 1: the public markets, So you have to play it across 120 00:06:31,880 --> 00:06:35,480 Speaker 1: the board. Same thing with cybersecurity, same thing with artificial 121 00:06:35,520 --> 00:06:39,600 Speaker 1: intelligence or the cloud. Right, I just want to come 122 00:06:39,600 --> 00:06:42,880 Speaker 1: back to Cisco with downt and after hours, Cisco is 123 00:06:42,920 --> 00:06:46,280 Speaker 1: active saying it's impossible to catch up on supply given 124 00:06:46,320 --> 00:06:48,680 Speaker 1: the current situation. You think about their exposures, what we 125 00:06:48,720 --> 00:06:52,159 Speaker 1: see in the semiconductor space, their exposure to China. But 126 00:06:52,240 --> 00:06:56,280 Speaker 1: you against the opportunity in semiconductors taught me about that well. 127 00:06:56,320 --> 00:06:58,760 Speaker 1: We do see a lot of opportunity in semiconductors, where 128 00:06:58,800 --> 00:07:01,400 Speaker 1: it's going to take time because I think new factories 129 00:07:01,400 --> 00:07:03,640 Speaker 1: are going to have to be built. There's going to 130 00:07:03,720 --> 00:07:06,440 Speaker 1: be tremendous demand. But we're going through this adjustment, and 131 00:07:06,520 --> 00:07:09,159 Speaker 1: I think that's where the issue is is that we're 132 00:07:09,160 --> 00:07:11,520 Speaker 1: going through this adjustment. It's taking down a lot of 133 00:07:11,560 --> 00:07:14,640 Speaker 1: great companies that will I think emerge stronger as a 134 00:07:14,680 --> 00:07:17,280 Speaker 1: result of this. They will emerge differently as a result 135 00:07:17,320 --> 00:07:20,160 Speaker 1: of this, and there will be I think tremendous opportunity 136 00:07:20,200 --> 00:07:25,120 Speaker 1: in that space, including with companies like Ziska. We've seen 137 00:07:25,200 --> 00:07:28,280 Speaker 1: this under performance of the NAZAC one hundred relative to 138 00:07:28,280 --> 00:07:32,000 Speaker 1: the broader market, right, the sensitivity of tech to higher rates, 139 00:07:32,040 --> 00:07:36,520 Speaker 1: the psychology around that going forward, what is the key 140 00:07:36,640 --> 00:07:39,840 Speaker 1: data that we're looking at. Do we track inflation or 141 00:07:39,880 --> 00:07:43,960 Speaker 1: do we assess the markets faith that the FED can 142 00:07:44,040 --> 00:07:47,720 Speaker 1: handle inflation without causing a soft hard landing or indeed 143 00:07:47,720 --> 00:07:51,080 Speaker 1: delivering a soft landing. Well, the economy is really moving, 144 00:07:51,520 --> 00:07:53,640 Speaker 1: UH is pretty hot right now, and it's going to 145 00:07:53,760 --> 00:07:56,800 Speaker 1: take a bit to cool it down. So I think 146 00:07:56,840 --> 00:08:00,280 Speaker 1: that and the consumer is still spending even and though 147 00:08:00,320 --> 00:08:04,520 Speaker 1: you're seeing the Walmart and and and Target results, but 148 00:08:04,600 --> 00:08:07,680 Speaker 1: I think that the economy is probably strong enough not 149 00:08:07,760 --> 00:08:10,760 Speaker 1: to have a recession this year. But I think we 150 00:08:10,880 --> 00:08:13,320 Speaker 1: might get a recession next year, but I don't think 151 00:08:13,360 --> 00:08:16,960 Speaker 1: it will be long, right, male, final question, you also 152 00:08:17,000 --> 00:08:20,840 Speaker 1: see opportunity in private markets towards me about that. We 153 00:08:20,920 --> 00:08:24,360 Speaker 1: see lots more opportunity actually in private markets than in 154 00:08:24,400 --> 00:08:27,040 Speaker 1: public markets. And I think there's a tremendous amount of 155 00:08:27,040 --> 00:08:29,480 Speaker 1: money to be put to work. And I think that 156 00:08:29,640 --> 00:08:32,640 Speaker 1: exactly what's happening in the public markets will bring down 157 00:08:32,720 --> 00:08:38,160 Speaker 1: valuations and we'll create fantastic opportunities in the private markets 158 00:08:38,880 --> 00:08:42,880 Speaker 1: across the whole spectrum, the whole spectrum. Indeed, mel like 159 00:08:42,920 --> 00:08:55,080 Speaker 1: a Messino CEO of We Family Offices. Thank you, as 160 00:08:55,120 --> 00:08:59,000 Speaker 1: Elon Musk continues to tweet and tweet and tweet his 161 00:08:59,080 --> 00:09:02,240 Speaker 1: concerns about twee this problems sources say his deal to 162 00:09:02,280 --> 00:09:05,000 Speaker 1: buy the platform is still very much going forward. For 163 00:09:05,080 --> 00:09:07,400 Speaker 1: more and where things stand, I'm joined by Bloomberg's Deals 164 00:09:07,440 --> 00:09:12,920 Speaker 1: reporter Michelle Davis, along with Bloomberg Technology executive editor Tom Giles. 165 00:09:12,920 --> 00:09:14,559 Speaker 1: And Tom, I'm going to start with you, just bring 166 00:09:14,679 --> 00:09:16,439 Speaker 1: us up to speed. Where do we stand with this? 167 00:09:16,520 --> 00:09:19,720 Speaker 1: What a Twitter saying and all of this? Yeah, well Twitter, 168 00:09:20,040 --> 00:09:23,880 Speaker 1: Twitter thinks the deal's going forward. Um as our colleague Michelle, 169 00:09:23,880 --> 00:09:26,120 Speaker 1: who were about to talk to broke the news yesterday, 170 00:09:26,360 --> 00:09:28,760 Speaker 1: Twitter's board came out and said, we're going to enforce 171 00:09:28,840 --> 00:09:32,280 Speaker 1: this merger agreement. We've got an agreement in place where 172 00:09:32,280 --> 00:09:35,480 Speaker 1: Elon Musk is going to pay fifty twenty for our company, right, 173 00:09:35,640 --> 00:09:38,840 Speaker 1: and we expect that deal to go through. So all 174 00:09:38,920 --> 00:09:43,160 Speaker 1: this talk, all this background noise about bots and the 175 00:09:43,280 --> 00:09:46,800 Speaker 1: deals on hold, which ain't a thing, by the way, 176 00:09:47,360 --> 00:09:50,840 Speaker 1: not a thing. Twitter is like, the deal goes forward, 177 00:09:50,960 --> 00:09:52,560 Speaker 1: all right, So Michelle, I want to get the inside 178 00:09:52,559 --> 00:09:54,760 Speaker 1: scoop from you. But first we had Natasha Lamb from 179 00:09:54,760 --> 00:09:58,360 Speaker 1: our junior capital on the show on Tuesday. Listen is 180 00:09:58,400 --> 00:10:02,200 Speaker 1: what she had to say about this whole situation. I 181 00:10:02,240 --> 00:10:05,520 Speaker 1: think Twitter has had so many challenges over the years, 182 00:10:05,840 --> 00:10:09,080 Speaker 1: which is why you've seen you know, CEOs come and 183 00:10:09,120 --> 00:10:12,280 Speaker 1: go move around, why you're seeing what's happening with Elon 184 00:10:12,400 --> 00:10:15,520 Speaker 1: Musk right now. Um, you know, Unfortunately, right now I 185 00:10:15,559 --> 00:10:18,120 Speaker 1: feel like I feel like Elon Musk is like a 186 00:10:18,160 --> 00:10:22,640 Speaker 1: cat playing with a bottle of string, a cat with 187 00:10:22,679 --> 00:10:25,600 Speaker 1: a ball of string. But what you're hearing, Michelle is 188 00:10:25,600 --> 00:10:30,280 Speaker 1: in the background, the bankers, the advisors, business as usual. Yeah. 189 00:10:30,320 --> 00:10:34,160 Speaker 1: Everyone that I've been talking to, um, you know, seems 190 00:10:34,160 --> 00:10:37,360 Speaker 1: to have the impression that things the Steel will proceed 191 00:10:37,600 --> 00:10:42,319 Speaker 1: as planned. One big sign of that is that the 192 00:10:42,440 --> 00:10:46,000 Speaker 1: proxy filing hit yesterday morning. That's you know, this big, 193 00:10:46,040 --> 00:10:49,720 Speaker 1: more than page long documents that explains how the deal 194 00:10:49,760 --> 00:10:53,040 Speaker 1: came together. Um. It's something that was put together in 195 00:10:53,080 --> 00:10:56,280 Speaker 1: coordination between the Musk camp and the Twitter camp, and 196 00:10:56,280 --> 00:10:58,880 Speaker 1: it's something that Musk would have had to personally sign 197 00:10:58,920 --> 00:11:01,120 Speaker 1: off on before would been filed. And this is a 198 00:11:01,600 --> 00:11:05,040 Speaker 1: proxy that you know outline the deal terms twenties. So 199 00:11:05,240 --> 00:11:08,360 Speaker 1: that's the clearest indication that you know, both sides do 200 00:11:08,960 --> 00:11:12,280 Speaker 1: see this deal going forward, despite the you know tweets 201 00:11:12,320 --> 00:11:17,240 Speaker 1: that we're seeing on Twitter. Michelle, I've got a question, 202 00:11:17,360 --> 00:11:20,280 Speaker 1: so all this chatter, all this noise in the background 203 00:11:20,320 --> 00:11:23,920 Speaker 1: about Boughts and whether or not he had all the 204 00:11:23,960 --> 00:11:27,200 Speaker 1: information he needed before he agreed to this deal. What 205 00:11:27,440 --> 00:11:31,000 Speaker 1: happens if he decides I don't want to pay fifty 206 00:11:31,840 --> 00:11:35,720 Speaker 1: What are the means that he has at his disposal. So, 207 00:11:35,920 --> 00:11:37,520 Speaker 1: you know a lot of people have talked about the 208 00:11:37,520 --> 00:11:40,439 Speaker 1: fact that the deal has a breakup fee and that 209 00:11:40,520 --> 00:11:42,880 Speaker 1: you know, people say that he could just pay this 210 00:11:42,960 --> 00:11:45,880 Speaker 1: billion dollar break up and walk away. That's not true. Um, 211 00:11:45,960 --> 00:11:49,080 Speaker 1: this deal actually includes as it's seller friendly, So it 212 00:11:49,120 --> 00:11:53,120 Speaker 1: includes this legal provision called specific performance, which basically means 213 00:11:53,320 --> 00:11:55,840 Speaker 1: I must decides he wants to walk away, Twitter can 214 00:11:55,840 --> 00:11:57,800 Speaker 1: take him to court and get a court order that 215 00:11:57,840 --> 00:12:00,320 Speaker 1: says you have to complete the steale, you have to 216 00:12:00,360 --> 00:12:01,960 Speaker 1: come up with the finance, and you have to pay 217 00:12:02,080 --> 00:12:05,880 Speaker 1: for Twitter. Um. Other options that he could take is 218 00:12:05,920 --> 00:12:08,680 Speaker 1: he could try to show that there was something called 219 00:12:08,679 --> 00:12:12,679 Speaker 1: a material adverse event. Um, it's a mac cause and 220 00:12:12,760 --> 00:12:15,280 Speaker 1: he could say, you know, there was like some change 221 00:12:15,320 --> 00:12:18,680 Speaker 1: to the business that materially, for a sustained period of time, 222 00:12:18,679 --> 00:12:21,520 Speaker 1: is going to change Twitter's outlook. Um, But the burden 223 00:12:21,520 --> 00:12:23,800 Speaker 1: of proof is on him. He would have to show 224 00:12:23,800 --> 00:12:26,320 Speaker 1: this so him saying, uh, you know, Twitter, I'm not 225 00:12:26,360 --> 00:12:28,600 Speaker 1: going through this deal until you prove to me that 226 00:12:28,679 --> 00:12:31,960 Speaker 1: box make up fewer than five percent of accounts. That's 227 00:12:32,000 --> 00:12:35,200 Speaker 1: not Twitter doesn't have to prove anything. Um. The other 228 00:12:35,240 --> 00:12:38,240 Speaker 1: thing is he waived his right to do diligence when 229 00:12:38,320 --> 00:12:41,280 Speaker 1: he was going about this deal and presented that as 230 00:12:41,360 --> 00:12:44,560 Speaker 1: something that, uh, you know, was a vote in favor 231 00:12:44,559 --> 00:12:46,000 Speaker 1: of the deal. He said, you know, I'm someone who's 232 00:12:46,000 --> 00:12:47,560 Speaker 1: gonna be able to do this quickly. I won't even 233 00:12:47,559 --> 00:12:49,959 Speaker 1: do diligence and so kind of doesn't have a like 234 00:12:50,120 --> 00:12:53,400 Speaker 1: to stand on. And then finally, Twitter has made public 235 00:12:53,400 --> 00:12:56,360 Speaker 1: disclosures about the fact that you know, it estimates that 236 00:12:56,440 --> 00:12:58,680 Speaker 1: the box make up fewer the five percent of accounts, 237 00:12:58,679 --> 00:13:01,839 Speaker 1: but it's also in securities filing said, including in its 238 00:13:02,040 --> 00:13:05,199 Speaker 1: most recent ten K said the number could be higher 239 00:13:05,200 --> 00:13:08,160 Speaker 1: than that. So it for the people I talked to 240 00:13:08,200 --> 00:13:10,760 Speaker 1: you say that it would be a judge would be 241 00:13:10,840 --> 00:13:14,000 Speaker 1: hard press to agree with Musk on this. Um. What 242 00:13:14,120 --> 00:13:16,720 Speaker 1: could happen is, you know, he could walk he could 243 00:13:16,760 --> 00:13:19,920 Speaker 1: try to walk away. Twitter could take him to court. Um. 244 00:13:20,040 --> 00:13:23,160 Speaker 1: And then in order to avoid some you know, lengthy 245 00:13:23,160 --> 00:13:27,840 Speaker 1: protracted court battle. Um, there could be a scenario where 246 00:13:27,840 --> 00:13:32,120 Speaker 1: the two come to some settlement. But at this point, um, 247 00:13:32,440 --> 00:13:34,920 Speaker 1: from my understanding, you know, Twitter does not have any 248 00:13:34,920 --> 00:13:39,920 Speaker 1: reason to renegotiate a deal. The contract is in their favor, um, 249 00:13:39,960 --> 00:13:42,520 Speaker 1: and so it seems like the deal has to go 250 00:13:42,559 --> 00:13:46,679 Speaker 1: ahead unless unless must can prove that there's some you know, 251 00:13:46,800 --> 00:13:50,400 Speaker 1: material adverse effect to the business. Meantime, Tom wierrating on 252 00:13:50,400 --> 00:13:53,000 Speaker 1: the share price right, you know, we saw the sell 253 00:13:53,000 --> 00:13:55,360 Speaker 1: off in Twitter stock accelerate with the broader market, but 254 00:13:55,480 --> 00:14:01,800 Speaker 1: basically the skepticisn't from the market that sent materializes. Meantime, 255 00:14:02,280 --> 00:14:06,959 Speaker 1: Elomuski is tweeting a lot about his political affiliations, and 256 00:14:07,160 --> 00:14:10,760 Speaker 1: we wonder, is this him getting ahead of scrutiny of 257 00:14:10,800 --> 00:14:13,800 Speaker 1: a deal. Is this him trying to get allies in DC? 258 00:14:14,280 --> 00:14:16,120 Speaker 1: What's your ead? Sure, there's a couple of things going on. 259 00:14:16,200 --> 00:14:19,800 Speaker 1: He talked about his disillusionment with the Democrats, how in 260 00:14:19,840 --> 00:14:23,240 Speaker 1: the next election he's voting Republican and this is apparently 261 00:14:23,280 --> 00:14:24,920 Speaker 1: the first time he's done and I haven't seen his 262 00:14:25,000 --> 00:14:27,880 Speaker 1: voting records, but that's what he's saying. So what's interesting 263 00:14:27,920 --> 00:14:29,960 Speaker 1: about that? You have a couple of dynamics going on 264 00:14:30,360 --> 00:14:35,280 Speaker 1: This is a guy whose market is moving, is shifting. 265 00:14:35,320 --> 00:14:40,080 Speaker 1: He started in California's company started in California. He's moved 266 00:14:40,200 --> 00:14:44,040 Speaker 1: to Texas. He's shifting towards wanting to sell trucks. He's 267 00:14:44,080 --> 00:14:47,680 Speaker 1: got a different constituency. The market for electronic vehicles in 268 00:14:47,720 --> 00:14:51,080 Speaker 1: California anyway is saturated. He needs to embrace a whole 269 00:14:51,120 --> 00:14:56,520 Speaker 1: new constituency people who drive trucks, different constituency than the 270 00:14:56,520 --> 00:14:59,240 Speaker 1: Californians were buying e vs. Right, So that's one side 271 00:14:59,280 --> 00:15:01,440 Speaker 1: of the equation. The other side of the equation is, 272 00:15:01,720 --> 00:15:04,640 Speaker 1: as you pointed out, there's a lot of scrutiny around 273 00:15:04,680 --> 00:15:07,720 Speaker 1: this deal, and there's a lot of scrutiny around UH, 274 00:15:07,840 --> 00:15:10,840 Speaker 1: around Tesla and his in his management of Tesla, whether 275 00:15:10,880 --> 00:15:15,040 Speaker 1: it's Nitza, whether it's the SEC looking at things he's 276 00:15:15,040 --> 00:15:20,080 Speaker 1: tweeted about sales of Tesla stock, and reportedly the SEC 277 00:15:20,400 --> 00:15:24,280 Speaker 1: is looking into the timing of his disclosure around the 278 00:15:25,040 --> 00:15:28,960 Speaker 1: Twitter state. So the government is already scrutinizing a lot 279 00:15:29,040 --> 00:15:33,760 Speaker 1: about Elon Musk and what he says in potential manipulation 280 00:15:34,040 --> 00:15:37,960 Speaker 1: of securities, and so this could be him just getting 281 00:15:37,960 --> 00:15:40,760 Speaker 1: ahead of it and saying, look, I told you so well. 282 00:15:40,920 --> 00:15:43,400 Speaker 1: We knew this was already happening. We didn't need Ellen 283 00:15:43,520 --> 00:15:47,760 Speaker 1: to tell us sec NITSA. These agencies have already been 284 00:15:47,760 --> 00:15:52,400 Speaker 1: doing it for months. Michelle, very quickly, five seconds. What's 285 00:15:52,440 --> 00:15:55,400 Speaker 1: the probability of this deal happening? I couldn't tell you. 286 00:15:56,720 --> 00:16:00,160 Speaker 1: Tom at twenty, I don't think it happens. I think 287 00:16:00,160 --> 00:16:03,320 Speaker 1: there's some kind of negotiation, just like Michelle was talking about. 288 00:16:03,520 --> 00:16:06,840 Speaker 1: They go to court, he negotiates the price down. All right, 289 00:16:07,800 --> 00:16:11,000 Speaker 1: wait and see Bloomberg's Michelle Davis and Tom Giles, executive 290 00:16:11,080 --> 00:16:13,800 Speaker 1: editor for Bloomberg Technology. Thanks to you both coming up. 291 00:16:13,840 --> 00:16:16,600 Speaker 1: We dig deep in today's market sell off as investors 292 00:16:16,600 --> 00:16:20,360 Speaker 1: assess the impact of higher prices on earnings and economic growth. 293 00:16:20,680 --> 00:16:38,680 Speaker 1: This is Bloomberg. Let's get straight back to the sell 294 00:16:38,720 --> 00:16:41,640 Speaker 1: off in financial markets. All corners of the equities market 295 00:16:41,720 --> 00:16:44,840 Speaker 1: sold off Wednesday, with tech among the worst performing sectors. 296 00:16:44,880 --> 00:16:47,640 Speaker 1: Joining us to digest the drop is Bloomberg Senior editor 297 00:16:47,720 --> 00:16:52,000 Speaker 1: for Markets and opinion columnist John Authors. John on Wednesday, 298 00:16:52,080 --> 00:16:55,040 Speaker 1: like this, when you see the red across the Bloomberg terminal, 299 00:16:55,400 --> 00:16:58,600 Speaker 1: where do you look for answers? Well, first of all, 300 00:16:59,000 --> 00:17:01,360 Speaker 1: this is one of those is which has gone back 301 00:17:01,400 --> 00:17:03,360 Speaker 1: to the kind of synchronization we saw in No. Seven 302 00:17:03,360 --> 00:17:07,040 Speaker 1: and oh eight. So if you look at how bond 303 00:17:07,119 --> 00:17:10,199 Speaker 1: yields have moved on how the oil price have moved today, 304 00:17:10,240 --> 00:17:13,119 Speaker 1: both rose until about eight nine o'clock in the morning, 305 00:17:13,760 --> 00:17:19,679 Speaker 1: tested new levels, decided they weren't going there, and slid 306 00:17:19,840 --> 00:17:23,600 Speaker 1: the rest of the day. And basically stocks have fallen 307 00:17:23,680 --> 00:17:28,360 Speaker 1: in line with the oil price and with bondyields all day. 308 00:17:28,400 --> 00:17:35,000 Speaker 1: It's a very coherent bet actually against inflation, the bet 309 00:17:35,080 --> 00:17:38,080 Speaker 1: that the miss ties back into target. Although it has 310 00:17:38,119 --> 00:17:41,320 Speaker 1: a huge impact on the whole of the tech sector, 311 00:17:42,359 --> 00:17:46,159 Speaker 1: it ties into this belief that inflation might be bitten 312 00:17:46,160 --> 00:17:51,399 Speaker 1: off by companies having to write, having to swallow sallow 313 00:17:51,480 --> 00:17:55,399 Speaker 1: with bad margins, tighten margins. These are big declines, and 314 00:17:55,440 --> 00:17:59,560 Speaker 1: you wrote this fantastic column on Tuesday about the dangers 315 00:17:59,640 --> 00:18:02,159 Speaker 1: of by sing the dip. You basically talk about how 316 00:18:02,520 --> 00:18:07,240 Speaker 1: fund managers, investors their sanguin about stagflation or persistent inflation. 317 00:18:07,240 --> 00:18:10,320 Speaker 1: Any you look at the outlook for rates, but all 318 00:18:10,320 --> 00:18:13,960 Speaker 1: of these players, they're underweight tech and texts most sensitive 319 00:18:13,960 --> 00:18:17,080 Speaker 1: to rates. Walk me through that one. Um, it's certainly 320 00:18:17,080 --> 00:18:19,200 Speaker 1: true that in the environment of the last few years, 321 00:18:19,280 --> 00:18:22,240 Speaker 1: tech has been very sensitive to rates at the moment 322 00:18:22,560 --> 00:18:26,439 Speaker 1: when it's more of a straightforward play of am I 323 00:18:26,560 --> 00:18:30,600 Speaker 1: comfortable being in stocks or bonds? Do I think there's 324 00:18:30,640 --> 00:18:37,280 Speaker 1: going to be inflation? Uh? And stagflation or recession? At 325 00:18:37,320 --> 00:18:39,240 Speaker 1: this point, I think you need to get back to 326 00:18:39,280 --> 00:18:42,719 Speaker 1: the Willie Sutton dictum who was, you know, when he 327 00:18:42,720 --> 00:18:45,080 Speaker 1: was asked why he robbed banks, he said, because that's 328 00:18:45,080 --> 00:18:47,520 Speaker 1: where the money is. If you want to take profits 329 00:18:47,560 --> 00:18:49,159 Speaker 1: at the moment, if you want to get out of 330 00:18:49,920 --> 00:18:53,240 Speaker 1: the equity market, then the most liquid stocks in which 331 00:18:53,320 --> 00:18:56,879 Speaker 1: people are probably sitting on profits still are the big 332 00:18:57,040 --> 00:19:00,400 Speaker 1: tech fang stocks. So it's the main reason they're down. Yeah, 333 00:19:00,400 --> 00:19:02,120 Speaker 1: come with me, it's might be mactaminal. Take a look 334 00:19:02,119 --> 00:19:04,639 Speaker 1: at this chart. We've talked about the pain in certain 335 00:19:04,680 --> 00:19:08,880 Speaker 1: pockets of this market, arc Innovation ETF being one seen 336 00:19:08,960 --> 00:19:12,800 Speaker 1: big declines. At the same time we've seen five straight 337 00:19:12,800 --> 00:19:16,919 Speaker 1: weeks of flows. Okay, a little drop off in that. Still, 338 00:19:16,760 --> 00:19:20,960 Speaker 1: what is the psychology here? What is driving that? I 339 00:19:21,040 --> 00:19:25,720 Speaker 1: fear it's a lottery ticket vibe of you might as 340 00:19:25,720 --> 00:19:27,959 Speaker 1: well shoot for the moon. You might you don't have 341 00:19:28,040 --> 00:19:30,320 Speaker 1: much money anyway. The only way it's really going to 342 00:19:30,400 --> 00:19:33,040 Speaker 1: make a difference, few as if you buy something that's 343 00:19:33,119 --> 00:19:37,480 Speaker 1: really going to to rip higher. ARC has had a 344 00:19:37,520 --> 00:19:41,560 Speaker 1: lot of publicity and also people like to invest in 345 00:19:41,680 --> 00:19:46,400 Speaker 1: something that's a little exciting, which obviously the ARC stocks are, 346 00:19:46,520 --> 00:19:51,520 Speaker 1: whereas the likes of Targets and Walnut aren't. So. But 347 00:19:51,640 --> 00:19:54,560 Speaker 1: I think that's a disconnect between the retail markets and 348 00:19:54,640 --> 00:19:57,240 Speaker 1: the broader institutions who are mostly behind what's been going 349 00:19:57,240 --> 00:20:00,240 Speaker 1: on today. John. When I was a kid, I was 350 00:20:00,280 --> 00:20:03,480 Speaker 1: obsessed with dinosaurs, and as you know, I'm a Londoner. 351 00:20:03,480 --> 00:20:05,960 Speaker 1: I used to go to the Natural History Museum. Look 352 00:20:06,000 --> 00:20:09,399 Speaker 1: at the skeletons going across the Bloomberg terminal. I go 353 00:20:09,480 --> 00:20:12,679 Speaker 1: under your bio and I see the word brontosaurus. What 354 00:20:12,720 --> 00:20:16,520 Speaker 1: are you talking about? Forward to me about a brontosaurus moment? Okay, Well, 355 00:20:16,640 --> 00:20:19,199 Speaker 1: I was also a fan of Dippy the Diplodocus in 356 00:20:19,240 --> 00:20:21,040 Speaker 1: the in the main hall at the Metro History Museum 357 00:20:21,040 --> 00:20:25,080 Speaker 1: in London. As love the Brontosaurus. It's a reference to Yes, 358 00:20:25,119 --> 00:20:30,000 Speaker 1: another British guy, Jeremy Grantham who in oh seven, as 359 00:20:30,560 --> 00:20:36,320 Speaker 1: as the housing market had already turned and subprime mortgage 360 00:20:36,400 --> 00:20:41,720 Speaker 1: dealers were beginning to go bankrupt was I asked him 361 00:20:41,760 --> 00:20:44,280 Speaker 1: why is the stock market still holding up so much? 362 00:20:44,320 --> 00:20:47,320 Speaker 1: And he said that the stock market is basically like 363 00:20:47,520 --> 00:20:51,400 Speaker 1: a brontosaurus. A brontosaurus, if you bit its tail, it's 364 00:20:51,680 --> 00:20:54,600 Speaker 1: nervous system. Its brain was so limited that it would 365 00:20:54,600 --> 00:20:56,520 Speaker 1: take a long time to know that its tail had 366 00:20:56,520 --> 00:20:59,200 Speaker 1: been bitten, to feel the pain. And in the same way, 367 00:20:59,240 --> 00:21:02,760 Speaker 1: he said that the up markets take some extremely long 368 00:21:02,800 --> 00:21:06,520 Speaker 1: time to cotton onto what is happening elsewhere in the economy, 369 00:21:06,560 --> 00:21:09,440 Speaker 1: elsewhere in the markets. You know, I've always wanted to 370 00:21:09,480 --> 00:21:13,320 Speaker 1: do that, talk about dinosaurs in financial markets. You've made 371 00:21:13,359 --> 00:21:25,159 Speaker 1: my day. Look Bloomberger Billium columnists John Orthord, Welcome to 372 00:21:25,160 --> 00:21:28,480 Speaker 1: Bloomberg Technology. I'm Ed Ludlow in San Francisco. Shares of 373 00:21:28,520 --> 00:21:31,480 Speaker 1: retailers plunged on Wednesday, leading the sell off on Wall 374 00:21:31,480 --> 00:21:35,720 Speaker 1: Street after US retail giants cut their growth outlooks. Bloomberg's 375 00:21:36,080 --> 00:21:39,360 Speaker 1: Ridoutta joined to the latest Which names are we watching? Well? 376 00:21:39,640 --> 00:21:43,040 Speaker 1: Yesterday it was Walmart. Today it was Target actually having 377 00:21:43,080 --> 00:21:47,040 Speaker 1: its worst day since seven It was a miss on 378 00:21:47,080 --> 00:21:50,280 Speaker 1: those earnings and actually cutting their profit outlook to six 379 00:21:50,320 --> 00:21:52,960 Speaker 1: percent from eight percent. This was not about sales. It 380 00:21:53,000 --> 00:21:55,719 Speaker 1: was about those higher freight costs, higher fuel costs, and 381 00:21:55,760 --> 00:21:59,400 Speaker 1: also those inventory levels rising actually up some fort from 382 00:21:59,440 --> 00:22:01,800 Speaker 1: a year ago. That was a similar story that we 383 00:22:01,840 --> 00:22:05,240 Speaker 1: saw from Walmart yesterday, which is also down in the 384 00:22:05,320 --> 00:22:08,679 Speaker 1: session today. But this is not just your traditional retailers 385 00:22:08,680 --> 00:22:11,399 Speaker 1: that are being hit today. That has extended over to 386 00:22:11,480 --> 00:22:13,679 Speaker 1: some of your e commerce stocks. I'm looking at Etsy, 387 00:22:13,880 --> 00:22:16,359 Speaker 1: I'm looking at Wayfam, looking at eBay. All of those 388 00:22:16,400 --> 00:22:18,199 Speaker 1: were down today. They suffer some a lot of the 389 00:22:18,280 --> 00:22:22,879 Speaker 1: same problems, supply chain issues, inflation. Those stocks actually on 390 00:22:22,920 --> 00:22:25,639 Speaker 1: a year today basis getting hit even harder than the 391 00:22:25,680 --> 00:22:28,280 Speaker 1: likes of Walmart than the likes of Target. But you've 392 00:22:28,280 --> 00:22:30,439 Speaker 1: got to remember when we talk about these e comma stocks, 393 00:22:30,600 --> 00:22:34,280 Speaker 1: these were actually your pandemic darlings. But that of course 394 00:22:34,280 --> 00:22:36,680 Speaker 1: started to falter and we got that reopening, that stay 395 00:22:36,840 --> 00:22:39,480 Speaker 1: stay at home began to suffer as people got back 396 00:22:39,560 --> 00:22:42,359 Speaker 1: out there and started shopping back in their brick and mortarn. 397 00:22:42,440 --> 00:22:45,520 Speaker 1: If you actually look at the selective e Commerce index, 398 00:22:45,560 --> 00:22:48,960 Speaker 1: it's actually given up about half of the peak of 399 00:22:49,160 --> 00:22:53,560 Speaker 1: the pandemic gains. And of course, when we talk about 400 00:22:54,000 --> 00:22:57,280 Speaker 1: shoppers changing, it's not just how they shot but also 401 00:22:57,400 --> 00:22:59,639 Speaker 1: what they have been shopping on and we see that 402 00:22:59,720 --> 00:23:03,879 Speaker 1: really by consumer discretionary really getting hit. Those stocks down 403 00:23:03,880 --> 00:23:06,160 Speaker 1: in the past month in a big way. A key 404 00:23:06,200 --> 00:23:09,359 Speaker 1: part of that, of course, is inflation. Yes, wages are rising, 405 00:23:09,400 --> 00:23:11,600 Speaker 1: but they are not keeping a pace. So we're seeing 406 00:23:11,600 --> 00:23:15,440 Speaker 1: a lot of that optional spending really dwindling, particularly as 407 00:23:15,600 --> 00:23:18,960 Speaker 1: food and fuel prices have been rising in a big way. 408 00:23:18,960 --> 00:23:20,360 Speaker 1: And that is the key theme that we have seen 409 00:23:20,440 --> 00:23:23,480 Speaker 1: in some of these retail earnings. Said alright, Ridica is 410 00:23:23,520 --> 00:23:25,840 Speaker 1: so smart on that retail beat. Thank you very much. 411 00:23:25,920 --> 00:23:27,960 Speaker 1: Let's stick with the market sell off. Lots of big 412 00:23:28,040 --> 00:23:31,080 Speaker 1: name tech companies who stocks sword as Risk has said, 413 00:23:31,080 --> 00:23:33,679 Speaker 1: in the pandemic era of feeling the burn of higher 414 00:23:33,680 --> 00:23:36,960 Speaker 1: interest rates, the continued crisis of a war in Ukraine, 415 00:23:37,000 --> 00:23:40,720 Speaker 1: domestic inflation, and a pandemic now well into its third year. 416 00:23:40,920 --> 00:23:43,480 Speaker 1: Let's talk about how all this market chaos is affecting 417 00:23:43,560 --> 00:23:47,280 Speaker 1: not just public markets but later staged startups and companies. 418 00:23:47,280 --> 00:23:51,520 Speaker 1: With Light Speed Venture partner Alex Taosig, Alex on a 419 00:23:51,600 --> 00:23:56,800 Speaker 1: day like this read everywhere, anxiety everywhere. What's your take 420 00:23:56,840 --> 00:24:00,200 Speaker 1: on it? Oh? Thanks for having me for us all that. 421 00:24:00,280 --> 00:24:02,879 Speaker 1: I appreciate it. Um definitely a tough day for public 422 00:24:02,920 --> 00:24:06,520 Speaker 1: market investors. UM. You know, as a venture capital firm, 423 00:24:06,760 --> 00:24:09,240 Speaker 1: UM with over twenty years of investing history in the 424 00:24:09,280 --> 00:24:11,520 Speaker 1: private markets, you know, we we have a little bit 425 00:24:11,520 --> 00:24:15,000 Speaker 1: of a different perspective. Our companies generally don't have the 426 00:24:15,520 --> 00:24:18,159 Speaker 1: pleasure of being marked every single day. They can take 427 00:24:18,160 --> 00:24:20,880 Speaker 1: a little bit of a longer term view. So essentially, 428 00:24:20,920 --> 00:24:23,600 Speaker 1: a lot of these companies raise money one at you know, 429 00:24:23,800 --> 00:24:27,360 Speaker 1: capital is fairly cheap historically and at fairly high prices, 430 00:24:27,440 --> 00:24:29,720 Speaker 1: and you know, our perspective is a lot of those 431 00:24:29,760 --> 00:24:31,840 Speaker 1: companies are going to come back into the market in 432 00:24:31,880 --> 00:24:33,960 Speaker 1: the next couple of years and not face the same 433 00:24:34,400 --> 00:24:36,960 Speaker 1: kind of cheap capital environment. And so we're sort of 434 00:24:37,000 --> 00:24:39,800 Speaker 1: expecting that what the public companies are seeing right now 435 00:24:39,960 --> 00:24:42,879 Speaker 1: is going to trickle back down into the privates over time. 436 00:24:43,160 --> 00:24:45,240 Speaker 1: But there's a lot private companies can do in the 437 00:24:45,280 --> 00:24:48,280 Speaker 1: intervening period to make their businesses a lot more attractive 438 00:24:48,320 --> 00:24:50,800 Speaker 1: so that when they do have to access the financial markets, 439 00:24:50,920 --> 00:24:54,359 Speaker 1: they'll look a lot better. You have the experience, of course, 440 00:24:54,480 --> 00:24:58,040 Speaker 1: of looking to your portfolio some of those companies in 441 00:24:58,080 --> 00:25:00,399 Speaker 1: the past have gone public. Of course, what means my 442 00:25:00,400 --> 00:25:03,000 Speaker 1: Bloombog Terminalis. Take a look at this chart. You want 443 00:25:03,040 --> 00:25:06,880 Speaker 1: to make a key point, which is that perhaps we've 444 00:25:06,920 --> 00:25:09,919 Speaker 1: seen this before. Right, what we're seeing on our screen 445 00:25:10,040 --> 00:25:13,119 Speaker 1: is that there is a single metric that shows the 446 00:25:13,200 --> 00:25:16,840 Speaker 1: magnitude of the current downturn that we're seeing, and that's 447 00:25:16,880 --> 00:25:20,520 Speaker 1: a retreat in revenue multiples for a specific corner of 448 00:25:20,520 --> 00:25:22,760 Speaker 1: the technology market. Left hand of your screen, the blue 449 00:25:22,800 --> 00:25:27,040 Speaker 1: line Amazon back in through two thousand, two thousand one, 450 00:25:27,240 --> 00:25:32,120 Speaker 1: right hand side Shopify. Why are you looking at this data? 451 00:25:32,760 --> 00:25:35,720 Speaker 1: We are always looking at the public market multiples that 452 00:25:35,800 --> 00:25:39,000 Speaker 1: apply to revenue as essentially we invest in growth assets 453 00:25:39,000 --> 00:25:41,879 Speaker 1: that aren't usually profitable, and so the rate of growth 454 00:25:41,880 --> 00:25:43,920 Speaker 1: of the business is very important in the expectation of 455 00:25:43,960 --> 00:25:46,360 Speaker 1: future growth is very important. And I think in the 456 00:25:46,440 --> 00:25:48,800 Speaker 1: in the in the days where you have ascendencies of 457 00:25:48,800 --> 00:25:52,040 Speaker 1: new platforms, there's a lot of enthusiasm around the new thing, 458 00:25:52,160 --> 00:25:55,640 Speaker 1: and um, you know, that can often create speculative asset bubbles, 459 00:25:55,840 --> 00:25:58,920 Speaker 1: which is sort of something that's common throughout financial markets. 460 00:25:58,960 --> 00:26:01,040 Speaker 1: And you know, some of what's happened in the the last 461 00:26:01,040 --> 00:26:04,080 Speaker 1: few years, uh in addition to being you know, pushed 462 00:26:04,080 --> 00:26:06,560 Speaker 1: on by the pandemic, we feel like are parallel to 463 00:26:06,680 --> 00:26:08,960 Speaker 1: what happened in the dot com bubble with certain names 464 00:26:08,960 --> 00:26:11,960 Speaker 1: that really benefited from the shift to e commerce. But 465 00:26:12,320 --> 00:26:15,120 Speaker 1: the other thing to just consider here is that Amazon 466 00:26:15,200 --> 00:26:18,719 Speaker 1: still around and it's and it's very very valuable company. Uh, 467 00:26:18,760 --> 00:26:22,000 Speaker 1: and it saw its way through and share price collapse 468 00:26:22,040 --> 00:26:24,640 Speaker 1: post the dot com bubble, and uh, not to say 469 00:26:24,680 --> 00:26:26,800 Speaker 1: Shopify is going to continue to go down. Maybe it will, 470 00:26:26,840 --> 00:26:29,320 Speaker 1: maybe it won't, But we also believe that's a very 471 00:26:29,400 --> 00:26:31,760 Speaker 1: durable business. So the chart, right, it sort of tells 472 00:26:31,760 --> 00:26:34,400 Speaker 1: a few different stories. At the same time, we personally 473 00:26:34,440 --> 00:26:37,439 Speaker 1: take a view of optimism and that you know, these 474 00:26:37,480 --> 00:26:40,439 Speaker 1: speculative bubbles come and go, but some of these businesses 475 00:26:40,440 --> 00:26:43,280 Speaker 1: are building real value for the long term. Right you're 476 00:26:43,280 --> 00:26:45,960 Speaker 1: looking on our screen some of the pain in technology 477 00:26:46,000 --> 00:26:48,480 Speaker 1: shares over the last seven days or so, the likes 478 00:26:48,520 --> 00:26:51,600 Speaker 1: of Apple, some of those mega caps like Microsoft. I 479 00:26:51,640 --> 00:26:54,439 Speaker 1: am fascinated with the private markets. We broke a story 480 00:26:55,040 --> 00:26:59,359 Speaker 1: on Tuesday that SpaceX is raising more money at evaluation 481 00:26:59,400 --> 00:27:01,879 Speaker 1: of a d twenty five billion dollars. It was valued 482 00:27:01,880 --> 00:27:04,720 Speaker 1: around a hundred billion dollars in October. When you hear 483 00:27:04,760 --> 00:27:08,080 Speaker 1: about that, how do you assess valuations right now, and 484 00:27:08,119 --> 00:27:11,080 Speaker 1: what do valuations look like in the coming months, especially 485 00:27:11,119 --> 00:27:13,879 Speaker 1: with the backdrop of a FED that looks determined to 486 00:27:13,880 --> 00:27:18,080 Speaker 1: to raise rates. We this is a conversation we have 487 00:27:18,160 --> 00:27:20,399 Speaker 1: a lot in internally and with some of our peers 488 00:27:20,400 --> 00:27:23,000 Speaker 1: at other firms. You know, there is a big valuation 489 00:27:23,040 --> 00:27:27,080 Speaker 1: reset that's essentially happening right now. Um not as in 490 00:27:27,119 --> 00:27:29,719 Speaker 1: the public because again these are not publicly traded securities, 491 00:27:30,119 --> 00:27:34,440 Speaker 1: but the private markets always look to the public markets 492 00:27:34,680 --> 00:27:37,560 Speaker 1: for some sort of guidance on valuation. And so you know, 493 00:27:37,760 --> 00:27:40,439 Speaker 1: essentially for a lot of businesses, your multiple has been 494 00:27:40,480 --> 00:27:43,600 Speaker 1: cut in half, maybe cut by three x over the 495 00:27:43,680 --> 00:27:46,359 Speaker 1: last six months, and so those businesses are essentially going 496 00:27:46,440 --> 00:27:48,879 Speaker 1: to have to get back to par before they go 497 00:27:48,920 --> 00:27:51,920 Speaker 1: out and raise again in this environment. And so we're 498 00:27:51,960 --> 00:27:56,720 Speaker 1: really stressing the importance of cash flow and becoming default 499 00:27:56,720 --> 00:27:59,080 Speaker 1: alive in this environment, which essentially means that you can 500 00:27:59,160 --> 00:28:01,520 Speaker 1: ratchet up and down on your sales and marketing spend 501 00:28:01,880 --> 00:28:05,680 Speaker 1: and maintain a relatively modest burn while the volatility continues 502 00:28:05,720 --> 00:28:08,280 Speaker 1: to play out, and we certainly expect the valatility to 503 00:28:08,359 --> 00:28:12,080 Speaker 1: probably increase before it decreases again very quickly. Alets what 504 00:28:12,119 --> 00:28:14,320 Speaker 1: I'm saying on my screen is the share performance of 505 00:28:14,400 --> 00:28:17,840 Speaker 1: names like Airbnb, Snap, Uber, Uber over the last couple 506 00:28:17,880 --> 00:28:21,000 Speaker 1: of years. But these are names that were created in 507 00:28:21,160 --> 00:28:23,639 Speaker 1: periods of stress. I am thinking back to two thousand 508 00:28:23,680 --> 00:28:26,600 Speaker 1: and eight, two thousand nine in the financial crisis very quickly. 509 00:28:26,640 --> 00:28:29,040 Speaker 1: What would your advice be to a founder right now 510 00:28:29,280 --> 00:28:33,399 Speaker 1: with the markets as they are, absolutely the first The 511 00:28:33,440 --> 00:28:36,320 Speaker 1: first thing is to stay optimistic. So while it might 512 00:28:36,359 --> 00:28:38,040 Speaker 1: be a little bit difficult to do if you're looking 513 00:28:38,080 --> 00:28:41,000 Speaker 1: at your own personal stock portfolio, the reality is that 514 00:28:41,080 --> 00:28:44,800 Speaker 1: a downturn in a capital constrained environment often produces some 515 00:28:44,880 --> 00:28:47,680 Speaker 1: of the best companies. Companies can really focus in on 516 00:28:47,680 --> 00:28:50,520 Speaker 1: what they're great at and ignore things that are extraneous. 517 00:28:51,040 --> 00:28:54,000 Speaker 1: Talent tends to stick around longer, and people are kind 518 00:28:54,000 --> 00:28:56,560 Speaker 1: of not choosing between as many different jobs, so you 519 00:28:56,560 --> 00:28:59,080 Speaker 1: can keep them engaged for longer. You can really have 520 00:28:59,200 --> 00:29:01,720 Speaker 1: the time to hone that business model because you have 521 00:29:01,840 --> 00:29:06,160 Speaker 1: to to survive. So we we invest in all cycles consistently. 522 00:29:06,440 --> 00:29:08,920 Speaker 1: We've been doing it for over twenty years, and I 523 00:29:08,960 --> 00:29:11,360 Speaker 1: do think that there's also some advantages that companies can 524 00:29:11,400 --> 00:29:13,440 Speaker 1: have during a downturn, but that's presuming that you can 525 00:29:13,440 --> 00:29:16,760 Speaker 1: get control of your business and do it decisively. Right 526 00:29:16,960 --> 00:29:19,360 Speaker 1: lights be a benchure partner, Alex TUSI giving us the 527 00:29:19,400 --> 00:29:23,160 Speaker 1: private markets take on volatility, Thank you very much. Coming 528 00:29:23,240 --> 00:29:27,040 Speaker 1: up a Bloomberg scoop gave Plotkin is telling investors he 529 00:29:27,080 --> 00:29:30,840 Speaker 1: plans to wind down his Melvin Capital Management after billions 530 00:29:30,840 --> 00:29:51,000 Speaker 1: of dollars of losses. Details ahead. This is Bloomberg time 531 00:29:51,040 --> 00:29:53,560 Speaker 1: for our crypto report, and it's been a brutal market 532 00:29:53,600 --> 00:29:57,200 Speaker 1: sell off in digital currencies. Bloomberg's Shinnali back Bassack with us. 533 00:29:57,200 --> 00:29:59,320 Speaker 1: But before we get into digital assets, I have to 534 00:29:59,360 --> 00:30:02,880 Speaker 1: ask you about Melvin Capital Management's plan to wind down. Yeah, 535 00:30:02,920 --> 00:30:05,560 Speaker 1: truly ed. Remember this is an amazing scoop by Bloomer's 536 00:30:05,560 --> 00:30:09,120 Speaker 1: Hamma Parmer. Gay plot Can really the poster child's here 537 00:30:09,240 --> 00:30:13,160 Speaker 1: of that game stop short Squeeze. Even after recouping some 538 00:30:13,240 --> 00:30:17,240 Speaker 1: the losses that he had in early, is now down 539 00:30:17,320 --> 00:30:19,600 Speaker 1: again for the year and telling investors that he is 540 00:30:19,680 --> 00:30:22,880 Speaker 1: returning money and winding down funds. Remember this is right 541 00:30:22,920 --> 00:30:25,640 Speaker 1: after he initially tried to reboot the fund in a 542 00:30:25,640 --> 00:30:29,440 Speaker 1: different fashion. Scrap those plans. And now remember, I've got 543 00:30:29,440 --> 00:30:31,920 Speaker 1: to say Wall Street for a while now has been 544 00:30:31,920 --> 00:30:34,680 Speaker 1: expecting some casualties in the hedge fund industry, and it 545 00:30:34,760 --> 00:30:38,600 Speaker 1: starts here with Melvin Capital. Alright, Snalie, keep give me 546 00:30:38,600 --> 00:30:40,480 Speaker 1: a quick update on the markets in the world of 547 00:30:40,480 --> 00:30:43,880 Speaker 1: cryptocurrencies as well. Yeah. Absolutely, Something interesting here, ed is 548 00:30:43,920 --> 00:30:46,120 Speaker 1: that even though you saw that brutal cell off today 549 00:30:46,120 --> 00:30:48,479 Speaker 1: in the market more largely, especially in the NAZAC one 550 00:30:49,000 --> 00:30:52,400 Speaker 1: five percent sell off, you're actually seeing Bitcoin even though 551 00:30:52,400 --> 00:30:56,280 Speaker 1: it's trading below that level, only falling about three percent 552 00:30:56,320 --> 00:30:59,840 Speaker 1: over over twenty four hour period, so not selling off 553 00:31:00,080 --> 00:31:03,680 Speaker 1: steeply as the market you are seeing. It also holds 554 00:31:03,640 --> 00:31:08,400 Speaker 1: steady as opposed to other coins, all coins in this downturn. 555 00:31:08,720 --> 00:31:11,280 Speaker 1: So when you look at Bitcoin to what extent is 556 00:31:11,320 --> 00:31:17,120 Speaker 1: it the relative safe haven compared to the other crypto assets. Alright, thanks, 557 00:31:17,160 --> 00:31:19,560 Speaker 1: say stay with us. Let's bringing our next guests. Honey 558 00:31:19,680 --> 00:31:22,240 Speaker 1: rush One, who's the co founder and CEO of twenty 559 00:31:22,240 --> 00:31:25,560 Speaker 1: one Shares, a crypto exchange traded products issue that's been 560 00:31:25,600 --> 00:31:27,920 Speaker 1: making ways in Europe for the past four years and 561 00:31:27,960 --> 00:31:30,800 Speaker 1: it's now marking its US entrance with the launch of 562 00:31:30,840 --> 00:31:34,400 Speaker 1: two new funds. Simple question to start with, Honey, why 563 00:31:34,520 --> 00:31:38,200 Speaker 1: is the US okay with e t P s the 564 00:31:38,320 --> 00:31:42,320 Speaker 1: nor e t S, So thank you for having me. 565 00:31:42,360 --> 00:31:45,320 Speaker 1: I'm really excited to talk about our launch into the 566 00:31:45,360 --> 00:31:48,880 Speaker 1: US market. We're launching private funds today, so we're not 567 00:31:49,000 --> 00:31:52,320 Speaker 1: yet launching e t f s for e tps. We 568 00:31:53,080 --> 00:31:55,040 Speaker 1: are working on an e t F in America and 569 00:31:55,360 --> 00:31:58,880 Speaker 1: that's public as well, but nothing has been announced yet 570 00:31:58,920 --> 00:32:01,680 Speaker 1: on that word still work king very very closely with 571 00:32:01,720 --> 00:32:05,640 Speaker 1: the regulators on all of that. Why is it that 572 00:32:05,760 --> 00:32:07,880 Speaker 1: this is the time to launch new products in a 573 00:32:07,960 --> 00:32:11,000 Speaker 1: down market, especially when there's a lot of questions about 574 00:32:11,040 --> 00:32:14,160 Speaker 1: how comfortable institutions will get with these types of products 575 00:32:14,200 --> 00:32:19,160 Speaker 1: in such a downturn. So there are a couple of reasons. 576 00:32:19,560 --> 00:32:23,800 Speaker 1: When we first launched in the world's first physically backed 577 00:32:24,120 --> 00:32:27,320 Speaker 1: et P, which was the first crypto et F on 578 00:32:27,360 --> 00:32:31,680 Speaker 1: the Swiss Stock Exchange, it was a bear market, and uh, 579 00:32:31,720 --> 00:32:35,200 Speaker 1: I remember that the initial seat capital of five million 580 00:32:35,480 --> 00:32:37,400 Speaker 1: went down to three and a half two days later. 581 00:32:37,800 --> 00:32:40,720 Speaker 1: It turns out the building during bear markets, if you're 582 00:32:40,760 --> 00:32:43,479 Speaker 1: focused on the long term, UH ends up being a 583 00:32:43,480 --> 00:32:48,200 Speaker 1: pretty good bet. UH. The other way of looking at 584 00:32:48,240 --> 00:32:52,200 Speaker 1: this is um nothing fundamental has changed with any of 585 00:32:52,240 --> 00:32:56,280 Speaker 1: the underlying technologies, and we're seeing this across the board, 586 00:32:56,360 --> 00:32:59,880 Speaker 1: both across every crypto asset as well as more in 587 00:33:00,080 --> 00:33:03,360 Speaker 1: stitutional investor interests. One of the things that should be 588 00:33:03,440 --> 00:33:06,320 Speaker 1: very very comforting is that despite the market sell off 589 00:33:06,320 --> 00:33:09,200 Speaker 1: and what happened with the terror ecosystem last week, we 590 00:33:09,240 --> 00:33:12,320 Speaker 1: only saw a couple of days of outflows UH, and 591 00:33:12,360 --> 00:33:16,600 Speaker 1: we've seen consistent inflows today, yesterday, the day before and 592 00:33:16,640 --> 00:33:19,400 Speaker 1: Friday as well. While you're on it, how does what 593 00:33:19,520 --> 00:33:22,720 Speaker 1: happened last week, I guess more than a week ago now, 594 00:33:22,800 --> 00:33:26,840 Speaker 1: the terror breakdown really draw into question the broader crypto 595 00:33:26,880 --> 00:33:32,680 Speaker 1: ecosystem and the place of other coins stable coins in 596 00:33:32,760 --> 00:33:40,800 Speaker 1: the ecosystem. So we had UM the world's largest Luna 597 00:33:41,040 --> 00:33:44,880 Speaker 1: Terra e t f UM, which was listed on a 598 00:33:44,960 --> 00:33:47,920 Speaker 1: European exchanges including Switzerland. So we've been following this very 599 00:33:48,000 --> 00:33:54,680 Speaker 1: very closely UM on the product itself. Considering that Luna 600 00:33:54,800 --> 00:34:00,440 Speaker 1: is now operating intermittently, we've obviously suspended quoting the products. However, 601 00:34:00,480 --> 00:34:02,959 Speaker 1: there seems to be a potential rescue plan and will 602 00:34:03,040 --> 00:34:05,720 Speaker 1: keep that up and running while we monitor that. I 603 00:34:05,720 --> 00:34:07,960 Speaker 1: think it's important to just take a step back and 604 00:34:08,239 --> 00:34:11,880 Speaker 1: really look at Terra as what it was, which was 605 00:34:12,160 --> 00:34:14,880 Speaker 1: a grand experiment that was supported by some of the 606 00:34:14,920 --> 00:34:18,640 Speaker 1: world's largest and most notable investors, both in the crypto 607 00:34:18,680 --> 00:34:21,200 Speaker 1: space and in the traditional financial space, to try and 608 00:34:21,200 --> 00:34:25,400 Speaker 1: build an algorithmic stable point. Had they succeeded, which obviously 609 00:34:25,400 --> 00:34:28,799 Speaker 1: they did not, it would have had huge positive ripple effects, 610 00:34:28,880 --> 00:34:31,960 Speaker 1: and so it was a worthy experiment to run that 611 00:34:32,080 --> 00:34:35,919 Speaker 1: built a vibrant ecosystem with a lot of risks, and 612 00:34:36,320 --> 00:34:40,640 Speaker 1: our research has shown that the risk for there as 613 00:34:40,680 --> 00:34:43,880 Speaker 1: well as the opportunity. Honey, we see on our screens. 614 00:34:43,920 --> 00:34:48,200 Speaker 1: You're in Florence, Italy. Lovely, that's a wonderful place in 615 00:34:48,239 --> 00:34:51,080 Speaker 1: the hot land of the European Union. Towards me about 616 00:34:51,080 --> 00:34:55,000 Speaker 1: the regulatory landscape, the difference between doing business in Europe 617 00:34:55,120 --> 00:34:58,440 Speaker 1: versus the US, your experience of launching these products in 618 00:34:58,480 --> 00:35:05,560 Speaker 1: each market, it's different um geography by geography, what regulators 619 00:35:05,560 --> 00:35:08,680 Speaker 1: are looking for and what populations are looking for can 620 00:35:08,719 --> 00:35:12,520 Speaker 1: be different. We just launched Australia's first Bitcoin and Ethereum 621 00:35:12,520 --> 00:35:16,480 Speaker 1: e t S and that was due to answering very 622 00:35:16,560 --> 00:35:19,000 Speaker 1: very different questions than we have in Europe, both in 623 00:35:19,000 --> 00:35:23,120 Speaker 1: the EU and in Switzerland where we are active. Uh 624 00:35:23,480 --> 00:35:27,920 Speaker 1: Switzerland jumped ahead of the pack by trying to create 625 00:35:27,960 --> 00:35:31,360 Speaker 1: a crypto nation. And so we've been very very supported 626 00:35:31,719 --> 00:35:34,400 Speaker 1: from the beginning out of our Zurich base, But as 627 00:35:34,800 --> 00:35:38,200 Speaker 1: the asset classes has become too big to ignore, other 628 00:35:38,280 --> 00:35:41,160 Speaker 1: regulators around the continent and and actually around the world 629 00:35:41,880 --> 00:35:45,520 Speaker 1: have started to pay attention and have had incredibly engaging 630 00:35:45,640 --> 00:35:49,120 Speaker 1: conversations with us. You know, I think it's really interesting 631 00:35:49,160 --> 00:35:52,560 Speaker 1: that you had been working on e t p s 632 00:35:52,560 --> 00:35:56,680 Speaker 1: outside of bitcoin. There are so many uh calls for 633 00:35:56,719 --> 00:35:59,239 Speaker 1: e t s when it comes to bitcoin itself. But 634 00:35:59,320 --> 00:36:01,239 Speaker 1: when you look at what happened with Luna and the 635 00:36:01,320 --> 00:36:03,960 Speaker 1: need to halt the product, what is it taught you 636 00:36:04,080 --> 00:36:08,440 Speaker 1: about products that are tied to other types of assets 637 00:36:08,440 --> 00:36:10,560 Speaker 1: here in the cryptic universe that have a lot more 638 00:36:10,640 --> 00:36:16,840 Speaker 1: risk potentially. So one of the beautiful things about crypto 639 00:36:16,920 --> 00:36:20,120 Speaker 1: is that everything is open source, including the smart contracts, 640 00:36:20,120 --> 00:36:23,600 Speaker 1: including the risks that that are applied to whatever ecosystem 641 00:36:23,640 --> 00:36:26,680 Speaker 1: you might be investing in. And like I said, our 642 00:36:26,719 --> 00:36:32,279 Speaker 1: research very adequately on Luna displayed both the risks and 643 00:36:32,400 --> 00:36:37,240 Speaker 1: the potential rewards. It's um, it's going to be different 644 00:36:37,320 --> 00:36:41,879 Speaker 1: investing the alts versus Bitcoin and ethereum. And again this 645 00:36:42,000 --> 00:36:46,240 Speaker 1: was a grand and I I believe very noteworthy experiment 646 00:36:46,280 --> 00:36:49,640 Speaker 1: to run right thanks to Honey Rush One they're co 647 00:36:49,760 --> 00:36:51,840 Speaker 1: founder and CEO. Twenty one shares and of course my 648 00:36:51,920 --> 00:36:55,680 Speaker 1: good mate Shinali Bassak over in New York coming up 649 00:36:55,840 --> 00:36:58,960 Speaker 1: an e s G exit for Tesla, WHI ev maker 650 00:36:59,040 --> 00:37:02,680 Speaker 1: loss its spot in the SMP s G index and 651 00:37:02,719 --> 00:37:05,480 Speaker 1: what the world's richest man has to say about it? 652 00:37:05,719 --> 00:37:09,040 Speaker 1: That's next. We're also looking at shares of Cisco in 653 00:37:09,080 --> 00:37:13,520 Speaker 1: after hours down twelve point seven percent. The company talking 654 00:37:13,520 --> 00:37:16,799 Speaker 1: about struggles with the supply chain China, the war in 655 00:37:16,920 --> 00:37:21,200 Speaker 1: Ukraina ultimately cutting its sales forecast for stock. Will keep 656 00:37:21,200 --> 00:37:24,279 Speaker 1: an eye on as the markets go by. This is 657 00:37:24,280 --> 00:37:42,320 Speaker 1: Bloomberg this week's Technomics. Shares of Tesla's dropping on Wednesday, 658 00:37:42,320 --> 00:37:44,319 Speaker 1: and the ev maker also lost its spot on the 659 00:37:44,360 --> 00:37:47,120 Speaker 1: E s G version of the SMP FI Index. The 660 00:37:47,160 --> 00:37:51,600 Speaker 1: industries provided a citing working conditions and crashes for Tesla's 661 00:37:51,640 --> 00:37:56,040 Speaker 1: score on Environmental Social and Governance Standard. Elon Musk reacting 662 00:37:56,040 --> 00:37:59,319 Speaker 1: to the news, tweeting quote ex On is rated top 663 00:37:59,360 --> 00:38:02,400 Speaker 1: ten best in world for Environmental Social and Governments e 664 00:38:02,600 --> 00:38:06,120 Speaker 1: s G by SMP, while Tesla didn't make the list 665 00:38:06,440 --> 00:38:09,400 Speaker 1: E s G is a scam. It has been weaponized 666 00:38:09,440 --> 00:38:12,480 Speaker 1: by phony social justice warriors. All in on must words 667 00:38:12,520 --> 00:38:15,200 Speaker 1: not mine, joining us to discuss all of this. Bloomberg's 668 00:38:15,239 --> 00:38:18,160 Speaker 1: Danna Whole, who leads coverage not just of everything Tesla, 669 00:38:18,280 --> 00:38:22,120 Speaker 1: but everything Elon Musk as well in all that noise, 670 00:38:22,239 --> 00:38:24,359 Speaker 1: tell us what the news was there? Well, I think 671 00:38:24,360 --> 00:38:26,760 Speaker 1: it's pretty clear that Elon musk knew that this was coming. 672 00:38:26,840 --> 00:38:29,480 Speaker 1: He has been raising concerns about E s G reading 673 00:38:29,560 --> 00:38:32,480 Speaker 1: systems for several weeks now, and he does have a point. 674 00:38:32,520 --> 00:38:34,920 Speaker 1: I mean, what are the metrics and why are they 675 00:38:34,920 --> 00:38:37,359 Speaker 1: always changing? And for passive investors, E s G ranks 676 00:38:37,560 --> 00:38:40,160 Speaker 1: rankings are very important. But he would argue, you know, 677 00:38:40,200 --> 00:38:42,920 Speaker 1: we make electric cars, how can we be ranked less 678 00:38:42,920 --> 00:38:45,480 Speaker 1: than an oil company? Right? And we have to remind ourselves. 679 00:38:45,520 --> 00:38:48,240 Speaker 1: Of course, the mission statement of Tesla is to advance 680 00:38:48,280 --> 00:38:51,400 Speaker 1: the transitions to sustainable energy. I mean, what is Tesla's 681 00:38:51,440 --> 00:38:53,960 Speaker 1: impact on the world? Bring us back to basics. We 682 00:38:54,000 --> 00:38:56,600 Speaker 1: assume everyone knows what the company does and how it's 683 00:38:56,600 --> 00:38:59,480 Speaker 1: trying to help, But what does Tesla do? So Tesla 684 00:38:59,520 --> 00:39:03,600 Speaker 1: makes elector cars, they also make energy products, solar roof batteries. 685 00:39:03,760 --> 00:39:06,320 Speaker 1: They have big utility contracts, but they have been dinged 686 00:39:06,440 --> 00:39:10,000 Speaker 1: quite a bit reputationally by workforce issues. But at the 687 00:39:10,000 --> 00:39:12,040 Speaker 1: Fremont plant they have been sued by the State of 688 00:39:12,080 --> 00:39:16,400 Speaker 1: California for blatant racism against black workers. The e o 689 00:39:16,440 --> 00:39:19,000 Speaker 1: C is investigating them, um, and so, I mean there 690 00:39:19,239 --> 00:39:21,640 Speaker 1: are some problems there, and the board of directors has 691 00:39:21,680 --> 00:39:26,040 Speaker 1: been dinged quite a bit for overlapping duties and um. 692 00:39:26,080 --> 00:39:28,120 Speaker 1: You know, they've been under pressure to diversify their board, 693 00:39:28,160 --> 00:39:30,520 Speaker 1: which they have done. I'm just looking at Tesla's stock 694 00:39:30,640 --> 00:39:34,040 Speaker 1: year today on the Bloomberg down more than caught up 695 00:39:34,080 --> 00:39:37,560 Speaker 1: in Wednesday's sell off, as all stocks were. What's the 696 00:39:37,600 --> 00:39:40,719 Speaker 1: story for Tesla right now? Because we're so focused on 697 00:39:40,760 --> 00:39:44,480 Speaker 1: Elon Masque's tweet by tweet analysis of what's happening with 698 00:39:44,480 --> 00:39:46,840 Speaker 1: the Twitter deal, I feel like we're not really talking 699 00:39:46,880 --> 00:39:49,480 Speaker 1: about Tesla. Well, I think what's really happening at Tesla 700 00:39:49,600 --> 00:39:51,840 Speaker 1: is production in China. I mean, the production in China 701 00:39:51,920 --> 00:39:54,160 Speaker 1: really took a hit when the factory in Shanghai was 702 00:39:54,160 --> 00:39:56,520 Speaker 1: shut down for almost a month because of COVID. Now 703 00:39:56,520 --> 00:39:58,719 Speaker 1: they're bringing that back online, but you know, they're still 704 00:39:58,719 --> 00:40:00,680 Speaker 1: supply chain issues and it's going to be a hard 705 00:40:00,760 --> 00:40:03,719 Speaker 1: quarter for them. There's all this macro stuff. They still 706 00:40:03,760 --> 00:40:06,680 Speaker 1: hold bitcoin. Bitcoin has seen a rough ride of late 707 00:40:07,200 --> 00:40:09,799 Speaker 1: um and there's not really any new product launches on 708 00:40:09,840 --> 00:40:12,480 Speaker 1: the horizon. So Musk said that there's going to be 709 00:40:12,480 --> 00:40:15,759 Speaker 1: an AI day in August. So what are we going 710 00:40:15,800 --> 00:40:18,719 Speaker 1: to see there? Like the new Tesla bat More talk 711 00:40:18,800 --> 00:40:22,279 Speaker 1: about Jojo like more promises about self driving. But I mean, 712 00:40:22,400 --> 00:40:23,919 Speaker 1: this is like a weird year for them. They don't 713 00:40:23,960 --> 00:40:26,400 Speaker 1: have a new product that they're bringing to market. So 714 00:40:26,440 --> 00:40:29,239 Speaker 1: if our audience out there, Donna writes a fantastic if 715 00:40:29,280 --> 00:40:32,319 Speaker 1: I say so myself column for hyper Drive where you 716 00:40:32,440 --> 00:40:34,680 Speaker 1: basically take a step back talk about what's going on 717 00:40:34,760 --> 00:40:38,200 Speaker 1: the world of evs and Tesla. And Wednesday's column is 718 00:40:38,239 --> 00:40:42,120 Speaker 1: about insurance. Yeah, what's Tesla doing in the world of insurance. Well, 719 00:40:42,120 --> 00:40:44,560 Speaker 1: this is a big passion project of the CFO Za Kercorn, 720 00:40:44,680 --> 00:40:46,920 Speaker 1: and you know, Tesla very shrewdly, I think, is trying 721 00:40:46,960 --> 00:40:49,920 Speaker 1: to find new revenue streams. They always say that they 722 00:40:49,960 --> 00:40:52,880 Speaker 1: are a software company, not just a car company, and 723 00:40:52,920 --> 00:40:55,239 Speaker 1: they really want to have like a captive audience with 724 00:40:55,280 --> 00:40:57,560 Speaker 1: their customers. Um, you know, you buy a car, then 725 00:40:57,560 --> 00:40:59,319 Speaker 1: you get the solar roof, then you get the power wall. 726 00:40:59,320 --> 00:41:01,520 Speaker 1: Well you might as well. I Tesla insurance too. And 727 00:41:01,560 --> 00:41:05,279 Speaker 1: because Tesla has so much data on your vehicle and 728 00:41:05,320 --> 00:41:07,880 Speaker 1: how you drive it, they can really kind of monetize 729 00:41:07,920 --> 00:41:10,160 Speaker 1: that but also offer you a premium based on your 730 00:41:10,280 --> 00:41:13,399 Speaker 1: driving skills. Um. You know, other insurance companies have tried 731 00:41:13,440 --> 00:41:16,400 Speaker 1: to do this, but Tesla customers, particularly who live in Texas, 732 00:41:16,440 --> 00:41:17,759 Speaker 1: have said that they really like it and that their 733 00:41:17,800 --> 00:41:20,680 Speaker 1: premiums are cheaper. Very quickly, we've just got a few seconds. 734 00:41:20,840 --> 00:41:23,640 Speaker 1: What's the next thing to look for in the Tesla calendar? 735 00:41:25,239 --> 00:41:26,719 Speaker 1: But you on the spot a little bit. In the 736 00:41:26,719 --> 00:41:30,520 Speaker 1: Tesla calendar. We will have a second quarter delivery figures 737 00:41:30,600 --> 00:41:33,919 Speaker 1: in early July. We will have an annual meeting August four. 738 00:41:34,200 --> 00:41:37,000 Speaker 1: All right, thanks to Bloomberg's down the whole Elon Musk, 739 00:41:37,120 --> 00:41:40,279 Speaker 1: reporter in chief. That does it for this edition of 740 00:41:40,320 --> 00:41:43,720 Speaker 1: Bloomberg Technology. We're back tomorrow, where we'll continue to follow 741 00:41:43,760 --> 00:41:46,640 Speaker 1: the S and P five biggest drop in almost two years, 742 00:41:46,640 --> 00:41:49,920 Speaker 1: and the broader implications, including for tech, and don't forget 743 00:41:49,960 --> 00:41:52,319 Speaker 1: to tune in to Bloomberg Studio one point oh at 744 00:41:52,400 --> 00:41:56,279 Speaker 1: nine pm New York Time, Emily Chang speaks exclusively with 745 00:41:56,400 --> 00:42:00,000 Speaker 1: Roadblock CEO and co founder David Bazuki about the online 746 00:42:00,080 --> 00:42:04,560 Speaker 1: gaming platforms explosive growth, and cultivating a civil digital community 747 00:42:04,760 --> 00:42:09,799 Speaker 1: while exploring the revenue opportunities. That's tonight, and this is Bloomberg.