Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Taylor Briggs in New York in for
Speaker 1: Emily Chang, and this is Bloomberg Technology. Coming up in
Speaker 1: the next hour, Tesla CEO Elon Musk planning to shed
Speaker 1: ten percent of staff. Is Corporate America turns up the
Speaker 1: volume on all of these economic warnings. We have the story. Plus,
Speaker 1: while speaking of Elon Musk, he's one step closer to
Speaker 1: buying Twitter, the social media company says that a regulatory
Speaker 1: waiting period has expired. We'll discuss the next steps, and
Speaker 1: of course a big preview of Apple's Worldwide Developer Conference
Speaker 1: and coming up quickly on Monday, developers are going to
Speaker 1: gather in person for the time in years. Why can
Speaker 1: we expect We'll break it all down for you. Let's
Speaker 1: stake with today's jobs market, the market moves. Of course,
Speaker 1: those job numbers really coming. They can fascinate. Thirty am
Speaker 1: this morning, I want to do all of this with
Speaker 1: cross Marks tieth market strategists Victoria Fernandez and talked to
Speaker 1: us sort of about you know, sort of the the
Speaker 1: decent the good jobs numbers and how we're thinking about
Speaker 1: the way that that impacts the federal reserve that certainly
Speaker 1: needs to be on the move. Yeah, Taylor, I think
Speaker 1: we had some conflicting stories this morning coming out of
Speaker 1: the job support. Obviously, it was a little bit bigger
Speaker 1: than expected, and so therefore people were concerned that the
Speaker 1: Fed is going to continue to raise rates, maybe even
Speaker 1: faster than what they've telegraphed so far. They've telegraphed fifty
Speaker 1: basis point moves at the next two meetings September. They're
Speaker 1: saying is open. Perhaps the jobs report today makes a
Speaker 1: fifty basis point move in September more likely. But I
Speaker 1: think we also have to look at the average hourly
Speaker 1: earnings that stay flat versus last month, and this is
Speaker 1: where we're really gonna see, um, you know, the inflation component.
Speaker 1: It dig in, that sticky component of inflation coming from wages,
Speaker 1: and we didn't see the game there that many people thought,
Speaker 1: and we saw the participation rate go higher, which again
Speaker 1: could help bring wage inflation down a little bit. So
Speaker 1: a little bit of a mixed story, but I do
Speaker 1: think that that is going to continue to go full
Speaker 1: force at this point and that's why we saw the
Speaker 1: markets react the way they did today. And is that
Speaker 1: why tech continues to be the big underperformer, just struggling
Speaker 1: to be outperforming and it yields rising kind of environment. Yeah, Obviously,
Speaker 1: when yields go higher, those tech names, those what we
Speaker 1: consider long duration stocks, tend to not do well. But look,
Speaker 1: even when yield went down over the last ten days
Speaker 1: or so, we had yields come back off of that
Speaker 1: terday high at three twenty, and we didn't see Tech
Speaker 1: do tremendously well. We didn't see them take leadership. You
Speaker 1: still have Energy taking leadership right now. So that has
Speaker 1: to make us think that there's not gonna be a
Speaker 1: big shift um and we're gonna be in a big
Speaker 1: upturn for the markets. That makes us think we are
Speaker 1: just having a little bit of a bear market rally
Speaker 1: right now with Energy still leading. So I think you
Speaker 1: have to be careful with tech. There's a lot of
Speaker 1: volatility around those names with yields constantly moving, but I
Speaker 1: don't think you want to remove them all from your portfolio.
Speaker 1: You still need some exposure there. It was interesting, though
Speaker 1: the strategy is over at Bank of America said that
Speaker 1: tech is a huge laggard in sort of this stagflationary
Speaker 1: environment and that growth is the lagger. That this sort
Speaker 1: of outperformance that we've had as of late is such
Speaker 1: an anomaly that really the trend is towards value. Are
Speaker 1: you viewing value out performance and if we get a
Speaker 1: stagflationary environment, yeah, we actually like value better. Here when
Speaker 1: you look at our tim predictions that we put out
Speaker 1: on December thirty one, we talked about value versus growth,
Speaker 1: and what we've seen since the beginning of the year
Speaker 1: is that about half roughly about half of the outperformance
Speaker 1: from value over growth has kind of dissipated, but yet
Speaker 1: it's still performing better. So we have a balanced portfolio.
Speaker 1: We've trimmed a little bit of our value names, but
Speaker 1: we're still overweight that we still have growth names in
Speaker 1: the portfolio. We think with all the volatility that's coming,
Speaker 1: value may still outperform, but you want to make sure
Speaker 1: that you have a good balanced portfolio, and that's where
Speaker 1: we're having our clients position themselves. Victoria's interesting. We're speaking
Speaker 1: with Rick Reader over at black Rock earlier this morning,
Speaker 1: talking a little bit about the Federal Reserve and dare
Speaker 1: we say sort of a goldilocks ish environment. Take a
Speaker 1: listen to what he had to say. This will do
Speaker 1: nothing to deter the head from where they where they're going.
Speaker 1: But I think I think it's a big report because
Speaker 1: I think we're now going to make the turn. I
Speaker 1: think the next three or four months, you're going to
Speaker 1: see these numbers decline. I could see a negative print
Speaker 1: over the next three or four months, and that's the
Speaker 1: thing that I'm keyed into, and I think that's what
Speaker 1: markets will react to and trying to interpret how deep
Speaker 1: the Fed's gonna go. Is that sort of peak jobs
Speaker 1: what we just got. Yeah, I listened to that interview
Speaker 1: this morning and it was interesting this he's expecting negative
Speaker 1: numbers to come out, and I'm really kind of along
Speaker 1: those lines. I do think that we're going to see
Speaker 1: the labor market really start to come down. And look,
Speaker 1: the Feed has told us they are willing to sacrifice
Speaker 1: some of the strength and the labor market in order
Speaker 1: to bring inflation down. So I think we have to
Speaker 1: expect that that is actually going to happen. We talk
Speaker 1: about peak inflation, peak yield, I think we have to
Speaker 1: also speak about peak labor market and how we're going
Speaker 1: to see some of those smaller companies, you know, that's
Speaker 1: where they've been hurting the worst on some of the
Speaker 1: labor cost issues. If they start laying people off in
Speaker 1: those lower paying jobs, that's definitely going to affect UM
Speaker 1: the labor market reports coming in the next few months. Finally, here,
Speaker 1: what's the biggest question you're getting from clients at this moment?
Speaker 1: You know, it's interesting. We just hosted a Q and
Speaker 1: a UM with clients this week where they could just
Speaker 1: call in and ask questions to our CIO, Bob Doll
Speaker 1: and myself. The biggest question we got was about recession
Speaker 1: and inflation UM and so we're you know, we're telling
Speaker 1: people we don't expect a recession these this year. Household
Speaker 1: balance sheets are strong, corporate balance sheets continue to do well.
Speaker 1: Are we going to see growth slow down a little bit, Yes,
Speaker 1: but we're not at the level with the labor market
Speaker 1: with earnings, were not at the level yet that we
Speaker 1: think we're gonna go into recession. We're looking if that
Speaker 1: happens maybe second half of next year, but we still
Speaker 1: think the economy will hold pretty strong. Here for the
Speaker 1: rest of really appreciated cross marks. Chief market Strategists Victoria
Speaker 1: Fernandez Happy Friday, and that sort of leaves us off
Speaker 1: at a really good note when we think about recession,
Speaker 1: is that the biggest question that clients are asking, is
Speaker 1: that the biggest question that corporate CEOs like Tesla CEO
Speaker 1: Elon Musk is asking. He now actually comes out Today's
Speaker 1: saying that he's aiming to cut around ten percent of
Speaker 1: salaried staff from the company, saying that he quote has
Speaker 1: a super bad feeling about the economy. Dan Levy of
Speaker 1: course over credit suites joining us. Now, how are you
Speaker 1: thinking about if this is sort of an idiosyncratic Hassla
Speaker 1: issue or are you a little bit worried this is
Speaker 1: a broader e v broader economic issue? Thank you, Thank
Speaker 1: you for having the tailor. UM. We were surprised by
Speaker 1: the headline simply because Tesla is in uber growth mode.
Speaker 1: We know there's a lot of capacity that's coming online.
Speaker 1: They need UH support staff to to support that growth.
Speaker 1: So the headlines UM came as a bit of a
Speaker 1: surprise us. You know, yes, we're getting more questions from
Speaker 1: investors on the risk of recession. But the main thing
Speaker 1: that I would just point out is that Tesla and
Speaker 1: the auto industry broadly right now. The primary issue is
Speaker 1: actually not demand at the moment, but it's really supply.
Speaker 1: This is a supply constrained industry. Anything that's produced will
Speaker 1: be sold. UM. When you look at US auto sales,
Speaker 1: twelve point eight millions are in May, much lower than
Speaker 1: the typical seventeen million star that you would get. UH
Speaker 1: that that's because you have inventory at all time low.
Speaker 1: So the largest problem right now is supply, and in
Speaker 1: the case of Tesla, they need staff to support supply.
Speaker 1: Increasing that supply, uh and and unlocking that volume. Is
Speaker 1: this why maybe you well, I don't want to say
Speaker 1: you sound confused, but some of your counterparts Morgan Stanley's
Speaker 1: Adam Jonas, the cfr A analyst, saying that this sort
Speaker 1: of goes against what they were thinking when you talk
Speaker 1: about ramping up production, of increasing that supply, needing the
Speaker 1: staff that you can in the factories because the demand
Speaker 1: is there, are you could I say that maybe there's
Speaker 1: some confusion there as well. I think confusion is the
Speaker 1: right way to look at it. It is a little
Speaker 1: bit of a surprise for a company that is in
Speaker 1: uber growth mode and that I think it probably has
Speaker 1: a very long term view they have UH you know,
Speaker 1: something like eighteen or nineteen billion dollars of cash on
Speaker 1: the balance sheet, so they're well insulated. It is a
Speaker 1: little bit of a surprise. Now, I think to give
Speaker 1: credit to Tesla maybe to understand partially what's happening. This
Speaker 1: is a company that, even with all of the padding
Speaker 1: that they have on the balance sheet, they are very
Speaker 1: cost focused. We actually just had a field trip to
Speaker 1: the Fremont factory last week. You can still see this
Speaker 1: is a very cost focused company, even with all of
Speaker 1: the improvements in margins. So I don't know if it's
Speaker 1: something along those lines, but but yes, for a company
Speaker 1: that has a lot of growth, a head that needs
Speaker 1: to increase the volume, that needs to increase the support
Speaker 1: staff to support that volume, it's it was a slightly
Speaker 1: surprising headline. Really appreciate it your time and the fundamental analysis,
Speaker 1: Dan Levy, of course over a credit swas, really really
Speaker 1: appreciate your perspective there. Let's talk about that stock split,
Speaker 1: Amazon's one with the first split adjusted trading. It all
Speaker 1: begins on Monday. Now, remember the split was announced back
Speaker 1: in March. Shares initially got a boost, but then of
Speaker 1: course April and May came really falling here with a
Speaker 1: lot of the tech volatility. What does the split mean
Speaker 1: for investors joining us now? Michael Pactor, Managing director of
Speaker 1: Equity Research over a web Bush Securities, And we know
Speaker 1: the math intrinsic value hasn't changed for the company, but
Speaker 1: does the psychology, the consumer sentiment around the stock change
Speaker 1: it all for you? Yes? I mean, Taylor, I think
Speaker 1: that the idea of a split is to make the
Speaker 1: shares appear more affordable. And obviously institution just don't care,
Speaker 1: but individual investors do and employees do. Um, So it
Speaker 1: allows the company to be more appealing to individual investors,
Speaker 1: you know. And if you have ten thousand dollars to invest,
Speaker 1: are you going to buy four shares of Amazon? You know,
Speaker 1: maybe not, but you might buy a hundred shares at
Speaker 1: twenty it's been twelve thousand. I think that's how they're
Speaker 1: thinking about it. Same with employee compensation. You know, I
Speaker 1: have a friend who went to work there, and I
Speaker 1: remember the game two three shares of stock investing over
Speaker 1: four years, and it was just really complicated. They could
Speaker 1: push Camp down now stock based Camp down to even
Speaker 1: fulfillment center workers and truck drivers if they choose to
Speaker 1: because now they can give out stock an increments, you know,
Speaker 1: say a hundred twenty dollars instead, So it really provides
Speaker 1: a lot more flexibility for investors who are individuals want
Speaker 1: to buy one share, and for employees who they want
Speaker 1: to compensate and keep motivated so they can give them
Speaker 1: one share. So I think the stock will probably go
Speaker 1: up on this. More importantly though, this shows that management
Speaker 1: actually cares, and I think they have a reputation, very
Speaker 1: well earned reputation for not caring about Wall Street, and
Speaker 1: this is a very investor friendly thing to do. So
Speaker 1: I think it's a signal from Andy Jassey, who has
Speaker 1: been absent as far as investors are concerned, that maybe
Speaker 1: he does care about the share price, and we're going
Speaker 1: to see a start to go up. Very interesting. I
Speaker 1: am curious when you're thinking about management exit today Michael
Speaker 1: the Amazon CEO of the Worldwide Consumer Dave Clark resigns,
Speaker 1: are you thinking about Andy Josse coming in shaking up
Speaker 1: there sort of c suite areas the impact that that
Speaker 1: may have. You know, if if you had to pick
Speaker 1: one area of Amazon that was not doing poorly, it
Speaker 1: was that one. So I would say that, you know,
Speaker 1: consumer has been great. Actually, they they're great on everything
Speaker 1: they do on the revenue side, where they're out of
Speaker 1: controls the expanse side. And to be perfectly honest, I
Speaker 1: don't think it is Dave Clark's fault or anybody else's fault.
Speaker 1: I think it's Jeff Bezos and Andy Jesse's fault because
Speaker 1: they have a bunch of scut work projects that they're
Speaker 1: not going to tell us about, and they're investing a
Speaker 1: ton of money in things that may not pay off
Speaker 1: for ten or twenty years um. Like. As an example,
Speaker 1: I think Amazon Fresh self service stores is just a
Speaker 1: ridiculously stupid idea. Uh, you know, we don't shop at Amazon,
Speaker 1: so we can get in our car and drive to
Speaker 1: a store and you know, not have to deal with
Speaker 1: the clerk and checkout. Isn't the reason that I shot
Speaker 1: at the Amazon. So I think these guys have a
Speaker 1: lot of spending cuts to make. I don't think Dave
Speaker 1: Clark was the guide to make those guts. It's Andy Jassey,
Speaker 1: So he should be much more self introspective and be
Speaker 1: more self aware and start worrying about what he's doing
Speaker 1: the CEO. The bigger problem is that they're losing employees
Speaker 1: up and down the ranks because they don't pay enough
Speaker 1: and they're being poached by competitors. So they if they're
Speaker 1: going to get rid of somebody to CE suite, get
Speaker 1: rid of the head of HR because that person has
Speaker 1: not done a good job. Interesting. Okay, so we're getting
Speaker 1: into some of the idiosyncratic issues with an Amazon. But Michael,
Speaker 1: I thought it was really interesting. One of your counterparts,
Speaker 1: Sprint thill over at Jeffreys. I think I spoke with
Speaker 1: him last week and he said that sentiment on broader
Speaker 1: tech has never been worse. That they're doing backflips at
Speaker 1: the Exxon shareholders meeting, and you go to these tech
Speaker 1: conferences and sentiment is horrible. Is a lot of this
Speaker 1: maybe sort of the broad sentiment around technology in general. Yeah,
Speaker 1: My My largest personal holding is ex On Mobiles, so
Speaker 1: I've been doing back clips as well. Um, you know,
Speaker 1: there's two types of tech. You know, there's tech that's
Speaker 1: not profitable, and so when you're paying a revenue multiple
Speaker 1: for for companies like Unity and I love Unity, you
Speaker 1: know it's a genuinely great company, but they don't have profits. Um,
Speaker 1: there is no bottom. I mean, who knows how to
Speaker 1: value that thing. Then there are tech companies like Microsoft, Apple, Amazon,
Speaker 1: Google that are immensely profitable, and so it's really easy
Speaker 1: to kind of step in when you think they've gone
Speaker 1: down enough. And I think that where Jazz has control
Speaker 1: is he can say I'm gonna take earnings for share
Speaker 1: up ten bucks by slowing our spending on some of
Speaker 1: these projects that are going to pay off for ten years.
Speaker 1: If he does that, I think the stock has a
Speaker 1: potenci to go right back to where it was. So
Speaker 1: let's see what these tech leaders do. But the profitable
Speaker 1: companies should lead the rebound, and the big guys tend
Speaker 1: to be pretty profitable. Really appreciate all of your smart analysis.
Speaker 1: My goal packed or Knaging, director of Equity Research over
Speaker 1: Wedbush Securities. And just a note, I know that we're
Speaker 1: talking about the CEO Andy Jassy there. Stay tuned on
Speaker 1: Wednesday to thirty pm Eastern at the B Tech Summit.
Speaker 1: We will have a live interview of course with him there,
Speaker 1: so make sure to tune in for that. Lots of
Speaker 1: great interviews coming up at that B Tech summit. In
Speaker 1: the meantime, lots of great interviews coming up right here
Speaker 1: right now. We are one step closer, of course, for
Speaker 1: Elon Musk. Overcoming those hurdles for a Twitter takeover that
Speaker 1: conversation is next. This is Blimberg. Twitter passed in US
Speaker 1: anti trust review, clearing another step in its hurdle for
Speaker 1: the acquisition by Elon Musk in that proposed forty four
Speaker 1: billion dollar deal. However, the transaction it is still subject
Speaker 1: to acceptance by Twitter sharehold. There is another regulatory reviews
Speaker 1: joining this now Bloomberg's Edla Lowe sticking around late for
Speaker 1: US on a Friday, and how much of this sort
Speaker 1: of hurdle today was expected, Yeah, it was expected into
Speaker 1: a large extent. It's rubber stamping, you know. Essentially, the
Speaker 1: provision means that when a piece of M and A
Speaker 1: happens like this, both parties have to give the Federal
Speaker 1: Trade Commission and the Antitrust Division of the d o
Speaker 1: J thirty days to review the deal. And all this
Speaker 1: regulatory filing showed US is that that thirty day period
Speaker 1: has elapsed or the regulators went back to the parties
Speaker 1: and said, you pass the checks, you can proceed. But
Speaker 1: as we know, you know, regulators are looking at other
Speaker 1: elements at this, for example, the timing of when Elon
Speaker 1: must try to build up his stake in Twitter ahead
Speaker 1: of that offered to buy the company interesting and the
Speaker 1: sheer process at forty Yes, that is a far cry
Speaker 1: from the fifty four twenty. Are there real concerns that
Speaker 1: this may not get done? Yeah? You know, certainly the
Speaker 1: rubber stamping news of Friday moves us towards a place
Speaker 1: where we think it's more likely to get done. You know,
Speaker 1: we're talking about the spread here, right, the difference between
Speaker 1: the current share price forty dollars a share and the
Speaker 1: fifty four dollars twenty cents per share offer that Elon
Speaker 1: must made. The basic rule being the whyd that gets
Speaker 1: It's a soft indication of skepticism on Wall Street is
Speaker 1: going to happen that if that gap closes, we're moving
Speaker 1: towards a place where it's more likely to happen. It's
Speaker 1: just a soft indication. You also have, like merger arbitrars
Speaker 1: specialists that put odds on the deal, and at some
Speaker 1: point that you know, the odds on this deal happening
Speaker 1: have been below for they've now improved. The question is
Speaker 1: does he't come back in with a lower offer, And
Speaker 1: it seems like given today's news, that's unlikely to be
Speaker 1: the case. Interesting. So the hurdle then, that's now on
Speaker 1: Twitter shareholders. What would be anything for them to not
Speaker 1: vote for it? Yeah, this is a psychological question more
Speaker 1: than anything. You know, at twenty cents a share, you
Speaker 1: would lick your lips at that offer. That's a great
Speaker 1: offer if you're an existing shareholder of Twitter, because the
Speaker 1: trading Twitter hasn't really mirrored what we've seen in broader markets, right,
Speaker 1: because it's been subject to m and A and to
Speaker 1: take private bid. It hasn't traded with the wild swings
Speaker 1: and big drops like we've seen in other social media stocks.
Speaker 1: So yeah, wait and see, really appreciate it. Our very
Speaker 1: own at Ludlow coming up stick with us equality and
Speaker 1: inclusion in the workplace. We're going to speak with Brutal
Speaker 1: Gurus CEO Bobby Risette about her mission to represent under
Speaker 1: represented groups at her company, and that really important conversation
Speaker 1: is next. This is Bloomberg. Love's happening on Wall Street.
Speaker 1: It's the basic law of economics. It validated bottle market
Speaker 1: was already pricing. We need to catch up. This is
Speaker 1: Bloomberg Wall Street Week. I'm David Weston. We've got the
Speaker 1: information and insights. David. You just hit the mail right
Speaker 1: on the head from businesses most in fluential and instrumental,
Speaker 1: and that's the way you run good risk manage. It's
Speaker 1: a challenging dynamic. We could continue to see that college
Speaker 1: from Bloomberg Wall Street Week premieres Friday, with replays all
Speaker 1: weekend on Bloomberg Television and Radio. This is Bloomberg Technology.
Speaker 1: I'm Taylor Riggs in New York in for Emily Chang
Speaker 1: and this week started the Pride Month of course Bloomberg Television,
Speaker 1: focusing on a wide range of topics highlighting what equality
Speaker 1: means for the economy. Company these and well investors. Virgil
Speaker 1: Gurus it is a talent as a service solution platform
Speaker 1: that matches its users with the perfect North American remote
Speaker 1: assistance and freelancers by using match making algorithms. CEO Bobby
Speaker 1: Rossett is on a mission to create employment opportunities for
Speaker 1: underrepresented individuals. She has, of course amanded within her own
Speaker 1: company that of the workers identify as female, of course
Speaker 1: by the bipop community, and forty as part of the
Speaker 1: lgbt Q plus community. Bobby so pleased to say, joins
Speaker 1: us now and talk to us sort of as we
Speaker 1: kick off Pride Month and sort of a renewed focus
Speaker 1: on equality. And it's not lost on us that today
Speaker 1: is also job stay as well and continuing to see
Speaker 1: underrepresented individuals maybe not quite have the same opportunities as others.
Speaker 1: What do you really see is sort of the way
Speaker 1: to help move that forward. I thank you so much, UM,
Speaker 1: you know I I think all companies are are starting
Speaker 1: to gear towards UH inclusion intiversity in the workplace. At
Speaker 1: least we're seeing it a lot more now here in Canada. UM.
Speaker 1: We obviously have a lot more work to do, and
Speaker 1: I think it's important to that employers such as UH
Speaker 1: tech companies mostly need to really focus on putting that
Speaker 1: diversity out there right up front for everybody on their
Speaker 1: team to see and what they're working on, put their
Speaker 1: numbers on their site. I think all of this is
Speaker 1: extremely important so that we can show everybody that they
Speaker 1: are welcome no matter what. This is a technology show
Speaker 1: as well, so we're focused on equality across the board.
Speaker 1: We're really looking at highlighting it within the TEX sector
Speaker 1: as well. Do you see that the tech sector has
Speaker 1: maybe lagged or or struggled and and how do you
Speaker 1: sort of see this sector as being able to match
Speaker 1: other areas. I absolutely have, um you know, down here
Speaker 1: in Canada, it took me more than a hundred and
Speaker 1: seventy knows just to raise my seed round, which is
Speaker 1: obviously or the series they finding around that we just closed.
Speaker 1: But um I I want to say that all of
Speaker 1: that wasn't because of who I am as a person.
Speaker 1: I'm an Indigenous LGBT woman and you know, having being
Speaker 1: an Indigenous lgbtwo woman in tech, but let alone a
Speaker 1: CEO of a very large scale of I've seen a
Speaker 1: lot of the barriers. I've had to push through a
Speaker 1: lot of them. I've I've seen, you know, so much
Speaker 1: that it's been difficult for me to be able to
Speaker 1: scale the company knowing that people aren't believing in me
Speaker 1: because who I is who I am. So that's one
Speaker 1: of the reasons why Virtual Grows focuses so much on
Speaker 1: diversity and inclusion and the workplace. So we hire people
Speaker 1: from all walks of life, and all of our talent
Speaker 1: are people that have a story. Every single one of
Speaker 1: them has a story, whether they're a line and immigrant
Speaker 1: to somebody who might be transitioning genders who can't find
Speaker 1: work because of it, to UM, you know, to people
Speaker 1: who are veterans and might have social anxiety because of PTSD,
Speaker 1: and two people with mental health issues as well, and
Speaker 1: this is important that you're giving them a safe space
Speaker 1: to work. And UM, I felt that using our platform
Speaker 1: for that was the best thing to do. Has anything
Speaker 1: gotten better, particularly since COVID in a sort of renewed
Speaker 1: focus that we've all had on more equality, you know,
Speaker 1: I think so, especially because of the remote work. You know,
Speaker 1: remote work is here to stay, and everybody's obviously UH
Speaker 1: figured that out with COVID and and you know, everybody
Speaker 1: is not afraid to hit it head on as they
Speaker 1: were before. UM. But I still think there's a lot
Speaker 1: going on. I still think that there's a lot of
Speaker 1: people being told no because of who they are. And
Speaker 1: I think, you know, like I said earlier, that if
Speaker 1: it starts with one business just making that change and
Speaker 1: not being afraid to make that change and standing out
Speaker 1: and shouting those numbers out, UM, just like how we
Speaker 1: shout out our identify as women UH in six or
Speaker 1: identify as part of the l g B t Q community.
Speaker 1: It's important to put that out so that people are
Speaker 1: seeing that. And so I've noticed a lot more tech
Speaker 1: companies that are hiring remote We are hiring a lot
Speaker 1: more diverse populations. But I think there's obviously so a
Speaker 1: lot of work today and you talk about remote work,
Speaker 1: and I am curious, is that sort of opened up
Speaker 1: the labor pool that instead of access to the individual city,
Speaker 1: the remote work now is access to a talent pool
Speaker 1: across the whole country, maybe across the whole world. How
Speaker 1: have you seen within your company sort of the ability
Speaker 1: to use remote work to your advantage. So Virtual Grous
Speaker 1: is talents as a service platform. So what we use
Speaker 1: we provide marginalized and underrepresented folks through the platform and
Speaker 1: we match them with a business or an entrepreneur um.
Speaker 1: Some of our largest lines come from the US and
Speaker 1: we will provide anywhere from a hundred to two to
Speaker 1: three D virtual assistance for them. And a lot of
Speaker 1: them are actually coming to us because of our equality
Speaker 1: and our diversity, and they're actually saying, hey, you know what,
Speaker 1: we want two hundred people of diverse backgrounds um and
Speaker 1: so we're noticing a lot more of that is coming out.
Speaker 1: The difference with us, though, is that a lot of
Speaker 1: companies like us off short and it's not necessarily a
Speaker 1: bad thing, you know, um, But for us, we promise
Speaker 1: to keep it on short in North America, So while
Speaker 1: we're going global, all of our workers will always remain
Speaker 1: in US R Canada, so we can keep it on
Speaker 1: our North American economy and I keep it down here.
Speaker 1: You mentioned sort of your own struggles. I am curious
Speaker 1: with the VC funding world. There's been a lot from
Speaker 1: a broad acre an eco economic environment. We've been hearing
Speaker 1: that investors are saying to their portfolio companies, conserve cash,
Speaker 1: slow down, be prepared to not be able to fundraise
Speaker 1: for a while, be prepared to hold on to just
Speaker 1: that whatever cash that you have on hand. Have you
Speaker 1: found the fundraising environment generally a little bit better, particularly
Speaker 1: for minority owned businesses, you know, such as yours. How
Speaker 1: have you experienced sort of that VC funding and maybe
Speaker 1: a post COVID environment now, Oh, honestly, for us, it's
Speaker 1: been good. I just closed my Series A funding round
Speaker 1: less than a month and about a month ago, and
Speaker 1: it only took me six months to open and close
Speaker 1: it directly full, so I actually had no problem. And
Speaker 1: now the difference is is I did gear away from
Speaker 1: vcs and kind of went more into impact feces because
Speaker 1: what we're creating is impact. Um you know, we we are,
Speaker 1: like I said, providing work to marginalized communities that a
Speaker 1: lot of people are not doing. So we were able
Speaker 1: to target the impact investors, which really made it a
Speaker 1: lot easier on us. UM that said, one of my
Speaker 1: investors just geared us up and said, you know, we're
Speaker 1: almost heading in towards a recession, and uh, you know,
Speaker 1: the the the economy is changing and is changing fast,
Speaker 1: and the cost of living is is changing and we
Speaker 1: all know that. Um. So as as far as going
Speaker 1: into our Series B, we're probably going to get in
Speaker 1: there a little bit faster than later because you obviously
Speaker 1: got to make sure you protect your run rates. So
Speaker 1: we're working hard on on that and we're probably looking
Speaker 1: to jump into it within the next eight months as
Speaker 1: opposed to twelve fourteen months like we were planning on. Well,
Speaker 1: we wish you the best of luck in that funding
Speaker 1: round and really sort of important comments when we think
Speaker 1: about a quality and of course sort of the fundraising
Speaker 1: environment in the midst of sort of a slowing macro
Speaker 1: economic environment as well. Really appreciated. Thank you, Bobby Rosette
Speaker 1: of Virtual Groups, really appreciated time for our crypto report.
Speaker 1: I want to start with Bitcoin dropping back below the
Speaker 1: thirty thou mark. This is after a sort of regained
Speaker 1: that closely watched levels just a day ago. Our crypto
Speaker 1: contributortionally Boss take here with more and Sully. Is this
Speaker 1: sort of a classic risk off sort of sentiment Again, Yeah,
Speaker 1: you're looking at the SMP that was down in another week.
Speaker 1: But if you look at it, Taylor, something interesting. Even
Speaker 1: with the two day decline or twenty four hour decline
Speaker 1: and bitcoin of about two percent, you actually have over
Speaker 1: a seven day period a three percent rise in Bitcoin.
Speaker 1: We should look at what this downturn really looks like
Speaker 1: in the context of other stocks as well, because, as
Speaker 1: we know, this route and bitcoin is really hurting other
Speaker 1: companies that are exposed to bitcoin. One company that many
Speaker 1: investors and crypto employees are talking about is coin base,
Speaker 1: where there was a very steep sell off today and
Speaker 1: they are trading below where they were a week ago
Speaker 1: and getting much closer to that fifty drop over a
Speaker 1: one month period. Remember, coin Base had said that they
Speaker 1: would be resending some offers as well as instituting a
Speaker 1: hiring freeze. There are other stocks out there that are
Speaker 1: still also trading lower on the week. They have not
Speaker 1: said anything necessarily about hiring, but you look at a
Speaker 1: riot blockchain or a block and you wonder how the
Speaker 1: stock pressure will impact their plans moving forward. Taylor really
Speaker 1: appreciation only stick with me here because I'm gonna bring
Speaker 1: in our guests next guests for more insight on this.
Speaker 1: Tak Inclined, of course, the co founder of Edgin Node,
Speaker 1: the company behind the graph protocol. You think of them
Speaker 1: is the Google of block chains. And before we got
Speaker 1: to get into the nitty gritty, I'm curious how you
Speaker 1: think about the volatility surrounding the price action and the
Speaker 1: calls that it's going to go to four hundred thousand
Speaker 1: and then calls that well, maybe actually bitcoin's only worth
Speaker 1: eight thousand. How does all of that volatility impact you? Yeah,
Speaker 1: it doesn't really. We've been I've been I've learned about
Speaker 1: bitcoin in so I've been used to this volatility um
Speaker 1: and we kind of prepare for it and embrace ourselves
Speaker 1: in the crypto space for that volatility um, and we're
Speaker 1: just focused on building. Speaking of building to again How
Speaker 1: do you think about this in terms of all the
Speaker 1: companies out there that had these really tremendous hiring plans
Speaker 1: like coin base, and now saying that they may resen
Speaker 1: some offers. How does that impact the inclination of certain
Speaker 1: people who maybe we're not in crypto before, but we're
Speaker 1: thinking about crypto and now might be more spooked by
Speaker 1: some of these jerks need to knee jerk reactions ahead. No,
Speaker 1: I think that that's a fair response. But I do
Speaker 1: notice that there are still many projects hiring within the
Speaker 1: space coin basis of a multi thousand person company, and
Speaker 1: so with volumes down, exchanges are impacted, and so it
Speaker 1: sounds like they just want to hunger down for a bit.
Speaker 1: But there are many projects that are building within the space.
Speaker 1: One thing that's really interesting about the crypto ecosystem is
Speaker 1: that you don't need companies that are thousands of people wide,
Speaker 1: unless it's a bridge to the space like coin base. UM.
Speaker 1: You can have companies that are much smaller, so a
Speaker 1: few dozen to a few hundred UM, and then it's
Speaker 1: it's less impactful when there are times like this. UM,
Speaker 1: So I wouldn't lose steam. I think that it's still
Speaker 1: quite optimistic within the space and just with the potential
Speaker 1: that that crypto and web three have. Well, what are
Speaker 1: the kinds of companies you think will be able to
Speaker 1: hire most tea in Where can a person who wants
Speaker 1: to get a lot of crypto skill gain that crypto
Speaker 1: expertise in a crypto winter. Yeah, I mean we're still
Speaker 1: hiring Edgin note and we work on the graph protocol.
Speaker 1: Many coord developers within the graph ecosystem are also hiring
Speaker 1: UM and I think there are many protocols like look
Speaker 1: at our, we look at connects. UM. We still need
Speaker 1: talent and it's actually in a in a market like this,
Speaker 1: it's easier to get talent. There were the price tags
Speaker 1: for lan. We're really rising up during the bowl market,
Speaker 1: and so it is a good opportunity for projects and
Speaker 1: companies to be very decisive about who they want to
Speaker 1: hire and the and the roles that they really need
Speaker 1: to hire for in a time of uncertainty within the
Speaker 1: broader macro environment. UM. But yeah, many projects are still hiring.
Speaker 1: How do you think about the inherent conflict of decentralization
Speaker 1: on companies that are getting bigger and bigger who might
Speaker 1: need authority and centralization over a product. Yeah, it's a
Speaker 1: great question. So I think in Web three, you really
Speaker 1: want to give that power away. You want to give
Speaker 1: up power back to user, and that's really what this
Speaker 1: is about. But that doesn't mean that centralized companies won't
Speaker 1: go away. They'll just exist in the concept and the
Speaker 1: concept of decentralization, and the Graphic Protocol is a great
Speaker 1: example of this. There are over five companies, one of
Speaker 1: which is Edge and Node that exists within the context
Speaker 1: of that protocol. And now that we have these new
Speaker 1: monetization structures, were able to get rid of the kind
Speaker 1: of wompy monetization models like ads and kind making users
Speaker 1: the product like what we see a lot in web
Speaker 1: to um within the Web three space, and so that's exciting.
Speaker 1: The graph has been referred to of the Google of
Speaker 1: block chains, and you've announced a Web three browser. So
Speaker 1: how is that kind of browser going to be different
Speaker 1: than Google itself? Yeah, so great question. So u Geo
Speaker 1: is the browser that was announced yesterday, and it is
Speaker 1: a decentralized browser. It's the first browser of Web three,
Speaker 1: so very different than any browser that we're used to
Speaker 1: in the web to space. And Web three is really
Speaker 1: a new web it's a verifiable web and so you
Speaker 1: can think of like a Google Docs form where you
Speaker 1: can see all the change history. That's how GEO works,
Speaker 1: and so anyone can contribute to changes. However, there's reputation
Speaker 1: within GEO and so you the more you vote, the more,
Speaker 1: and you can earn more reputation over time, um and
Speaker 1: you have more say so, it's really about giving the power,
Speaker 1: the control, the ownership, the decision making all back to
Speaker 1: the user. And everyone's been asking where's Web three? I
Speaker 1: can't find it? Well, now you know you kind So
Speaker 1: what about the Web two companies that are getting more
Speaker 1: into Web three and it's starting to dip their toe
Speaker 1: into blockchain in a bigger way. Do you think that
Speaker 1: the traditional Web two companies met at Google even? Do
Speaker 1: you think that they can create a lot of competition
Speaker 1: in this space? I don't. I think that Google is
Speaker 1: doing very well selling ads they I think that they
Speaker 1: are doing a great job in that current space. I
Speaker 1: think once you as a founder, once you take equity
Speaker 1: or once you start monitoring monetizing in one way, it's
Speaker 1: really difficult to reshape that monetization and you have a
Speaker 1: lot of stakeholders. UM and so I think they would
Speaker 1: need to kind of like spin out or enable this
Speaker 1: space in in some way. And even with banks, right
Speaker 1: like banks aren't going away. You still want someone to
Speaker 1: call you when you're if you have a margin trade
Speaker 1: out and you're about to get liquidated. And so there's
Speaker 1: still a lot of room for the traditional companies to
Speaker 1: exist within the space. It'll just be in a different context.
Speaker 1: You know, we talked about Crypto Winter in the Vein
Speaker 1: of Hire, but what about Crypto Winter in terms of
Speaker 1: the types of projects that will be built. Do you
Speaker 1: think this is the opportunity for Crypto to pivot? Are
Speaker 1: there going to be different types of projects than we
Speaker 1: saw in the last couple of years. Yeah, I mean,
Speaker 1: so all the pieces of the tech stack are there.
Speaker 1: We're still building. And I'm actually really excited about this
Speaker 1: cool off because so many founders and projects were being
Speaker 1: pulled in ninety different directions in the Bowl market, and
Speaker 1: now you see the projects that are really being used
Speaker 1: and it kind of comes back to fundamentals as opposed
Speaker 1: to the marketing that went in during that Bowl market,
Speaker 1: and so you're pulled in less directions and you're able
Speaker 1: to just build. And I think the biggest piece, the
Speaker 1: biggest piece to the puzzle is really time and now
Speaker 1: like this market, we have that time. Really appreciated taking
Speaker 1: Incline co founder a Vegan note of course in our
Speaker 1: very Bloomberg Sennalis Bossic, really appreciate both of you joining
Speaker 1: me here today. Coming up after two years of being
Speaker 1: virtual Apples w w DC event, it is that it
Speaker 1: kicks off Monday. We are going to be live in
Speaker 1: Apple Park and we have sort of the latest on
Speaker 1: what to expect that's next. This is Bloomberg the Apple
Speaker 1: Worldwide Developer Conference. It kicks off Monday in person for
Speaker 1: the first time since the beginning of the pandemic. The
Speaker 1: tech giant holds it each year to show off new
Speaker 1: features and device enhancements that developers can harness with their apps.
Speaker 1: Joining this now Ben Bajarin, principal analysts and CEO at
Speaker 1: Creative Strategies consumer tech research Companies. So, okay, hit it
Speaker 1: with me first. What is sort of the key thing
Speaker 1: that you're really looking forward to on Monday. Yeah. Apple's
Speaker 1: WWDC is always an interesting event because it's the one
Speaker 1: sort of place where where they do give a little
Speaker 1: bit more of a roadmap to the future. Not the
Speaker 1: long off future, but stuff that's coming this fall, so
Speaker 1: they'll preview everything new that's coming to iOS, iPad os,
Speaker 1: mac os, stuff like that, maybe t v O S.
Speaker 1: So it's generally always a software focused event. I know
Speaker 1: we talk a lot about hardware, but I don't know
Speaker 1: how much hardware would really be at this event is
Speaker 1: not typically what what Apple does with with w WDC,
Speaker 1: but really just talking to developers, showing them the vision
Speaker 1: for the platform where they're going, so that they can
Speaker 1: start to take advantage of new s, d ks and
Speaker 1: a p I s create new apps on whatever new
Speaker 1: bells and whistles they're bringing to the platform. So that's
Speaker 1: usually what I'm looking at the most is how are
Speaker 1: they evolving their platforms forward, and then things around If
Speaker 1: a piece of hardware shows of or something else is
Speaker 1: usually kind of icing on the cake. Would that be
Speaker 1: in the form of a new headset. I don't think so.
Speaker 1: I would not expect that. I would caution others do not
Speaker 1: not expect that. I mean, personally, I'm not sure that
Speaker 1: technology is there yet, even from stuff I've seen demo
Speaker 1: and tech wise, it's it's just not there. So I
Speaker 1: would caution away from that. But that being said, Apple
Speaker 1: does have a toolkit called a R Kit that they're
Speaker 1: continuing to try to gain momentum for and get developers
Speaker 1: to start using anymore. So it'll be interesting to see
Speaker 1: if they launched anything new around a R kit that
Speaker 1: might give us some signals about where they're going. Really, again,
Speaker 1: it's about getting developers to take advantage of those tools,
Speaker 1: those technologies and create new apps, and in this case
Speaker 1: maybe more a R apps, but they'll be smartphone based. Well,
Speaker 1: we talk about the apps. Our own internal reporter, Mark
Speaker 1: German has done a lot of research and looking at
Speaker 1: maybe a new iOS six team the way it can
Speaker 1: interact with the user. How do you think about the
Speaker 1: the iOS system the six team. Yeah, I think it
Speaker 1: would be really interesting. I mean that that could be,
Speaker 1: in my opinion, one of the bigger surprises if there's
Speaker 1: a user interface overhaul, something that's flashy and new that
Speaker 1: we can get excited about. You know, iOS is great,
Speaker 1: It's it's evolved quite a bit of time. It's really
Speaker 1: only gone through a couple of serious, i would say
Speaker 1: serious user interface um overhauls. So if people have argued
Speaker 1: that we're due for one to make it more flashy
Speaker 1: and new, because because that's the thing I think it's
Speaker 1: really interesting about this platform in general. Apple's approach to
Speaker 1: it is this event really signals all of the new
Speaker 1: features and functionality that they bring to their customer space,
Speaker 1: right basically making all of their customers devices better with
Speaker 1: a software update. And so what might that look like
Speaker 1: with something that's kind of brand new, I think that
Speaker 1: would be an esting surprise. Again, it's hard to expect that,
Speaker 1: but that's the kind of thing that I think people
Speaker 1: would would get really excited about, is a fresh, fresh
Speaker 1: look for iOS. This is also a company that has
Speaker 1: done a huge amount of work to bring the chip
Speaker 1: design in house. How much of that is control over
Speaker 1: your own destiny versus some comments on the supply chain
Speaker 1: that are still a little bit difficult in this environment.
Speaker 1: I think it's primarily driven by control of destiny. I mean,
Speaker 1: the Apple looks at the entirety of their product roadmap
Speaker 1: from software, services and hardware. They always have a vision
Speaker 1: for that where they want to go, and they take
Speaker 1: that and and and build Silicon with that vision in mine. Right,
Speaker 1: the Silicon team is in lock set with the hardware
Speaker 1: planning team, the software planning team, and services, So it's
Speaker 1: really a comprehensive whole. Note their supply chain images are issues,
Speaker 1: but the reality is, even with Apple's internal design of
Speaker 1: these ships, they're not going to be immune to the
Speaker 1: supply chain issues. Hopefully they can try to manage that better,
Speaker 1: but absolutely, Apple Silicon is a is a critical part
Speaker 1: of moving their hardware device strategy forward in everything, including
Speaker 1: some things that are new in the future, whether that's
Speaker 1: headsets or whatnot. At all the Apple Silicon based do
Speaker 1: you see any sort of macro issues? The supply chain startles,
Speaker 1: the shutdowns of some of the factories in China starting
Speaker 1: to impact this company in a significant way. I don't
Speaker 1: know about a significant way, but we're definitely worried about
Speaker 1: some impact. I mean, there's no doubt that the China
Speaker 1: market has slowed down quite a bit, even just consumers
Speaker 1: buying there, and China is a big part of Apple's business.
Speaker 1: So I do think people are starting to caution a
Speaker 1: little bit about what do you expect in terms of
Speaker 1: a hardware impact. Again, that's not demand going away, that's
Speaker 1: just people either not being able to get outside and
Speaker 1: buy phones. That's supply chain or factory being shut down,
Speaker 1: not being able to make them and so across the board.
Speaker 1: And I think this is true really of all consumer
Speaker 1: electronics category. These aren't necessarily lost sales. These are just
Speaker 1: delayed sales. But but that being said, it's it's going
Speaker 1: to have an impact right in a short term some
Speaker 1: degree really appreciate it. Ben Herron, principal analysts and see
Speaker 1: you over a creative strategies, really appreciate it. That doesn't.
Speaker 1: For this edition of Bloomberg Technology, tune in Monday b
Speaker 1: Tech Live from the w w d C. You don't
Speaker 1: want to miss it. This is Bloomberg