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Speaker 1: From the heart of work, innovation, money and power. CALLI

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Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with

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Speaker 1: Emily Jay. I'm Caroline Hyde in New York in for

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Speaker 1: Emily Chang, and this is Bloomberg Technology. Coming up. In

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Speaker 1: the next hour, earnings come thick and fast. We delve

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Speaker 1: in on Alphabet shares full after third quarter earnings per

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Speaker 1: share and sales they miss estimates, search, YouTube, the network

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Speaker 1: division all full short of analyst expectations. We're going to

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Speaker 1: break it all down for you in the Ripple Effects

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Speaker 1: plus Built Rewards, the company that uses a point system

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Speaker 1: to help you pay rent or a home down payment

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Speaker 1: just for its valuation quadruple Overnight, I'll chat with the CEO,

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Speaker 1: Uncle Jane, about the startups, unicorn status and what it

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Speaker 1: plans to do in a tough housing market. And it

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Speaker 1: is the only story you need to read about Crypto. Ever,

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Speaker 1: Bloomberg's Matt Levine has written a cover to cover issue

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Speaker 1: of Bloomberg Business Week, the second of its kind in

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Speaker 1: the magazine's nine three year history. Us Later in the hour,

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Speaker 1: we pushed towards further earnings, further fundamentals, and we bring

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Speaker 1: in while the ramifications of the latest dost that we

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Speaker 1: just got after the bow. I'm prettysed to say that

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Speaker 1: broad Sweet Media Group CEO Daniel Newman is with us.

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Speaker 1: Is also the founding part of Principal Analysts of Future

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Speaker 1: and Research, basically a man who's at the cuting edge

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Speaker 1: of what digital transformation means for you and your business

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Speaker 1: and can analyze. Basically, we'll go with either market capitalization

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Speaker 1: or market impact, and I think market impact is going

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Speaker 1: to be coming from Alphabet today, and I'm interested in

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Speaker 1: your perspective, Daniel, Well, it was a miss any real

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Speaker 1: areas concerned, though, Well, I think we had an overall expectation, Caroline,

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Speaker 1: of seeing the ad market pullback. I think the big

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Speaker 1: concertain isn't as much for Google as it is for

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Speaker 1: the rest of the ad space. As I said to

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Speaker 1: Emily last quarter when I joined the show at the

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Speaker 1: same period of time, I said, Alphabet's top of the heat.

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Speaker 1: There are the technology for advertised are that is going

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Speaker 1: to be the last to be removed, the last to

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Speaker 1: be slowed. And this means that the advertised business is

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Speaker 1: slowing significantly, and I'm worried about what this means for Meta.

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Speaker 1: We already saw what happened to snap um, So that's

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Speaker 1: my biggest concern. I still think that the Google business

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Speaker 1: overall is robust. I think it's the best of class,

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Speaker 1: and I'm still optimistic that going forward that Google is

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Speaker 1: still going to offer a lot of value to its shareholders.

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Speaker 1: I was also a little concerned about the slowing of

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Speaker 1: the cloud business. Despite the fact that it beat, it

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Speaker 1: didn't quite keep up with what we saw from Azure

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Speaker 1: this quarter. And that's going to be something to watch

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Speaker 1: as well, because they're pouring a lot in they're still

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Speaker 1: losing money in that particular business. But I did I

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Speaker 1: did attend their Google Cloud Next event. I did hear

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Speaker 1: from Thomas Curry and the CEO of that group, and

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Speaker 1: it does seem that that investment is going to pay

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Speaker 1: off as the market continues to spend on enterprise. Of course,

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Speaker 1: we know that in many ways this is a company

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Speaker 1: that's backed off from some other bets, in large part

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Speaker 1: because they've got to double down on where is profitable

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Speaker 1: for them at the moment we've poured out. The CFO

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Speaker 1: of Alphabet was speaking with her own end Ludlow a

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Speaker 1: bit earlier, and she was saying in terms of YouTube

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Speaker 1: for example, I would say the largest driver of the

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Speaker 1: deceleration was a further pullback and spent from some advertisers

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Speaker 1: that was a cross brand and direct response talk to

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Speaker 1: us about whether or not this is going to be

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Speaker 1: there for what we read into meta you were just

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Speaker 1: saying about the impact. We heard it from Snap the

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Speaker 1: Warriors about the market marketing budgets getting that little bit smaller.

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Speaker 1: Is there anywhere in terms of reinvestment, in terms of

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Speaker 1: doubling down YouTube shorts and they're like that you want

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Speaker 1: to see to prove that still YouTube is where you

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Speaker 1: have to be for eyeballs. Yeah, I think they need

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Speaker 1: to stay the course on their strategy. The macroeconomic conditions

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Speaker 1: are in this moment what they are, and the Google

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Speaker 1: does have the best product. They are diversifying, they are innovating.

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Speaker 1: The YouTube short product is interesting, and of course TikTok

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Speaker 1: has the most acceleration and that's what YouTube is trying

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Speaker 1: to do to answer to what TikTok has been able

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Speaker 1: to to do. You know, I watched IBMS earnings last

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Speaker 1: week in the strength of the enterprise, so kind of

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Speaker 1: on the other side of Google will with their cloud business.

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Speaker 1: I really think that investment is going to be even

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Speaker 1: more critical coming out of this pandemic. Companies are going

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Speaker 1: to have to adjust UH and the investment in cloud

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Speaker 1: an enterprise maybe the area that provides the biggest opportunity

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Speaker 1: going forward. And we also saw that with the top

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Speaker 1: and bottom line beat from Microsoft. So I think that's

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Speaker 1: an opportunity for Google, you said, Guy bausifually therefore, in

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Speaker 1: touch discussing Microsoft, which is being dragged in lower lower

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Speaker 1: and after I was training large part because of the

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Speaker 1: moon music coming out of Alphabet. But this was a

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Speaker 1: beat across the board. This is a company that's still

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Speaker 1: posting even though it's worth more than a trillion dollars

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Speaker 1: revenue growth of more than nine effects headwind s. But

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Speaker 1: where did you see some of the concerns in terms

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Speaker 1: of corporate spending any Well, it seemed that the biggest

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Speaker 1: concern and what sort of drove this stock down after

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Speaker 1: hours was more than it just didn't hit its azure number.

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Speaker 1: The mark looking for closer. I think it came out

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Speaker 1: at thirty five. Of course, just like Ruthport said at Google,

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Speaker 1: you know, FX was an issue across the board at Google.

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Speaker 1: But I actually like the fact that it was you know,

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Speaker 1: diverse that the company performed in most category is in productivity.

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Speaker 1: It performed in the intelligent cloud business, it performed pretty well,

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Speaker 1: and even in personal computing. In on the consumer side

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Speaker 1: with surface and gaming, an area that a lot of

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Speaker 1: people were concerned, it came in at where it was

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Speaker 1: expected to Caroline, So I actually didn't feel as negatively

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Speaker 1: about the quarter. I meant growth. It's still above you know,

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Speaker 1: the fold that grew a little bit faster than the

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Speaker 1: Google Cloud business, and it's still indicative to me the

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Speaker 1: enterprise is stronger. That's why I alluded to that IBM

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Speaker 1: result last week. I think that surprised a lot of people,

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Speaker 1: but enterprise seems to be where spending will continue. Advertising

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Speaker 1: seemed more compression, and of course consumer, I'm really concerned

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Speaker 1: about how some of the consumer tech focus brands are

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Speaker 1: going to turn out this quarter. Well said, I want

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Speaker 1: to double down on what sat In Adela was saying.

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Speaker 1: Of course, we await what's being sent in the cools,

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Speaker 1: but he on in the press release of the earnings,

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Speaker 1: was talking about the world facing increasing headwinds and digital technology.

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Speaker 1: We made the ultimate tailwind, basically the argument that it's defrationary.

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Speaker 1: Do you buy that. Have we not just brought forward

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Speaker 1: all of that spending during covid ors There's still more

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Speaker 1: to come. Yes, Satia is really saying the same thing.

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Speaker 1: And I've had a few other conversations. I had one

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Speaker 1: with Harvin Krishna. I had one with Bill McDermott a

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Speaker 1: Servant and Service Now, and both of them have used that,

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Speaker 1: and I've actually really found that to be the case.

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Speaker 1: Companies during this pandemic that had to spend rapidly to

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Speaker 1: support their growth did a lot of hiring, added a

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Speaker 1: lot of short term costs, and as long as the

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Speaker 1: growth was there, they didn't necessarily need to fix that.

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Speaker 1: Now that we're seeing the market compress a little bit

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Speaker 1: the economy slow, some of those digital transformation investments and

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Speaker 1: things like automation and AI they need to be fully

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Speaker 1: implemented so that some of those costs, those hiring freezes,

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Speaker 1: and those pullbacks are able to not slow customer experience

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Speaker 1: and product delivery. So I think those digital investments are

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Speaker 1: going to be much more robust. But I do think

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Speaker 1: starting to see some of those hiring freezes, those layoffs,

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Speaker 1: some of the slowing revenue and of course margin compression

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Speaker 1: in the near term are going to be the continued

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Speaker 1: concern for tech. But long term, it's hard to not

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Speaker 1: think that Mike or Soft and companies like them are

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Speaker 1: gonna be solving a lot of these problems for enterprises. Okay, Daniel.

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Speaker 1: So therefore, when we look ahead to Amazon, is that

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Speaker 1: going to be a fixer for this quarture? In particular,

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Speaker 1: when we're looking at a metro, is that going to

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Speaker 1: be a hit because of the advertising spend where line

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Speaker 1: not who you're most concerned about, who your least concerned

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Speaker 1: about for us, Yeah, I'm quite concerned about meta. It

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Speaker 1: would It's hard to think with the big dollars being

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Speaker 1: invested in their metaverse, people were already sort of nervous

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Speaker 1: about that. You see Google and alphabets advertising dollars, you know,

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Speaker 1: going a little bit the wrong way in terms of

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Speaker 1: the markets perception, and like I said, I think they're

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Speaker 1: the top of the heap for advertising. Last to be

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Speaker 1: cut out. Apple is gonna be really interesting to watch

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Speaker 1: because Apple it tends to have that consumer quality that

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Speaker 1: that bucks some of the consumer trends in terms of

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Speaker 1: people of higher affluence continue to buy even when the

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Speaker 1: market gets tougher, but their iPhone fourteen specs. For some

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Speaker 1: of the numbers are a bit worrying. Two people, I

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Speaker 1: really want to see the a WUS cloud number. That's

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Speaker 1: such a huge number. Four. Amazon's opping and despite e

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Speaker 1: commerce and the holiday and some of these prime days,

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Speaker 1: you know, Amazon has had a tough couple of quarters.

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Speaker 1: I still believe that they're building a bigger and bigger

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Speaker 1: moat for e commerce. So in the long run, it's

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Speaker 1: hard to not like them. But a WS has been

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Speaker 1: so instrumental, and that is the biggest cloud provider. And

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Speaker 1: if my enterprise thesis is true, Caroline, then aw S

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Speaker 1: should at least be seeing the same kind of growth

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Speaker 1: that Asure did. Really smart conversation with you, as always, Daniel,

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Speaker 1: thank you so much for pointing us forwards. Daniel Newman

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Speaker 1: here of course put Sweet Media Group CEO as such

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Speaker 1: in a dalla in Microsoft's sup press release just now

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Speaker 1: says it is a world facing increasing headwinds. Recessionals. For example,

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Speaker 1: they remain top of mind for investors this earning season,

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Speaker 1: and a recently bo economics model projects the likelihood of

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Speaker 1: a US recession is now and then the next twelve months.

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Speaker 1: So let's put all of these earnings and valuations into

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Speaker 1: contact because so far, as head of Invested strateg Sheet,

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Speaker 1: li Is Young is with us some place to say,

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Speaker 1: and as we get the micro data with the earnings

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Speaker 1: and whether their meats or their beats, ultimately in the

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Speaker 1: back of our mind is what are the valuations of

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Speaker 1: these businesses and do they reflect these headwinds that they're

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Speaker 1: being hit by. What do you make of the way

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Speaker 1: in which you've line ourselves up for earning season. Well, look,

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Speaker 1: I think we're sitting at a point in the year

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Speaker 1: where we've done a lot of work and valuations have

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Speaker 1: seen a decent amount of pain since January, and I

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Speaker 1: think it's less about what's the right valuation for these

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Speaker 1: stocks to be at, and it's more about what are

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Speaker 1: people actually willing to pay for them. Knowing that we

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Speaker 1: have not solved all the problems that still lie ahead,

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Speaker 1: and knowing that we still have a pretty uncertainty of

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Speaker 1: political backdrop, we're coming up on mid term elections, We've

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Speaker 1: got all the classic kind of market signals that are

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Speaker 1: saying a recession might be coming, those are all going off,

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Speaker 1: So there is still a decent amount of uncertainty ahead.

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Speaker 1: Not to mention that just the month of October. Despite

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Speaker 1: this rally, we've seen more almost half of the days

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Speaker 1: with a more than two percent swing in the SMP

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Speaker 1: five hundred. That is a lot of volatility, and a

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Speaker 1: VIX that's still hovering around thirty also indicates to me

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Speaker 1: that the next few weeks are going to be bumpy.

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Speaker 1: And what's wild is a volatility in the salt market

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Speaker 1: is basically nothing in comparis into the volatility if you've

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Speaker 1: seen in the bond market, in the FX market. And

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Speaker 1: I'm interested in these correlations because, for example, today's trade,

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Speaker 1: we saw stocks rally and tech do well because bond

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Speaker 1: markets rallied and niels pushed lower. Is that the sort

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Speaker 1: of correlation we're likely to keep on seeing. Well on

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Speaker 1: a day like today, I think it was very much

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Speaker 1: a rate story. So we got some housing data earlier

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Speaker 1: in the morning, about nine am Eastern time, and if

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Speaker 1: you just look at the tape and how things moved

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Speaker 1: throughout the day, that nine am release of home prices

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Speaker 1: coming down pretty sharply is what I think sent ten

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Speaker 1: year yields down, It sent two year yields down, and

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Speaker 1: everybody got sort of excited that, oh it's working. Inflation

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Speaker 1: is going to go away, and then stocks rallied on

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Speaker 1: the other side of that also, though you want to

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Speaker 1: look at the fact not just tech rallied, but high

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Speaker 1: beta stocks rallied, And that's not necessarily something that I

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Speaker 1: would expect to be lasting in an environment where we have,

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Speaker 1: in my opinion, more than a fifty chance of a

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Speaker 1: recession in the next six to twelve months. So it

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Speaker 1: really was a very risk on trade. It was sort

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Speaker 1: of this, Oh, it's a big relief. We might get

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Speaker 1: a solved on the inflation problem. It might be sooner

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Speaker 1: than we think. But the issue is that once that

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Speaker 1: boulder starts rolling down the hill, it's really difficult to

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Speaker 1: stop it at a certain point and not go into

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Speaker 1: contraction territory. To that end, of course, with basically all

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Speaker 1: the market moves kind of being dictated by bad news

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Speaker 1: being good news, the Federal Reserve perhaps not hiking quite

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Speaker 1: so much as we had expected. How much of a

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Speaker 1: dollar story is this all going to be? Are we

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Speaker 1: likely to see? Are we now at pink dollar? This

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Speaker 1: is hugely important to a lot of the micro stories.

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Speaker 1: For example, a Microsoft that had highlighted the head winds

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Speaker 1: of a strong dollar. Yeah, I mean, look we've thought

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Speaker 1: that we were at peak dollar, and when I say we,

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Speaker 1: I mean just investors at large. Think there have been

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Speaker 1: a lot of people who thought were at peak dollar

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Speaker 1: earlier this year, So I don't know if this is

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Speaker 1: peak or not. Regardless, even if it is technically peak,

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Speaker 1: that doesn't mean that it's going to come down with

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Speaker 1: a quickness. So a strong dollar in general, as we know,

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Speaker 1: is a headwind not only to trade, but it's a

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Speaker 1: headwind to those large cap corporations that have a lot

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Speaker 1: of international revenue. And those big companies are the ones

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Speaker 1: that have been the market story. And if you're a

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Speaker 1: newer investor, those are also the companies that have really

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Speaker 1: been the winners for you in the portfolio. So it's

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Speaker 1: difficult to kind of shift your mindset. But I would

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Speaker 1: encourage people that even in an environment like this, you

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Speaker 1: have to think about maybe where the opportunities are, and

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Speaker 1: they could be in places that you wouldn't normally look.

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Speaker 1: So a strong dollar is actually very good for smaller

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Speaker 1: cap companies because they get a majority of their revenue

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Speaker 1: from inside US borders, so they don't have that headwind.

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Speaker 1: So looking at things like that, the last thing I'll

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Speaker 1: say about a strong dollar. Is that from a macro perspective,

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Speaker 1: the signal that you want to see is that when

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Speaker 1: the dollar weakens, that tends to mean that we're nearing

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Speaker 1: the end of a tightening cycle or nearing the end

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Speaker 1: of a hiking cycle. The fact that the dollar is

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Speaker 1: still pretty strong here, I think means that the Fed

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Speaker 1: continues to hike and they right now don't have a

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Speaker 1: ton of reason not to, particularly with such a strong

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Speaker 1: labor market as we've seen time and time again. And

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Speaker 1: what's been interesting is on an anecdotal basis, you hear

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Speaker 1: of startups and actually some big tech listed companies dialing

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Speaker 1: back their head count looking to actually just slow hiring

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Speaker 1: or indeed fire. Are you likely to hear you anticipating

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Speaker 1: more concerns being voiced by CEOs as we're in earning season,

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Speaker 1: because I'm not hearing it particularly from Satya Adela or

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Speaker 1: from well Ruth poor At or or soon Pitch. I.

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Speaker 1: So if we look at the labor market just in particular,

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Speaker 1: I would expect to see some weakness in it and

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Speaker 1: see that coming through in the data closer to the

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Speaker 1: end of the year. So the labor market is one

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Speaker 1: of the last things if not the last thing to

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Speaker 1: turn when you have an economic contraction or a slowdown.

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Speaker 1: And if you just think about that logically, there's a

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Speaker 1: reason we're not hearing about it from c e O

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Speaker 1: S because they will do everything else they can to

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Speaker 1: control costs before they have to actually lay people off

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Speaker 1: and cut jobs. So what we're hearing right now is

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Speaker 1: a lot of hiring freezes and that's coming through in

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Speaker 1: the data. So if you just look at the job

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Speaker 1: openings or the JOLTS number that we got for August,

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Speaker 1: job openings came down by one point one million. That

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Speaker 1: was a huge drop. So now the ratio of the

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Speaker 1: number of jobs open per unemployed worker is one point seven.

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Speaker 1: That's down from two. We used to have two jobs

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Speaker 1: for every unemployed person. Pre pandemic, that number was one

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Speaker 1: point two. So that's still that gap still has to

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Speaker 1: narrow a bit. The risk is that that gap narrows

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Speaker 1: and then we're in this kind of comfortable supply demand

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Speaker 1: place with labor. That's when if we haven't slowed the bleeding,

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Speaker 1: that's when you start to hear about layoff. So we

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Speaker 1: still have some time between now and I think that point,

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Speaker 1: but I do expect it to start coming through in

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Speaker 1: the in the labor data, see some weakness by the

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Speaker 1: end of this year. Ultimately, at this moment, is with

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Speaker 1: so much you talking about recession, people thinking, since she's high,

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Speaker 1: with a lot of lack of clarity, is it time

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Speaker 1: to put all that cash that people have been taking

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Speaker 1: out of stocks putting it into cash? Is time to

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Speaker 1: reinvest or keep powder driving? Now you can think about

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Speaker 1: reinvesting it and and look, nobody's going to call the

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Speaker 1: bottom perfectly, and if they do, it's going to be lucky.

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Speaker 1: So let's just all stop trying. Right But if you

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Speaker 1: think about just where we are, you're to date with

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Speaker 1: an SMP still down twenty or so year to date,

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Speaker 1: that's a better entry point than it was in January.

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Speaker 1: So I would start to get ready on what's the

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Speaker 1: shopping list? What are the sectors and the industry groups

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Speaker 1: that you would be interested in buying and drip in slowly.

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Speaker 1: So in this particular moment right now, I would be

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Speaker 1: looking at financials because they're still very attractively priced compared

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Speaker 1: to many other sectors, and they don't have a ton

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Speaker 1: of pain ahead. In my opinion, I think they've been

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Speaker 1: pretty punished through this cycle, and I think they can

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Speaker 1: come out well. On the other side, I'll be looking

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Speaker 1: at industrials and I've been talking about healthcare for a

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Speaker 1: very long time. I think that healthcare is a great

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Speaker 1: long term investment. And then a little bit further down

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Speaker 1: and look, I think this rally is fragile, so I

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Speaker 1: would expect another correction on the other side of it.

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Speaker 1: If and when that happens and you see an SMP

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Speaker 1: get back down to previous levels, so let's say something

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Speaker 1: like thirty or below, that's when you start to nibble

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Speaker 1: on riskier things. You start to look at semiconductors, you

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Speaker 1: start to look at tech again, and you start to

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Speaker 1: look at other things that might be a little bit

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Speaker 1: more high beata. And then later even after that, when

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Speaker 1: the economy really confirms that it's weakened, so when the

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Speaker 1: labor market starts to fall apart, that's when you start

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Speaker 1: to look at things like home builders and you get

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Speaker 1: back in on that train. You look at small caps

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Speaker 1: in that environment as well. Well. We've got a great

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Speaker 1: conversation to common terms of fuel, exposure to the real

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Speaker 1: estate market always so small at Helping Dovetail, you'll conversation

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Speaker 1: with our audience who was so interested in tech. We

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Speaker 1: thank you, Lizzie young A so far of course, head

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Speaker 1: of investment strategy there. Meanwhile, coming up, Amazon expands payment

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Speaker 1: options including Venmo at last ahead of the holiday season

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Speaker 1: or discuss the strategy, the expectations visi Blue meg off earnings.

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Speaker 1: There was another key story that occurred today, Amazon adding

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Speaker 1: Venmo at last as a new payment option for customers,

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Speaker 1: of course, all ahead of Black Friday and the key

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Speaker 1: holiday season when we expensive Sofa is actually here in

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Speaker 1: New York and of course he covers Amazon for us.

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Speaker 1: You know that. Wonderful to have you in the same

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Speaker 1: studio spends to talk to us about. Finally, this has

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Speaker 1: been in the works for what like a year already. Yeah,

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Speaker 1: the Venmo Amazon tie up has been in the works

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Speaker 1: for for quite some time. And then Venmo in particular

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Speaker 1: PayPal has really wanted to move this, you know, a

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Speaker 1: peer to peer payment system thing like Okay, we bought

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Speaker 1: a pizza and you're gonna vend me ten dollars to

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Speaker 1: get that beyond simply people splitting the cost of bills

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Speaker 1: and things into something that they can actually make money

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Speaker 1: off of, which would be you know, commerce buying things. So, yeah,

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Speaker 1: this is a this is a very big deal for

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Speaker 1: for PayPal and Venmo in terms of trying to nudge

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Speaker 1: that along. It's something they've been working on a long time.

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Speaker 1: Right now. You maybe see it, you know, for uh

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Speaker 1: used by a patron at like a nail salon or

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Speaker 1: some other small business like a landscape, or you're not

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Speaker 1: really seeing it used you know, to buy from big retailers.

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Speaker 1: So this could be a big, big symbol to sends

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Speaker 1: a message Amazon is willing to do it, why why

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Speaker 1: not you? And then Amazon has an incentive to try

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Speaker 1: to uh you know, lower the cost of accepting any

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Speaker 1: kind of payment at all. So it just gives them

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Speaker 1: potential negotiating power if this were to take off, especially

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Speaker 1: take off with millennials when they're negotiating rates with the

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Speaker 1: big cards, you know, on how much of each transaction

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Speaker 1: they share with them. We know, we remember that sounds

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Speaker 1: still that they had over in the UK with Visa

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Speaker 1: for example. I'm interested in, well, therefore, ahead of the

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Speaker 1: holiday season, how many people do they think will actually

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Speaker 1: be using this versus by now pay later that they

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Speaker 1: have with the firm or just you know, in the

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Speaker 1: credit card that you have on top with them. Yeah, exactly.

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Speaker 1: I think that's still going to be Traditionally, the predominant

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Speaker 1: way that people pay is that the credit card that

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Speaker 1: they already have, and that's the problem here. Venmo has

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Speaker 1: a lot of incentive to make this work. Amazon has

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Speaker 1: a lot of incentive to make this work. Customers don't

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Speaker 1: really have much incentive to use it. So how are

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Speaker 1: they going to try to compel people to break those

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Speaker 1: habits and uh and and start using Venmo to pay

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Speaker 1: for things. There's been a real long game for Venmo.

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Speaker 1: They don't really disclose uh how much They've got billions

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Speaker 1: of dollars slashing slashing around in Venmo, but it's still

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Speaker 1: mostly things that they don't make money on and people

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Speaker 1: just paying back one another for these little nickel and

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Speaker 1: dime things. Um. So the question is will they get

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Speaker 1: people to use Venmo the way they use their credit cards.

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Speaker 1: We'll see what sort of incentives they give us. Thank you, Spencer,

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Speaker 1: so great to have him here, and he's gonna be

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Speaker 1: a busy guy because of course Amazon's got their numbers

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Speaker 1: coming out later in the week. We thank him for

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Speaker 1: spending some time with us. This is Bloomberg Technology. I'm

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Speaker 1: Caroline Hyde in New York. Let's talk to another New

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Speaker 1: York startup. Because built rewards and loyalty program and credit

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Speaker 1: card that converts rent payments into points, it's now saying

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Speaker 1: it's valuation more than quadrupled one five billion dollars. Left

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Speaker 1: Lane Capital led a hundred fifty million dollar equity funding

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Speaker 1: round for the startup. We want to know how they're

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Speaker 1: going to use the funds, the growth trajectory. Who better

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Speaker 1: than to talk through it all CEO and core Jane.

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Speaker 1: Great to have you here. Hey, it's going to be here, Caroline,

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Speaker 1: thanks for having me. So tell me what is the

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Speaker 1: growth jerectory? How can you penetrate yet further the market

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Speaker 1: and disrupt basically financial institutions. Today, more than ever, rent

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Speaker 1: prices continue to soar. And one of the things that

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Speaker 1: banks and I think startups have missed is you on

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Speaker 1: one hand, you have startups trying to cryptocurrencies to people,

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Speaker 1: and then banks still running a model from twenty years ago.

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Speaker 1: And we said, if you look at our generation, the

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Speaker 1: biggest expense people have is rent. Why don't you get

431
00:21:04,680 --> 00:21:07,720
Speaker 1: anything back for that? Right? Why can't I build my

432
00:21:07,760 --> 00:21:10,240
Speaker 1: credit history just by paying my rent on time? Or

433
00:21:10,280 --> 00:21:12,480
Speaker 1: why can't I earn points and miles to travel the

434
00:21:12,480 --> 00:21:15,800
Speaker 1: world by paying rent? And so you know, it took

435
00:21:15,880 --> 00:21:19,040
Speaker 1: us four years to bring together the real estate industry,

436
00:21:19,119 --> 00:21:22,600
Speaker 1: to bring together the payment networks, the banks, the airlines,

437
00:21:22,680 --> 00:21:25,520
Speaker 1: the hotels. But fourteen months ago when we launched this,

438
00:21:25,920 --> 00:21:28,880
Speaker 1: we weren't really sure how fast it would pick up. Right,

439
00:21:29,400 --> 00:21:31,400
Speaker 1: what's been crazy to see, is it? I mean less

440
00:21:31,400 --> 00:21:34,760
Speaker 1: than fourteen months, we've had over three billion dollars of

441
00:21:34,800 --> 00:21:37,520
Speaker 1: payments going through this just on the rent side, people

442
00:21:37,520 --> 00:21:39,399
Speaker 1: who have signed up for the built Master card or

443
00:21:39,440 --> 00:21:41,960
Speaker 1: so let's to pay rent at any apartment and earned

444
00:21:41,960 --> 00:21:44,760
Speaker 1: points as well as replace your kind of everyday card

445
00:21:45,480 --> 00:21:48,439
Speaker 1: that's seen over one point six billion dollars of spend already.

446
00:21:48,440 --> 00:21:51,520
Speaker 1: So you're seeing this massive uptake from a generation saying,

447
00:21:51,560 --> 00:21:54,639
Speaker 1: hold on a second rent is my biggest expense. You

448
00:21:54,640 --> 00:21:57,239
Speaker 1: can give me value there. I'll be loyal to you

449
00:21:57,440 --> 00:22:00,119
Speaker 1: across all of my other spend categories. And by the way,

450
00:22:00,119 --> 00:22:02,280
Speaker 1: if you can help me build a path to homeownership,

451
00:22:03,040 --> 00:22:04,840
Speaker 1: that's really how you lock me in. And so it

452
00:22:04,880 --> 00:22:07,080
Speaker 1: talk to me about that path to home ownership because

453
00:22:07,119 --> 00:22:09,800
Speaker 1: it's about building up your credit quantity. But how else.

454
00:22:10,280 --> 00:22:12,879
Speaker 1: So look, one of the challenges with home ownership and

455
00:22:12,960 --> 00:22:17,000
Speaker 1: I just bought my first place here. It was so complicated,

456
00:22:17,040 --> 00:22:21,119
Speaker 1: and I consider myself a financially astute like individual. But

457
00:22:21,240 --> 00:22:23,119
Speaker 1: you look at that and saying I'm going to spend

458
00:22:23,359 --> 00:22:25,280
Speaker 1: X amount of months. Let's say you're New York rent

459
00:22:25,280 --> 00:22:26,879
Speaker 1: which by the way, the average New York rent is

460
00:22:26,880 --> 00:22:28,959
Speaker 1: almost six thousand dollars. Now do you know what I mean?

461
00:22:29,440 --> 00:22:33,280
Speaker 1: You think about that first goal? I thought, time you

462
00:22:33,320 --> 00:22:35,480
Speaker 1: start earning points and miles and your six thousand color

463
00:22:35,520 --> 00:22:37,760
Speaker 1: a month rent payment. But now you take that and

464
00:22:37,800 --> 00:22:39,640
Speaker 1: you say, well, how do I even know if it's

465
00:22:39,680 --> 00:22:42,320
Speaker 1: better to rent or own? How can I compare that?

466
00:22:42,400 --> 00:22:45,520
Speaker 1: And today nothing existed. And so we went out and

467
00:22:45,560 --> 00:22:48,120
Speaker 1: we actually partnered with Fannie Mae, Freddie Mack and fh

468
00:22:48,200 --> 00:22:50,479
Speaker 1: A and built the first tool where you can actually

469
00:22:50,480 --> 00:22:54,359
Speaker 1: see based on your credit profile, your income, real time

470
00:22:54,400 --> 00:22:57,280
Speaker 1: interest rates, say, here are the homes that you could

471
00:22:57,280 --> 00:23:00,399
Speaker 1: buy for the same monthly payment as your rent, and

472
00:23:00,440 --> 00:23:03,000
Speaker 1: you can compare apples apples and if you're ready to buy.

473
00:23:03,400 --> 00:23:06,720
Speaker 1: We also got regulatory approval to use your points to

474
00:23:06,800 --> 00:23:10,080
Speaker 1: cover your down payment. Huh, so that one life this morning.

475
00:23:10,080 --> 00:23:14,040
Speaker 1: By the way, congratulations, you're talking points, you're talking rewards,

476
00:23:14,080 --> 00:23:18,280
Speaker 1: you're talking gen Z millennials. I can only infer that

477
00:23:18,359 --> 00:23:22,400
Speaker 1: AMEX is what looking at you in particular? Who are

478
00:23:22,440 --> 00:23:24,320
Speaker 1: you in terms of income level? Who are you in

479
00:23:24,440 --> 00:23:27,000
Speaker 1: terms of demographic Who is coming to you? So the

480
00:23:27,119 --> 00:23:29,840
Speaker 1: vast majority of our card holders, in the vast majority

481
00:23:29,840 --> 00:23:33,399
Speaker 1: of our loyalty members are thirty five. Right. So if

482
00:23:33,440 --> 00:23:35,560
Speaker 1: you live in a high rise building in a major

483
00:23:35,640 --> 00:23:38,520
Speaker 1: city in New York, l A, San Francisco, Chicago, Denver,

484
00:23:39,000 --> 00:23:42,320
Speaker 1: chances are you're living in a built alliance property, which

485
00:23:42,359 --> 00:23:45,280
Speaker 1: means you're using built to pay your rent at all

486
00:23:45,320 --> 00:23:48,840
Speaker 1: of these buildings. Then you also have thirty five yearls

487
00:23:48,840 --> 00:23:51,640
Speaker 1: who live in other buildings or mom and pop landlords,

488
00:23:51,720 --> 00:23:53,760
Speaker 1: and they're signing up for the built Master card in

489
00:23:53,800 --> 00:23:56,119
Speaker 1: the wells Fargo and they're getting to earn points and

490
00:23:56,160 --> 00:23:59,640
Speaker 1: build their credit for no annual feed. Right. So when

491
00:23:59,800 --> 00:24:02,159
Speaker 1: you raising this money, is it about marketing? Is it

492
00:24:02,200 --> 00:24:05,199
Speaker 1: about doubling down country eating into market share? What are

493
00:24:05,200 --> 00:24:08,240
Speaker 1: the is about? Building partnerships? Is about hiring? Where do

494
00:24:08,240 --> 00:24:09,720
Speaker 1: you look at in terms of your to do list?

495
00:24:10,080 --> 00:24:11,960
Speaker 1: So one of the things that we spent a lot

496
00:24:12,000 --> 00:24:14,560
Speaker 1: of time with this business. A little different from our

497
00:24:14,560 --> 00:24:18,480
Speaker 1: peers in Silicon Valley is profitability. So Built is a

498
00:24:18,520 --> 00:24:21,359
Speaker 1: profitable business. So when we look to you know, grow

499
00:24:21,440 --> 00:24:23,600
Speaker 1: the business, we weren't actually looking to raise money. It

500
00:24:23,680 --> 00:24:26,160
Speaker 1: was an old friend of mine from Left Lane Capital

501
00:24:26,240 --> 00:24:29,120
Speaker 1: reached out and said, hey, there's an opportunity for us

502
00:24:29,119 --> 00:24:32,640
Speaker 1: to finish bringing together strategic partners into this business if

503
00:24:32,640 --> 00:24:35,199
Speaker 1: we do a large financing together. And so, led by

504
00:24:35,280 --> 00:24:37,679
Speaker 1: Left Lane, we went down and we brought partners like

505
00:24:37,720 --> 00:24:40,520
Speaker 1: Gray Star, who's the largest property management company in the country,

506
00:24:40,920 --> 00:24:44,160
Speaker 1: Invitation Homes, who is the largest single family rental company

507
00:24:44,280 --> 00:24:47,000
Speaker 1: in the country, and then even our banking partners like

508
00:24:47,040 --> 00:24:50,680
Speaker 1: Wells Fargo to double down and really build that defensible

509
00:24:50,760 --> 00:24:53,639
Speaker 1: mode around this business. Right, So is it about in

510
00:24:53,680 --> 00:24:57,360
Speaker 1: this landscape where look, valuations are coming down, people are

511
00:24:57,400 --> 00:25:00,320
Speaker 1: not just writing checks in quite the same liberal almana

512
00:25:00,359 --> 00:25:03,119
Speaker 1: than they were. Is this about strategic investors? Is this

513
00:25:03,200 --> 00:25:07,119
Speaker 1: about evaluation that was slightly lower than you anticipated? What

514
00:25:07,200 --> 00:25:09,800
Speaker 1: was it like? You know, I'm not one I don't

515
00:25:09,840 --> 00:25:13,119
Speaker 1: believe in playing the valuation game because inevitably that you know,

516
00:25:13,280 --> 00:25:15,639
Speaker 1: all all these things come to an end, right And

517
00:25:15,640 --> 00:25:17,520
Speaker 1: so even as we were doing this round, we actually

518
00:25:17,520 --> 00:25:21,080
Speaker 1: looked at fairly conservative publicly traded comps, which I know

519
00:25:21,200 --> 00:25:24,919
Speaker 1: is a heresy to stay in Silicon Valley. If you

520
00:25:24,960 --> 00:25:26,240
Speaker 1: think about a lot of the work we do on

521
00:25:26,240 --> 00:25:28,320
Speaker 1: a loyalty space, it's not that different than a payment

522
00:25:28,359 --> 00:25:31,080
Speaker 1: network like Master Carter Visa. And so we look at

523
00:25:31,080 --> 00:25:34,080
Speaker 1: if we're taking a piece of transactions, whether that's rent

524
00:25:34,440 --> 00:25:37,280
Speaker 1: or your dining right, and we can start to clip

525
00:25:37,320 --> 00:25:40,560
Speaker 1: that on all of your biggest expenses while rewarding the customers,

526
00:25:41,040 --> 00:25:43,639
Speaker 1: then that's not that different from the payment network. And

527
00:25:43,720 --> 00:25:47,000
Speaker 1: so that's how we really built the valuation. That's how

528
00:25:47,040 --> 00:25:50,320
Speaker 1: we built the business. And look, I think today entrepreneurs

529
00:25:50,359 --> 00:25:53,679
Speaker 1: should be focused number one on strategic capital. You know,

530
00:25:53,720 --> 00:25:55,880
Speaker 1: we were lucky to get that both from Left Lane

531
00:25:55,880 --> 00:25:58,359
Speaker 1: Capital but also from our real estate partners and our

532
00:25:58,359 --> 00:26:00,480
Speaker 1: banking partners who get to work with us on the

533
00:26:00,520 --> 00:26:03,159
Speaker 1: payment side and on the investment side. I'm looking at

534
00:26:03,160 --> 00:26:04,800
Speaker 1: a Visa, I can bring it up on the Bloomberg

535
00:26:04,840 --> 00:26:07,520
Speaker 1: and estimated p ratio for looking is twenty three times.

536
00:26:07,560 --> 00:26:09,600
Speaker 1: They're trading in a P ratio twenty nine times in

537
00:26:09,640 --> 00:26:12,480
Speaker 1: the hair. And now there is a they are a company.

538
00:26:12,520 --> 00:26:16,080
Speaker 1: They just had their earnings and actually are raising their dividend,

539
00:26:16,440 --> 00:26:18,879
Speaker 1: giving more money in terms of the buy back to investors.

540
00:26:19,040 --> 00:26:20,920
Speaker 1: And they're saying that the economy is still pretty strong.

541
00:26:20,960 --> 00:26:24,399
Speaker 1: Are you seeing a strong and using a slowing down

542
00:26:24,560 --> 00:26:26,680
Speaker 1: of payments from your customers? What does the environment like?

543
00:26:27,040 --> 00:26:28,919
Speaker 1: So one of the other exciting things I think when

544
00:26:28,960 --> 00:26:31,639
Speaker 1: you think about this type of business is that it's

545
00:26:31,640 --> 00:26:35,159
Speaker 1: fairly countercyclical to any recission um And so when in

546
00:26:35,280 --> 00:26:37,520
Speaker 1: good times you see a lot of spend, whether it's

547
00:26:37,560 --> 00:26:40,440
Speaker 1: on retail or travel, which we see on the built

548
00:26:40,480 --> 00:26:44,199
Speaker 1: master card, but even in downturns, you still see that

549
00:26:44,280 --> 00:26:47,320
Speaker 1: rent continues to be an expense that most people still

550
00:26:47,359 --> 00:26:49,800
Speaker 1: have to pay month over month. And so if you

551
00:26:49,800 --> 00:26:54,600
Speaker 1: can make that better payment experience right and reward them,

552
00:26:54,600 --> 00:26:59,560
Speaker 1: our business days fairly recession proof. As consumers change spending

553
00:26:59,560 --> 00:27:02,240
Speaker 1: the habits elsewhere. And what about you and hiring? And

554
00:27:02,359 --> 00:27:04,560
Speaker 1: you are you based in New what is so? We are?

555
00:27:04,680 --> 00:27:06,919
Speaker 1: We are in New York office. We are probably one

556
00:27:06,920 --> 00:27:10,720
Speaker 1: of those crazy companies that have believed an in person office,

557
00:27:11,119 --> 00:27:13,399
Speaker 1: and so our team has been coming in since it

558
00:27:13,520 --> 00:27:17,600
Speaker 1: was allowed um one, and so we continue to have

559
00:27:17,600 --> 00:27:19,840
Speaker 1: folks come in and I'll tell you like that has

560
00:27:19,880 --> 00:27:24,280
Speaker 1: been one of our best recruiting tools to being in

561
00:27:24,359 --> 00:27:26,199
Speaker 1: New York and telling folks that we are an in

562
00:27:26,280 --> 00:27:29,159
Speaker 1: person culture that you can come in and work with

563
00:27:29,240 --> 00:27:33,000
Speaker 1: other really smart people to help solve real problems that

564
00:27:33,040 --> 00:27:38,199
Speaker 1: affect frankly, our own employee base and their friends. So, so,

565
00:27:38,320 --> 00:27:40,760
Speaker 1: is there any hybrid have you said, look, will be,

566
00:27:40,840 --> 00:27:42,960
Speaker 1: we'll be, We'll put your purposes. Yeah. Look, I think

567
00:27:42,960 --> 00:27:45,359
Speaker 1: it's really important as a CEO in today's economy to

568
00:27:45,400 --> 00:27:47,359
Speaker 1: be clear on where you stand. I think it's that

569
00:27:47,400 --> 00:27:50,080
Speaker 1: ambiguity that's been very hard for folks because then you

570
00:27:50,080 --> 00:27:51,880
Speaker 1: feel the pressure to go in, but don't know if

571
00:27:51,880 --> 00:27:53,760
Speaker 1: you should go in and no one else And so

572
00:27:54,000 --> 00:27:56,360
Speaker 1: we've just made it really simple. We're an in person company.

573
00:27:56,560 --> 00:27:58,880
Speaker 1: If you need to take time and be flexible, we're

574
00:27:58,920 --> 00:28:01,000
Speaker 1: totally okay with that. But I gotta tell you that

575
00:28:01,119 --> 00:28:04,639
Speaker 1: the productivity, the morale. We've had no turnover at this

576
00:28:04,720 --> 00:28:07,520
Speaker 1: business really in the last fourteen months since we launched

577
00:28:07,520 --> 00:28:09,560
Speaker 1: the product, and I think that's a testament to people

578
00:28:09,960 --> 00:28:13,520
Speaker 1: just having those relationships, those friendships and candily working on

579
00:28:13,600 --> 00:28:17,280
Speaker 1: problems that actually matter to society. Today, right, And I

580
00:28:17,280 --> 00:28:20,560
Speaker 1: think what I'm really excited about today is this built

581
00:28:20,600 --> 00:28:22,760
Speaker 1: home stuff. I mean, if we can help young people

582
00:28:23,119 --> 00:28:26,040
Speaker 1: understand what it takes to go from renting to home

583
00:28:26,080 --> 00:28:29,840
Speaker 1: ownership and make it as easy to understand as here's

584
00:28:29,840 --> 00:28:31,960
Speaker 1: what you're paying and rent, here's what you could buy

585
00:28:32,000 --> 00:28:34,359
Speaker 1: for that same amount, and by the way, here's how

586
00:28:34,400 --> 00:28:35,960
Speaker 1: much you need to save, and if you want, you

587
00:28:36,000 --> 00:28:38,480
Speaker 1: can use your points to cover that down payment. I mean,

588
00:28:38,720 --> 00:28:40,800
Speaker 1: that is going to be the most important driver to

589
00:28:40,920 --> 00:28:44,600
Speaker 1: fixing inequality in our generation, because otherwise a small handful

590
00:28:44,640 --> 00:28:47,400
Speaker 1: will get to buy homes and build wealth and everybody

591
00:28:47,440 --> 00:28:50,520
Speaker 1: else will be left behind paycheck to paycheck. And I

592
00:28:50,560 --> 00:28:52,800
Speaker 1: think if we can help move the needle even a

593
00:28:52,840 --> 00:28:58,200
Speaker 1: little bit on that, it's a really motivating opportunity. Financial knowledge,

594
00:28:58,600 --> 00:29:01,280
Speaker 1: financial empowerment. We are here for it, come and talk

595
00:29:01,320 --> 00:29:03,720
Speaker 1: about it all day every day. And Chow Jane, of course,

596
00:29:03,960 --> 00:29:07,200
Speaker 1: the Built CEO, talking about well what I'm pretty passionate

597
00:29:07,240 --> 00:29:09,400
Speaker 1: about too. Meanwhile, coming up the story of crypto, where

598
00:29:09,400 --> 00:29:11,840
Speaker 1: did it come from? How does it work? Because they're

599
00:29:11,840 --> 00:29:14,560
Speaker 1: all a scam, mr All. Where would it take us?

600
00:29:14,720 --> 00:29:16,800
Speaker 1: We discussed in the latest issue of Broomberg Business Week,

601
00:29:16,920 --> 00:29:20,120
Speaker 1: which is totally utterly from page the start to the finish,

602
00:29:20,320 --> 00:29:53,360
Speaker 1: dedicated to these questions. There's a broom bag. Hi. I'm Mattlivian,

603
00:29:54,000 --> 00:29:57,160
Speaker 1: former lawyer and investment banker. Now I'm a columnist for

604
00:29:57,200 --> 00:30:00,440
Speaker 1: Bloomberg Opinion, where I write a finances letter called money Stuff.

605
00:30:00,760 --> 00:30:03,320
Speaker 1: For the past few years, the most polarizing thing in

606
00:30:03,360 --> 00:30:08,000
Speaker 1: finance has been crypto. Crypt grew out of Setoshi Nakamoto's

607
00:30:08,040 --> 00:30:11,200
Speaker 1: Bitcoin white paper to become, among other things, the set

608
00:30:11,200 --> 00:30:14,440
Speaker 1: of lines on charts that went up, some people bought Lamborghinis,

609
00:30:15,840 --> 00:30:19,000
Speaker 1: and then this year those lines on charts went down.

610
00:30:19,520 --> 00:30:24,280
Speaker 1: If you're at crypto skeptic, this was very satisfying crypto enthusiasts.

611
00:30:24,680 --> 00:30:30,680
Speaker 1: It was just another reason to double down. I don't

612
00:30:30,720 --> 00:30:33,000
Speaker 1: have strong feelings either way about the value of crypto.

613
00:30:33,360 --> 00:30:36,600
Speaker 1: I like finance. I think it's interesting and if you

614
00:30:36,720 --> 00:30:40,320
Speaker 1: like understanding the structures that people built to organize economic reality,

615
00:30:41,600 --> 00:30:46,600
Speaker 1: crypto is amazing. Bloomberg Business we asked me to write

616
00:30:46,600 --> 00:30:49,160
Speaker 1: about crypto, and when I was finished, it was enough

617
00:30:49,200 --> 00:30:52,080
Speaker 1: to fill an entire issue cover to cover. It's called

618
00:30:52,280 --> 00:30:55,000
Speaker 1: the Crypto Story, and I think it's as thrilling to

619
00:30:55,040 --> 00:31:08,120
Speaker 1: read as a ride in a lambo. Matthew Levine, Bloomberg

620
00:31:08,160 --> 00:31:11,080
Speaker 1: opinion columnists who covers finance, who wrote the entire issue

621
00:31:11,120 --> 00:31:13,400
Speaker 1: the Latest Business Week, just the second time in the

622
00:31:13,440 --> 00:31:17,280
Speaker 1: magazine's history, and one single author has done that. So

623
00:31:17,320 --> 00:31:19,600
Speaker 1: in today's Crypto Report, we're going to look at that story,

624
00:31:19,720 --> 00:31:22,120
Speaker 1: where it comes from, what it means, and why it

625
00:31:22,240 --> 00:31:26,400
Speaker 1: still matters that Bloomberg's Business Weeks pat Regnia, because it

626
00:31:26,520 --> 00:31:29,520
Speaker 1: takes two to tango, and you had to edit the

627
00:31:29,520 --> 00:31:32,120
Speaker 1: whole thing. So it's the labor of love for you,

628
00:31:32,200 --> 00:31:34,080
Speaker 1: as it is for the person who wrote it. Taught

629
00:31:34,160 --> 00:31:38,440
Speaker 1: us a little bit about this fort opus of lessay

630
00:31:38,560 --> 00:31:41,160
Speaker 1: and really what the key takeaways were for you. So

631
00:31:41,440 --> 00:31:44,120
Speaker 1: for me it was country is an opportunity to have

632
00:31:44,280 --> 00:31:48,920
Speaker 1: crypto demystified. I've I've spent the last you know, a

633
00:31:48,960 --> 00:31:52,120
Speaker 1: couple of years really getting deep into crypto, and every

634
00:31:52,160 --> 00:31:55,080
Speaker 1: story I do, I'm asking the writer, wait, what is

635
00:31:55,120 --> 00:31:58,040
Speaker 1: this thing? Is this a company? Is this a protocol?

636
00:31:58,320 --> 00:32:00,600
Speaker 1: What's this thing that's happening on the block? Chane, Crypto

637
00:32:00,680 --> 00:32:05,080
Speaker 1: has a way of filling the space with new words

638
00:32:05,120 --> 00:32:08,000
Speaker 1: and what seemed like new ideas that you have to

639
00:32:08,040 --> 00:32:11,520
Speaker 1: decode in order to even tell the simplest story about crypto.

640
00:32:11,960 --> 00:32:14,880
Speaker 1: And one of the things that Matt really accomplished in

641
00:32:14,920 --> 00:32:16,760
Speaker 1: this piece, and I think that everyone who reads it

642
00:32:16,800 --> 00:32:21,080
Speaker 1: will enjoy this, is that it takes crypto step by

643
00:32:21,120 --> 00:32:24,760
Speaker 1: step and explains it and most importantly, doesn't do it

644
00:32:24,840 --> 00:32:28,520
Speaker 1: with the purpose of selling you on crypto. In fact,

645
00:32:28,640 --> 00:32:30,720
Speaker 1: I think it's really a tool for thinking about it

646
00:32:30,800 --> 00:32:33,000
Speaker 1: so that when you're encountering it and you're asking yourself,

647
00:32:33,040 --> 00:32:34,760
Speaker 1: what is this thing that I'm looking at? What is

648
00:32:34,800 --> 00:32:37,400
Speaker 1: this thing I'm being sold or pitched on, What is

649
00:32:37,440 --> 00:32:39,840
Speaker 1: this thing I might be considering investing in? What is

650
00:32:39,880 --> 00:32:42,560
Speaker 1: this thing my kid is talking to me about? Is

651
00:32:42,600 --> 00:32:45,400
Speaker 1: this something that that I am familiar with, as opposed

652
00:32:45,440 --> 00:32:48,240
Speaker 1: to being intimidated into thinking that I couldn't understand it?

653
00:32:48,280 --> 00:32:50,840
Speaker 1: And it's so much more sophisticated than I could grasp

654
00:32:51,000 --> 00:32:52,800
Speaker 1: and well done. Because the bit that irritates me so

655
00:32:52,880 --> 00:32:56,360
Speaker 1: much is this discussion about democratization. But it's very under

656
00:32:56,720 --> 00:32:59,240
Speaker 1: democratic to put up acronyms in areas that we don't

657
00:32:59,280 --> 00:33:01,880
Speaker 1: understand and then make every one feel that it's still

658
00:33:01,880 --> 00:33:05,080
Speaker 1: a wall garden, but where the addiction has been real

659
00:33:05,200 --> 00:33:07,440
Speaker 1: and I've seen it in my own family is from

660
00:33:07,520 --> 00:33:10,640
Speaker 1: traditional finance or trad fy that if I'm amuse us

661
00:33:10,640 --> 00:33:13,280
Speaker 1: with that ton of phrase, but traditional finance they if

662
00:33:13,280 --> 00:33:16,200
Speaker 1: they catch the bug for crypto, they'll go all in

663
00:33:16,280 --> 00:33:18,880
Speaker 1: as well. Are we still hearing of that revolving door

664
00:33:18,960 --> 00:33:20,880
Speaker 1: and whether that will continue? Well, I think some of

665
00:33:20,920 --> 00:33:23,640
Speaker 1: that was happening. As Matt says, you know, the lines

666
00:33:23,680 --> 00:33:26,200
Speaker 1: were going up for a while and so this was

667
00:33:26,200 --> 00:33:28,480
Speaker 1: a place to go. Lately, the lines have been going down.

668
00:33:29,000 --> 00:33:33,360
Speaker 1: Um uh not obviously in traditional finance and in crypto.

669
00:33:33,720 --> 00:33:36,239
Speaker 1: So that may that may slow things down. But one

670
00:33:36,240 --> 00:33:38,160
Speaker 1: of the things that crypto does is it gives people

671
00:33:38,200 --> 00:33:41,120
Speaker 1: like another door to go through. So sometimes maybe you

672
00:33:41,160 --> 00:33:43,560
Speaker 1: are I think we've seen this. You're you're doing something

673
00:33:43,600 --> 00:33:46,000
Speaker 1: in traditional finance and things aren't quite clicking for you,

674
00:33:46,080 --> 00:33:48,320
Speaker 1: or it's not moving as fast as you'd like. Meanwhile,

675
00:33:48,360 --> 00:33:51,440
Speaker 1: over here there's this other new financial system that if

676
00:33:51,480 --> 00:33:54,239
Speaker 1: you can master a piece of code, because it's all

677
00:33:54,280 --> 00:33:56,720
Speaker 1: there and it's and it's new to get built, you

678
00:33:56,760 --> 00:33:59,320
Speaker 1: can you can start moving right away. You know, those

679
00:33:59,360 --> 00:34:00,960
Speaker 1: of us who have come finance for a while knows

680
00:34:01,000 --> 00:34:03,400
Speaker 1: that you know that there's cycles where that happens where

681
00:34:03,400 --> 00:34:05,720
Speaker 1: there's a new thing on the ground I mean I

682
00:34:06,240 --> 00:34:09,080
Speaker 1: I started covering finance in the nineties. This sort of

683
00:34:09,080 --> 00:34:11,839
Speaker 1: sounds unbelievable, but once mutual funds were the hot thing

684
00:34:12,239 --> 00:34:14,719
Speaker 1: that if you were young, you would start, you would start,

685
00:34:14,760 --> 00:34:16,399
Speaker 1: and then it was e T F this is sort

686
00:34:16,400 --> 00:34:17,840
Speaker 1: of a place where people can get in on the

687
00:34:17,840 --> 00:34:20,839
Speaker 1: ground floor. Well, people started to get in. I think

688
00:34:20,880 --> 00:34:23,920
Speaker 1: when crypto became something that many could have understand or

689
00:34:23,960 --> 00:34:26,920
Speaker 1: at least be tantalized by, was n f T. So

690
00:34:26,960 --> 00:34:29,319
Speaker 1: it was the idea that, oh, I can understand that

691
00:34:29,360 --> 00:34:31,520
Speaker 1: the royalty is going to be going to an artist.

692
00:34:31,520 --> 00:34:34,319
Speaker 1: People can own what they have made and keep sort

693
00:34:34,320 --> 00:34:36,560
Speaker 1: of a value of that as it goes through different

694
00:34:36,560 --> 00:34:39,759
Speaker 1: people's hands. Is n f T still a gateway to

695
00:34:39,800 --> 00:34:42,560
Speaker 1: the system because they have so fallen out of love

696
00:34:42,600 --> 00:34:45,840
Speaker 1: in terms of evaluation perspective, where are we in crypto

697
00:34:45,880 --> 00:34:48,400
Speaker 1: in the longer term? So, you know, Matt when he

698
00:34:48,440 --> 00:34:50,120
Speaker 1: looks at the piece, kind of talks about sort of

699
00:34:50,120 --> 00:34:53,399
Speaker 1: how thin the connection is between the code that you're

700
00:34:54,280 --> 00:34:56,759
Speaker 1: investing in on the blockchain and what the actual piece

701
00:34:56,760 --> 00:34:58,600
Speaker 1: of art is. I do think that for a lot

702
00:34:58,600 --> 00:35:01,480
Speaker 1: of people, um you know, it's sort of disturbing to

703
00:35:01,520 --> 00:35:03,759
Speaker 1: imagine that, like, well, bitcoin, what's backing the value of

704
00:35:03,760 --> 00:35:06,879
Speaker 1: a bitcoin? I don't know. Um now, there's nothing really

705
00:35:06,920 --> 00:35:08,799
Speaker 1: backing the value of a board eight. But at least

706
00:35:08,800 --> 00:35:10,200
Speaker 1: you could sort of say to yourself, it's like, well,

707
00:35:10,239 --> 00:35:12,239
Speaker 1: I kind of understand the art market, so at least

708
00:35:12,239 --> 00:35:14,440
Speaker 1: to the extent that it's a little bit arbitrary and aesthetic.

709
00:35:14,480 --> 00:35:17,160
Speaker 1: I understand that there's a market like that. I think

710
00:35:17,480 --> 00:35:18,960
Speaker 1: this is outside of the scope of Matt Store, but

711
00:35:19,000 --> 00:35:21,080
Speaker 1: I think we've all observed that there were there were enough,

712
00:35:21,080 --> 00:35:24,720
Speaker 1: there were enough shenanigans in that market, kind of creating

713
00:35:24,719 --> 00:35:28,480
Speaker 1: inflated valuations. Um. I mean that I think that's given

714
00:35:28,520 --> 00:35:31,920
Speaker 1: people a lot of pause about getting into that space.

715
00:35:32,360 --> 00:35:35,319
Speaker 1: So what then, Because we talk a lot across all

716
00:35:35,320 --> 00:35:38,399
Speaker 1: of our platforms here that yes, in some ways it's

717
00:35:38,400 --> 00:35:43,120
Speaker 1: a store of value, still is generally a trading asset type.

718
00:35:43,320 --> 00:35:45,040
Speaker 1: When does it become more than that? When does it

719
00:35:45,040 --> 00:35:48,279
Speaker 1: become integral to yours and my way of life? I mean,

720
00:35:48,560 --> 00:35:52,439
Speaker 1: that's really the question that Matt's wrestling with. Matt, as

721
00:35:52,560 --> 00:35:54,360
Speaker 1: you know, is really just an expert on finance, and

722
00:35:54,400 --> 00:35:56,959
Speaker 1: what he really focuses on is the degree to which

723
00:35:57,280 --> 00:36:00,320
Speaker 1: crypto finance is just finance. It's very similar lard of

724
00:36:00,360 --> 00:36:02,680
Speaker 1: finance when you strip it all down. Even though it's

725
00:36:02,680 --> 00:36:04,640
Speaker 1: a new thing and it gives people a new, faster

726
00:36:04,760 --> 00:36:08,360
Speaker 1: start on certain things, it's often rebuilding the same structures

727
00:36:08,400 --> 00:36:10,719
Speaker 1: that we've had before, maybe a new ways, often in

728
00:36:10,760 --> 00:36:13,520
Speaker 1: disastrous ways. Inside of the crypto space. We didn't just

729
00:36:13,560 --> 00:36:15,399
Speaker 1: see a crypto winner. We really saw a crypto two

730
00:36:15,400 --> 00:36:18,560
Speaker 1: thousand and eight. They build all of the structures that

731
00:36:18,640 --> 00:36:22,200
Speaker 1: created a financial crisis inside of crypto um. I think

732
00:36:22,200 --> 00:36:25,640
Speaker 1: it's very interesting that that crisis didn't really weak out

733
00:36:25,920 --> 00:36:28,680
Speaker 1: into the rest of the market. I think, however, that's

734
00:36:28,719 --> 00:36:32,080
Speaker 1: probably one reason why crypto is continuing to be worth

735
00:36:32,120 --> 00:36:35,240
Speaker 1: our attention. Is the people who are building these structures

736
00:36:35,280 --> 00:36:37,840
Speaker 1: are building things that look a lot like the things

737
00:36:38,239 --> 00:36:44,919
Speaker 1: in traditional finance that break and sometimes break disastrously. Well done, well,

738
00:36:45,360 --> 00:36:48,279
Speaker 1: what an enormous read. Go have a look at his work,

739
00:36:48,280 --> 00:36:50,840
Speaker 1: and that of course of Matt levin Bloomberg Business Weeks

740
00:36:50,960 --> 00:37:01,920
Speaker 1: pat Menia, We thank him. Let's get you up to

741
00:37:01,920 --> 00:37:04,200
Speaker 1: speed with the latest in the Musk Twitter saga. Elon

742
00:37:04,280 --> 00:37:07,520
Speaker 1: Musk has impact fact pledged earlier to close the acquisition

743
00:37:07,640 --> 00:37:10,200
Speaker 1: of Twitter by Friday. He announced this in a video

744
00:37:10,239 --> 00:37:12,879
Speaker 1: conference call with bankers we understand helping fund the deal.

745
00:37:13,160 --> 00:37:16,000
Speaker 1: It's all according to sources Ed Ludlow, of course, minute

746
00:37:16,000 --> 00:37:19,040
Speaker 1: by minute across this particular deal. And well he said

747
00:37:19,040 --> 00:37:20,799
Speaker 1: he would do it at the beginning, and now it

748
00:37:20,840 --> 00:37:23,359
Speaker 1: seems as always being forced to do it at the end. Yeah,

749
00:37:23,360 --> 00:37:25,360
Speaker 1: this this is one of the interesting situations where the

750
00:37:25,400 --> 00:37:28,400
Speaker 1: devil's in the detail. And Bloomberg also reporting that, according

751
00:37:28,400 --> 00:37:30,560
Speaker 1: to sources, the banks are kind of braced for this

752
00:37:30,640 --> 00:37:34,360
Speaker 1: borrowing notice that should have come Tuesday. Then the money

753
00:37:34,400 --> 00:37:36,839
Speaker 1: that the banks have pledged in the former debt would

754
00:37:36,840 --> 00:37:40,040
Speaker 1: go into es grow Thursday. And as you said, Carrow,

755
00:37:40,120 --> 00:37:42,479
Speaker 1: he's told these bankers that he fully intends to close

756
00:37:42,560 --> 00:37:46,120
Speaker 1: the deal by five pm Friday. You know, the Twitter

757
00:37:46,160 --> 00:37:48,880
Speaker 1: stock reacted in a way you'd expect. He got closer

758
00:37:48,920 --> 00:37:52,480
Speaker 1: to the dollars twenty cents per share offer price, and

759
00:37:52,520 --> 00:37:55,520
Speaker 1: it's kind of a soft indication from the street that, yeah,

760
00:37:55,680 --> 00:37:57,239
Speaker 1: we think we're at a place where this deal is

761
00:37:57,239 --> 00:37:59,359
Speaker 1: going to get done, and the mechanics of it as

762
00:37:59,400 --> 00:38:02,080
Speaker 1: such that you know, they're moving in that direction. I

763
00:38:02,120 --> 00:38:04,640
Speaker 1: would say we'd already reported a week ago that you

764
00:38:04,920 --> 00:38:08,040
Speaker 1: bankers and advisors on both sides of enacting diligently to

765
00:38:08,160 --> 00:38:12,120
Speaker 1: meet that five pm Eastern time deadline on Oxo, which

766
00:38:12,200 --> 00:38:16,080
Speaker 1: was set by the chance Re Delaware chance rejudge. So

767
00:38:16,360 --> 00:38:19,080
Speaker 1: we know where we stand. And of course later in

768
00:38:19,120 --> 00:38:21,960
Speaker 1: the week twenty six we get Twitter earnings. Talk to

769
00:38:22,040 --> 00:38:24,120
Speaker 1: us about the earnings you've just been digesting. Talk about

770
00:38:24,200 --> 00:38:27,600
Speaker 1: the conversation you had with Ruth Poor at Alphabet. Yeah,

771
00:38:27,680 --> 00:38:29,759
Speaker 1: I mean Alphabet, you know, missing on the top and

772
00:38:29,840 --> 00:38:33,000
Speaker 1: bottom line. Interesting. You know, clearly this is a challenging

773
00:38:33,120 --> 00:38:35,800
Speaker 1: environment for them. In that conversation with Ruth Poor actually

774
00:38:35,840 --> 00:38:38,759
Speaker 1: kind of gave some granularity on the pool back in

775
00:38:38,840 --> 00:38:42,320
Speaker 1: ad budgets across brand and direct ads, particularly on YouTube.

776
00:38:42,520 --> 00:38:45,879
Speaker 1: But ultimately she gave some detail on the macro picture, right,

777
00:38:45,880 --> 00:38:49,759
Speaker 1: which is that the macro environment remains challenging. Um and

778
00:38:50,040 --> 00:38:52,600
Speaker 1: you know, this is a quarter in which all big

779
00:38:52,640 --> 00:38:55,960
Speaker 1: tech companies that derive profits from sales I should say,

780
00:38:55,960 --> 00:38:58,560
Speaker 1: from around the world are facing currency head winds. M

781
00:38:59,000 --> 00:39:01,000
Speaker 1: But you know a point in the middle there. The

782
00:39:01,040 --> 00:39:05,239
Speaker 1: sequential deceleration was primarily driven by lapping what parts saying

783
00:39:05,320 --> 00:39:08,040
Speaker 1: is we're comparing this quarter to what was frankly an

784
00:39:08,040 --> 00:39:10,680
Speaker 1: astonishing quarter in the same period a year ago, where

785
00:39:10,680 --> 00:39:14,000
Speaker 1: they saw just incredible double digit top line growth as

786
00:39:14,000 --> 00:39:16,920
Speaker 1: they recovered from the earlier stages of the pandemic um.

787
00:39:17,600 --> 00:39:20,600
Speaker 1: That's a that's an interesting trick sometimes that executives used

788
00:39:20,600 --> 00:39:22,960
Speaker 1: to point you to a comparison with a strong quarter,

789
00:39:23,520 --> 00:39:26,879
Speaker 1: but anasts many across the bord ahead of earning exam

790
00:39:26,920 --> 00:39:29,719
Speaker 1: has been downgrading the outlooks of companies, and so it's

791
00:39:29,719 --> 00:39:32,520
Speaker 1: always a jolt when they missed them. So I think,

792
00:39:32,600 --> 00:39:34,600
Speaker 1: what does the read across How are you thinking about

793
00:39:34,600 --> 00:39:36,719
Speaker 1: what she's talking about in terms of YouTube, in terms

794
00:39:36,719 --> 00:39:41,040
Speaker 1: of advertisers, what does this mean perhaps for tomorrow for meta? Yeah,

795
00:39:41,120 --> 00:39:43,760
Speaker 1: I think what we're seeing is that there's broad weakness

796
00:39:43,760 --> 00:39:46,120
Speaker 1: in the ad space. Right when we had Snaps earnings

797
00:39:46,200 --> 00:39:49,400
Speaker 1: last week and they scrapped guidance and they had their

798
00:39:49,440 --> 00:39:52,560
Speaker 1: slowest growth on record, they gave some pretty granular deta

799
00:39:52,600 --> 00:39:55,120
Speaker 1: about the pullback by advertisers. The question from the street

800
00:39:55,239 --> 00:39:57,919
Speaker 1: was is this specific to Snap because of what they're

801
00:39:57,960 --> 00:40:00,799
Speaker 1: offering struggling to gain traction with advert isis or is

802
00:40:00,840 --> 00:40:03,560
Speaker 1: this more widespread. In the commentary we've had from roof

803
00:40:03,600 --> 00:40:06,759
Speaker 1: Pat and other Google Alphabet executives, you can see it

804
00:40:06,800 --> 00:40:08,600
Speaker 1: is more widespread, and I guess that it builds some

805
00:40:08,680 --> 00:40:12,480
Speaker 1: concern going into Meta earnings this Thursday. Yes, certainly, I

806
00:40:12,480 --> 00:40:14,319
Speaker 1: think she in one of her key ones, she was saying, look,

807
00:40:14,360 --> 00:40:17,120
Speaker 1: this is this is a pullback and advertising. The question

808
00:40:17,200 --> 00:40:18,960
Speaker 1: is is how long it lasts? And I'm sure we'll

809
00:40:18,960 --> 00:40:21,080
Speaker 1: be getting some more granular detail from the calls that

810
00:40:21,080 --> 00:40:23,400
Speaker 1: are going on with analysts with investors at the moment,

811
00:40:23,880 --> 00:40:26,360
Speaker 1: and so smart, we thank you for delving in with

812
00:40:26,360 --> 00:40:28,480
Speaker 1: the key questions with her and bringing them to us

813
00:40:28,560 --> 00:40:31,360
Speaker 1: as swiftly as he did. Meanwhile, that does it for

814
00:40:31,400 --> 00:40:34,920
Speaker 1: this edition of Bloompeg Technology Wednesday. Do not miss the

815
00:40:34,960 --> 00:40:37,120
Speaker 1: next studio at one point, oh how many chanting a

816
00:40:37,120 --> 00:40:39,960
Speaker 1: story to the door dash CEO. So you want to

817
00:40:40,000 --> 00:40:42,120
Speaker 1: be looking in on that. What is he seeing in

818
00:40:42,239 --> 00:40:45,200
Speaker 1: terms of the consumer the resilience, the desire to spend

819
00:40:45,280 --> 00:40:48,439
Speaker 1: up to get your deliveries as many a question also

820
00:40:48,480 --> 00:40:51,400
Speaker 1: the labor market therein as well, and how we continue

821
00:40:51,440 --> 00:40:54,600
Speaker 1: to consider those employees. Don't forget to check out our

822
00:40:54,600 --> 00:40:56,080
Speaker 1: podcast of course as well. You can find it on

823
00:40:56,120 --> 00:40:58,200
Speaker 1: the terminal if you're lucky enough to have one. Also,

824
00:40:58,520 --> 00:41:01,040
Speaker 1: of course you can go to Apple Justify to my heart,

825
00:41:01,480 --> 00:41:03,160
Speaker 1: and of course go and check out what we've been

826
00:41:03,160 --> 00:41:05,480
Speaker 1: making of the latest Spotify earnings, which of course have

827
00:41:05,560 --> 00:41:07,760
Speaker 1: come minute. Was a big look out for what's Apples

828
00:41:07,800 --> 00:41:10,160
Speaker 1: saying in its earnings later in the week, sit with

829
00:41:10,200 --> 00:41:12,160
Speaker 1: us a Blue Bag TV and of course across all

830
00:41:12,200 --> 00:41:14,640
Speaker 1: our products for the earnings discipline Bag