WEBVTT - NYC's Shrinking Tech Presence 0:00:02.240 --> 0:00:05.520 From the heart of where innovation, money and power Colli 0:00:06.320 --> 0:00:10.880 in Silicon Vallet and beyond. This is Bloomberg Technology with 0:00:10.920 --> 0:00:26.599 Emily Jay. I'm Emily checking San Francisco and this is 0:00:26.640 --> 0:00:29.600 Bloomberg Technology. Coming up in the next hour. Twitter has 0:00:29.640 --> 0:00:32.280 a big week ahead, not just earnings, but the first 0:00:32.320 --> 0:00:36.800 hearing in Twitter v. Musk is now scheduled for Tuesday 0:00:36.960 --> 0:00:41.280 in a Delaware court. We will tell you what to expect. Plus, 0:00:41.360 --> 0:00:44.800 Amazon and Meta are getting creative to save cash with 0:00:44.920 --> 0:00:48.200 plans to cut back on office expansion in New York. 0:00:48.520 --> 0:00:52.239 Will bring you the Bloomberg exclusive. And we're chatting with 0:00:52.240 --> 0:00:55.640 bitcoin bull Anthony Popliano about the crypto downturn and his 0:00:55.720 --> 0:00:59.840 new startup designed to train workers for a new generation 0:01:00.360 --> 0:01:04.200 of crypto comy. Looking ahead, a judge set a hearing 0:01:04.319 --> 0:01:07.800 for Tuesday, granting Twitter's request to fast track its case 0:01:08.120 --> 0:01:11.920 against Elon Musk. Twitter lawyers claim Musk wrongfully canceled his 0:01:12.000 --> 0:01:14.920 forty four billion dollar buyout and say they only need 0:01:14.959 --> 0:01:17.880 four days to prove it in Delaware court and the 0:01:17.920 --> 0:01:20.679 Court of Public Opinion. Joining me now Jasmine Emberg, principal 0:01:20.760 --> 0:01:24.800 analyst at Insider Intelligence, So look, Jasmine, Twitter has been 0:01:24.800 --> 0:01:27.680 in a state of limbo now for months. How significant 0:01:27.800 --> 0:01:30.000 is it that they got the judge to hear this 0:01:30.080 --> 0:01:34.399 case right away. It's significant, um, but it is of 0:01:34.440 --> 0:01:37.000 course only the first hearing in what I expect will 0:01:37.000 --> 0:01:40.600 be a pretty long and drawn out court battle. Either way, though, 0:01:40.640 --> 0:01:43.720 there really is no great outcome for Twitter at this point. 0:01:43.760 --> 0:01:45.880 It is either going to end up in the hands 0:01:45.920 --> 0:01:49.800 of someone who is unhappy and uninterested in the product, 0:01:50.360 --> 0:01:52.120 or then it's going to go back to the same 0:01:52.160 --> 0:01:54.800 position it was before this whole ordeal began, which of 0:01:54.840 --> 0:01:58.960 course is a position of under performance relative to its peers, 0:01:59.120 --> 0:02:03.080 or perhaps even weaker than it was lost April. Right 0:02:03.120 --> 0:02:07.360 Twitter earnings are coming out towards the end of next week. 0:02:07.560 --> 0:02:09.320 What are you expecting there in the middle of all 0:02:09.400 --> 0:02:13.240 of this. Yeah, I'm expecting that we will see that 0:02:13.280 --> 0:02:16.640 Twitter had a pretty turbulent quarter, and I'm not expecting 0:02:16.720 --> 0:02:20.160 the termoil to end right now. Musk is the noisiest 0:02:20.240 --> 0:02:22.560 challenge that Twitter is dealing with at the moment, but 0:02:22.639 --> 0:02:25.840 of course it's also susceptible to many of the challenges 0:02:25.840 --> 0:02:29.360 within the digital advertising landscape, which include these macro Economic 0:02:29.440 --> 0:02:34.119 headwinds include iOS changes include shifting consumer behaviors which are 0:02:34.160 --> 0:02:38.040 impacting you know, social media platforms across the board. Twitter 0:02:38.240 --> 0:02:42.200 is a relatively small player in the social media advertising landscape. 0:02:42.240 --> 0:02:45.360 At Insider Intelligence, we expect Twitter to rank in just 0:02:45.560 --> 0:02:49.240 one percent of worldwide digital ad revenues this year. Compare 0:02:49.280 --> 0:02:51.600 that with Facebook, which we're expecting we'll bring in around 0:02:52.919 --> 0:02:57.000 Instagram nine percent and TikTok is even double. Um what 0:02:57.200 --> 0:02:58.960 where Twitter is expected to be by the end of 0:02:58.960 --> 0:03:01.320 this year at around two per set. So for especially 0:03:01.360 --> 0:03:04.079 for a small tier player, this was probably a very 0:03:04.160 --> 0:03:09.240 tough quarridor meantime, you've got Twitter still making product announcements 0:03:09.280 --> 0:03:11.239 in the middle of all this, trying to portray this 0:03:11.320 --> 0:03:14.480 sort of business as usual environment when all of this 0:03:14.680 --> 0:03:18.520 is completely unprecedented. I'm curious how you think of courtroom battle. 0:03:18.960 --> 0:03:21.320 You've also got the U S midterm elections coming up. 0:03:21.600 --> 0:03:25.560 How do you think this is all going to impact engagement? Yeah, 0:03:25.560 --> 0:03:27.959 I mean Twitter has been rolling out new ada and 0:03:28.000 --> 0:03:31.400 commerce related tools in order to you know, prove to 0:03:31.440 --> 0:03:33.760 advertisers at it's business as normal, as you said, but 0:03:33.840 --> 0:03:38.000 it certainly isn't. Twitter is a platform that thrives on 0:03:38.080 --> 0:03:41.400 news and controversies. So there is a possibility that people 0:03:41.560 --> 0:03:44.200 logged in a more signed up for the platform to 0:03:44.240 --> 0:03:47.080 watch the drama unfold. But we also heard that some 0:03:47.160 --> 0:03:49.800 people may have left the platform because they didn't want 0:03:49.800 --> 0:03:52.720 it to be controlled by Musk. I am still expecting 0:03:52.760 --> 0:03:56.080 to see perhaps some growth in monetize able daily active 0:03:56.160 --> 0:04:00.040 users at Insider Intelligence. So for the full year to 0:04:00.320 --> 0:04:04.000 we're actually expecting just very minimal growth worldwide and a 0:04:04.080 --> 0:04:08.480 decline in Twitter users. Now we UM forecast monthly users, 0:04:08.480 --> 0:04:11.000 so they're not comparable to Twitter's m d a US. 0:04:11.960 --> 0:04:14.360 So look, if you're a Twitter investor right now, what 0:04:14.400 --> 0:04:18.480 do you do? You know, that's a great question. I 0:04:18.520 --> 0:04:20.360 think we'll have to wait and see the state of 0:04:20.400 --> 0:04:23.720 the financials next sport next week. Um well, and we'll 0:04:23.720 --> 0:04:26.960 get a better picture of what Twitter is um really 0:04:26.960 --> 0:04:30.920 dealing with at the moment. Alright, Jasmine Emberg, Insider Intelligence 0:04:30.960 --> 0:04:33.560 principal analysts. Always good to have your perspective here on 0:04:33.600 --> 0:04:38.000 the show. Jasmine, thank you. So what are Musque's chances 0:04:38.040 --> 0:04:40.040 of getting out of this deal? And how good is 0:04:40.080 --> 0:04:42.040 Twitter's case? For more on that, I want to bring 0:04:42.080 --> 0:04:46.200 in Lawrence Hammermash, Executive director of the University of Pennsylvania 0:04:46.320 --> 0:04:49.640 Carry Law School. Uh, Larry, I'm so excited to have 0:04:49.720 --> 0:04:53.279 you so curious to hear what you think. Whose argument 0:04:53.320 --> 0:04:55.880 is better here? Looking at what you've seen so far, 0:04:56.120 --> 0:05:00.640 a very um raucous complaint from Twitter, as well as 0:05:00.880 --> 0:05:03.280 what we've heard from Elon Musk to this point. Of course, 0:05:03.279 --> 0:05:06.320 he's been very prolific on Twitter itself. Who's got a 0:05:06.320 --> 0:05:10.000 better case? Based on what I've seen so far, I'll 0:05:10.040 --> 0:05:12.520 side with Twitter, but you know that it's early in 0:05:12.520 --> 0:05:18.120 the day. I've seen from Musk's lawyers their principal contentions 0:05:18.160 --> 0:05:22.279 about why Musk is entitled to walk away. I've now 0:05:22.360 --> 0:05:29.000 read Twitter's complaint and it's it's pretty clear that there's 0:05:29.040 --> 0:05:31.400 there's more to the story at once Twitter tells it. 0:05:31.720 --> 0:05:36.000 That suggests to me that Musk's arguments are gonna be tough. 0:05:36.560 --> 0:05:38.159 I mean, I can go into detail, but that's the 0:05:38.240 --> 0:05:42.360 overall of you I've got. How significant is the judge 0:05:42.440 --> 0:05:47.360 fast tracking this suit? I wouldn't well, First of all, Uh, 0:05:47.480 --> 0:05:51.400 it's absolutely standard when someone asks for a trial in 0:05:52.120 --> 0:05:55.000 a couple of months for the judge to hear the 0:05:55.320 --> 0:05:58.920 that question of scheduling pretty much right away, and sometimes 0:05:58.960 --> 0:06:01.719 the same day. So Tuesday. It's kind of leisurely for 0:06:01.800 --> 0:06:04.360 something like this. The real question is what's going to 0:06:04.440 --> 0:06:07.080 happen on Tuesday? And is the judge going to schedule 0:06:07.080 --> 0:06:11.200 a trial in September, as Twitter as asked, or is 0:06:11.720 --> 0:06:15.120 Musk gonna come in with guns blazing with a filing 0:06:15.160 --> 0:06:17.919 that says, you know you shouldn't try this case in 0:06:18.000 --> 0:06:21.120 any kind of with any kind of speed or unusual speed. Uh, 0:06:21.160 --> 0:06:23.560 this is You're never gonna make me have to go 0:06:23.640 --> 0:06:28.200 through with a deal, so there's no rush. Uh, you know, 0:06:28.720 --> 0:06:32.440 I haven't seen we haven't seen Musk's filing in opposition 0:06:32.480 --> 0:06:36.760 to Twitter's request for speed, But it'll be in I 0:06:36.760 --> 0:06:39.599 would guess by Monday, and we'll know more than I 0:06:39.640 --> 0:06:42.160 still would think. The judge would set the case down 0:06:42.200 --> 0:06:46.320 for trial sometime in the fall, maybe even early even 0:06:46.400 --> 0:06:50.479 late summer. Right when does Musk not come in guns blazing? 0:06:53.080 --> 0:06:56.159 Well he's he's got a big arsenal, I'll tell you that. Well, 0:06:56.240 --> 0:06:58.280 so are you saying there that you think this could 0:06:58.279 --> 0:07:00.800 be wrapped up in the fall. I mean, we just 0:07:00.880 --> 0:07:04.480 heard Jasmine Edinburgh predict this is gonna be a long 0:07:04.480 --> 0:07:06.599 and drawn out court battle. But maybe it won't be 0:07:06.640 --> 0:07:09.360 as long as we think, well, it will be drawn 0:07:09.400 --> 0:07:11.680 out and it's gonna seem long, but it's possible that 0:07:11.800 --> 0:07:15.480 could be over by the fall late fall. Certainly. Um, 0:07:15.520 --> 0:07:18.600 that's not an unusual kind of a pace for the 0:07:18.640 --> 0:07:23.840 Delaware Court of Chancery in handling disputes involving busted deals. 0:07:23.880 --> 0:07:26.920 So how likely is it that a court will force 0:07:27.080 --> 0:07:29.680 Elon Musk to do this deal? I know it is 0:07:29.960 --> 0:07:35.679 fairly unprecedented, but there is some precedent there. There certainly 0:07:35.720 --> 0:07:38.200 is some precedent, and in fact, the chancellor who's going 0:07:38.240 --> 0:07:41.040 to be hearing the case did it herself within the 0:07:41.120 --> 0:07:43.800 last couple of years. Uh, for a much smaller and 0:07:43.920 --> 0:07:47.400 less notorious company. But but it's a remedy that has 0:07:47.560 --> 0:07:51.000 has been used forcing the other, the buyer, to go forward. 0:07:51.640 --> 0:07:54.520 But um, and I can also say that the merger 0:07:54.560 --> 0:07:59.240 agreement between Musk and Twitter is pretty strong in suggesting 0:07:59.240 --> 0:08:02.680 that that's what the court would need to do. But uh, 0:08:03.560 --> 0:08:05.960 it's a judge, it's a chancellor. They I think they 0:08:06.080 --> 0:08:10.360 value their flexibility and discretion in deciding what remedy is appropriate. 0:08:10.960 --> 0:08:14.440 And I could see the Chancellor saying, you know, forcing 0:08:14.520 --> 0:08:17.120 must to go through this deal. Is not necessarily a 0:08:17.120 --> 0:08:20.920 good idea for the world. Uh, And people will be 0:08:20.920 --> 0:08:25.080 better off if I find some other way to enforce 0:08:25.240 --> 0:08:28.800 or apply sanctions for non compliance with the agreement. If 0:08:28.800 --> 0:08:31.800 that's what she finds, how could the court force Musk 0:08:31.920 --> 0:08:35.400 to buy Twitter? Do you see a daily fine, for example? 0:08:35.480 --> 0:08:39.200 Do you see going after his assets, going after his 0:08:39.280 --> 0:08:42.960 tesla shares? Yeah? I mean those are that those would 0:08:42.960 --> 0:08:46.800 be the natural go tows. Uh. People have asked me 0:08:46.880 --> 0:08:48.920 in the course of the week, but what about imprisonment? 0:08:49.480 --> 0:08:52.679 And I kind of don't think in the cards, but 0:08:53.720 --> 0:08:56.160 daily finds. I suppose you could call it the usual 0:08:56.200 --> 0:08:58.760 stuff if someone is contempt or of course a long 0:08:58.800 --> 0:09:00.760 way away from that. There's got to be a judgment 0:09:01.240 --> 0:09:04.800 and Musk would have to find an appropriate response. And 0:09:05.679 --> 0:09:07.720 if a if a court orders you to go forward 0:09:07.720 --> 0:09:11.600 with a deal, I could see even Elon Musk settling it. 0:09:12.840 --> 0:09:14.720 And if he is forced to buy it, could he 0:09:14.800 --> 0:09:18.360 then turn right around and sell it? What are the 0:09:18.480 --> 0:09:22.880 legal issues there? I think once he's a buyer and 0:09:22.880 --> 0:09:27.040 and finishes the acquisition, it's his company, I will say 0:09:27.040 --> 0:09:30.040 to do with what he wishes. But you know, whatever 0:09:30.240 --> 0:09:33.600 governance powers he's got over the company he can use 0:09:33.720 --> 0:09:39.040 to seek new investors, sell off a significant steak, or 0:09:39.200 --> 0:09:43.920 just continue to run it as a buyer. Interesting. Now, 0:09:44.360 --> 0:09:46.760 I want to talk about who wins in any of 0:09:46.760 --> 0:09:50.200 these scenarios. We were speaking with Jason Goldman, one of 0:09:50.200 --> 0:09:53.560 the early early members of the Twitter founding team, who said, 0:09:53.880 --> 0:09:56.880 nobody wins except the lawyers. Take a listen to what 0:09:57.000 --> 0:10:01.200 he has to say. Definitely the lawyer years. When you 0:10:01.200 --> 0:10:03.440 know the lawyers are excited when they describe a case 0:10:03.480 --> 0:10:07.800 as being unprecedented and complicated, that's definitely code for there's 0:10:07.840 --> 0:10:11.160 going to be unprecedented legal fees. So they're they're said, 0:10:11.200 --> 0:10:16.120 everyone else is a loser in this for sure. So look, Larry, 0:10:16.200 --> 0:10:19.040 no matter the outcome, is this gonna be any good 0:10:19.040 --> 0:10:22.640 for Twitter or Elon Musk in the end? Well, Jasmine 0:10:22.720 --> 0:10:25.040 Edburgh said something before that I thought was right on 0:10:25.080 --> 0:10:30.040 the money. Um Uh, No matter what happens, the longer 0:10:30.120 --> 0:10:33.200 this drags out, the worst it is for Twitter. Uh. 0:10:33.440 --> 0:10:36.480 Elon Musk is sitting on the sidelines right now looking 0:10:36.520 --> 0:10:39.320 at Twitter, and he doesn't have to do anything at 0:10:39.320 --> 0:10:42.760 the moment except litigate. Uh. And certainly he's got the 0:10:42.800 --> 0:10:46.480 resources to pay the lawyers to do that. Uh, Twitter's 0:10:46.559 --> 0:10:49.120 the party here that's got to deal with running a 0:10:49.160 --> 0:10:52.400 business while all these fireworks are going off all around. 0:10:53.040 --> 0:10:56.000 And as I've told people from time to time this week, 0:10:56.080 --> 0:11:01.160 that's that's not an enviable negotiating position. So, uh, you know, 0:11:01.200 --> 0:11:03.760 there there is a victory scenario I suppose for Twitter, 0:11:03.920 --> 0:11:07.000 but uh, there are a lot of things can go 0:11:07.080 --> 0:11:11.000 wrong for everybody. For sure. How much will Musk's own 0:11:11.240 --> 0:11:13.600 record be used against him? He's got a history with 0:11:13.640 --> 0:11:18.240 the SEC. He didn't disclose his initial Twitter shares the 0:11:18.280 --> 0:11:21.959 way he should have. He's had problems with other regulatory 0:11:22.040 --> 0:11:25.360 agencies over the course of just the last few months. 0:11:25.920 --> 0:11:29.559 Will that come into play? Um? I think at best 0:11:29.559 --> 0:11:33.360 asthmic atmospherically, the the court in a case like this 0:11:33.960 --> 0:11:37.040 is going to focus like a laser on the terms 0:11:37.040 --> 0:11:39.640 of the merger agreement. If this case is going to 0:11:39.760 --> 0:11:44.440 get decided after a trial of four days or six 0:11:44.520 --> 0:11:47.280 days or whatever. Uh, it's still going to have to 0:11:47.320 --> 0:11:50.959 be pre focused. And I I would think you're not 0:11:51.000 --> 0:11:55.480 going to hear a whole lot about uh these peripheral 0:11:55.520 --> 0:11:57.880 things what Musk has done. It's not as if the 0:11:58.720 --> 0:12:02.520 Chancellor is unaware of some of the color here, but 0:12:03.559 --> 0:12:07.360 I wouldn't expect the parties to focus on it all right, 0:12:07.920 --> 0:12:11.960 Larry hammer Mesh, University of Pennsylvania Carry Law School Executive Director, 0:12:12.200 --> 0:12:24.439 really appreciate your thoughts and insights here. Today, TikTok just 0:12:24.520 --> 0:12:26.640 named a new head of security as the app deals 0:12:26.679 --> 0:12:30.800 with increasing scrutiny from US policymakers over concerns that user 0:12:30.920 --> 0:12:34.000 data could wind up in the hands of the Chinese government. 0:12:34.000 --> 0:12:36.840 Blue Bricks Alex Brinka is covering the story. So, Alex, 0:12:36.880 --> 0:12:39.320 who did they tap to run security? And of course 0:12:39.360 --> 0:12:42.360 we're talking about the parent company, Byte Dance of course, 0:12:42.679 --> 0:12:45.520 of course, And and they've tapped somebody from Internal UM 0:12:45.600 --> 0:12:49.920 called kim Alberella. She will run UM Global Security for 0:12:50.120 --> 0:12:54.520 Byte Dance UM and is replacing the chap Ronald Courtier 0:12:54.520 --> 0:12:56.559 who was there before. And I want to point out 0:12:56.600 --> 0:12:59.280 something really interesting here, because we're in this moment for 0:12:59.360 --> 0:13:02.880 TikTok where they are sparring with the US government, A 0:13:02.920 --> 0:13:05.960 lot of focuses on what they are doing security wise, 0:13:06.280 --> 0:13:08.880 and in making this move and and this change this 0:13:08.960 --> 0:13:12.320 morning to bring him in as the interim um TikTok 0:13:12.400 --> 0:13:14.560 CEO and Bye Dances VP of tax said that this 0:13:14.640 --> 0:13:19.000 is part of their evolving approach to minimize concerns about 0:13:19.120 --> 0:13:22.680 security in the U S So, UM, what I'm reading 0:13:22.720 --> 0:13:24.760 between the lines here, Emily, and what I what I'm 0:13:24.800 --> 0:13:27.400 hearing from a source who is close to the decision 0:13:27.400 --> 0:13:31.480 making behind this move is that um Clotier was a 0:13:31.520 --> 0:13:34.360 really great keep the bad guys out guy. Uh. Now 0:13:34.520 --> 0:13:37.320 they are kind of evolving their approach to think about 0:13:37.360 --> 0:13:42.560 how to UM best set up a data management department 0:13:42.559 --> 0:13:46.280 and security department that allays some of these concerns that 0:13:46.360 --> 0:13:48.680 we've seen coming out of Congress, coming out of the 0:13:48.800 --> 0:13:52.520 SEC about what TikTok is doing with US users data 0:13:52.760 --> 0:13:55.680 and if any of that data gets into nefarious hands 0:13:55.679 --> 0:13:58.240 through his parent company, Bye Dance. We do have a 0:13:58.240 --> 0:14:01.120 statement from the CEO show to to part of our 0:14:01.559 --> 0:14:05.400 evolving approach has been to minimize concerns about the security 0:14:05.400 --> 0:14:07.480 of user data in the US, including the creation of 0:14:07.480 --> 0:14:10.680 a new department to manage user data US user data 0:14:10.800 --> 0:14:13.679 for TikTok. Can you remind us what the company has 0:14:13.720 --> 0:14:17.040 said about how they handle user data, who can see it, 0:14:17.080 --> 0:14:21.200 and whether the Chinese government can see it or not. Yeah, 0:14:21.240 --> 0:14:22.960 and they've said a lot. Emily, just in the past 0:14:23.000 --> 0:14:25.440 couple of weeks UM. Basically in a letter to U 0:14:25.480 --> 0:14:28.520 S senators, the company said that they're working on coordining 0:14:28.560 --> 0:14:31.920 off US users data and working with Scipius and National 0:14:31.920 --> 0:14:35.320 Security Arm of the US government to decide which protected 0:14:35.440 --> 0:14:38.400 data is geeped by the US government should actually stay 0:14:38.400 --> 0:14:40.480 in U S servers. Those service will be run of 0:14:40.520 --> 0:14:44.000 course by Oracle. So they have said, uh, we're trying 0:14:44.000 --> 0:14:46.920 to keep stuff here. But what has raised concern is 0:14:47.120 --> 0:14:49.360 a couple of weeks ago they did admit that some 0:14:49.720 --> 0:14:52.440 US users data does get into the hands of Chinese 0:14:52.440 --> 0:14:54.440 employees who are doing work. They say that there are 0:14:54.520 --> 0:14:57.560 there are rigorous security um kind of constraints and who 0:14:57.600 --> 0:15:00.720 can see that. But so far what that information is 0:15:00.800 --> 0:15:04.000 it is things like public videos, public comments, and things 0:15:04.040 --> 0:15:07.360 needed to run the app writ large. UM. So that's 0:15:07.400 --> 0:15:09.920 kind of the split that they're talking about right now. 0:15:10.080 --> 0:15:11.960 But it does seem like Emily, this will be an 0:15:11.960 --> 0:15:16.320 evolving landscape and evolving infrastructure for them going forward, UM 0:15:16.360 --> 0:15:18.320 with this kind of shake up and the Security Arm 0:15:18.320 --> 0:15:22.360 with their operations. So what's next? What do we expect? Yeah, 0:15:22.960 --> 0:15:26.680 there should be um some meetings with Brendan Cars team 0:15:26.760 --> 0:15:28.680 is something we learned about this week Brendon Cars an 0:15:28.680 --> 0:15:31.960 FCC member or Republican member who has been very loud, 0:15:32.080 --> 0:15:35.440 very vocal, saying that just this week that TikTok's a 0:15:35.520 --> 0:15:38.800 security threat to our military who's using it overseas um. 0:15:38.800 --> 0:15:40.560 The company has said this week that they're meeting with 0:15:40.600 --> 0:15:44.400 that team. They will also continue this process working with Syphius, 0:15:44.400 --> 0:15:47.560 that national security arm of US government, to try to 0:15:48.240 --> 0:15:50.760 wall off this information in a way that they feel 0:15:50.800 --> 0:15:53.200 comfortable with. I would guess what they're trying to do 0:15:53.400 --> 0:15:55.840 is head off any large buzz like we saw a 0:15:55.880 --> 0:15:58.680 couple of years ago, with folks like President Trump at 0:15:58.680 --> 0:16:01.400 the time saying we need to get rid of TikTok 0:16:01.600 --> 0:16:04.440 because it is a national security threat. Um. But I 0:16:04.480 --> 0:16:07.880 would expect that kind of volleying to continue between lawmakers, 0:16:07.880 --> 0:16:12.520 folks like the SEC, and TikTok. All right, Bloomberg's Alex Barnka, 0:16:12.640 --> 0:16:15.920 thank you for breaking all that down. Coming up New 0:16:16.000 --> 0:16:18.800 York's prospects as a tech hub, just take a bit 0:16:18.800 --> 0:16:37.440 of a we will explain next. This is Bloomberg Now 0:16:37.520 --> 0:16:40.680 to an exclusive. Sources tell Bloomberg that Meta and Amazon 0:16:40.720 --> 0:16:43.280 are cutting back on plans to boost their office presence. 0:16:43.320 --> 0:16:46.640 In order to cut costs, both companies are backing out 0:16:46.640 --> 0:16:49.200 of expansions in New York that could have brought hundreds 0:16:49.200 --> 0:16:52.360 of millions of dollars to the city's economy. Bloombergs Natalie 0:16:52.400 --> 0:16:56.040 Wong broke this story. Natalie, what do we know? Thanks 0:16:56.080 --> 0:16:58.480 for having me. So we reported today that Meta and 0:16:58.560 --> 0:17:02.280 Amazon have pulled back on their expansion plans for offices 0:17:02.280 --> 0:17:04.960 in New York City. Meta had planned to take over 0:17:05.160 --> 0:17:08.399 roughly three hundred thousand square feet of new offices in 0:17:08.440 --> 0:17:10.760 a building near Astor Place, and that would have been 0:17:10.760 --> 0:17:13.320 a big expansion. It's no longer doing that, according to 0:17:13.359 --> 0:17:16.680 our sources. Amazon was also in talks to expand in 0:17:16.720 --> 0:17:19.479 a JP Morgan subly space, taking over a roughly four 0:17:19.560 --> 0:17:22.840 hundred thousand square feet, and they're also cutting back on 0:17:22.920 --> 0:17:25.000 the amount of script they're looking to take. So it 0:17:25.080 --> 0:17:28.360 really shows a sort of ca caution on these tech 0:17:28.400 --> 0:17:30.840 firms parts in terms of looking at how much office 0:17:30.840 --> 0:17:33.800 space they really need in this current market condition. So 0:17:33.840 --> 0:17:36.800 how big a blow is this to New York's ambitions 0:17:36.840 --> 0:17:40.600 to become a bigger tech hub. It's a pretty big 0:17:40.640 --> 0:17:43.919 blow just because New York has already been struggling with 0:17:44.000 --> 0:17:47.439 a major office split. UM, and it's just slowly started 0:17:47.480 --> 0:17:49.600 to come back in terms of office leasing in the 0:17:49.640 --> 0:17:52.320 past two years. The firms that were really driving us 0:17:52.359 --> 0:17:54.280 for the big tech firms that seem to have instatiable 0:17:54.320 --> 0:17:57.600 appetite force bace like Facebook, like Amazon. So the fact 0:17:57.600 --> 0:18:01.359 that even these firms are pressing pause on growth, you know, 0:18:01.440 --> 0:18:04.320 that's likely going to trickle out across smaller tech firms, 0:18:04.440 --> 0:18:07.240 their crypto firms, and other financial industry firms as well. 0:18:09.160 --> 0:18:13.240 Is this happening elsewhere across the country. This is happening 0:18:13.280 --> 0:18:16.240 elsewhere across the country. You know, we've reported that Amazon 0:18:16.400 --> 0:18:19.399 has cut back on other real estate needs in terms 0:18:19.440 --> 0:18:22.680 of planned warehouses for sites that they just built for 0:18:22.920 --> 0:18:26.200 just purchased several months ago. You know, they've pressed pause 0:18:26.240 --> 0:18:29.360 on those sides. They've expanded too quickly. UM construction as 0:18:29.359 --> 0:18:32.320 halting on other sides across the country, and office markets 0:18:32.320 --> 0:18:35.439 in many places like San Francisco, Seattle, Los Angeles have 0:18:35.520 --> 0:18:38.720 already been struggling to come back because tech firms especially 0:18:38.840 --> 0:18:41.120 have been slower to bring back their workers. So now 0:18:41.119 --> 0:18:44.000 you have a double whammy of a companies see that 0:18:44.040 --> 0:18:45.840 remote work is here to stay and they have to 0:18:45.920 --> 0:18:49.280 juggle how much space they need versus how many workers 0:18:49.320 --> 0:18:51.520 are actually gonna return, and then they also have to 0:18:51.680 --> 0:18:54.840 figure out, you know, how much costs they have to 0:18:55.359 --> 0:18:57.919 cut in terms of this slow down with their growth, 0:18:57.960 --> 0:19:01.479 with the economy and fears about it central recession. All right, 0:19:01.720 --> 0:19:04.719 Natalie Long, thank you for your reporting on this. We 0:19:04.760 --> 0:19:16.640 will keep following. Welcome back to Bloomberg Technology. We've got 0:19:16.640 --> 0:19:19.920 some breaking news. Elon Musk has responded to Twitter's request 0:19:19.960 --> 0:19:23.760 to expedite the trial, which of course had judged today granted, 0:19:23.800 --> 0:19:27.520 setting a date to start for Tuesday. Musk now saying 0:19:27.640 --> 0:19:30.880 he wants that move to February or later. Of course, 0:19:30.920 --> 0:19:34.840 Twitter wants the trial to start in September, Musk saying 0:19:34.880 --> 0:19:37.800 that Twitter dragged its feet on the deal is and 0:19:37.960 --> 0:19:41.359 is now rushing this trial for a little bit more 0:19:41.359 --> 0:19:43.560 of a breakdown. I want to bring back a leadlow 0:19:43.800 --> 0:19:46.920 and not surprising that Elon Musk wouldn't want to rush 0:19:46.960 --> 0:19:49.480 to court on Tuesday. Yeah, yeah, not surprising at all. 0:19:49.560 --> 0:19:51.679 I mean, and most of the lawyers the Bloomberg spoken 0:19:51.720 --> 0:19:54.640 to you felt that Twitter had a good case too 0:19:55.440 --> 0:19:57.399 hold Moss to account to the original terms of the 0:19:57.440 --> 0:20:02.200 deal cents a share. The hearing is set for next Tuesday, 0:20:02.240 --> 0:20:04.919 the initial hearing. The expectation is that this will be 0:20:04.920 --> 0:20:08.920 a protracted legal proceeding anyway. But as you say, Musk 0:20:09.080 --> 0:20:12.320 is accusing Twitter of having dragged its feet over the 0:20:12.400 --> 0:20:15.879 negotiation of the deal and now rushing to court. Remember, 0:20:15.920 --> 0:20:19.160 the sticking point for him is and what he will 0:20:19.280 --> 0:20:24.240 argue is that Twitter was not forthcoming in the timing 0:20:24.520 --> 0:20:27.639 frequency or what they shared on the issue of bots 0:20:27.680 --> 0:20:29.960 on the platform. And he's going to argue that that 0:20:30.080 --> 0:20:33.480 was equal to material adverse effect, thus changing the value 0:20:33.480 --> 0:20:36.159 of the deal, thus voiding it. Well, and we were 0:20:36.200 --> 0:20:39.440 speaking with the professor from the University of Pennsylvania Law 0:20:39.480 --> 0:20:42.800 School earlier who said, not surprising that the judge granted 0:20:42.840 --> 0:20:46.960 this request for a Tuesday hearing. What's going to happen 0:20:46.960 --> 0:20:51.280 on Tuesday will be more surprising. He suggested this trial 0:20:51.359 --> 0:20:55.080 could be wrapped up by the fall exactly. And the 0:20:55.119 --> 0:20:58.679 thing is that, you know, it's hard to judge judge 0:20:58.680 --> 0:21:01.320 pun the pun how this will oh because there's very 0:21:01.320 --> 0:21:06.639 little past precedent in holding an offer maker an acquirer 0:21:06.720 --> 0:21:08.800 to account. But also there's not a lot of past 0:21:08.840 --> 0:21:12.280 precedent around the material adverse effects. What's fascinating, of course, 0:21:12.320 --> 0:21:17.159 is that Twitter has earnings next Friday before market, you know, 0:21:17.160 --> 0:21:20.240 while this is all going on, and earnings is happening, 0:21:20.240 --> 0:21:22.560 so you know, hard pivot. Let's talk about what's happening 0:21:22.600 --> 0:21:25.479 in a while, because because it's just so much right 0:21:25.640 --> 0:21:28.400 to take on board that Twitter reports Fridays, they said, 0:21:28.480 --> 0:21:32.560 we start Monday or Tuesday rather with with Netflix, Tesla Snap. 0:21:33.320 --> 0:21:35.159 What these many of them have in common is that 0:21:35.200 --> 0:21:37.639 they have actually revised guidance the year right. Tester had 0:21:37.680 --> 0:21:41.119 a very difficult quarter where the Shanghai plant was shut down. 0:21:41.320 --> 0:21:43.800 You see how tired I am. This Friday will bring 0:21:43.880 --> 0:21:45.480 up the next poor business director, and look at the 0:21:45.480 --> 0:21:47.880 following week, because we're bracing not just for next week 0:21:48.200 --> 0:21:51.159 but the week after that. Look at the number of 0:21:51.280 --> 0:21:53.760 companies reporting in the space of just a few days, 0:21:53.760 --> 0:21:56.399 the mega cap that's around them very quickly, and we 0:21:56.480 --> 0:21:58.800 make a really interesting point as we look at what 0:21:58.880 --> 0:22:01.919 the kind of expectation is for this earnings period. The 0:22:02.000 --> 0:22:06.879 expectation is sales growth, right, top line growth. Part of 0:22:06.880 --> 0:22:09.000 that is boosted by inflation. Part of that is that 0:22:09.040 --> 0:22:12.600 the consumer is kind of held up strongly and that's 0:22:12.640 --> 0:22:15.359 kind of where we're looking. Sales growth is looking pretty 0:22:15.400 --> 0:22:17.639 good other than for the alphabet parent company of Google. 0:22:18.119 --> 0:22:20.480 But if you look at the earnings estimates, the profit 0:22:20.600 --> 0:22:24.159 that's expected, those earnings expectations have come down. Why you 0:22:24.200 --> 0:22:27.720 have inflation, you have things eating into margins, higher input costs, 0:22:27.760 --> 0:22:30.879 labor costs. So this is it. Now we're super focused 0:22:30.920 --> 0:22:33.239 on what the world looks like, and hopefully in the 0:22:33.240 --> 0:22:35.639 next two weeks some companies and some of their CEOs 0:22:35.680 --> 0:22:37.040 are going to give us a good explanation of what 0:22:37.080 --> 0:22:40.720 it's look at those beautiful graphics. Add thank you very much, 0:22:40.800 --> 0:22:43.080 appreciate you walking through all of that for us. I 0:22:43.080 --> 0:22:45.280 want to get a little more in depth now on 0:22:45.440 --> 0:22:47.399 the earnings and what we can expect with Bambahara and 0:22:47.440 --> 0:22:52.439 principal analyst and CEO at Creative Strategies, Ben Gosh, what 0:22:52.480 --> 0:22:54.320 are you expecting? Where are you expecting to see the 0:22:54.320 --> 0:22:58.040 most pain? Let's start there. Yeah, so I am a 0:22:58.080 --> 0:23:01.960