Speaker 1: From the heart of where innovation, money and power. CALLI
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Caroline Hide in New York game for
Speaker 1: Emily Chang and this is Bloomberg Technology coming up in
Speaker 1: the next hour. The sell off and continues across the board.
Speaker 1: Tech is in the crosshairs. Is fears Lingo over the
Speaker 1: fensibility to tackle inflation. Then as that one well now
Speaker 1: down in the last three training days plus Crypto not
Speaker 1: spared in this sell off. Bitcoin slipping down below thirty two,
Speaker 1: down more than from its all time high. My conversation
Speaker 1: with Galaxy Digitals Michael Novegratz about where he thinks the
Speaker 1: bottom might be, and look out below how the slide
Speaker 1: inequities is affecting the once hot I p O market.
Speaker 1: Will talk to one textio who says, with the traditional
Speaker 1: IPO press, it's actually a scam kicking things off. Victoria Green,
Speaker 1: she's a chief investment officer. I'm fanning partner over at
Speaker 1: g squad. Victoria perfect to have your voice, because what
Speaker 1: do you make of whether we're going to see capitulation
Speaker 1: in the market sometime soon, whether the correlations are all
Speaker 1: sort of working against the tech investor right now. I
Speaker 1: don't think it's going to capitulate yet. You know the
Speaker 1: number one invested adage right now, if don't fight the FED,
Speaker 1: and I think the FED is going up, they're gonna hike,
Speaker 1: They're gonna tighten. And that's a little bit tough on
Speaker 1: on tech and growth right now. And honestly, and not
Speaker 1: all stocks are created equal. Right now, I'm kind of
Speaker 1: staying out with the new and in with the old.
Speaker 1: Are of the new stuff, the pandemic darlings that are
Speaker 1: now pandemic duds are not really performing the same as
Speaker 1: some of the old tech. You look at your IBM,
Speaker 1: your Cisco, your broad cooms and and and more of
Speaker 1: the value text. So right now, we really do think
Speaker 1: you want to be owning companies that are giving you
Speaker 1: the earnings now, that have a sustainable path forward on
Speaker 1: how they're going to grow their earning, not just on
Speaker 1: a wing in a prayer and what they hope will happen.
Speaker 1: And so I think you see a lot of these
Speaker 1: stocks getting punished. I mean, Amazon down thirty three percent
Speaker 1: since the end of March, and that company obviously prints
Speaker 1: billions upon billions of cash. But I think investors are
Speaker 1: looking where are we going to find growths? How are
Speaker 1: you going to grow your earnings? Why is Microsoft off
Speaker 1: one of the four percent? People questioning the growth of
Speaker 1: that sort of a business as well? Or is this
Speaker 1: the sort of at the moment everything the baby goes
Speaker 1: out with a baffof it's a following tide following all boats.
Speaker 1: You know, that's a horrible way of putting it. But
Speaker 1: at baby and bathwater. Absolutely there's nowhere to hide right now.
Speaker 1: If you're looking for green on the screen, it is
Speaker 1: very minimal, especially in the tech sector. I don't think
Speaker 1: there's anything wrong with earning Microsoft. They had great earning
Speaker 1: uh and obviously they've got a good potential, but I
Speaker 1: think they're getting dragged down with everyone else. You're seeing
Speaker 1: this correlation with with bitcoin, with tech stocks, with the
Speaker 1: arc funds, and we actually con termed about the Holy trinity,
Speaker 1: and you're seeing that correlation live up to it. It's
Speaker 1: it's billing right now because you really can't see one
Speaker 1: move without the other one. And you're not seeing bitcoin
Speaker 1: be aheads at all. You're seeing it not in head inflation,
Speaker 1: and you're seeing it more and more developed into a
Speaker 1: tradeable stock type investment that has no earning, so you
Speaker 1: know what it is. I think we're finding out a
Speaker 1: little bit more what it is. When you're chief investment officer,
Speaker 1: are you looking at well, either is this a by
Speaker 1: the dip moment and you know when everyone else is
Speaker 1: fearful be greedy, or is there something that you need
Speaker 1: to see some sort of bottom, some sort of clearing
Speaker 1: of the deck by the Federal Reserve, some sort of
Speaker 1: sign of of peak inflation before you start thinking, Okay,
Speaker 1: now is a safe moment to be allocating cash. Uh,
Speaker 1: we're not quite buyed yet of the tech sector. I
Speaker 1: think it's a little early. I don't think we think
Speaker 1: of situation yet. The sad's not going to rescue us here.
Speaker 1: I think there are some people holding out, some hope
Speaker 1: that maybe they won't be as hawkish because look at
Speaker 1: how bad the markets then. But we're holding tight. We've
Speaker 1: been looking more at value. I think with tech, you
Speaker 1: know there are some selective names. You look at some
Speaker 1: of the semis that have sold off or cybersecurity that
Speaker 1: there are very good companies you're seeing it just it
Speaker 1: doesn't matter who you are, you're going down. I think
Speaker 1: it's early to come in, and if you look at
Speaker 1: the technicals, we're kind of in the middle ground right now,
Speaker 1: and and I think that means there's more to ball.
Speaker 1: There's nothing to rescue us really soon. What is the
Speaker 1: sign of capitulation for you, Victoria, I mean, I think
Speaker 1: we need a Billy show nine percent down there. I
Speaker 1: think we need to sign some support and some putting
Speaker 1: on the technical side. And I think, obviously, you know,
Speaker 1: have we reached Pete Pocket said, I don't think so.
Speaker 1: I think they're going to run off their balance sheet.
Speaker 1: So I think maybe this summer we can see it
Speaker 1: move around. You know, I don't see us avoiding a second.
Speaker 1: So I'm not moving very fast right now because I
Speaker 1: see a little bit more pain in the cards, especially
Speaker 1: for the sector. Meanwhile, forty five pm New York time,
Speaker 1: it was announced by Grinder that it is going to
Speaker 1: go public through a Tiger's back at two point one
Speaker 1: billions on evaluation. I mean, I've seen headline after headline,
Speaker 1: Bank of America, Goldman City, all these banks backing away
Speaker 1: from being exposed to special purpose acquisition companies. They're worried
Speaker 1: about the regulation effect right about being in some way
Speaker 1: affected by it, do this companies still coming to the market.
Speaker 1: Do you see still spacks but purchasing companies. I think
Speaker 1: stacks work when they have a target in mind and
Speaker 1: they can acquire it. You know, it's just kind of
Speaker 1: a backdoor I p O. I think what they're trying
Speaker 1: to limit is a spack raising capital on hopes and
Speaker 1: dreams and not really having a set target. And you
Speaker 1: saw a lot of SPACs fail and the banks got rich,
Speaker 1: the sponsors got rich, and the underlying clients tended to
Speaker 1: not do well. So obviously the SEC stepping in uh
Speaker 1: really made people back off the similar to other I
Speaker 1: p O s, I think the fact is not going
Speaker 1: to be dead, but I think it's going to go
Speaker 1: back to doing what it was supposed to do, which
Speaker 1: was kind of bring a company to market with a
Speaker 1: little bit of a backdoor. But then it became open
Speaker 1: season and everybody was just raising all this money to
Speaker 1: eventually go buy something, and there aren't enough targets, and
Speaker 1: you saw multiple SPACs fail, and you know you have
Speaker 1: to wonder. Obviously, with Bumble and everything else, this is
Speaker 1: a crowded space. But the Grinder has put a pretty
Speaker 1: decent niche in their market, and it is a is
Speaker 1: a viable product. Um. I think they're really targeting the
Speaker 1: facts that that didn't really have a target, and investors
Speaker 1: really got hurt by putting the money with This person
Speaker 1: knows what they're doing. They're going to be able to
Speaker 1: find this company for me and then eventually not finding
Speaker 1: what they wanted. There's a global element to this, of course, Yes,
Speaker 1: we're very fearful of the FED of inflation of very
Speaker 1: close to home things, but of course this is also
Speaker 1: the perfect year political storm. This is an inflationary pressure
Speaker 1: that is worldwide. This is also a story of slowdown,
Speaker 1: particularly in China. How much you're looking at those global
Speaker 1: effects from that at the moment, Victoria, are you very
Speaker 1: much focused on what's affecting the US economy? Well, I
Speaker 1: mean the supply chain issue in China is going to
Speaker 1: affect us greatly. You know, we we barely got out
Speaker 1: of COVID and we kind of ductap together this recovery.
Speaker 1: We weren't really on that pilt of a footing, even
Speaker 1: though the market had this tremendous rally off that mark,
Speaker 1: and then we look around and you see what's happening
Speaker 1: in Shanghai. The zero COVID policies in China and the
Speaker 1: supply chain back up. We're still very vulnerable to that
Speaker 1: supply chain back up, you know, moving a factory and
Speaker 1: actually shoring up your supply chain from maybe we have
Speaker 1: some other options and people are sitting on some more inventory.
Speaker 1: It's not easy to build. You can't build a factory
Speaker 1: and get it going in a year. So our supply
Speaker 1: chains better. No, you have pressure coming from the war
Speaker 1: in Ukraine. You're cutting rushed out of the market. You
Speaker 1: have China shutting down, Shanghai shutting down. You see all
Speaker 1: of those chips backed up at the Shanghai port, very
Speaker 1: revenuscent of what was happening outside of the port of
Speaker 1: l A and you're already putting pressure on on what
Speaker 1: wasn't really a great supply chain to begin with. So
Speaker 1: the world is getting smaller. And when the world gets smaller,
Speaker 1: you know we cut out Russia. China's shutting down a
Speaker 1: little bit. How are you going to find your growth
Speaker 1: right now? If you have less trading partners and you're
Speaker 1: paying more. So I think there's a lot of pain
Speaker 1: still to be had. I'm not uber bear. I think
Speaker 1: we can find footing. I don't think this is an
Speaker 1: o A, but I think you need to be very
Speaker 1: aware of what you own right now and how how
Speaker 1: at risk you are to your earnings holding up. Are
Speaker 1: they sustainable? You know? And then you look at a
Speaker 1: Netflix and realize that, hey, some of these these high
Speaker 1: fire megacaps. You know, it takes one or two bad
Speaker 1: earnings for Booker a Netflix and suddenly they lose value.
Speaker 1: Victoria Green can talk all afternoon to you. Thank you
Speaker 1: so much, Chief investment officer for g squared. Fascinating discussion,
Speaker 1: of course, coming from what is a boutique independent advisory
Speaker 1: fun Meanwhile, coming up more on the text sell off
Speaker 1: what that means for the I p O landscape. We're
Speaker 1: just talking about it with Victoria. We'll discuss all this
Speaker 1: and more with mobile analytics company Amplitude as net. This
Speaker 1: is a bloomberg. We're seeing the end of a long
Speaker 1: era of free money that our economy, in the global
Speaker 1: economy has been in, you know, going back all the
Speaker 1: way to September eleven. Well, it's a bit of a
Speaker 1: blood bath out there. So companies that were already in
Speaker 1: the ip O window hoping to go public this year,
Speaker 1: that window is shut late stage growth companies are pulling back.
Speaker 1: Early stage companies are not getting rounds done. I mean,
Speaker 1: there's a real venture chill afoot. Unfortunately, it's certainly a
Speaker 1: tough market out there, as you acknowledge. But you know,
Speaker 1: at the same time at DoorDash, we're focused on the fundermentals,
Speaker 1: and the fundomentals for doordesh are incredibly strong. You know,
Speaker 1: we're not happy about obviously what's been happening with tech
Speaker 1: stocks or our stock, but at the same time, you know,
Speaker 1: new world that we're entering, and I just think about
Speaker 1: the fundamental value proposition that Toyot provides, you know, to
Speaker 1: our customers. You know, we just keep our eye on
Speaker 1: the ball, which is serving our customers, and I think
Speaker 1: that's what a lot of companies are are probably just
Speaker 1: doing there in this time. A few tech executives there
Speaker 1: that we've been having across the Blue Bow Technology Show
Speaker 1: in the last week or so, reacting to the tech
Speaker 1: sell off. We want to talk to another CEO, Amplitudes.
Speaker 1: Spencer Skates is with us company joined the public market
Speaker 1: and or a direct listing less than a year ago
Speaker 1: back in September, and you go to the Heady Heights
Speaker 1: of about a ten billion dollar market cap and and
Speaker 1: I'm afraid it's a lot less than that now, Spencer,
Speaker 1: And of course, I'm sure you're gonna say, look, I
Speaker 1: on the prize, keep focused on the business, But what
Speaker 1: do you do when your investors must be a little
Speaker 1: shell shopped? Yeah, and again, I think we delivered a
Speaker 1: phenomenal Q one result on our last earnings call. We're
Speaker 1: really excited about being out in the public markets. One
Speaker 1: of the number one things I had to emphasize with
Speaker 1: the team is that short term market volatility is just
Speaker 1: not in your control. You can still deliver everything you
Speaker 1: commit to as a company. You can grow the business.
Speaker 1: We had one of our most phenomenal growth years last year,
Speaker 1: being up sixty every year, and you can still get
Speaker 1: hit in the public markets because of things outside of
Speaker 1: your control. And so we're seeing that happened very broadly
Speaker 1: across the sector. You know, even companies that meet or
Speaker 1: exceed earnings expectations get hit um and so it really
Speaker 1: tests what c e O s and what teams are
Speaker 1: in it for the long term versus short. Yeah, well
Speaker 1: said on that, and I'm interested is to how you
Speaker 1: make sure that your talent remains in the long term,
Speaker 1: because when you've had an exit moment, when you've of
Speaker 1: course people got a lot of money exposed to the
Speaker 1: share price. Now, how do you ensure that people remain
Speaker 1: as focused on the long term as you are. Well,
Speaker 1: we actually brought the entire company through a whole exercise
Speaker 1: where we actually pretended we were a public before we
Speaker 1: went out into the markets, where we simulated a stock
Speaker 1: price for the company, and we hadn't go way up,
Speaker 1: and then we had to go way down, um, and
Speaker 1: then we had to come back to the middle. And
Speaker 1: the key thing for everyone to understand and take away
Speaker 1: was that even if they delivered the results, even if
Speaker 1: they achieved their goals, even if they were successful as
Speaker 1: a company, that the stock price could have tremendous volatility.
Speaker 1: And so the only thing that we could control was
Speaker 1: whether we hit our goals, whether we ship products, whether
Speaker 1: we make customers happy, um. And to stay focused on that,
Speaker 1: and if you stay focused on that, that will result
Speaker 1: in success in the long term. Some of the best
Speaker 1: tech companies got started during down terms and recessions. Sales
Speaker 1: Force started in the early two thousand's, uh, you know,
Speaker 1: face books started around then as well. Lots of great
Speaker 1: companies like Airbnb started during the financial crisis in two
Speaker 1: thousand and eight UM and so it's really now is
Speaker 1: that is one of the best times to build and
Speaker 1: grow a large tech company. And so this is where
Speaker 1: you see a lot of noise being removed from the market,
Speaker 1: where companies who are not as good will have to
Speaker 1: go through layoffs, will have to kind of pull back
Speaker 1: their investments as money isn't available and as free as
Speaker 1: it is now as it was in the past. And
Speaker 1: it's really for those who have robust, durable businesses that
Speaker 1: will be able to weather the next few years. And
Speaker 1: so that's something that we've always done very well here
Speaker 1: at Amplitude. And the robustness of your business is also
Speaker 1: put determined by the demand and by companies willing to
Speaker 1: spend on products such as ourselves. Do you feel like
Speaker 1: the sentiment is there, that the confidence is there for
Speaker 1: people to be buying Amplitude services. Oh yeah, we had,
Speaker 1: you know, That's why we were very proud of the
Speaker 1: Q one results that we had. We had a lot
Speaker 1: of great companies decided to either come on to Amplitude
Speaker 1: for the first time, companies like Barnes and Noble or
Speaker 1: brain Security. We had a lot of companies expand on
Speaker 1: us in a big way. PayPal was a big uh
Speaker 1: as a big expansion growth this quarter. We had Square,
Speaker 1: we had Okay, Cupid, we had IBM, we had the
Speaker 1: weather channels. So tons and tons of companies out there
Speaker 1: really willing to make investments with Amplitude, and that goes
Speaker 1: back to the rising power of the product organization. So
Speaker 1: you know what we do here at Amplitude is we
Speaker 1: help companies build data driven products UM. And so what
Speaker 1: Adobe is for marketing and salesforces, for sales team, Amplitude
Speaker 1: is for product teams and so all the same megatrends
Speaker 1: around people driving growth through products. So product like growth,
Speaker 1: people needing data DRIM products UM, digital optimization being the
Speaker 1: next wave after digital transformation, all of those data points
Speaker 1: are still very much ringing, ringing true today. Okay, And
Speaker 1: do you have what is it that continues to perhaps
Speaker 1: be a limitation to you? Of course? Does it? Is
Speaker 1: it talent? I feel that everyone's talking about how facely
Speaker 1: everyone is fighting for at the moment, how having to
Speaker 1: pay up for the information rey pressures. That is that
Speaker 1: something you feel confident in a way you currently stand spensive. Yeah,
Speaker 1: you know, talent is always a challenge for every company
Speaker 1: and it's no different here at Amplitude. And that's honestly
Speaker 1: my number one concern before we went out into the
Speaker 1: public markets. People ask me, hey, what do you think
Speaker 1: the biggest risk to Amplitude is UM and I kept
Speaker 1: going back to talent and our ability to make them successful.
Speaker 1: Here in Amplitude. We're really confident UM in the market
Speaker 1: opportunity here, you know, thirty seven billion dollars of total
Speaker 1: adjustable market for what we do. We're really confident and
Speaker 1: that we have a best in class product. We had
Speaker 1: a number of awards that continue to come out about
Speaker 1: cementing Amplitude as the number one product analytics platform in
Speaker 1: the space UM. And so it really comes down to
Speaker 1: our ability to execute on that and that's that's the
Speaker 1: talent Now. I think in the sessiony environment, you know,
Speaker 1: a lot of ways, talent becomes cheaper and more accessible
Speaker 1: because there's less opportunities out there. So it's a it's
Speaker 1: a really great opportunity for us and to go play offense.
Speaker 1: We have this really strong balance sheet here at Amplitude,
Speaker 1: and you know, we are continuing to make investments in
Speaker 1: talent across the board, Spencer, Skates, Applitude CEO Mata. Of course,
Speaker 1: parent company of Facebook, is opening its first physical store
Speaker 1: and it's a brick and mortar bed on the metaverse
Speaker 1: Matter hopes giving consumers chance to try out the VR,
Speaker 1: the a R hardware, while the little boost interest in
Speaker 1: the future of digital interactions. Companies had a meta store.
Speaker 1: That's Martin Gilliad spoke to take a listen. What we
Speaker 1: learned from this store will definitely go into how we
Speaker 1: build the product and where we actually continue to sell it.
Speaker 1: Why Burling Game and not San Francisco or New York
Speaker 1: City or London. Yeah, this great question. So Burling Game
Speaker 1: is the headquarters of Reality ants, and we felt that
Speaker 1: it was important to have the customer experience that we're
Speaker 1: creating very closely. Where we're creating a product. We want
Speaker 1: that to be senator to how we continue to build
Speaker 1: innovation in the future, and so this felt like the
Speaker 1: perfect place to put our very first experience. I've been
Speaker 1: in a few different situations where you see a product
Speaker 1: in pop up format, right, you're in a mall, you're
Speaker 1: walking perhaps in some kind of outlets area. Could you
Speaker 1: guys look at pop ups maybe you know, doing temporary
Speaker 1: pop ups in different cities around the world. Well, I
Speaker 1: think what we will learn from this experience is where
Speaker 1: we should be in the kind of experiences we should create.
Speaker 1: A lot of the experiences that we've built in Browning
Speaker 1: Game Store are unique. It's the first time some of
Speaker 1: these have actually existed anywhere. And I'm sure as you
Speaker 1: saw from our our quest to a demo UM, and
Speaker 1: as we learn more, we'll decide where and how those
Speaker 1: who show up around the world. Is this a luxury experience?
Speaker 1: Do you want it to be a luxury experience? We
Speaker 1: actually wanted to be an approachable experience. We want people
Speaker 1: to feel comfortable asking questions. We've built it so that
Speaker 1: people can pick up the products and they can test
Speaker 1: it out, and we have these great associates so you
Speaker 1: can ask questions, UM, and it can be so much
Speaker 1: more um than what people read about. This one of
Speaker 1: those things where you have to experience. And that's what
Speaker 1: stores built around. Told me what it's like going into
Speaker 1: the stool, What am I going to touch? Feel? Experience?
Speaker 1: While I'm that Yeah, so there's a couple of things. Um. Obviously,
Speaker 1: we have our products here around our reband stories where
Speaker 1: you can try glasses on that offer the ability to
Speaker 1: take pictures and video, which I personally appreciated having intended
Speaker 1: a wedding last week where I was able to actually
Speaker 1: be at the wedding while I was actually sharing it
Speaker 1: with other people. We have portal which actually I'm speaking
Speaker 1: to you on today, UM, that allows you to have
Speaker 1: these conversations not just for work, but even with family.
Speaker 1: And I think about the pandemic when my my son
Speaker 1: had an opportunity to reach stories to his grandmother every night,
Speaker 1: which was amazing. And then obviously, UM, probably the most
Speaker 1: exciting thing that people say when they walk into store
Speaker 1: is a mixed reality screen with Quest two that allows
Speaker 1: them to actually not just try the product, but allow
Speaker 1: everyone who's with them to see how they are experiencing
Speaker 1: the game as well. And that experience allows it to
Speaker 1: be and one that is shared with many, even though
Speaker 1: it's experienced by a few. Martin, are you open to
Speaker 1: the idea that the store experiment might not work the
Speaker 1: actually the best way for Meta to grow its hardware
Speaker 1: reach virtual reality reach is online. Well, the store is
Speaker 1: not an experiment, it is it is a continued investment
Speaker 1: from us to make sure that we can get um
Speaker 1: feedback from our consumers, but also an opportunity for us
Speaker 1: to keep building and make sure the seas at the
Speaker 1: center of what people are experiencing with our hardware. And
Speaker 1: you're the head of Meta Store, so I'll ask you
Speaker 1: again you want to open some more stores and where
Speaker 1: I think as we learn more about how people are
Speaker 1: experiencing this will will be able to communicate with that
Speaker 1: means later. Right now, we're focused on what we are
Speaker 1: creating and growing gaming the experiences that people will have here.
Speaker 1: Martin gilliad that of course hand a Meta Store talking
Speaker 1: to our own ed Ludlow. Welcome back to Bluemberg Technology.
Speaker 1: I'm Caroline Hyde in New York. Let's get back to
Speaker 1: the markets, because well we've all been so focused on
Speaker 1: it for the day, for the last three days, and
Speaker 1: of course the shares a ribban I want to watch.
Speaker 1: The ev maker saw its biggest drop on record after
Speaker 1: a lock up on its shares expired on Sunday night.
Speaker 1: Ed Ludlow is here with the details. Remind us what
Speaker 1: what happened with the lock up expiry. This of course
Speaker 1: didn't go too well for Rivian Right. So, Ribban had
Speaker 1: this huge ip O in November, and as is often
Speaker 1: the case when they have an I p O, some
Speaker 1: of the biggest investors and insiders and employees are restricted
Speaker 1: in what they can do with their shares. Initially, the
Speaker 1: lock up on Sunday night basically meant that seven hundred
Speaker 1: and twenty million shares of Ribban suddenly became available for
Speaker 1: public trading. They could be sold, and we had news
Speaker 1: reports over the weekend that Ford, which is one of
Speaker 1: the biggest Ribbean investors, had sold a block of eight
Speaker 1: million shares at a discount from Friday's close, and it's
Speaker 1: it's just not good for sentiment. You know, when one
Speaker 1: of your biggest shareholder does trade when the lock up lifts,
Speaker 1: it kind of sends jitters throughout the market. And you
Speaker 1: look at how Rivian shares have performed since that post
Speaker 1: i p O peak, where they were at hundred and
Speaker 1: seventy two dollars a share. We're now down below twenty
Speaker 1: five dollars a share, the stocks fall at seven percent,
Speaker 1: and all things considered, when we come to lock ops
Speaker 1: it it went as badly as it possibly could have
Speaker 1: gone badly as possibly could have gone. Meanwhile, of course
Speaker 1: there is one person or andy, one investor that's not selling, right. Yeah,
Speaker 1: So Abdulla Teacher Meil is a big Saudi family conglomerate.
Speaker 1: They are the third biggest shareholder in Rivian, behind tro Price,
Speaker 1: a big name on Wall Street of course, and Amazon,
Speaker 1: which is another big investor in customer Ribban. And they
Speaker 1: told me we have no intention to sell down our
Speaker 1: stake to sell the shares, and they gave a very
Speaker 1: public backing of Rivian's management. But we didn't have the
Speaker 1: same explicit backing from Amazon. For example, Amazon said they
Speaker 1: were committed to working with Rivian, but they didn't comment
Speaker 1: on a rule out selling the shares at a later date,
Speaker 1: And so there's a lot psychology around this. What's really
Speaker 1: interesting though is throughout the day Monday, there's lots of
Speaker 1: data suggest retail investors are now looking at ribbyan right,
Speaker 1: it's cheaper option. They were oversubscribed in the I p O,
Speaker 1: A lot of retail investors missed out, so there could
Speaker 1: be some upward trajectory from here. But it was just
Speaker 1: a really rough day, biggest drop on record, rough day
Speaker 1: for Ribban, rough day for many ed We thank you
Speaker 1: so much. Let's talk about more of that roughness shall
Speaker 1: we call it, and the text sell off happening right here,
Speaker 1: right now? What does it mean in the public markets?
Speaker 1: What does that spin over affect to the private markets?
Speaker 1: Want to bring in Race Capital partner Edith Young for
Speaker 1: more on this. Of course, early stage Silicon Valley venture
Speaker 1: capital funds so not unaware of what's happening in the
Speaker 1: public markets and the and the race to enter those
Speaker 1: public markets. What do you make of currently let's talk
Speaker 1: stocks first. How much are we seeing this ripple effect
Speaker 1: affecting valuations in the private markets and people's desire to
Speaker 1: build right here right now? Yeah, I think, as Caroline
Speaker 1: as an investor that really focused on early stage infrastructure software,
Speaker 1: the market is brutal and it's certainly will impact a
Speaker 1: lot of evaluation in the private market. Um But having
Speaker 1: said that, I think the particular in the world of
Speaker 1: Web three and Web two infrastructure software just there's still
Speaker 1: so much more to be built, um Like for us
Speaker 1: particular at the early stage, I think valuation is not
Speaker 1: particular impact us yet. But at the same time, I'm
Speaker 1: still really really bullish on some of the companies that
Speaker 1: we invested in, Still you know, Salana. Obviously a little
Speaker 1: bit more on the crypto side. Ft X is a
Speaker 1: little bit you still private I'm so bullish on while
Speaker 1: they're building, but early stage is still missing a lot
Speaker 1: of building block. So I'm excited about Bundler, which is
Speaker 1: sort of storage for Web three, notified, which is like
Speaker 1: communication of Web three. There's still so much more to
Speaker 1: be built, but we need to just hang tight um
Speaker 1: and not get too scared with what's going on. Okay,
Speaker 1: let's talk about the crypto market, because you mentioned to
Speaker 1: companies very exposed basing themselves on one three in the future.
Speaker 1: Thereof when you see the biggest cryptocurrency, Bitcoin getting hammered
Speaker 1: so much, when you see the spillover effects of a
Speaker 1: VC money that's been placed into these sorts of businesses
Speaker 1: and and now a pullback and perhaps that sort of
Speaker 1: risk tolerance. Does that mean that people are going to
Speaker 1: be worrying about the rest of the crypto space. How
Speaker 1: do how does the spillover effect happen? Well, I think
Speaker 1: crypto and the Web three space is not purely just
Speaker 1: about bitcoin prices or talking prices. It's really about the
Speaker 1: technology sire things in my head. You know, in many
Speaker 1: in many cases, SLANA is basically building the AWS and
Speaker 1: the Web three infrastructure, and not that along that there's
Speaker 1: still back up recovery, communication storage. It's still not there yet.
Speaker 1: I think if we look at the crypto market, if
Speaker 1: you're purely just looking exchanges, obviously it's a little bit crazy.
Speaker 1: But you know, three years ago or even five years ago,
Speaker 1: when I first got into it, bitcoin prices with three
Speaker 1: thousand dollars. Today is still ten x um. And you
Speaker 1: know three three or four years ago, come by market
Speaker 1: ab about four billion, but today is so over I
Speaker 1: think one point three one point five trillion. So in
Speaker 1: that sense, overall market is not going away, but we
Speaker 1: definitely will see some ripple effect of what's going on.
Speaker 1: But I'm so super bullish because there's so much more
Speaker 1: things and the fundamental for the technology, which is not
Speaker 1: about crazy trading, it's about founders often and I think,
Speaker 1: of course when you mentioned Solano, when you mentioned f
Speaker 1: t X thing as Sam Bankman Free SPF have been
Speaker 1: on a podcast of Bloomberg's recently Odd Lots by my Alcohegue,
Speaker 1: Joe's Wisenthal and a healthy dose of cynicism coming from
Speaker 1: SPF when it came to well, what's happening in terms
Speaker 1: of VC money, in terms of far yield farming, in
Speaker 1: terms of you know, what's been built, in terms of
Speaker 1: in terms of I know, the lunars of this world.
Speaker 1: Do you think this is a healthy sort of rebalancing
Speaker 1: in the market that will stop seeing just money, that
Speaker 1: these sort of momentum trades that are happening within crypto. Yeah, Carolina.
Speaker 1: When I spoke with Emily and in December about what's
Speaker 1: going to happen in twenty two, I predicted that, you know,
Speaker 1: crypto prices usually dropped in the beginning of the year,
Speaker 1: and there's certainly half and you know, I think for
Speaker 1: us that with SPF and I'm really really thankful that
Speaker 1: got to invest in f t X pretty much early
Speaker 1: on in I think like the key thing is really about,
Speaker 1: you know, making sure that we do that we don't
Speaker 1: do crazy things. I think, you know, investors is no
Speaker 1: longer just about investing, is really about helping our founders
Speaker 1: to build, to make sure that we're compliance, to make
Speaker 1: sure that you know, operating wise, you know, we're here
Speaker 1: to help them and we for many many um as
Speaker 1: you just talk about Ravan and with the lock up.
Speaker 1: A lot of the investor just sell off right after
Speaker 1: the six months lock up for many many of our companies.
Speaker 1: For Salana, I've been holding since eighteen. I still will hold.
Speaker 1: It's all about being long term and not being a
Speaker 1: short term investor. I mean, at the end of the day,
Speaker 1: I'm not a hedge fund. I'm not here to tray
Speaker 1: and make sure term money. It's really about like long
Speaker 1: term holding, supporting the ecosystem. The ecosystem needs to be
Speaker 1: supported with the regulation as well, and of course FTX
Speaker 1: front and central with the proposal that's going through at
Speaker 1: the moment in terms of you know, the future of
Speaker 1: options or derivatives and and intermediation within that. I was
Speaker 1: suppoke to the new chairman of this a CFTC a
Speaker 1: little bit earlier and how do you feel regulation is
Speaker 1: getting to grips with this new ecosystem. I think I think,
Speaker 1: you know, coming from the White House for for a
Speaker 1: few more. I think too about two or three months ago,
Speaker 1: having the executive order to basically indicated the President Brighten
Speaker 1: really wanted to support, you know, regulate is a good
Speaker 1: sign for the ecosystem long term, and particularly with st X,
Speaker 1: the ft T token is not available for US market.
Speaker 1: I think, you know, they make a really really conscious
Speaker 1: choice to move headquarters to the Bahamas, which I went
Speaker 1: two weeks ago with the fts on front, which is
Speaker 1: amazingly successful and having a very clear line being drawn
Speaker 1: what's being offered to the U S customers versus the
Speaker 1: rest of the world is very, very different. In addition
Speaker 1: to ft X, you know, coin Based, which already gone public,
Speaker 1: is making a huge effort to make sure that we
Speaker 1: all regulate k y C a m L no compliance.
Speaker 1: This is a really really good thing for the crypto
Speaker 1: market long term, and we are raised Capital are here
Speaker 1: to support all these initiatives, Edith. So it's great catching
Speaker 1: up with the Race Capital planner, Edith Young, stay well,
Speaker 1: thank you very much. Indeed, meanwhile, coming up while bitcoins,
Speaker 1: we're just talking about it slumping at a level that
Speaker 1: was last seen in July. We're here from Galaxy Digitals.
Speaker 1: Mike demograds on that very fact as a brim bag
Speaker 1: time for our crypto report now with Bitcoin of courls
Speaker 1: extending losses, even dropping below almost thirty thousand at one
Speaker 1: point on Monday, this is the first time it goes
Speaker 1: a slow since back in July. It's declined from a
Speaker 1: November record high. Crypto contributor Shnani Bassak is hey with
Speaker 1: more brutal setting pressure, brutal, brutal, brutal solid pressure. And
Speaker 1: you take a look over here at Caroline, we've been
Speaker 1: talking about this one year merry go round, the crypto
Speaker 1: investors have really gone through, and Bitcoin being the brunt
Speaker 1: of that, the biggest cryptocurrency here. And you look at
Speaker 1: where we've gone more than ten percent lower over the
Speaker 1: last couple of days, now getting a little bit of
Speaker 1: lift about thirty one thousand. Again. You and I have
Speaker 1: talked to novgrads a little bit earlier today with a
Speaker 1: real worry that they could fall below thirty thousand if
Speaker 1: the NASDAC also continued to decline. That is a low
Speaker 1: that he expects. Listen, but it's not just Bitcoin that
Speaker 1: we want to talk about, although that there is a
Speaker 1: lot of momentum in that downward pressure there you see
Speaker 1: over the last couple of days. Let's talk about a cryptocurrencies,
Speaker 1: even stable coins. A lot of worry that you see
Speaker 1: over there with ust being unpegged to the dollar. I
Speaker 1: want to pull up this tweet from investor Jim Bianco
Speaker 1: of Bianco Research, and the worry that USC down more
Speaker 1: than four percent and under ninety cents at one point,
Speaker 1: the worry that a downward move in a stable coin
Speaker 1: like that can qualify bitcoin backed by bitcoin exactly the
Speaker 1: most important part there is there a more selling that
Speaker 1: needs to be done to peg that stable coin to
Speaker 1: the dollars. So there's a lot of worries here about
Speaker 1: how one asset will correlate to another asset. And let's
Speaker 1: take a listen to here of what Nobs had to
Speaker 1: say about the selling pressure when we were forty thousand
Speaker 1: literally just a week ago. And so the pace of
Speaker 1: this move has been severe, Right, it's correlated with the
Speaker 1: risk off that you're seeing all assets, right, the rise
Speaker 1: of the dollar um. And so I still think thirty
Speaker 1: should hold. Right, We'll see if twelve thousand holds the
Speaker 1: NASDAC and we bounce uh in the next few days.
Speaker 1: Uh that I think you'll see Bitcoin thirty thirty thousand
Speaker 1: will hold. If the Nasdaq falls and we head towards
Speaker 1: eleven thousand, you know there's a shot that thirty thousand goes.
Speaker 1: I would tell you getting away from price, which is
Speaker 1: hard to do it today, when the markets down ten
Speaker 1: percent um, it's really interesting if you just look back
Speaker 1: at all the adoption that's happened this year. I mean
Speaker 1: the first quarter, loan venture funds have put fourteen billion
Speaker 1: dollars into the ecosystem. And so this is a an
Speaker 1: asset class, right blockchain, digital assets, Bitcoin that is getting
Speaker 1: tremendous investment, tremendous interest. And so while the short term
Speaker 1: you know, outlook is painful and it's and it's gonna be,
Speaker 1: like I said, volatable with the rest of assets, has
Speaker 1: the FED adjusts from free money to to normalize conditions, Um,
Speaker 1: my medium term conviction hasn't wavered. I really do still
Speaker 1: see this as a very excit aiding asset class with
Speaker 1: a lot of momentum. And my infracorrelation because I think
Speaker 1: that was the main hope, the prayer this saying that
Speaker 1: was going to these institution investors that have come into
Speaker 1: crypto is that this is a non correlated asset. But
Speaker 1: thus far it's very correlated in a large part, probably
Speaker 1: because more institutional players have come in and they're having
Speaker 1: to sell as they seen the NASCA go down. Listen,
Speaker 1: it had less correlation until there was free money forever. Right.
Speaker 1: The correlation increased dramatically after COVID because every central bank
Speaker 1: took a fire hose of liquidity and sprayed on the tarmac,
Speaker 1: and so it made all assets. You can look at
Speaker 1: the correlation of you know, fine wines or baseball cards
Speaker 1: or any collectible to the NASDAC to assets, and so
Speaker 1: we're unwinding this era of free money, and so it's
Speaker 1: not surprising to me that Bickmin, which was ahead of
Speaker 1: its free money, is selling off. I do think those
Speaker 1: correlations will break down or will lessen the moment we
Speaker 1: find some stability in the market. But right now, if
Speaker 1: your investor, you've got hundred fires to put out, did
Speaker 1: you over commit to venture? Do you have enough liquidity
Speaker 1: to pay your private equity commitments? Oh my goodness. I
Speaker 1: used to be in risk parity and that doesn't seem
Speaker 1: to be working at all anymore. And so very few
Speaker 1: people want to put on new risk in a moment
Speaker 1: of this kind of tumult. And so I think once
Speaker 1: the tumult stops, I think that's a word, tumult um.
Speaker 1: Once the chaos stops, then I think you're going to
Speaker 1: see the allocators who have been doing all their homework. Listen,
Speaker 1: I just went around the country and to a bunch
Speaker 1: of conferences. Is I am wildly convicted that there's infrastructure
Speaker 1: being put in place to bring lots of capital into
Speaker 1: the space. So again it's it's it's surviving this this
Speaker 1: unwigned that investors have to to manage. When you talk
Speaker 1: about the unmined, though, Mike, you seem to be talking
Speaker 1: about a lot of people that maybe just saw the
Speaker 1: opportunity here. These weren't sort of the early adopters, weren't
Speaker 1: necessarily the crypto faithful, if you will, at least not
Speaker 1: in the traditional sense here. For those crypto faithful out
Speaker 1: there here, do they look at this type of market
Speaker 1: and think you add to positions, you buy into this dip,
Speaker 1: or do you just kind of stay the course and
Speaker 1: wait for whatever shakeout is happening to end. Listen, for
Speaker 1: the guys who have been in cryptal a long time,
Speaker 1: longer than me, this is par for the course. Um,
Speaker 1: for most people who manage institutional money or manage lots
Speaker 1: of money, this is unbelievably painful, and so you use
Speaker 1: the same kind of risk analysis you do when you're
Speaker 1: training other assets. Right, I would tell you though that
Speaker 1: the new institutional players that are coming in are coming
Speaker 1: in with a very long term focus. I mean, and
Speaker 1: you can put black Rock and black Stone and Citadel
Speaker 1: and Apollo into that bucket, right, those are four of
Speaker 1: the biggest names and investing and that they're getting in right,
Speaker 1: They're they're working on infrastructure and trying to help create
Speaker 1: institutional frameworks to bring their clients in. And so I
Speaker 1: don't think this asset class is going away because we've
Speaker 1: had all your clients, your analysts today, I've been asking
Speaker 1: you about the recession probabilities and how you prepare for that.
Speaker 1: How do you prepare for that? So I think we
Speaker 1: are going to go into a recession in some ways
Speaker 1: that will be good for crypto because it will finally
Speaker 1: get interest rates calm and down again. Like I'm sure
Speaker 1: we'll have crypto adoption both from investors. We're already seeing
Speaker 1: it with companies, right. So, But as a classes always
Speaker 1: get prices, always get ahead of where the actual you know,
Speaker 1: building of a company is. Right, Testa wasn't even you know,
Speaker 1: selling cars, and they had a decent market cap, and
Speaker 1: so you gotta got to keep the story up until
Speaker 1: you can build product that then generates the revenue. That's
Speaker 1: the process that's happening in crypto, and so what crypto
Speaker 1: needs is stability and the non crypto markets at that point,
Speaker 1: you'll see stability in crypto and you'll see fast adoption
Speaker 1: and Caroline that was of course Galaxy Digitals, my over
Speaker 1: Grads Galaxy Digital micro Strategy. Both of these companies dropped
Speaker 1: more than today in the market. So you see that
Speaker 1: crypto decline actually exacerbated a lot more in those firms
Speaker 1: exposed to cryptocurrencies. Talk to us about exacerbating. Do you
Speaker 1: think that the pressure with Luda and the fact that
Speaker 1: a bitcoin backed stable coin means that you have more
Speaker 1: setting pressure on people on the you know, on the treasury.
Speaker 1: Is this going to be a really ugly feedback loop.
Speaker 1: That's a big concern here that there could be ripple
Speaker 1: of ripple effects across de five markets. The question is
Speaker 1: how low does that peg have to go, how much
Speaker 1: decoupling does it have to be, and how long does
Speaker 1: it have to last for the Lunar Foundation for us
Speaker 1: t to keep on having to sell bitcoin into that decline.
Speaker 1: Hine always so smart when it comes to crypto. We
Speaker 1: thank you for that and and D the interview with
Speaker 1: Mike Novel Grads, Let's get back to the set off
Speaker 1: that we've seen across well every asset cast today basically
Speaker 1: apart from bonds, stocks tumbling to a new thirteen months
Speaker 1: LOWD Michael Antonellie's with us a bout joining us to
Speaker 1: discuss the tech side of this, in particular because it
Speaker 1: was the NASDA then I was one hundred now basically
Speaker 1: in in correction mode, down ten percent in the last
Speaker 1: three days. How much further do we fall before capitulation? Well,
Speaker 1: you don't have to go very far to look for
Speaker 1: superlatives about how bad it's been for the NASDAC. You're
Speaker 1: talking about about a drop year today, which is the
Speaker 1: worst year. You'rest starter year on record by a lot.
Speaker 1: The next closest is nineteen seventy three, which was down
Speaker 1: about seventeen percent. So, uh, you know, not only that,
Speaker 1: my friend Luke Kawa Bloomberg alumni, he said, uh, he said,
Speaker 1: this is the biggest non recessionary six month contraction the
Speaker 1: NASA one forward pe uh in history. So this, this
Speaker 1: this repricing just been vicious, very vicious, and very rapid.
Speaker 1: But when you think about the last few years. Maybe
Speaker 1: this starting to make a little bit of a sense.
Speaker 1: If you look at the past, say from twenty nineteen,
Speaker 1: at the end of one the Nasdaq is up about
Speaker 1: a hundred and six and that's like one hundred annualizing
Speaker 1: it about thirty eight percent a year for three years.
Speaker 1: That's that's a lot. That's a lot. You know, when
Speaker 1: you look at this pullback, it makes sense from the
Speaker 1: perspective of the fantas hiking rates. We're trying to take
Speaker 1: some steam out of the markets, were trying to tighten
Speaker 1: financial conditions. Mike, why didn't you tell us about this
Speaker 1: at the start of this year? Well, using valuations is
Speaker 1: a very very difficult tool. It's proven to be historically difficult,
Speaker 1: historically difficult. But what sort of depths we plumbed in
Speaker 1: terms of valuations visa v the rest of the years?
Speaker 1: And and indeed, why is company I can understand the
Speaker 1: thesis of like get out of companies that don't have
Speaker 1: any E in their PAYE, but what about companies that
Speaker 1: really do, like Apple, Amazon, Microsoft, Why are they sort
Speaker 1: of being thrown out? I mean they those are certainly
Speaker 1: the largest holders and the ones that we watched the
Speaker 1: most because of those cracked. That really pretends a very
Speaker 1: bad market. If you look at some of these really
Speaker 1: big names, you know, one of one of the things
Speaker 1: I was looking at today is the fact that most
Speaker 1: of their big draw downs, okay, the things like a
Speaker 1: couple here, just throw a couple of like Facebook and
Speaker 1: Apple and n Video their biggest draw downs recently. We're
Speaker 1: in twenty twenty nine, not during COVID, so they were
Speaker 1: during this pandemic crash. They were about rate heights, same
Speaker 1: thing back there. So it's very very similar. Multiple compression.
Speaker 1: The FED just takes these multiples out of the system,
Speaker 1: and if you look at some of the high fires,
Speaker 1: you noticed that all of their COVID multiple expansions completely gone,
Speaker 1: earnings are actually doing okay. So it's all this FED
Speaker 1: driven multiple compression. Where can it go to? I mean,
Speaker 1: right now, I looked at and Video and Adobe and
Speaker 1: they're both at roughly the same four p E as Clorox.
Speaker 1: I don't know what that says a pretty well today, Michael,
Speaker 1: I don't know whether that. I don't know where the
Speaker 1: all three of those are too expensive, but Clorox, Adobe
Speaker 1: and Video kind of have the same formerd PU right now, Okay,
Speaker 1: is there any technical lines, any any assets that you're
Speaker 1: looking at, Because it was interesting today correlation started to
Speaker 1: work in a different way. We actually saw commodities get
Speaker 1: caught up in this setting. We saw bonds finally becomes
Speaker 1: a sort of haven trade. What are you looking for
Speaker 1: in terms of where to catch shop where tomorrow's trade
Speaker 1: is going to go. I thought that was important to
Speaker 1: I really did. I watching the five year note when
Speaker 1: I woke up, because I just kind of view that
Speaker 1: as a good proxy for the terminal rate. And it
Speaker 1: was up to three ten and then it's just the
Speaker 1: yield started plumbing down to two. Like that. That's maybe
Speaker 1: a little bit of flight to safety, which we haven't
Speaker 1: seen for a while. You see that oil trade down,
Speaker 1: that means maybe people are having to sell their winners,
Speaker 1: having to sell the things that have been doing well
Speaker 1: this year. That's important that that's a little capitulatory to me.
Speaker 1: I look at two things, like I said that five
Speaker 1: year note, I want to know that the terminal rates
Speaker 1: at three or less. I need that stabilize. And then
Speaker 1: I look at something called discretionary or staples, and I
Speaker 1: equal weight them to kind of take out Amazon UH
Speaker 1: and Tesla. So I equal weight them. And that's what
Speaker 1: my friends of fatigue is called one of the best
Speaker 1: strategists in the world. It's kind of a look at
Speaker 1: risk on risk off. So I want I'm watching that.
Speaker 1: I need that to make a low. It hasn't. It
Speaker 1: has not yet. So discretionary overstables equal way that there's
Speaker 1: a good proxy for risk on risk off. I need
Speaker 1: that to to to find the bottom too. Michael, I
Speaker 1: love how you push us forward. We thank you, Michael Antonani.
Speaker 1: Of course a bad meanwhile. That does it for this
Speaker 1: edition of a Bag Technology, But we'll continue to follow
Speaker 1: this own gu going sell off and the impact it's
Speaker 1: having across the board. We're back here tomorrow trying buy
Speaker 1: Tony Fidel of course, he's got his new book, Build
Speaker 1: and Unorthodox Guide to Making Things Worth Making, as well
Speaker 1: as get his thoughts on the tech markets. Will also
Speaker 1: be joined by Falconector's head of institutional coverage, cause from
Speaker 1: Talking Crypto this is a Bloomberg