1 00:00:03,080 --> 00:00:06,360 Speaker 1: From the heart of where innovation, money and power colli 2 00:00:07,200 --> 00:00:11,720 Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with 3 00:00:11,760 --> 00:00:27,280 Speaker 1: Emily Jay. I'm Emily Changese, San Francisco, and this is 4 00:00:27,280 --> 00:00:30,200 Speaker 1: Bloomberg Technology coming up in the next hour. From Netflix 5 00:00:30,240 --> 00:00:33,920 Speaker 1: to TikTok to Samsung. The exitus from Russia continues, and 6 00:00:34,000 --> 00:00:37,920 Speaker 1: the pressure to do more files on plus coin base 7 00:00:37,960 --> 00:00:40,600 Speaker 1: starts blocking sanctioned Russian users. What about the rest of 8 00:00:40,600 --> 00:00:43,279 Speaker 1: the crypto world? And f t X president joins us 9 00:00:43,320 --> 00:00:46,640 Speaker 1: this hour to talk about their conversations with regulators and 10 00:00:46,720 --> 00:00:49,680 Speaker 1: new services being launched in Europe, in the Middle East. 11 00:00:51,000 --> 00:00:54,320 Speaker 1: And Apple holds its first event of the year Tuesday. 12 00:00:54,560 --> 00:00:57,960 Speaker 1: You can expect updates to the iPhone, iPad and knock lines. 13 00:00:58,000 --> 00:01:01,080 Speaker 1: We're gonna bring you a preview later this Now. As 14 00:01:01,120 --> 00:01:03,959 Speaker 1: the conflict in Ugraine Ukraine continues to escalate, so does 15 00:01:03,960 --> 00:01:06,760 Speaker 1: the risk of cyber attacks against Ukraine and its allies. 16 00:01:07,040 --> 00:01:09,240 Speaker 1: Just weeks ago, we are now learning that hackers gained 17 00:01:09,240 --> 00:01:12,880 Speaker 1: access to computers belonging to current and PUT and former employees. 18 00:01:12,920 --> 00:01:16,760 Speaker 1: That nearly two dozen major natural gas suppliers and exporters, 19 00:01:16,800 --> 00:01:21,200 Speaker 1: including Chevron and Kinder Morgan EQT Corps, the largest producer 20 00:01:21,200 --> 00:01:23,479 Speaker 1: of national grass in the United States, also saying it's 21 00:01:23,480 --> 00:01:25,680 Speaker 1: been targeted by a rising number of cyber attacks since 22 00:01:25,720 --> 00:01:29,039 Speaker 1: the start of the Russian invasion of Ukraine. Here's CEO 23 00:01:29,280 --> 00:01:33,000 Speaker 1: Toby Rice. We have seen the hits on our system 24 00:01:33,440 --> 00:01:39,360 Speaker 1: increase significantly since this UH conflicts began in Europe. The 25 00:01:39,600 --> 00:01:43,440 Speaker 1: biggest threat to to Russia is American natural gas. So 26 00:01:43,520 --> 00:01:45,560 Speaker 1: when you think about what they're going to do to 27 00:01:45,959 --> 00:01:49,400 Speaker 1: stop to to preserve their power, it's shut down American 28 00:01:49,440 --> 00:01:53,640 Speaker 1: oil and gas. I want to bring in Matthew Only 29 00:01:53,680 --> 00:01:55,360 Speaker 1: now for more on this. He's the director of Threat 30 00:01:55,400 --> 00:01:58,200 Speaker 1: Intelligence at Cisco Tells Intelligence Group. Matt, thank you so 31 00:01:58,320 --> 00:02:00,800 Speaker 1: much for joining us I UNDERS and you're seeing a 32 00:02:00,840 --> 00:02:05,080 Speaker 1: new wave of crowdsourced cyber attacks on both sides of 33 00:02:05,120 --> 00:02:07,360 Speaker 1: this conflict. How would you describe the state of play? 34 00:02:07,520 --> 00:02:11,640 Speaker 1: What are you seeing? It's a it's a pretty crazy 35 00:02:11,680 --> 00:02:14,240 Speaker 1: situation right now in terms of Traditionally, we look at 36 00:02:14,240 --> 00:02:17,760 Speaker 1: these kind of UH conflicts and we have one side 37 00:02:17,760 --> 00:02:20,800 Speaker 1: and another side, and maybe in this case Russia and Ukraine. UH. 38 00:02:20,919 --> 00:02:24,079 Speaker 1: Now we have UM the Continent Ransomware group coming out 39 00:02:24,080 --> 00:02:27,040 Speaker 1: on the side of Russia. We have the Ukrainian cyber 40 00:02:27,040 --> 00:02:31,919 Speaker 1: police soliciting volunteers online to attack websites in Russia. Um. 41 00:02:32,080 --> 00:02:35,440 Speaker 1: We we have lots of different players who feel a 42 00:02:35,480 --> 00:02:36,919 Speaker 1: now as the time for them to kind of put 43 00:02:36,919 --> 00:02:39,200 Speaker 1: their stake in the ground and go after what they 44 00:02:39,200 --> 00:02:41,360 Speaker 1: believe in, and that that kind of raises the stakes 45 00:02:41,360 --> 00:02:44,440 Speaker 1: on the international stage of a possible misunderstanding between nations 46 00:02:45,560 --> 00:02:50,079 Speaker 1: and what could that lead to a possible misunderstanding between nations? Yeah, look, 47 00:02:50,120 --> 00:02:53,600 Speaker 1: I mean look, attribution is always difficult, like knowing what's 48 00:02:53,639 --> 00:02:55,919 Speaker 1: happening when when you're looking at attacks on the ground, 49 00:02:56,280 --> 00:02:58,880 Speaker 1: and nations have to respond to that. So if someone 50 00:02:59,200 --> 00:03:03,960 Speaker 1: hits something in Russia, for example, and Russia misinterprets that 51 00:03:04,040 --> 00:03:05,960 Speaker 1: as an attack in the United States or an attacks 52 00:03:06,000 --> 00:03:08,799 Speaker 1: solicited by the United States, then their response will come 53 00:03:08,880 --> 00:03:11,720 Speaker 1: the way the United States. Um, it's it just adds 54 00:03:11,800 --> 00:03:15,960 Speaker 1: chaos to an already dangerous situation. Well seas also urging 55 00:03:16,040 --> 00:03:18,840 Speaker 1: US companies to lock down their systems in case the 56 00:03:18,919 --> 00:03:22,919 Speaker 1: Russian government or private ackers take action. It could in 57 00:03:22,919 --> 00:03:26,320 Speaker 1: fact already be happening. You've got companies like CrowdStrike and 58 00:03:26,440 --> 00:03:30,400 Speaker 1: paying and cloud fare offering their help, offering their services 59 00:03:30,440 --> 00:03:32,280 Speaker 1: for free. What would you say as the threat level 60 00:03:32,360 --> 00:03:37,480 Speaker 1: right now against US businesses, U S entities. Yeah, the 61 00:03:37,480 --> 00:03:41,000 Speaker 1: the it's all down to how Putin decides to engage 62 00:03:41,080 --> 00:03:44,559 Speaker 1: the West, um, how do they respond to these unprecedentations 63 00:03:44,560 --> 00:03:47,160 Speaker 1: that have been put in place. Ultimately, we think that 64 00:03:47,160 --> 00:03:50,320 Speaker 1: there's largely they're very capable in the energy sector. We've 65 00:03:50,320 --> 00:03:53,720 Speaker 1: seen them for decade or more UM in the energy 66 00:03:53,760 --> 00:03:57,800 Speaker 1: sector gaining a foothold gatting understanding of those systems UM, 67 00:03:57,960 --> 00:04:00,160 Speaker 1: and so there's a threat there. But we also think 68 00:04:00,160 --> 00:04:01,800 Speaker 1: that there's a possibility that there could be a tip 69 00:04:01,800 --> 00:04:04,080 Speaker 1: for cats or thing where they're going after the financial 70 00:04:04,120 --> 00:04:06,280 Speaker 1: sector as well, which is a harder net to crack 71 00:04:06,520 --> 00:04:09,920 Speaker 1: UM in the West. I want to take a look 72 00:04:09,960 --> 00:04:13,320 Speaker 1: at Ukraine specifically, and you talked about all of these 73 00:04:13,320 --> 00:04:16,600 Speaker 1: different entities coming to the defense of Ukraine. We're talking 74 00:04:16,640 --> 00:04:19,720 Speaker 1: about from the EU to Lithuania to Romania to all 75 00:04:19,760 --> 00:04:23,279 Speaker 1: of these different companies. How effective do you think this 76 00:04:23,440 --> 00:04:26,120 Speaker 1: has been and is this a path towards sort of 77 00:04:26,520 --> 00:04:30,600 Speaker 1: further deterrence cyber deterrence in the future when you see 78 00:04:30,760 --> 00:04:34,120 Speaker 1: the rest of the world piling on. Yeah, I have 79 00:04:34,200 --> 00:04:36,640 Speaker 1: a hard time thinking about cyber deterrence when you see 80 00:04:36,640 --> 00:04:39,560 Speaker 1: the level of kinetic warfare going on, like cyber uh 81 00:04:39,640 --> 00:04:41,719 Speaker 1: is a piece of this story, but they're this human 82 00:04:41,800 --> 00:04:46,800 Speaker 1: side is also much much more more distressing. What I 83 00:04:46,800 --> 00:04:49,800 Speaker 1: would say in Ukraine, Um, it looks like Russia has 84 00:04:49,920 --> 00:04:54,360 Speaker 1: underestimated on all battle spaces Ukraine, both in terms of 85 00:04:54,560 --> 00:04:58,120 Speaker 1: how their military respond and how the West will respond, 86 00:04:58,200 --> 00:05:01,200 Speaker 1: but also in terms of how solid their cyber defenses are. 87 00:05:01,880 --> 00:05:04,040 Speaker 1: You Train spent the last few years well in terms 88 00:05:04,040 --> 00:05:07,880 Speaker 1: of putting that, putting together defenses and and you know, 89 00:05:08,120 --> 00:05:10,200 Speaker 1: Cisco is proud to have a role in that in 90 00:05:10,440 --> 00:05:14,560 Speaker 1: in kind of providing actually on the ground support right 91 00:05:14,600 --> 00:05:17,960 Speaker 1: now for critical infrastructure, ensuring that those systems stay up 92 00:05:17,960 --> 00:05:20,919 Speaker 1: when the Ukrainian people need them the most. There's also 93 00:05:21,240 --> 00:05:26,239 Speaker 1: movement in US Congress to take greater action on cyber attacks. 94 00:05:26,320 --> 00:05:29,760 Speaker 1: You've got massive cyber legislation which would require companies and 95 00:05:29,800 --> 00:05:34,480 Speaker 1: critical sectors to alert the government of potential hacks or ransomware. 96 00:05:34,480 --> 00:05:36,720 Speaker 1: You've got the ball now in the house is core. 97 00:05:36,839 --> 00:05:39,640 Speaker 1: What's your take on this legislation? Is this something that 98 00:05:39,720 --> 00:05:42,919 Speaker 1: you would like to see advance? Anytime I see the 99 00:05:43,000 --> 00:05:45,560 Speaker 1: government like you have to notify us of something. My 100 00:05:45,640 --> 00:05:47,039 Speaker 1: question is, then, what are you going to do with 101 00:05:47,080 --> 00:05:50,440 Speaker 1: that information? UM. I like that it's centered in and 102 00:05:50,440 --> 00:05:53,800 Speaker 1: around CISA because CISA has positioned itself as the sort 103 00:05:53,839 --> 00:05:56,960 Speaker 1: of go to agency in the United States to provide 104 00:05:57,000 --> 00:06:01,200 Speaker 1: information both to the private sector and to government networks 105 00:06:01,240 --> 00:06:04,360 Speaker 1: at risk and gives a really good understanding of what 106 00:06:04,400 --> 00:06:07,400 Speaker 1: our actors are using UM in terms of their attacks. 107 00:06:07,440 --> 00:06:10,920 Speaker 1: So I think centering information there signals that's how they 108 00:06:10,920 --> 00:06:12,760 Speaker 1: want the information used, and I think that's a good 109 00:06:12,760 --> 00:06:16,080 Speaker 1: place to put that information. Now, Look, the war on 110 00:06:16,200 --> 00:06:18,800 Speaker 1: Ukraine is escalating, it seems by the hour. What does 111 00:06:18,800 --> 00:06:22,160 Speaker 1: that escalation look like in cyberspace? How bad could this 112 00:06:22,320 --> 00:06:26,440 Speaker 1: get on both sides? You know? Again, you know the 113 00:06:26,480 --> 00:06:29,320 Speaker 1: cyber States element has large has been much quieter than 114 00:06:29,360 --> 00:06:34,279 Speaker 1: we anticipated. And I think that's because UM, that that 115 00:06:34,720 --> 00:06:36,960 Speaker 1: the Russia has kind of underestimated what they need to 116 00:06:37,000 --> 00:06:38,760 Speaker 1: do in the States, and I think right now they're 117 00:06:38,760 --> 00:06:42,479 Speaker 1: gonna so overcompensate in the connecting kinetic space that that 118 00:06:42,600 --> 00:06:46,679 Speaker 1: the cyberspace side inside of Ukraine just isn't of interest 119 00:06:46,720 --> 00:06:49,560 Speaker 1: to them. And I think they're using their best resources 120 00:06:49,640 --> 00:06:52,760 Speaker 1: right now engaging an espionage on the West to understand 121 00:06:52,920 --> 00:06:55,520 Speaker 1: what the red lines are and what the excess strategies 122 00:06:55,520 --> 00:07:00,280 Speaker 1: are for everybody. Matthew Only of Cisco, Matt thank you 123 00:07:00,320 --> 00:07:04,200 Speaker 1: so much for bringing this perspective. Meantime, the Russian government 124 00:07:04,279 --> 00:07:07,400 Speaker 1: blocked Facebook as part of its efforts to silence descent 125 00:07:07,440 --> 00:07:10,840 Speaker 1: and limit information about its invasion of Ukraine. Opposed from 126 00:07:10,880 --> 00:07:15,560 Speaker 1: Russia's communications regulator, raz Kammanadzer said Facebook would be blocked 127 00:07:15,600 --> 00:07:20,080 Speaker 1: because of quote discrimination against Russian media and information sources. 128 00:07:20,520 --> 00:07:24,880 Speaker 1: Facebook previously banned Russian state backed media accounts from operating 129 00:07:24,960 --> 00:07:26,960 Speaker 1: in the European Union in an effort to cut down 130 00:07:27,000 --> 00:07:39,880 Speaker 1: on Russian propaganda and misinformation a continued exodus of businesses 131 00:07:39,880 --> 00:07:43,120 Speaker 1: out of Russia. How does MasterCard, American Express and Visa 132 00:07:43,240 --> 00:07:51,480 Speaker 1: suspending operations their impact everyday Russians? Bloombergs Victoria Cavalery explains, Visa, MasterCard, 133 00:07:51,520 --> 00:07:54,720 Speaker 1: and American Express have become the latest international companies to 134 00:07:54,800 --> 00:07:57,840 Speaker 1: suspend operations in Russia to punish the country over its 135 00:07:57,840 --> 00:08:01,280 Speaker 1: invasion of Ukraine. What this means from a practical standpoint 136 00:08:01,320 --> 00:08:03,680 Speaker 1: is that if you have a Visa master Card issued 137 00:08:03,680 --> 00:08:06,320 Speaker 1: by a Russian institution and you attempt to use it 138 00:08:06,360 --> 00:08:08,840 Speaker 1: outside of the country. Let's say here in New York 139 00:08:08,960 --> 00:08:11,600 Speaker 1: to buy a cup of coffee, that transaction will not 140 00:08:11,640 --> 00:08:14,480 Speaker 1: go through. Similarly, if you have a visa or MasterCard 141 00:08:14,520 --> 00:08:16,760 Speaker 1: issued outside of Russia and you attempt to use it 142 00:08:17,240 --> 00:08:20,520 Speaker 1: with a Russian vendor, that transaction will also no longer work. 143 00:08:20,560 --> 00:08:22,920 Speaker 1: It will be denied. So, for example, if you live 144 00:08:22,920 --> 00:08:25,720 Speaker 1: in Russia and you have a bank with a foreign 145 00:08:25,720 --> 00:08:29,280 Speaker 1: institution UM say Chase in the US UM and you 146 00:08:29,320 --> 00:08:32,200 Speaker 1: have a card issued through Chase, you won't be able 147 00:08:32,280 --> 00:08:37,640 Speaker 1: to make any purchases in Russia. Here's what this means 148 00:08:37,640 --> 00:08:40,319 Speaker 1: for Russian citizens. If you live in Russia and you 149 00:08:40,360 --> 00:08:42,360 Speaker 1: bank with a Russian bank and you attempt to use 150 00:08:42,440 --> 00:08:45,080 Speaker 1: your visa or master card in the country, they will 151 00:08:45,120 --> 00:08:48,240 Speaker 1: continue to work. The Russian Central Bank said that they 152 00:08:48,240 --> 00:08:51,360 Speaker 1: can process those payments in the country. Caveat to that 153 00:08:51,559 --> 00:08:55,840 Speaker 1: is that once those cards expire, they will no longer work. However, 154 00:08:56,360 --> 00:08:58,960 Speaker 1: if you're a Russian citizen and you're any place else 155 00:08:59,000 --> 00:09:01,000 Speaker 1: in the world and you pull out your master card 156 00:09:01,520 --> 00:09:05,160 Speaker 1: and you bank with a Russian bank, you're out of luck. Further, 157 00:09:05,360 --> 00:09:07,520 Speaker 1: even if you bank with a Russian bank and you 158 00:09:07,600 --> 00:09:11,360 Speaker 1: try to make a foreign purchase something online, it also 159 00:09:11,440 --> 00:09:17,480 Speaker 1: will not work. This is another attempt to financially isolate 160 00:09:17,520 --> 00:09:20,360 Speaker 1: the Russian government and to put pressure on Russian President 161 00:09:20,600 --> 00:09:24,120 Speaker 1: Vladimir Putin to get him to reverse course. In Ukraine, 162 00:09:24,440 --> 00:09:27,000 Speaker 1: Western governments have rolled out a series of sanctions, and 163 00:09:27,080 --> 00:09:30,600 Speaker 1: private companies like Visa and MasterCard have undertaken their own 164 00:09:30,640 --> 00:09:36,040 Speaker 1: financial punishments by pausing the operations in Russia, suspending business, 165 00:09:36,360 --> 00:09:39,680 Speaker 1: closing up shop. Ukrainian president had requested that Visa and 166 00:09:39,720 --> 00:09:43,080 Speaker 1: MasterCard undertake these measures in the hopes that it will 167 00:09:43,240 --> 00:09:49,400 Speaker 1: pressure Russia to stop the war. Meantime, other companies continue 168 00:09:49,400 --> 00:09:52,880 Speaker 1: to shut down operations in Russia. Netflix says no new 169 00:09:52,920 --> 00:09:55,840 Speaker 1: customers will be able to sign up, TikTok is suspending 170 00:09:55,880 --> 00:09:58,000 Speaker 1: live streaming in the country after a Putin so called 171 00:09:58,160 --> 00:10:01,600 Speaker 1: fake news law, and Samsung of stopping all products shipments 172 00:10:01,640 --> 00:10:06,000 Speaker 1: to Russia, including smartphones and chips. Bloomberg's executive editor Tom 173 00:10:06,080 --> 00:10:10,320 Speaker 1: Giles with us Now along with Economy founder David Kirkpatrick. David, Tom, 174 00:10:10,400 --> 00:10:13,440 Speaker 1: thank you. Obviously, it's very complicated to figure out just 175 00:10:13,520 --> 00:10:17,079 Speaker 1: how this is impacting everyday Russians versus the Russian government, 176 00:10:17,280 --> 00:10:21,439 Speaker 1: versus Kuna himself, David, what do you make of this exodus? 177 00:10:21,440 --> 00:10:24,640 Speaker 1: What strikes you most about these companies taking a stand, 178 00:10:24,640 --> 00:10:29,720 Speaker 1: whether they have large businesses in Russia or not. Well, clearly, 179 00:10:29,800 --> 00:10:33,360 Speaker 1: digital information is an intrinsic part of modern economy and 180 00:10:33,400 --> 00:10:36,920 Speaker 1: how people are able to stay informed, and sadly, the 181 00:10:36,960 --> 00:10:39,920 Speaker 1: Russian government does not want its people to be informed. 182 00:10:40,600 --> 00:10:45,120 Speaker 1: So I think most of the consumer digital information companies 183 00:10:45,160 --> 00:10:49,880 Speaker 1: like TikTok, Facebook, Google are trying their best to continue 184 00:10:49,880 --> 00:10:54,520 Speaker 1: operating on the grounds that they help people stay informed 185 00:10:54,600 --> 00:10:57,960 Speaker 1: at a time when otherwise they would have difficulty doing so. 186 00:10:58,360 --> 00:11:01,439 Speaker 1: But many of them are finding that it's simply untenable. 187 00:11:01,520 --> 00:11:05,960 Speaker 1: So Netflix and TikTok shut down in Russia because new 188 00:11:06,040 --> 00:11:08,560 Speaker 1: laws that Russia has just introduced as part of their 189 00:11:08,600 --> 00:11:11,839 Speaker 1: suppression of information make it possible that they are their 190 00:11:11,840 --> 00:11:14,839 Speaker 1: employees might be prosecuted. So these companies are in a 191 00:11:14,960 --> 00:11:20,480 Speaker 1: very difficult position now. Ukraine's Vice Prime Minister, Mikailo Federov 192 00:11:20,640 --> 00:11:23,040 Speaker 1: Tom has been pretty aggressive about calling out these big 193 00:11:23,040 --> 00:11:26,840 Speaker 1: tech giants, specifically, most recently, he's called on Amazon and 194 00:11:26,920 --> 00:11:30,880 Speaker 1: Jeff Bezos to make some moves there. He also called 195 00:11:30,880 --> 00:11:34,480 Speaker 1: on Apple and Google to shut down the Play and 196 00:11:34,760 --> 00:11:37,960 Speaker 1: the App Store. Do we have any indication that Amazon, 197 00:11:38,480 --> 00:11:41,480 Speaker 1: for example, is going to cut off some of its 198 00:11:41,520 --> 00:11:47,880 Speaker 1: services to Russia. So overall, we haven't heard specifically from 199 00:11:47,920 --> 00:11:51,440 Speaker 1: Amazon recently. Overall, you have to keep in mind, you 200 00:11:51,480 --> 00:11:56,000 Speaker 1: know you asked earlier about cutting off Russia and possibly 201 00:11:56,040 --> 00:11:59,439 Speaker 1: taking a hit to business. A lot of these companies 202 00:11:59,480 --> 00:12:02,320 Speaker 1: buying large. Now there are some exceptions, but by and large, 203 00:12:02,360 --> 00:12:06,240 Speaker 1: the technology of US technology industry is not heavily exposed 204 00:12:06,240 --> 00:12:09,920 Speaker 1: to Russia. If you were to erase Russian business altogether, 205 00:12:09,960 --> 00:12:12,840 Speaker 1: which some of the companies are doing, you're talking about 206 00:12:12,880 --> 00:12:16,360 Speaker 1: a small sliver of overall revenue. So in terms of 207 00:12:16,400 --> 00:12:19,720 Speaker 1: this being a sacrificial move on the part of big 208 00:12:19,800 --> 00:12:23,760 Speaker 1: US companies, let's keep it in perspective. Now. The other 209 00:12:23,800 --> 00:12:26,920 Speaker 1: thing is they're being compelled to do this in many 210 00:12:26,960 --> 00:12:30,200 Speaker 1: cases because of US sanctions. You don't want to run 211 00:12:30,200 --> 00:12:33,560 Speaker 1: a foul of the US rules, and every day there's 212 00:12:33,600 --> 00:12:36,280 Speaker 1: another set there seems to be another set of sanctions 213 00:12:36,600 --> 00:12:42,280 Speaker 1: levied against Russia. Secondarily, there's the practical implications. How can 214 00:12:42,360 --> 00:12:44,440 Speaker 1: you do business even if you want to do business 215 00:12:44,720 --> 00:12:47,200 Speaker 1: in a country where you can't make payments, you can't 216 00:12:47,200 --> 00:12:51,079 Speaker 1: accept payments where Visa and MasterCard aren't accepted, where banking 217 00:12:51,840 --> 00:12:54,520 Speaker 1: facilities are being shut down right and left. So there's 218 00:12:54,559 --> 00:12:57,120 Speaker 1: the practical element, and then lastly, I think there is 219 00:12:57,160 --> 00:13:00,480 Speaker 1: the moral element. It does behoove these company needs to 220 00:13:00,559 --> 00:13:04,720 Speaker 1: take some sort of a moral stance, even though sacrifice. 221 00:13:04,760 --> 00:13:08,000 Speaker 1: It's not necessarily going to be a big sacrifice from 222 00:13:08,040 --> 00:13:10,760 Speaker 1: them on the sales side of things. We are also 223 00:13:10,840 --> 00:13:14,079 Speaker 1: seeing non US companies take stance here, David, like Samsung 224 00:13:14,200 --> 00:13:18,440 Speaker 1: stopping sending products and chips to Russia. Apple. I understand 225 00:13:18,480 --> 00:13:20,760 Speaker 1: their their businesses in Russia is fairly small, but does 226 00:13:20,800 --> 00:13:24,000 Speaker 1: Samsung have a larger business in Russian? Is that of 227 00:13:24,040 --> 00:13:27,240 Speaker 1: more consequence to them? I think it will be. I 228 00:13:27,280 --> 00:13:29,040 Speaker 1: think what they said is they're not going to ship 229 00:13:29,120 --> 00:13:32,760 Speaker 1: new product to Russia, which means probably that Samsung phones 230 00:13:32,800 --> 00:13:36,439 Speaker 1: and other equipment that's already in Russia will be um 231 00:13:36,960 --> 00:13:40,720 Speaker 1: still available. But this will have major consequence, there's no 232 00:13:40,840 --> 00:13:45,040 Speaker 1: question um. And I think the set of sanctions and 233 00:13:45,120 --> 00:13:49,520 Speaker 1: actions in net really will hurt the people. There's no 234 00:13:49,559 --> 00:13:52,720 Speaker 1: way it can avoid hurting the people. But I think 235 00:13:52,760 --> 00:13:55,480 Speaker 1: that's just unavoidable as a consequence of the sanctions and 236 00:13:55,559 --> 00:13:59,160 Speaker 1: the situation right, And there's a question, Tom, is it 237 00:13:59,679 --> 00:14:01,400 Speaker 1: a good thing or is it the right thing to 238 00:14:01,440 --> 00:14:04,040 Speaker 1: do to be hurting the Russian people, many of whom 239 00:14:04,240 --> 00:14:08,320 Speaker 1: don't necessarily support this war absolutely, And that gets back 240 00:14:08,360 --> 00:14:11,320 Speaker 1: to the point David made earlier is the information served. 241 00:14:11,360 --> 00:14:14,480 Speaker 1: The flow of information is not something that you want 242 00:14:14,520 --> 00:14:17,880 Speaker 1: to necessarily stop. If your Twitter, if your Facebook, if 243 00:14:17,920 --> 00:14:21,760 Speaker 1: you're the list goes on TikTok, you know there their 244 00:14:21,840 --> 00:14:25,080 Speaker 1: services are getting throttled into some degree. These companies are 245 00:14:25,120 --> 00:14:28,880 Speaker 1: cutting back on their own services YouTube ad sales, for example. 246 00:14:29,360 --> 00:14:32,320 Speaker 1: But do you want to deprive the Russian people of 247 00:14:32,360 --> 00:14:36,760 Speaker 1: the flow of information? Say, for example, here's how you 248 00:14:36,760 --> 00:14:39,720 Speaker 1: you know, here's a group of people in in solidarity 249 00:14:39,760 --> 00:14:43,440 Speaker 1: over opposition to the Russian government. Here's the flow, here's 250 00:14:43,600 --> 00:14:46,880 Speaker 1: actually what's going on. Here's the news and information that's 251 00:14:46,920 --> 00:14:51,040 Speaker 1: actually calling uh, calling out the Russian government for for 252 00:14:51,160 --> 00:14:56,080 Speaker 1: the invasion of Ukraine. Um. You know, as we've noted this, 253 00:14:56,080 --> 00:14:59,320 Speaker 1: this law that was passed last week, it puts really 254 00:14:59,360 --> 00:15:01,760 Speaker 1: tight limits on how you can't even talk about it. 255 00:15:01,840 --> 00:15:04,800 Speaker 1: The words you can use don't call it an invasion, 256 00:15:04,840 --> 00:15:09,240 Speaker 1: for example, Google search. Meantime, David as I understand it 257 00:15:09,280 --> 00:15:14,240 Speaker 1: still works. Also, YouTube and WhatsApp are hugely popular in Russia. 258 00:15:15,120 --> 00:15:18,600 Speaker 1: You know, are these services that you believe should stay 259 00:15:18,680 --> 00:15:22,000 Speaker 1: turned on? I mean there are there are pros and 260 00:15:22,000 --> 00:15:25,080 Speaker 1: cons to both arguments here. I think in the case 261 00:15:25,120 --> 00:15:27,600 Speaker 1: of those three it would be beneficial if they could 262 00:15:27,640 --> 00:15:31,520 Speaker 1: continue operating. I think somebody might say at Google in particular, 263 00:15:32,480 --> 00:15:34,680 Speaker 1: if it were turned off, it would harm the government's 264 00:15:34,960 --> 00:15:37,800 Speaker 1: ability to function and the economy, because we know everybody 265 00:15:37,880 --> 00:15:41,680 Speaker 1: uses search. But for now, I think making those services 266 00:15:41,920 --> 00:15:46,160 Speaker 1: still available to ordinary citizens is important. YouTube has a 267 00:15:46,240 --> 00:15:50,000 Speaker 1: huge role as an information conveyor in Russia, and I 268 00:15:50,040 --> 00:15:53,640 Speaker 1: think What'sapp, which is encrypted, is probably a critical tool 269 00:15:53,680 --> 00:15:57,680 Speaker 1: to continue making available to the Russian people if possible. Right, 270 00:15:57,840 --> 00:16:01,080 Speaker 1: certainly likely not the last of this long list of 271 00:16:01,120 --> 00:16:05,320 Speaker 1: companies taking action on Russia. To Economy founder David Kirkpatrick, 272 00:16:05,360 --> 00:16:16,040 Speaker 1: our very own Tom Giles, thank you both. A few 273 00:16:16,080 --> 00:16:18,520 Speaker 1: other stories we continue to watch. Door Dash considered a 274 00:16:18,600 --> 00:16:21,240 Speaker 1: takeover bid for London based deliver U, but the two 275 00:16:21,320 --> 00:16:23,880 Speaker 1: sides failed to reach an agreement. That's according to The 276 00:16:23,920 --> 00:16:27,080 Speaker 1: Sunday Times, the US food delivery service reportedly met with 277 00:16:27,320 --> 00:16:30,800 Speaker 1: delivery over the summer, while exploring plans to expand in 278 00:16:30,920 --> 00:16:34,360 Speaker 1: Europe instead, Door Dash Spot, the finish food delivery startup 279 00:16:34,440 --> 00:16:38,880 Speaker 1: volt for about eight billion dollars, and mandy And soaring 280 00:16:39,000 --> 00:16:41,880 Speaker 1: as much as after the information reported. Google is in 281 00:16:42,000 --> 00:16:45,280 Speaker 1: talks to acquire the cybersecurity company, marking what would be 282 00:16:45,440 --> 00:16:49,440 Speaker 1: google Second largest transaction ever. Bloomberg reported last month that 283 00:16:49,520 --> 00:16:51,960 Speaker 1: Microsoft was in discussions to buy mandy And, which has 284 00:16:51,960 --> 00:16:57,120 Speaker 1: a market value now about five billion dollars. Coming up 285 00:16:57,280 --> 00:17:00,000 Speaker 1: beyond Ukraine, Meta and other Silicon Valley giants have another 286 00:17:00,160 --> 00:17:03,240 Speaker 1: challenge on the horizon, staying attractive to tech workers here 287 00:17:03,640 --> 00:17:06,680 Speaker 1: in the United States as share prices fall. All the 288 00:17:06,760 --> 00:17:37,600 Speaker 1: details on that next. This is Bloomberg. Welcome back to 289 00:17:37,640 --> 00:17:41,240 Speaker 1: Bloomberg Technology. I'm Emily Chang. For years, employees of Silicon 290 00:17:41,320 --> 00:17:44,359 Speaker 1: Valley's largest companies could count on one constant, and that 291 00:17:44,560 --> 00:17:47,280 Speaker 1: is a rising share price. But now with shares of 292 00:17:47,320 --> 00:17:50,000 Speaker 1: the biggest tech companies dropping at least eleven percent in 293 00:17:50,080 --> 00:17:53,720 Speaker 1: recent months, in some cases, more employees are now unsure 294 00:17:54,080 --> 00:17:56,600 Speaker 1: about their fortunes and it's increasing the odds of a 295 00:17:56,680 --> 00:17:59,480 Speaker 1: rush to the exits. I want to bring in Bloomberg's 296 00:17:59,520 --> 00:18:02,560 Speaker 1: current why ner, who covers Meta Twitter and other companies 297 00:18:02,680 --> 00:18:07,080 Speaker 1: for US, Kurt, how exactly are they share prices impacting 298 00:18:07,119 --> 00:18:09,639 Speaker 1: employee retention. I mean, obviously it was going up for 299 00:18:09,880 --> 00:18:12,520 Speaker 1: so long, and this is kind of a massive jolt, 300 00:18:13,640 --> 00:18:15,600 Speaker 1: it is, right. I mean, if this has been your 301 00:18:15,960 --> 00:18:19,280 Speaker 1: norm for years, that you would get stock every year 302 00:18:19,400 --> 00:18:21,119 Speaker 1: with part of your salary, and if you use a 303 00:18:21,280 --> 00:18:24,359 Speaker 1: few years later, it would be, you know, worth more 304 00:18:24,400 --> 00:18:26,399 Speaker 1: than it was when you got it. UM. Suddenly, when 305 00:18:26,440 --> 00:18:28,640 Speaker 1: you are going the opposite direction, that catches some people 306 00:18:28,720 --> 00:18:32,119 Speaker 1: by surprise. I think if the entire tech industry is 307 00:18:32,160 --> 00:18:35,520 Speaker 1: kind of moving downward together, it probably helps retention somewhat 308 00:18:35,520 --> 00:18:37,920 Speaker 1: because you don't necessarily you know, you're not going to 309 00:18:38,119 --> 00:18:41,159 Speaker 1: your going to another company where the stock is diving. 310 00:18:41,520 --> 00:18:45,200 Speaker 1: But in general, obviously companies want this UM this number 311 00:18:45,240 --> 00:18:47,159 Speaker 1: to be going up because employees want to stay in 312 00:18:47,160 --> 00:18:49,080 Speaker 1: work at a place where their paychecks are getting bigger 313 00:18:49,119 --> 00:18:51,680 Speaker 1: every other quarter. So UM, I think it's really it's 314 00:18:51,760 --> 00:18:53,439 Speaker 1: just the reality of the fact that the tech instrure 315 00:18:53,520 --> 00:18:55,320 Speaker 1: right now is hurting and we haven't really seen that 316 00:18:55,480 --> 00:18:58,400 Speaker 1: happen for a really long time. So are you hearing 317 00:18:58,440 --> 00:19:01,879 Speaker 1: from employees who think it's just not necessarily worth it 318 00:19:01,920 --> 00:19:05,159 Speaker 1: anymore to keep working at you know, a Facebook or 319 00:19:05,880 --> 00:19:08,680 Speaker 1: an Amazon because the stock just isn't worth what it 320 00:19:08,800 --> 00:19:11,159 Speaker 1: used to be, or do they still believe in the 321 00:19:11,280 --> 00:19:14,720 Speaker 1: mission and want to push forward. I think that there's 322 00:19:14,840 --> 00:19:18,040 Speaker 1: just so many opportunities out there that unless you are 323 00:19:18,119 --> 00:19:21,480 Speaker 1: one of these big companies and offering a really attractive 324 00:19:21,520 --> 00:19:24,760 Speaker 1: financial package to people, there's other things they can go 325 00:19:24,880 --> 00:19:29,439 Speaker 1: do to make um, you know, a livable, great tech wage. Right, 326 00:19:29,560 --> 00:19:32,440 Speaker 1: And so I think, whereas before this idea that hey, 327 00:19:32,720 --> 00:19:35,920 Speaker 1: I'm getting in in Amazon today because I know four 328 00:19:35,960 --> 00:19:38,160 Speaker 1: years from now, when all my stuff vests, it's it's 329 00:19:38,200 --> 00:19:40,200 Speaker 1: really going to be worth twice as much, right, That 330 00:19:40,359 --> 00:19:41,880 Speaker 1: was a mindset that I think a lot of people 331 00:19:41,960 --> 00:19:44,240 Speaker 1: had and one of the not the only, but certainly 332 00:19:44,320 --> 00:19:46,920 Speaker 1: one of the driving factors for why these companies are 333 00:19:47,040 --> 00:19:50,119 Speaker 1: so popular with recruiting. Now, if you don't necessarily have 334 00:19:50,320 --> 00:19:52,480 Speaker 1: that belief, right, if you think, hey, a lot of 335 00:19:52,560 --> 00:19:54,440 Speaker 1: what I'm gonna get today might be worth the same 336 00:19:54,600 --> 00:19:56,920 Speaker 1: or or maybe even less in the future, well there's 337 00:19:56,920 --> 00:19:59,200 Speaker 1: just not as much incentive. And so maybe people go 338 00:20:00,000 --> 00:20:01,800 Speaker 1: build a startup on their own, right, or maybe they 339 00:20:01,880 --> 00:20:03,600 Speaker 1: take a chance on something that's a little bit less 340 00:20:03,640 --> 00:20:06,639 Speaker 1: established because they don't necessarily feel like they're they're definitely 341 00:20:06,680 --> 00:20:09,320 Speaker 1: going to get the return that they were used to expecting. 342 00:20:09,920 --> 00:20:11,920 Speaker 1: And these companies have been dealing with a whole host 343 00:20:12,040 --> 00:20:16,520 Speaker 1: of issues over the last several years, privacy, anti trust increasing, 344 00:20:16,880 --> 00:20:18,840 Speaker 1: you know, in the case of Metah for example, really 345 00:20:19,400 --> 00:20:22,400 Speaker 1: um deep seated brand issues. But in the last two weeks, 346 00:20:22,440 --> 00:20:24,119 Speaker 1: I wonder how much of that has changed with the 347 00:20:24,160 --> 00:20:26,880 Speaker 1: war in Ukraine and the uncertainty, how does that play 348 00:20:26,960 --> 00:20:30,080 Speaker 1: into choices. I mean, certainly we've been seeing people resign 349 00:20:30,119 --> 00:20:32,680 Speaker 1: and reshuffle across the board, but I wonder do we 350 00:20:32,720 --> 00:20:35,560 Speaker 1: see a pause now? Well? I think this is one 351 00:20:35,600 --> 00:20:37,840 Speaker 1: of the challenges as these companies get really big, is 352 00:20:37,880 --> 00:20:41,240 Speaker 1: how do you continue to attract people that really believe 353 00:20:41,280 --> 00:20:43,360 Speaker 1: in your mission? Right? And what is your mission now? 354 00:20:44,359 --> 00:20:47,200 Speaker 1: Ten years ago, Emily, you probably remember working at Facebook 355 00:20:47,400 --> 00:20:49,919 Speaker 1: was like, hey, we're changing the world, right, We're we're 356 00:20:50,000 --> 00:20:52,959 Speaker 1: connecting people in a way that didn't exist today. Um, 357 00:20:53,080 --> 00:20:55,280 Speaker 1: And now you work at Facebook and it's just PR 358 00:20:55,800 --> 00:20:59,280 Speaker 1: headache after PR headache, right, And so I think finding 359 00:20:59,359 --> 00:21:03,639 Speaker 1: people who maybe believe in those missions of the Amazon's, 360 00:21:03,640 --> 00:21:06,520 Speaker 1: Google's facebooks, these really big companies with tens of thousands 361 00:21:06,560 --> 00:21:08,920 Speaker 1: of employees. I just think it's a harder sell. And 362 00:21:09,119 --> 00:21:11,960 Speaker 1: so as a result, you know, when something like Ukraine 363 00:21:12,040 --> 00:21:15,000 Speaker 1: is going on, just something that's a real world issue. Um, 364 00:21:15,080 --> 00:21:16,520 Speaker 1: I think it puts a lot of that other stuff 365 00:21:16,560 --> 00:21:19,040 Speaker 1: into perspective from people who might not have been as 366 00:21:19,080 --> 00:21:22,720 Speaker 1: bought into that mission to begin with. Alright, Kurt Wagner 367 00:21:22,960 --> 00:21:25,400 Speaker 1: for this, I I'm sorry. I'm sure this story will 368 00:21:25,400 --> 00:21:29,160 Speaker 1: continue to evolve, Kurt. Thank you. Meantime, the massive list 369 00:21:29,200 --> 00:21:31,679 Speaker 1: of companies halting business with Russia keeps growing as they 370 00:21:31,760 --> 00:21:34,160 Speaker 1: take a stand against the war in Ukraine. This as 371 00:21:34,240 --> 00:21:38,520 Speaker 1: US docks plunge, inflation rises, and rising gas prices with 372 00:21:38,560 --> 00:21:42,119 Speaker 1: a possible ban on Russian oil loom joining US now 373 00:21:42,240 --> 00:21:44,719 Speaker 1: cole CEO Michelle Goss. Michelle, great to have you with us. 374 00:21:44,760 --> 00:21:46,720 Speaker 1: I know it's your investor day and you have to 375 00:21:46,800 --> 00:21:49,719 Speaker 1: be thinking about the macro economic picture here. What are 376 00:21:49,720 --> 00:21:53,120 Speaker 1: you bracing for in terms of how this global tumult 377 00:21:53,560 --> 00:21:57,680 Speaker 1: could impact consumer behavior? Yeah, Emily, Well, it's a it's 378 00:21:57,720 --> 00:22:00,600 Speaker 1: a great question. It's a great point. I mean, we 379 00:22:00,720 --> 00:22:03,920 Speaker 1: are navigating unprecedented times, just like we have the last 380 00:22:04,000 --> 00:22:06,920 Speaker 1: couple of years. And there's a lot of uncertainty and 381 00:22:07,000 --> 00:22:10,840 Speaker 1: concern out there for sure, I'd say from a coal standpoint, 382 00:22:11,320 --> 00:22:14,480 Speaker 1: you know, we're staying very close to the customer. UM. 383 00:22:14,720 --> 00:22:18,040 Speaker 1: We've demonstrated we can be agile and resilient during this time, 384 00:22:18,200 --> 00:22:21,000 Speaker 1: the global pandemic, supply chain issues and like over the 385 00:22:21,119 --> 00:22:24,360 Speaker 1: last couple of years. And today is our investor day 386 00:22:24,600 --> 00:22:27,119 Speaker 1: and we got to share some really exciting news. I mean, 387 00:22:27,240 --> 00:22:30,840 Speaker 1: as we look ahead, we have great confidence in our business, 388 00:22:31,080 --> 00:22:33,119 Speaker 1: lots of growth drivers. I'm sure we'll talk about that, 389 00:22:33,200 --> 00:22:37,080 Speaker 1: but we're also present to the fact that there is pressure. UM. 390 00:22:37,320 --> 00:22:40,399 Speaker 1: We have reflected that in our guidance to investors. UM 391 00:22:40,520 --> 00:22:44,480 Speaker 1: we've taken note in our margin headwinds that it relates 392 00:22:44,520 --> 00:22:47,000 Speaker 1: to things like freight and cost. In the same time, 393 00:22:47,320 --> 00:22:50,320 Speaker 1: from a customer standpoint, we want to be really sensitive 394 00:22:50,720 --> 00:22:52,919 Speaker 1: to the pricing pressures. I think one of the real 395 00:22:52,960 --> 00:22:56,200 Speaker 1: advantages we have here at Cold is our brand portfolio. 396 00:22:56,359 --> 00:23:01,440 Speaker 1: And we have aspirational, iconic national brands like Nike and Levies, 397 00:23:01,800 --> 00:23:05,080 Speaker 1: and we've got great entry price point brands that are 398 00:23:05,119 --> 00:23:09,000 Speaker 1: private label, so we can meet the customer wherever they are. 399 00:23:09,640 --> 00:23:12,160 Speaker 1: And like I said, we'll be agile and responsive. It's 400 00:23:12,160 --> 00:23:14,120 Speaker 1: probably also worth mentioning one of the things we announced 401 00:23:14,160 --> 00:23:17,280 Speaker 1: today is the next evolution of our loyalty program. So 402 00:23:17,440 --> 00:23:19,240 Speaker 1: if you have a coals charge, you get seven and 403 00:23:19,280 --> 00:23:21,960 Speaker 1: a half percent back in coals cash, which our customers 404 00:23:22,000 --> 00:23:24,760 Speaker 1: really value. What do you think could be the biggest 405 00:23:25,000 --> 00:23:27,920 Speaker 1: macro challenge for your customers? Is it inflation? Is it 406 00:23:28,040 --> 00:23:32,000 Speaker 1: geopolitical turmoil? Is it supply chain challenges? And by the way, 407 00:23:32,160 --> 00:23:37,320 Speaker 1: do you have factories in Russia? So UM you know 408 00:23:37,400 --> 00:23:40,639 Speaker 1: we're a domestic company. Clearly from a supply chain standpoint, 409 00:23:40,680 --> 00:23:42,959 Speaker 1: that is the area that we pay attention to, as 410 00:23:43,000 --> 00:23:46,720 Speaker 1: well as the inflationary pressures. UM you know, I think 411 00:23:46,800 --> 00:23:49,320 Speaker 1: it's it's hard to speculate in the midst of this 412 00:23:50,040 --> 00:23:53,800 Speaker 1: UM all the the uncertainties with the consumer, and that's 413 00:23:53,800 --> 00:23:56,240 Speaker 1: why it's so important for a business like ours that 414 00:23:56,320 --> 00:23:59,479 Speaker 1: serves sixty million customers that we do put the customer 415 00:23:59,520 --> 00:24:01,720 Speaker 1: first and that understand them. But I think it goes 416 00:24:01,880 --> 00:24:05,160 Speaker 1: back to, you know, what is on their mind, how 417 00:24:05,359 --> 00:24:12,359 Speaker 1: they're purchasing UM and coals serves America. I mean, eighty 418 00:24:12,400 --> 00:24:15,080 Speaker 1: percent of America lives within fifteen miles of the coals. 419 00:24:15,440 --> 00:24:17,800 Speaker 1: We serve lots of things that's really important to their 420 00:24:17,800 --> 00:24:21,080 Speaker 1: everyday lives. As we shared with our investors today, this 421 00:24:21,320 --> 00:24:24,320 Speaker 1: pivot into the active and casual lifestyle have living today, 422 00:24:24,880 --> 00:24:27,560 Speaker 1: moving into beauty UM. So these are all needs that 423 00:24:27,640 --> 00:24:29,359 Speaker 1: we expect that they're going to continue to have. But 424 00:24:29,440 --> 00:24:31,399 Speaker 1: like I said, we'll stay flexible and agile as we 425 00:24:31,520 --> 00:24:36,960 Speaker 1: understand and navigate the current situation. Coles has gotten a 426 00:24:37,119 --> 00:24:40,560 Speaker 1: couple of unsolicited takeover offers over the last couple of 427 00:24:40,600 --> 00:24:43,600 Speaker 1: weeks and also just released of filing an hour ago 428 00:24:43,760 --> 00:24:46,720 Speaker 1: that says, UM, your advisor, Goldman Sachs, is in talks 429 00:24:46,800 --> 00:24:50,399 Speaker 1: with twenty potential buyers. Can you give us the latest 430 00:24:50,480 --> 00:24:54,200 Speaker 1: on this and talk about how your plan addresses some 431 00:24:54,280 --> 00:24:58,440 Speaker 1: of these investor concerns and some of this investor interest. Yeah, 432 00:24:58,600 --> 00:25:03,160 Speaker 1: you bet, Emily. So first let me clarify the plan 433 00:25:03,400 --> 00:25:06,159 Speaker 1: we put together and what we shared today with a 434 00:25:06,240 --> 00:25:09,760 Speaker 1: lot more detail, is something we the board, the management 435 00:25:09,800 --> 00:25:13,600 Speaker 1: team really believes in and have great conviction that this 436 00:25:13,800 --> 00:25:17,800 Speaker 1: is going to create tremendous value to our shareholders. And 437 00:25:18,000 --> 00:25:21,360 Speaker 1: we have retained Goldman Sachs. We have a finance committee, UM, 438 00:25:21,680 --> 00:25:23,920 Speaker 1: that's part of the board. I mean, our board is 439 00:25:24,400 --> 00:25:28,440 Speaker 1: being extremely thoughtful and doing their fiduciary duty as we 440 00:25:28,600 --> 00:25:32,800 Speaker 1: evaluate UM all opportunities in front of us. Yes, UM, 441 00:25:33,040 --> 00:25:36,840 Speaker 1: we have had engagement with roughly twenty parties. UM, We've 442 00:25:36,880 --> 00:25:39,680 Speaker 1: had some unsolicited bids. We've also done some outreach to 443 00:25:39,720 --> 00:25:41,480 Speaker 1: make sure that we are doing our job as a 444 00:25:41,560 --> 00:25:45,880 Speaker 1: board to evaluate these options against a very strong plan 445 00:25:46,000 --> 00:25:49,280 Speaker 1: and ultimately all this will be considered as we decide 446 00:25:49,280 --> 00:25:51,439 Speaker 1: our path forward. But I'll end with you know, as 447 00:25:51,480 --> 00:25:54,080 Speaker 1: we look ahead, we've guided growth for the business. We 448 00:25:54,160 --> 00:25:59,000 Speaker 1: have game changing ideas that we're pursuing, like Sephora, expanding 449 00:25:59,080 --> 00:26:02,080 Speaker 1: active even billlding a hundred news stores. So we feel 450 00:26:02,119 --> 00:26:05,120 Speaker 1: really well positioned. But like I said, UM, we will 451 00:26:05,200 --> 00:26:08,520 Speaker 1: evaluate all options in front of us. You said Sephora 452 00:26:08,600 --> 00:26:11,560 Speaker 1: can become a two billion dollar business. When do you 453 00:26:11,640 --> 00:26:14,680 Speaker 1: see hitting that goal and what proportion of sales do 454 00:26:14,720 --> 00:26:20,680 Speaker 1: you see coming from digital versus on foot in store traffic. Now, Emily, 455 00:26:20,760 --> 00:26:23,280 Speaker 1: we haven't put a very specific date out there on 456 00:26:23,359 --> 00:26:26,200 Speaker 1: the two billion, but let's say it's in the medium horizon. 457 00:26:26,240 --> 00:26:28,639 Speaker 1: I mean, we're in the midst of building out eight 458 00:26:28,760 --> 00:26:31,080 Speaker 1: hundred and fifty shops. They're going to be a very 459 00:26:31,160 --> 00:26:34,000 Speaker 1: big contributor, and to your point, digital will be a 460 00:26:34,080 --> 00:26:36,359 Speaker 1: reasonable contributor to that. I mean, that's one of the 461 00:26:36,359 --> 00:26:39,800 Speaker 1: advantages we have with such a strong omni channel platform. 462 00:26:39,920 --> 00:26:42,320 Speaker 1: And candidly, it was one of the reasons I think 463 00:26:42,359 --> 00:26:45,400 Speaker 1: Sepphora wanted to partner with Coals because we have such 464 00:26:45,400 --> 00:26:48,040 Speaker 1: a strong footprint, it's convenient, it's off mall, we have 465 00:26:48,119 --> 00:26:51,280 Speaker 1: a growing digital business. We're taking advantage of that omni 466 00:26:51,359 --> 00:26:55,120 Speaker 1: channel power UM with things like buy online, pickup and store, 467 00:26:55,119 --> 00:26:57,160 Speaker 1: and we do that today with our stores that are open. 468 00:26:57,680 --> 00:26:59,400 Speaker 1: But we're going to test an idea, well, we're gonna 469 00:26:59,440 --> 00:27:03,080 Speaker 1: do both this leveraging seppor dot com their site and 470 00:27:03,240 --> 00:27:06,080 Speaker 1: driving customers into a Coal shop. And there's not that 471 00:27:06,119 --> 00:27:08,720 Speaker 1: many examples. I can't think of one of companies that 472 00:27:08,760 --> 00:27:11,760 Speaker 1: are doing that kind of cross company bocus so UM, 473 00:27:11,920 --> 00:27:14,960 Speaker 1: you know, I'm excited UM to continue to build out 474 00:27:15,080 --> 00:27:18,080 Speaker 1: this business with them. It's a very big idea. And 475 00:27:18,560 --> 00:27:22,359 Speaker 1: like I said, UM, in terms of the growth stores 476 00:27:22,600 --> 00:27:25,040 Speaker 1: and and we're growing our digital business to you know, 477 00:27:25,160 --> 00:27:27,480 Speaker 1: looking to grow an eight billion dollar business from six 478 00:27:27,560 --> 00:27:30,359 Speaker 1: billion today, right and I know you're launching some more 479 00:27:30,480 --> 00:27:34,560 Speaker 1: self checkout, buy online pickup in store options which have 480 00:27:34,680 --> 00:27:37,480 Speaker 1: been popular. Michelle gas Cole CEO. Good to have you 481 00:27:37,560 --> 00:27:40,760 Speaker 1: back with us. Thanks Michelle for stopping by coming up. 482 00:27:40,800 --> 00:27:43,320 Speaker 1: Crypto Exchange f t X expanding to Europe and the 483 00:27:43,320 --> 00:27:45,160 Speaker 1: Middle East. We're gonna talk with f t X US 484 00:27:45,200 --> 00:27:48,600 Speaker 1: president Brent Harrison about this new move as calls from 485 00:27:48,640 --> 00:27:53,200 Speaker 1: regulators to block Russian crypto clients. Right, Mr is Bloomberg, 486 00:27:58,800 --> 00:28:01,960 Speaker 1: we have seen some divergences in crypto since the start 487 00:28:02,000 --> 00:28:04,080 Speaker 1: of the Russian invasion of Ukraine. I want to bring 488 00:28:04,119 --> 00:28:06,240 Speaker 1: in our next guest, f t X US president Brett Harrison, 489 00:28:06,280 --> 00:28:08,480 Speaker 1: to talk about their expansion to Europe and the Middle 490 00:28:08,520 --> 00:28:10,720 Speaker 1: East and so much more. Brett, obviously, so much going 491 00:28:10,800 --> 00:28:13,800 Speaker 1: on in the crypto market right now, this question of 492 00:28:13,880 --> 00:28:18,360 Speaker 1: whether crypto is decoupled from more traditional assets or not. Meantime, 493 00:28:18,440 --> 00:28:21,240 Speaker 1: you've got this big launch in Europe in the Middle East. 494 00:28:21,600 --> 00:28:24,119 Speaker 1: Why now and when will we actually see these new 495 00:28:24,200 --> 00:28:29,920 Speaker 1: services begin? Sure, so ft X operates globally. Between f 496 00:28:30,040 --> 00:28:31,760 Speaker 1: t X and f t x US, we operate and 497 00:28:31,840 --> 00:28:34,640 Speaker 1: over a hundred eight jurisdictions, but in many of those 498 00:28:34,720 --> 00:28:39,000 Speaker 1: jurisdictions it hasn't been completely clear exactly what regulation, what 499 00:28:39,200 --> 00:28:42,160 Speaker 1: licensing is required in order to be able to operate 500 00:28:42,320 --> 00:28:45,600 Speaker 1: and expand the services that we can offer to citizens 501 00:28:45,680 --> 00:28:48,680 Speaker 1: and in these have different jurisdictions, and so what we've 502 00:28:48,720 --> 00:28:51,640 Speaker 1: been doing is working in every country possible to get 503 00:28:51,760 --> 00:28:54,080 Speaker 1: license in any way that we can, so that we 504 00:28:54,200 --> 00:28:56,920 Speaker 1: are fully set to offer all the services that we 505 00:28:57,040 --> 00:28:59,959 Speaker 1: can in a licensed way. And this is very much 506 00:29:00,040 --> 00:29:04,240 Speaker 1: to counteract this narrative that crypto companies are operating outside 507 00:29:04,240 --> 00:29:07,080 Speaker 1: of the regulatory regimes and envelopes that they want to 508 00:29:07,560 --> 00:29:10,440 Speaker 1: avoid being able to have the same kind of rules 509 00:29:10,480 --> 00:29:13,080 Speaker 1: applied to them as traditional financial markets. It's the opposite 510 00:29:13,120 --> 00:29:15,160 Speaker 1: for us. We want to be a part of the 511 00:29:15,240 --> 00:29:19,320 Speaker 1: regulatory discussion and work cooperatively with the different agencies in 512 00:29:19,360 --> 00:29:21,360 Speaker 1: these different countries to be able to be regulated. So 513 00:29:21,560 --> 00:29:23,960 Speaker 1: we're very excited about f t X and you. We 514 00:29:24,080 --> 00:29:26,760 Speaker 1: have the sci scum approval to be able to offer 515 00:29:26,800 --> 00:29:29,800 Speaker 1: that f t X dot com slash EU domain two 516 00:29:30,280 --> 00:29:33,120 Speaker 1: in the different places where we can passport that particular license, 517 00:29:33,360 --> 00:29:35,480 Speaker 1: and we'll be able to launch within a couple of 518 00:29:35,560 --> 00:29:38,920 Speaker 1: days all those services. Well. Speaking of changing regulation, there 519 00:29:38,920 --> 00:29:43,479 Speaker 1: has been increasing pressure on crypto exchanges to block Russian 520 00:29:43,800 --> 00:29:47,840 Speaker 1: clients in accordance with sanctions. You've got coin based saying 521 00:29:47,960 --> 00:29:50,320 Speaker 1: that they are now doing this. What is ft x 522 00:29:50,440 --> 00:29:55,240 Speaker 1: is position on this? Are you blocking sanctioned Russian entities 523 00:29:55,600 --> 00:30:00,120 Speaker 1: or users? We have been blocking sanctions Russian entity is 524 00:30:00,200 --> 00:30:02,280 Speaker 1: from the start, from before, even though the war with 525 00:30:02,480 --> 00:30:06,800 Speaker 1: Ukraine has started. FTX as an exchange is required, for example, 526 00:30:06,840 --> 00:30:09,320 Speaker 1: by Finsen to be able to uphold a m L 527 00:30:09,400 --> 00:30:12,680 Speaker 1: and sanctions according to the various sanction lists that we check. 528 00:30:12,800 --> 00:30:16,400 Speaker 1: That includes the O fact sanctions lists, FBI most Wanted 529 00:30:16,640 --> 00:30:20,400 Speaker 1: interpoll consolidated sanctioned lists, and we do an extraordinary job 530 00:30:20,480 --> 00:30:23,960 Speaker 1: of making sure that those sanctioned entities and individuals cannot 531 00:30:24,000 --> 00:30:28,000 Speaker 1: transactryptocurrency through the exchange. It's a different matter entirely to 532 00:30:28,240 --> 00:30:31,040 Speaker 1: consider whether we would on our own make the private 533 00:30:31,080 --> 00:30:34,280 Speaker 1: decision as a company to block every single Russian user, 534 00:30:34,400 --> 00:30:37,720 Speaker 1: regardless of their um appearing on those those lists are not. 535 00:30:38,120 --> 00:30:41,000 Speaker 1: And so we're in constant dialogue with Treasury, with members 536 00:30:41,040 --> 00:30:43,840 Speaker 1: of the Treasury who are telling us what they want 537 00:30:43,920 --> 00:30:45,920 Speaker 1: us to do in terms of helping to uphold the 538 00:30:46,000 --> 00:30:48,520 Speaker 1: global public policy decisions that they are working on with 539 00:30:48,680 --> 00:30:52,800 Speaker 1: the executive branch. UH you know, speaking of keeping an 540 00:30:52,840 --> 00:30:55,120 Speaker 1: eye on what users are doing and what was happening 541 00:30:55,160 --> 00:30:57,280 Speaker 1: over at coin base, I mean the idea that twenty 542 00:30:57,320 --> 00:31:00,600 Speaker 1: five thousand addresses had to be blocked as a result 543 00:31:00,680 --> 00:31:03,120 Speaker 1: of their own kind of internal look under the hood here, 544 00:31:03,600 --> 00:31:05,479 Speaker 1: bring us under the hood over there a little more 545 00:31:05,480 --> 00:31:08,840 Speaker 1: at f t x, because what is the scale of 546 00:31:08,960 --> 00:31:12,080 Speaker 1: which users around the world could be engaged in alist 547 00:31:12,120 --> 00:31:15,360 Speaker 1: of activity and where is it mostly coming from? Right? 548 00:31:16,040 --> 00:31:18,480 Speaker 1: I read that report from coin base, and if you 549 00:31:18,600 --> 00:31:22,200 Speaker 1: dig in, most of those addresses were found from prior 550 00:31:22,320 --> 00:31:24,960 Speaker 1: to when the conflict started, and so I think what 551 00:31:25,040 --> 00:31:26,920 Speaker 1: coin bas was trying to do is show that Look, 552 00:31:27,240 --> 00:31:30,840 Speaker 1: there's been discussion back and forth about whether cryptocurrency exchanges 553 00:31:30,920 --> 00:31:33,040 Speaker 1: like coin based and f t x are actually doing 554 00:31:33,080 --> 00:31:35,320 Speaker 1: their job of holding sanctions. The answer is we are, 555 00:31:35,720 --> 00:31:38,760 Speaker 1: and in fact, every single day we have to block 556 00:31:39,200 --> 00:31:43,200 Speaker 1: sanctioned activity, whether that's from Russia or from any other 557 00:31:43,440 --> 00:31:46,880 Speaker 1: particular nation or individual appearing on these sanctioned lists. And 558 00:31:46,920 --> 00:31:50,800 Speaker 1: that didn't start just now with with with the conflict 559 00:31:50,840 --> 00:31:53,520 Speaker 1: in the Ukraine. I'm wondering also when you take a 560 00:31:53,560 --> 00:31:55,400 Speaker 1: look at kind of the broader way that people are 561 00:31:55,520 --> 00:31:58,320 Speaker 1: thinking about cryptocurrency in this era, you know, as you 562 00:31:58,400 --> 00:32:02,440 Speaker 1: expand into Europe as look at the ruble conversion not 563 00:32:02,600 --> 00:32:05,680 Speaker 1: just a bitcoin but too stable coins, which is apparently 564 00:32:05,720 --> 00:32:08,440 Speaker 1: happening at an even greater scale. How do you see 565 00:32:08,480 --> 00:32:13,040 Speaker 1: this conversion over from traditional currencies moving into digital assets. 566 00:32:14,520 --> 00:32:17,240 Speaker 1: So what we're seeing, for example in the Ukraine and 567 00:32:17,800 --> 00:32:23,880 Speaker 1: is people converting cryptocurrencies into the currency into cryptocurrency. It's 568 00:32:23,880 --> 00:32:26,640 Speaker 1: a natural thing to do in a wartime economy where 569 00:32:26,680 --> 00:32:29,480 Speaker 1: there might be uncertainty about the currency. In other nations 570 00:32:29,560 --> 00:32:32,320 Speaker 1: maybe not during the wartime, but they also might have 571 00:32:32,440 --> 00:32:35,560 Speaker 1: hyper inflating currencies and they're looking for some flight to 572 00:32:35,720 --> 00:32:38,080 Speaker 1: a more safer asset that they are able to transport 573 00:32:38,240 --> 00:32:41,440 Speaker 1: cross border easily as long as they're not sanctioned. And 574 00:32:41,560 --> 00:32:43,920 Speaker 1: so we see that as a very real thing that's 575 00:32:43,920 --> 00:32:46,040 Speaker 1: happening right now, especially if you look at all of 576 00:32:46,160 --> 00:32:50,240 Speaker 1: the activity cryptocurrency activity entering Ukraine to help paid the 577 00:32:50,320 --> 00:32:53,200 Speaker 1: effort there, whether it's directly to Ukraine addresses or two 578 00:32:53,320 --> 00:32:55,920 Speaker 1: NGOs on the ground helping with upanitarian efforts. So I 579 00:32:55,960 --> 00:32:57,480 Speaker 1: think this is showing a lot of the power of 580 00:32:57,520 --> 00:33:01,240 Speaker 1: cryptocurrency as this instant settle and cross border payment that 581 00:33:01,320 --> 00:33:06,280 Speaker 1: can be a flight from currencies that might not be stable, right, 582 00:33:06,360 --> 00:33:07,760 Speaker 1: but is it really I mean, if you look at 583 00:33:07,800 --> 00:33:11,520 Speaker 1: the drop in bitcoin today, it's certainly gone down with 584 00:33:11,720 --> 00:33:13,320 Speaker 1: the rest of the market. And I know we're going 585 00:33:13,520 --> 00:33:16,840 Speaker 1: day by day here, but longer term, you know, what 586 00:33:17,040 --> 00:33:23,360 Speaker 1: is the recommendation to new potentially aspiring crypto investors as 587 00:33:23,440 --> 00:33:26,600 Speaker 1: to how to think about this asset and whether you're 588 00:33:26,800 --> 00:33:30,040 Speaker 1: facing more or less risk here than in something more traditional. 589 00:33:30,960 --> 00:33:34,000 Speaker 1: Of course, if you look at bitcoin prices themselves, there 590 00:33:34,080 --> 00:33:36,720 Speaker 1: is definitely volatility um But if you look at bitcoin 591 00:33:36,800 --> 00:33:40,360 Speaker 1: prices maybe for example, versus the Turkish Lira, that graph 592 00:33:40,440 --> 00:33:42,160 Speaker 1: still tends to go up into the right. If you 593 00:33:42,200 --> 00:33:43,840 Speaker 1: look if you if you have a country with the 594 00:33:43,880 --> 00:33:46,960 Speaker 1: currency of typer inflating, if people don't want to invest 595 00:33:47,080 --> 00:33:50,080 Speaker 1: in the asset itself that might have this volatility risk 596 00:33:50,160 --> 00:33:51,959 Speaker 1: to it, what they can do is they can convert 597 00:33:52,040 --> 00:33:55,440 Speaker 1: to a stable coin like USDC, which based is completely 598 00:33:55,520 --> 00:33:57,760 Speaker 1: one to one reserve back with the dollar in which tastes. 599 00:33:57,800 --> 00:34:01,080 Speaker 1: They can store their assets in a digital form that 600 00:34:01,320 --> 00:34:04,080 Speaker 1: is completely stable and pegged to the dollar, and therefore 601 00:34:04,200 --> 00:34:06,280 Speaker 1: be able to escape the risk from their own currency 602 00:34:06,400 --> 00:34:08,640 Speaker 1: hyperinflating and So that's the way in which people can 603 00:34:08,680 --> 00:34:12,520 Speaker 1: still interact with the digital currency system, but not necessarily 604 00:34:12,560 --> 00:34:15,480 Speaker 1: like into the risks associated with volatile currency, is that 605 00:34:15,560 --> 00:34:19,120 Speaker 1: they may be less certain about Okay, Brett Harrison, f 606 00:34:19,239 --> 00:34:30,879 Speaker 1: t X US President, Apple is hooding its first event 607 00:34:30,920 --> 00:34:34,000 Speaker 1: of joining us now what to expect to our very 608 00:34:34,040 --> 00:34:36,720 Speaker 1: on Mark German who covers Apple, Mark, what are you watching? 609 00:34:37,840 --> 00:34:39,840 Speaker 1: Thank you so much for having me? Yes, this is exciting. 610 00:34:39,880 --> 00:34:42,560 Speaker 1: This will be the first Apple product launch event of 611 00:34:43,680 --> 00:34:46,840 Speaker 1: I'm expecting the Max Studio. This would be sort of 612 00:34:46,880 --> 00:34:51,160 Speaker 1: a hybrid smaller MacPro larger Mac Mini, really aimed at 613 00:34:51,160 --> 00:34:55,000 Speaker 1: the professional market. You'll see Apple's most advanced non Intel 614 00:34:55,080 --> 00:34:58,280 Speaker 1: chip and a Mac to date in this computer. Launching 615 00:34:58,360 --> 00:35:01,879 Speaker 1: alongside that will be a new low cost monitor right 616 00:35:01,960 --> 00:35:05,320 Speaker 1: This will be their first new external monitor in about 617 00:35:05,480 --> 00:35:08,160 Speaker 1: three years. This is likely to be less than half 618 00:35:08,280 --> 00:35:11,839 Speaker 1: the price of the current monitor, which costs between five 619 00:35:11,920 --> 00:35:14,960 Speaker 1: and six thousand dollars depending on the texture you get 620 00:35:15,000 --> 00:35:20,319 Speaker 1: on the front glass depending on the the stand. If 621 00:35:20,320 --> 00:35:23,000 Speaker 1: you get the stand or not with the product. There 622 00:35:23,080 --> 00:35:26,520 Speaker 1: also is going to be a new iPad Air as 623 00:35:26,600 --> 00:35:29,680 Speaker 1: well as a new iPhone SC both with five G 624 00:35:30,160 --> 00:35:32,120 Speaker 1: and potentially a few other things on the docket, So 625 00:35:32,280 --> 00:35:34,879 Speaker 1: should be a fairly exciting day if you're a fan 626 00:35:34,960 --> 00:35:37,000 Speaker 1: of the iPhone, sc if you're a fan of the iPad, 627 00:35:37,040 --> 00:35:39,239 Speaker 1: and you're a fan of the Mac. We've already seen 628 00:35:39,280 --> 00:35:43,359 Speaker 1: Apple take a stand on Russia and its position there. 629 00:35:43,600 --> 00:35:45,680 Speaker 1: I know that Tim Cook often makes a nod to 630 00:35:46,280 --> 00:35:49,000 Speaker 1: world events at the beginning of these presentations. Are we 631 00:35:49,120 --> 00:35:52,680 Speaker 1: expecting to hear some commentary from him on the war 632 00:35:52,760 --> 00:35:56,080 Speaker 1: on Ukraine tomorrow or for Apple to take potentially and 633 00:35:56,120 --> 00:35:59,800 Speaker 1: even stronger stand. You've got ukraining officials calling on Apple 634 00:36:00,280 --> 00:36:04,000 Speaker 1: to cut off the Ice app store to Russia. So 635 00:36:04,239 --> 00:36:06,880 Speaker 1: we know what they did last week by stopping exports 636 00:36:06,920 --> 00:36:10,000 Speaker 1: into the country, stopping sales. They removed spot Nick News 637 00:36:10,080 --> 00:36:14,360 Speaker 1: and our Team News from the app stores outside of Russia. Actually, today, Emily, 638 00:36:14,440 --> 00:36:17,680 Speaker 1: they took another step. They stopped search ads, which is 639 00:36:17,719 --> 00:36:20,680 Speaker 1: the ability for developers to place advertisements for their apps 640 00:36:21,000 --> 00:36:22,960 Speaker 1: in the search results of the app store. They did 641 00:36:23,040 --> 00:36:26,439 Speaker 1: this in Russia. As of now, it appears that most 642 00:36:26,520 --> 00:36:28,920 Speaker 1: of Apple services, whether that is the App store itself, 643 00:36:29,320 --> 00:36:32,920 Speaker 1: I Message, Apple TV plus, Apple Books, etcetera, etcetera, are 644 00:36:33,000 --> 00:36:35,880 Speaker 1: still available in Russia. Of course there have been calls 645 00:36:36,000 --> 00:36:38,680 Speaker 1: for those to be disabled. We will see if Apple 646 00:36:38,760 --> 00:36:41,319 Speaker 1: will do that. In terms of if Tim Cook will 647 00:36:41,360 --> 00:36:44,920 Speaker 1: make a statement about the Ukraine situation. Traditionally they have 648 00:36:45,200 --> 00:36:48,600 Speaker 1: done this right. They have had to rerecord the beginning 649 00:36:48,640 --> 00:36:51,160 Speaker 1: of events because of world you know, matters going on, 650 00:36:51,239 --> 00:36:53,160 Speaker 1: so I would not be surprised if they do this. 651 00:36:53,480 --> 00:36:56,400 Speaker 1: They actually did this for their shareholder meeting last Friday 652 00:36:56,440 --> 00:37:00,239 Speaker 1: as well. Mark German, we'll be watching. You will be 653 00:37:00,520 --> 00:37:02,440 Speaker 1: as well. Thank you so much for giving us that 654 00:37:02,560 --> 00:37:06,360 Speaker 1: round up. That does it for this edition of Bloomberg Technology. Tomorrow, 655 00:37:06,680 --> 00:37:10,120 Speaker 1: International women say, We've got Julie Oscar Forrester Research and'll 656 00:37:10,160 --> 00:37:13,960 Speaker 1: talk about the Apple event as always. Denis Shaquire, prominent 657 00:37:14,040 --> 00:37:18,160 Speaker 1: venture capitalist, and Liz Young of Sophie talking about global 658 00:37:18,239 --> 00:37:18,640 Speaker 1: markets