Speaker 1: From the heart of where innovation, money and power colli
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Changese, San Francisco, and this is
Speaker 1: Bloomberg Technology coming up in the next hour. From Netflix
Speaker 1: to TikTok to Samsung. The exitus from Russia continues, and
Speaker 1: the pressure to do more files on plus coin base
Speaker 1: starts blocking sanctioned Russian users. What about the rest of
Speaker 1: the crypto world? And f t X president joins us
Speaker 1: this hour to talk about their conversations with regulators and
Speaker 1: new services being launched in Europe, in the Middle East.
Speaker 1: And Apple holds its first event of the year Tuesday.
Speaker 1: You can expect updates to the iPhone, iPad and knock lines.
Speaker 1: We're gonna bring you a preview later this Now. As
Speaker 1: the conflict in Ugraine Ukraine continues to escalate, so does
Speaker 1: the risk of cyber attacks against Ukraine and its allies.
Speaker 1: Just weeks ago, we are now learning that hackers gained
Speaker 1: access to computers belonging to current and PUT and former employees.
Speaker 1: That nearly two dozen major natural gas suppliers and exporters,
Speaker 1: including Chevron and Kinder Morgan EQT Corps, the largest producer
Speaker 1: of national grass in the United States, also saying it's
Speaker 1: been targeted by a rising number of cyber attacks since
Speaker 1: the start of the Russian invasion of Ukraine. Here's CEO
Speaker 1: Toby Rice. We have seen the hits on our system
Speaker 1: increase significantly since this UH conflicts began in Europe. The
Speaker 1: biggest threat to to Russia is American natural gas. So
Speaker 1: when you think about what they're going to do to
Speaker 1: stop to to preserve their power, it's shut down American
Speaker 1: oil and gas. I want to bring in Matthew Only
Speaker 1: now for more on this. He's the director of Threat
Speaker 1: Intelligence at Cisco Tells Intelligence Group. Matt, thank you so
Speaker 1: much for joining us I UNDERS and you're seeing a
Speaker 1: new wave of crowdsourced cyber attacks on both sides of
Speaker 1: this conflict. How would you describe the state of play?
Speaker 1: What are you seeing? It's a it's a pretty crazy
Speaker 1: situation right now in terms of Traditionally, we look at
Speaker 1: these kind of UH conflicts and we have one side
Speaker 1: and another side, and maybe in this case Russia and Ukraine. UH.
Speaker 1: Now we have UM the Continent Ransomware group coming out
Speaker 1: on the side of Russia. We have the Ukrainian cyber
Speaker 1: police soliciting volunteers online to attack websites in Russia. Um.
Speaker 1: We we have lots of different players who feel a
Speaker 1: now as the time for them to kind of put
Speaker 1: their stake in the ground and go after what they
Speaker 1: believe in, and that that kind of raises the stakes
Speaker 1: on the international stage of a possible misunderstanding between nations
Speaker 1: and what could that lead to a possible misunderstanding between nations? Yeah, look,
Speaker 1: I mean look, attribution is always difficult, like knowing what's
Speaker 1: happening when when you're looking at attacks on the ground,
Speaker 1: and nations have to respond to that. So if someone
Speaker 1: hits something in Russia, for example, and Russia misinterprets that
Speaker 1: as an attack in the United States or an attacks
Speaker 1: solicited by the United States, then their response will come
Speaker 1: the way the United States. Um, it's it just adds
Speaker 1: chaos to an already dangerous situation. Well seas also urging
Speaker 1: US companies to lock down their systems in case the
Speaker 1: Russian government or private ackers take action. It could in
Speaker 1: fact already be happening. You've got companies like CrowdStrike and
Speaker 1: paying and cloud fare offering their help, offering their services
Speaker 1: for free. What would you say as the threat level
Speaker 1: right now against US businesses, U S entities. Yeah, the
Speaker 1: the it's all down to how Putin decides to engage
Speaker 1: the West, um, how do they respond to these unprecedentations
Speaker 1: that have been put in place. Ultimately, we think that
Speaker 1: there's largely they're very capable in the energy sector. We've
Speaker 1: seen them for decade or more UM in the energy
Speaker 1: sector gaining a foothold gatting understanding of those systems UM,
Speaker 1: and so there's a threat there. But we also think
Speaker 1: that there's a possibility that there could be a tip
Speaker 1: for cats or thing where they're going after the financial
Speaker 1: sector as well, which is a harder net to crack
Speaker 1: UM in the West. I want to take a look
Speaker 1: at Ukraine specifically, and you talked about all of these
Speaker 1: different entities coming to the defense of Ukraine. We're talking
Speaker 1: about from the EU to Lithuania to Romania to all
Speaker 1: of these different companies. How effective do you think this
Speaker 1: has been and is this a path towards sort of
Speaker 1: further deterrence cyber deterrence in the future when you see
Speaker 1: the rest of the world piling on. Yeah, I have
Speaker 1: a hard time thinking about cyber deterrence when you see
Speaker 1: the level of kinetic warfare going on, like cyber uh
Speaker 1: is a piece of this story, but they're this human
Speaker 1: side is also much much more more distressing. What I
Speaker 1: would say in Ukraine, Um, it looks like Russia has
Speaker 1: underestimated on all battle spaces Ukraine, both in terms of
Speaker 1: how their military respond and how the West will respond,
Speaker 1: but also in terms of how solid their cyber defenses are.
Speaker 1: You Train spent the last few years well in terms
Speaker 1: of putting that, putting together defenses and and you know,
Speaker 1: Cisco is proud to have a role in that in
Speaker 1: in kind of providing actually on the ground support right
Speaker 1: now for critical infrastructure, ensuring that those systems stay up
Speaker 1: when the Ukrainian people need them the most. There's also
Speaker 1: movement in US Congress to take greater action on cyber attacks.
Speaker 1: You've got massive cyber legislation which would require companies and
Speaker 1: critical sectors to alert the government of potential hacks or ransomware.
Speaker 1: You've got the ball now in the house is core.
Speaker 1: What's your take on this legislation? Is this something that
Speaker 1: you would like to see advance? Anytime I see the
Speaker 1: government like you have to notify us of something. My
Speaker 1: question is, then, what are you going to do with
Speaker 1: that information? UM. I like that it's centered in and
Speaker 1: around CISA because CISA has positioned itself as the sort
Speaker 1: of go to agency in the United States to provide
Speaker 1: information both to the private sector and to government networks
Speaker 1: at risk and gives a really good understanding of what
Speaker 1: our actors are using UM in terms of their attacks.
Speaker 1: So I think centering information there signals that's how they
Speaker 1: want the information used, and I think that's a good
Speaker 1: place to put that information. Now, Look, the war on
Speaker 1: Ukraine is escalating, it seems by the hour. What does
Speaker 1: that escalation look like in cyberspace? How bad could this
Speaker 1: get on both sides? You know? Again, you know the
Speaker 1: cyber States element has large has been much quieter than
Speaker 1: we anticipated. And I think that's because UM, that that
Speaker 1: the Russia has kind of underestimated what they need to
Speaker 1: do in the States, and I think right now they're
Speaker 1: gonna so overcompensate in the connecting kinetic space that that
Speaker 1: the cyberspace side inside of Ukraine just isn't of interest
Speaker 1: to them. And I think they're using their best resources
Speaker 1: right now engaging an espionage on the West to understand
Speaker 1: what the red lines are and what the excess strategies
Speaker 1: are for everybody. Matthew Only of Cisco, Matt thank you
Speaker 1: so much for bringing this perspective. Meantime, the Russian government
Speaker 1: blocked Facebook as part of its efforts to silence descent
Speaker 1: and limit information about its invasion of Ukraine. Opposed from
Speaker 1: Russia's communications regulator, raz Kammanadzer said Facebook would be blocked
Speaker 1: because of quote discrimination against Russian media and information sources.
Speaker 1: Facebook previously banned Russian state backed media accounts from operating
Speaker 1: in the European Union in an effort to cut down
Speaker 1: on Russian propaganda and misinformation a continued exodus of businesses
Speaker 1: out of Russia. How does MasterCard, American Express and Visa
Speaker 1: suspending operations their impact everyday Russians? Bloombergs Victoria Cavalery explains, Visa, MasterCard,
Speaker 1: and American Express have become the latest international companies to
Speaker 1: suspend operations in Russia to punish the country over its
Speaker 1: invasion of Ukraine. What this means from a practical standpoint
Speaker 1: is that if you have a Visa master Card issued
Speaker 1: by a Russian institution and you attempt to use it
Speaker 1: outside of the country. Let's say here in New York
Speaker 1: to buy a cup of coffee, that transaction will not
Speaker 1: go through. Similarly, if you have a visa or MasterCard
Speaker 1: issued outside of Russia and you attempt to use it
Speaker 1: with a Russian vendor, that transaction will also no longer work.
Speaker 1: It will be denied. So, for example, if you live
Speaker 1: in Russia and you have a bank with a foreign
Speaker 1: institution UM say Chase in the US UM and you
Speaker 1: have a card issued through Chase, you won't be able
Speaker 1: to make any purchases in Russia. Here's what this means
Speaker 1: for Russian citizens. If you live in Russia and you
Speaker 1: bank with a Russian bank and you attempt to use
Speaker 1: your visa or master card in the country, they will
Speaker 1: continue to work. The Russian Central Bank said that they
Speaker 1: can process those payments in the country. Caveat to that
Speaker 1: is that once those cards expire, they will no longer work. However,
Speaker 1: if you're a Russian citizen and you're any place else
Speaker 1: in the world and you pull out your master card
Speaker 1: and you bank with a Russian bank, you're out of luck. Further,
Speaker 1: even if you bank with a Russian bank and you
Speaker 1: try to make a foreign purchase something online, it also
Speaker 1: will not work. This is another attempt to financially isolate
Speaker 1: the Russian government and to put pressure on Russian President
Speaker 1: Vladimir Putin to get him to reverse course. In Ukraine,
Speaker 1: Western governments have rolled out a series of sanctions, and
Speaker 1: private companies like Visa and MasterCard have undertaken their own
Speaker 1: financial punishments by pausing the operations in Russia, suspending business,
Speaker 1: closing up shop. Ukrainian president had requested that Visa and
Speaker 1: MasterCard undertake these measures in the hopes that it will
Speaker 1: pressure Russia to stop the war. Meantime, other companies continue
Speaker 1: to shut down operations in Russia. Netflix says no new
Speaker 1: customers will be able to sign up, TikTok is suspending
Speaker 1: live streaming in the country after a Putin so called
Speaker 1: fake news law, and Samsung of stopping all products shipments
Speaker 1: to Russia, including smartphones and chips. Bloomberg's executive editor Tom
Speaker 1: Giles with us Now along with Economy founder David Kirkpatrick. David, Tom,
Speaker 1: thank you. Obviously, it's very complicated to figure out just
Speaker 1: how this is impacting everyday Russians versus the Russian government,
Speaker 1: versus Kuna himself, David, what do you make of this exodus?
Speaker 1: What strikes you most about these companies taking a stand,
Speaker 1: whether they have large businesses in Russia or not. Well, clearly,
Speaker 1: digital information is an intrinsic part of modern economy and
Speaker 1: how people are able to stay informed, and sadly, the
Speaker 1: Russian government does not want its people to be informed.
Speaker 1: So I think most of the consumer digital information companies
Speaker 1: like TikTok, Facebook, Google are trying their best to continue
Speaker 1: operating on the grounds that they help people stay informed
Speaker 1: at a time when otherwise they would have difficulty doing so.
Speaker 1: But many of them are finding that it's simply untenable.
Speaker 1: So Netflix and TikTok shut down in Russia because new
Speaker 1: laws that Russia has just introduced as part of their
Speaker 1: suppression of information make it possible that they are their
Speaker 1: employees might be prosecuted. So these companies are in a
Speaker 1: very difficult position now. Ukraine's Vice Prime Minister, Mikailo Federov
Speaker 1: Tom has been pretty aggressive about calling out these big
Speaker 1: tech giants, specifically, most recently, he's called on Amazon and
Speaker 1: Jeff Bezos to make some moves there. He also called
Speaker 1: on Apple and Google to shut down the Play and
Speaker 1: the App Store. Do we have any indication that Amazon,
Speaker 1: for example, is going to cut off some of its
Speaker 1: services to Russia. So overall, we haven't heard specifically from
Speaker 1: Amazon recently. Overall, you have to keep in mind, you
Speaker 1: know you asked earlier about cutting off Russia and possibly
Speaker 1: taking a hit to business. A lot of these companies
Speaker 1: buying large. Now there are some exceptions, but by and large,
Speaker 1: the technology of US technology industry is not heavily exposed
Speaker 1: to Russia. If you were to erase Russian business altogether,
Speaker 1: which some of the companies are doing, you're talking about
Speaker 1: a small sliver of overall revenue. So in terms of
Speaker 1: this being a sacrificial move on the part of big
Speaker 1: US companies, let's keep it in perspective. Now. The other
Speaker 1: thing is they're being compelled to do this in many
Speaker 1: cases because of US sanctions. You don't want to run
Speaker 1: a foul of the US rules, and every day there's
Speaker 1: another set there seems to be another set of sanctions
Speaker 1: levied against Russia. Secondarily, there's the practical implications. How can
Speaker 1: you do business even if you want to do business
Speaker 1: in a country where you can't make payments, you can't
Speaker 1: accept payments where Visa and MasterCard aren't accepted, where banking
Speaker 1: facilities are being shut down right and left. So there's
Speaker 1: the practical element, and then lastly, I think there is
Speaker 1: the moral element. It does behoove these company needs to
Speaker 1: take some sort of a moral stance, even though sacrifice.
Speaker 1: It's not necessarily going to be a big sacrifice from
Speaker 1: them on the sales side of things. We are also
Speaker 1: seeing non US companies take stance here, David, like Samsung
Speaker 1: stopping sending products and chips to Russia. Apple. I understand
Speaker 1: their their businesses in Russia is fairly small, but does
Speaker 1: Samsung have a larger business in Russian? Is that of
Speaker 1: more consequence to them? I think it will be. I
Speaker 1: think what they said is they're not going to ship
Speaker 1: new product to Russia, which means probably that Samsung phones
Speaker 1: and other equipment that's already in Russia will be um
Speaker 1: still available. But this will have major consequence, there's no
Speaker 1: question um. And I think the set of sanctions and
Speaker 1: actions in net really will hurt the people. There's no
Speaker 1: way it can avoid hurting the people. But I think
Speaker 1: that's just unavoidable as a consequence of the sanctions and
Speaker 1: the situation right, And there's a question, Tom, is it
Speaker 1: a good thing or is it the right thing to
Speaker 1: do to be hurting the Russian people, many of whom
Speaker 1: don't necessarily support this war absolutely, And that gets back
Speaker 1: to the point David made earlier is the information served.
Speaker 1: The flow of information is not something that you want
Speaker 1: to necessarily stop. If your Twitter, if your Facebook, if
Speaker 1: you're the list goes on TikTok, you know there their
Speaker 1: services are getting throttled into some degree. These companies are
Speaker 1: cutting back on their own services YouTube ad sales, for example.
Speaker 1: But do you want to deprive the Russian people of
Speaker 1: the flow of information? Say, for example, here's how you
Speaker 1: you know, here's a group of people in in solidarity
Speaker 1: over opposition to the Russian government. Here's the flow, here's
Speaker 1: actually what's going on. Here's the news and information that's
Speaker 1: actually calling uh, calling out the Russian government for for
Speaker 1: the invasion of Ukraine. Um. You know, as we've noted this,
Speaker 1: this law that was passed last week, it puts really
Speaker 1: tight limits on how you can't even talk about it.
Speaker 1: The words you can use don't call it an invasion,
Speaker 1: for example, Google search. Meantime, David as I understand it
Speaker 1: still works. Also, YouTube and WhatsApp are hugely popular in Russia.
Speaker 1: You know, are these services that you believe should stay
Speaker 1: turned on? I mean there are there are pros and
Speaker 1: cons to both arguments here. I think in the case
Speaker 1: of those three it would be beneficial if they could
Speaker 1: continue operating. I think somebody might say at Google in particular,
Speaker 1: if it were turned off, it would harm the government's
Speaker 1: ability to function and the economy, because we know everybody
Speaker 1: uses search. But for now, I think making those services
Speaker 1: still available to ordinary citizens is important. YouTube has a
Speaker 1: huge role as an information conveyor in Russia, and I
Speaker 1: think What'sapp, which is encrypted, is probably a critical tool
Speaker 1: to continue making available to the Russian people if possible. Right,
Speaker 1: certainly likely not the last of this long list of
Speaker 1: companies taking action on Russia. To Economy founder David Kirkpatrick,
Speaker 1: our very own Tom Giles, thank you both. A few
Speaker 1: other stories we continue to watch. Door Dash considered a
Speaker 1: takeover bid for London based deliver U, but the two
Speaker 1: sides failed to reach an agreement. That's according to The
Speaker 1: Sunday Times, the US food delivery service reportedly met with
Speaker 1: delivery over the summer, while exploring plans to expand in
Speaker 1: Europe instead, Door Dash Spot, the finish food delivery startup
Speaker 1: volt for about eight billion dollars, and mandy And soaring
Speaker 1: as much as after the information reported. Google is in
Speaker 1: talks to acquire the cybersecurity company, marking what would be
Speaker 1: google Second largest transaction ever. Bloomberg reported last month that
Speaker 1: Microsoft was in discussions to buy mandy And, which has
Speaker 1: a market value now about five billion dollars. Coming up
Speaker 1: beyond Ukraine, Meta and other Silicon Valley giants have another
Speaker 1: challenge on the horizon, staying attractive to tech workers here
Speaker 1: in the United States as share prices fall. All the
Speaker 1: details on that next. This is Bloomberg. Welcome back to
Speaker 1: Bloomberg Technology. I'm Emily Chang. For years, employees of Silicon
Speaker 1: Valley's largest companies could count on one constant, and that
Speaker 1: is a rising share price. But now with shares of
Speaker 1: the biggest tech companies dropping at least eleven percent in
Speaker 1: recent months, in some cases, more employees are now unsure
Speaker 1: about their fortunes and it's increasing the odds of a
Speaker 1: rush to the exits. I want to bring in Bloomberg's
Speaker 1: current why ner, who covers Meta Twitter and other companies
Speaker 1: for US, Kurt, how exactly are they share prices impacting
Speaker 1: employee retention. I mean, obviously it was going up for
Speaker 1: so long, and this is kind of a massive jolt,
Speaker 1: it is, right. I mean, if this has been your
Speaker 1: norm for years, that you would get stock every year
Speaker 1: with part of your salary, and if you use a
Speaker 1: few years later, it would be, you know, worth more
Speaker 1: than it was when you got it. UM. Suddenly, when
Speaker 1: you are going the opposite direction, that catches some people
Speaker 1: by surprise. I think if the entire tech industry is
Speaker 1: kind of moving downward together, it probably helps retention somewhat
Speaker 1: because you don't necessarily you know, you're not going to
Speaker 1: your going to another company where the stock is diving.
Speaker 1: But in general, obviously companies want this UM this number
Speaker 1: to be going up because employees want to stay in
Speaker 1: work at a place where their paychecks are getting bigger
Speaker 1: every other quarter. So UM, I think it's really it's
Speaker 1: just the reality of the fact that the tech instrure
Speaker 1: right now is hurting and we haven't really seen that
Speaker 1: happen for a really long time. So are you hearing
Speaker 1: from employees who think it's just not necessarily worth it
Speaker 1: anymore to keep working at you know, a Facebook or
Speaker 1: an Amazon because the stock just isn't worth what it
Speaker 1: used to be, or do they still believe in the
Speaker 1: mission and want to push forward. I think that there's
Speaker 1: just so many opportunities out there that unless you are
Speaker 1: one of these big companies and offering a really attractive
Speaker 1: financial package to people, there's other things they can go
Speaker 1: do to make um, you know, a livable, great tech wage. Right,
Speaker 1: And so I think, whereas before this idea that hey,
Speaker 1: I'm getting in in Amazon today because I know four
Speaker 1: years from now, when all my stuff vests, it's it's
Speaker 1: really going to be worth twice as much, right, That
Speaker 1: was a mindset that I think a lot of people
Speaker 1: had and one of the not the only, but certainly
Speaker 1: one of the driving factors for why these companies are
Speaker 1: so popular with recruiting. Now, if you don't necessarily have
Speaker 1: that belief, right, if you think, hey, a lot of
Speaker 1: what I'm gonna get today might be worth the same
Speaker 1: or or maybe even less in the future, well there's
Speaker 1: just not as much incentive. And so maybe people go
Speaker 1: build a startup on their own, right, or maybe they
Speaker 1: take a chance on something that's a little bit less
Speaker 1: established because they don't necessarily feel like they're they're definitely
Speaker 1: going to get the return that they were used to expecting.
Speaker 1: And these companies have been dealing with a whole host
Speaker 1: of issues over the last several years, privacy, anti trust increasing,
Speaker 1: you know, in the case of Metah for example, really
Speaker 1: um deep seated brand issues. But in the last two weeks,
Speaker 1: I wonder how much of that has changed with the
Speaker 1: war in Ukraine and the uncertainty, how does that play
Speaker 1: into choices. I mean, certainly we've been seeing people resign
Speaker 1: and reshuffle across the board, but I wonder do we
Speaker 1: see a pause now? Well? I think this is one
Speaker 1: of the challenges as these companies get really big, is
Speaker 1: how do you continue to attract people that really believe
Speaker 1: in your mission? Right? And what is your mission now?
Speaker 1: Ten years ago, Emily, you probably remember working at Facebook
Speaker 1: was like, hey, we're changing the world, right, We're we're
Speaker 1: connecting people in a way that didn't exist today. Um,
Speaker 1: And now you work at Facebook and it's just PR
Speaker 1: headache after PR headache, right, And so I think finding
Speaker 1: people who maybe believe in those missions of the Amazon's,
Speaker 1: Google's facebooks, these really big companies with tens of thousands
Speaker 1: of employees. I just think it's a harder sell. And
Speaker 1: so as a result, you know, when something like Ukraine
Speaker 1: is going on, just something that's a real world issue. Um,
Speaker 1: I think it puts a lot of that other stuff
Speaker 1: into perspective from people who might not have been as
Speaker 1: bought into that mission to begin with. Alright, Kurt Wagner
Speaker 1: for this, I I'm sorry. I'm sure this story will
Speaker 1: continue to evolve, Kurt. Thank you. Meantime, the massive list
Speaker 1: of companies halting business with Russia keeps growing as they
Speaker 1: take a stand against the war in Ukraine. This as
Speaker 1: US docks plunge, inflation rises, and rising gas prices with
Speaker 1: a possible ban on Russian oil loom joining US now
Speaker 1: cole CEO Michelle Goss. Michelle, great to have you with us.
Speaker 1: I know it's your investor day and you have to
Speaker 1: be thinking about the macro economic picture here. What are
Speaker 1: you bracing for in terms of how this global tumult
Speaker 1: could impact consumer behavior? Yeah, Emily, Well, it's a it's
Speaker 1: a great question. It's a great point. I mean, we
Speaker 1: are navigating unprecedented times, just like we have the last
Speaker 1: couple of years. And there's a lot of uncertainty and
Speaker 1: concern out there for sure, I'd say from a coal standpoint,
Speaker 1: you know, we're staying very close to the customer. UM.
Speaker 1: We've demonstrated we can be agile and resilient during this time,
Speaker 1: the global pandemic, supply chain issues and like over the
Speaker 1: last couple of years. And today is our investor day
Speaker 1: and we got to share some really exciting news. I mean,
Speaker 1: as we look ahead, we have great confidence in our business,
Speaker 1: lots of growth drivers. I'm sure we'll talk about that,
Speaker 1: but we're also present to the fact that there is pressure. UM.
Speaker 1: We have reflected that in our guidance to investors. UM
Speaker 1: we've taken note in our margin headwinds that it relates
Speaker 1: to things like freight and cost. In the same time,
Speaker 1: from a customer standpoint, we want to be really sensitive
Speaker 1: to the pricing pressures. I think one of the real
Speaker 1: advantages we have here at Cold is our brand portfolio.
Speaker 1: And we have aspirational, iconic national brands like Nike and Levies,
Speaker 1: and we've got great entry price point brands that are
Speaker 1: private label, so we can meet the customer wherever they are.
Speaker 1: And like I said, we'll be agile and responsive. It's
Speaker 1: probably also worth mentioning one of the things we announced
Speaker 1: today is the next evolution of our loyalty program. So
Speaker 1: if you have a coals charge, you get seven and
Speaker 1: a half percent back in coals cash, which our customers
Speaker 1: really value. What do you think could be the biggest
Speaker 1: macro challenge for your customers? Is it inflation? Is it
Speaker 1: geopolitical turmoil? Is it supply chain challenges? And by the way,
Speaker 1: do you have factories in Russia? So UM you know
Speaker 1: we're a domestic company. Clearly from a supply chain standpoint,
Speaker 1: that is the area that we pay attention to, as
Speaker 1: well as the inflationary pressures. UM you know, I think
Speaker 1: it's it's hard to speculate in the midst of this
Speaker 1: UM all the the uncertainties with the consumer, and that's
Speaker 1: why it's so important for a business like ours that
Speaker 1: serves sixty million customers that we do put the customer
Speaker 1: first and that understand them. But I think it goes
Speaker 1: back to, you know, what is on their mind, how
Speaker 1: they're purchasing UM and coals serves America. I mean, eighty
Speaker 1: percent of America lives within fifteen miles of the coals.
Speaker 1: We serve lots of things that's really important to their
Speaker 1: everyday lives. As we shared with our investors today, this
Speaker 1: pivot into the active and casual lifestyle have living today,
Speaker 1: moving into beauty UM. So these are all needs that
Speaker 1: we expect that they're going to continue to have. But
Speaker 1: like I said, we'll stay flexible and agile as we
Speaker 1: understand and navigate the current situation. Coles has gotten a
Speaker 1: couple of unsolicited takeover offers over the last couple of
Speaker 1: weeks and also just released of filing an hour ago
Speaker 1: that says, UM, your advisor, Goldman Sachs, is in talks
Speaker 1: with twenty potential buyers. Can you give us the latest
Speaker 1: on this and talk about how your plan addresses some
Speaker 1: of these investor concerns and some of this investor interest. Yeah,
Speaker 1: you bet, Emily. So first let me clarify the plan
Speaker 1: we put together and what we shared today with a
Speaker 1: lot more detail, is something we the board, the management
Speaker 1: team really believes in and have great conviction that this
Speaker 1: is going to create tremendous value to our shareholders. And
Speaker 1: we have retained Goldman Sachs. We have a finance committee, UM,
Speaker 1: that's part of the board. I mean, our board is
Speaker 1: being extremely thoughtful and doing their fiduciary duty as we
Speaker 1: evaluate UM all opportunities in front of us. Yes, UM,
Speaker 1: we have had engagement with roughly twenty parties. UM, We've
Speaker 1: had some unsolicited bids. We've also done some outreach to
Speaker 1: make sure that we are doing our job as a
Speaker 1: board to evaluate these options against a very strong plan
Speaker 1: and ultimately all this will be considered as we decide
Speaker 1: our path forward. But I'll end with you know, as
Speaker 1: we look ahead, we've guided growth for the business. We
Speaker 1: have game changing ideas that we're pursuing, like Sephora, expanding
Speaker 1: active even billlding a hundred news stores. So we feel
Speaker 1: really well positioned. But like I said, UM, we will
Speaker 1: evaluate all options in front of us. You said Sephora
Speaker 1: can become a two billion dollar business. When do you
Speaker 1: see hitting that goal and what proportion of sales do
Speaker 1: you see coming from digital versus on foot in store traffic. Now, Emily,
Speaker 1: we haven't put a very specific date out there on
Speaker 1: the two billion, but let's say it's in the medium horizon.
Speaker 1: I mean, we're in the midst of building out eight
Speaker 1: hundred and fifty shops. They're going to be a very
Speaker 1: big contributor, and to your point, digital will be a
Speaker 1: reasonable contributor to that. I mean, that's one of the
Speaker 1: advantages we have with such a strong omni channel platform.
Speaker 1: And candidly, it was one of the reasons I think
Speaker 1: Sepphora wanted to partner with Coals because we have such
Speaker 1: a strong footprint, it's convenient, it's off mall, we have
Speaker 1: a growing digital business. We're taking advantage of that omni
Speaker 1: channel power UM with things like buy online, pickup and store,
Speaker 1: and we do that today with our stores that are open.
Speaker 1: But we're going to test an idea, well, we're gonna
Speaker 1: do both this leveraging seppor dot com their site and
Speaker 1: driving customers into a Coal shop. And there's not that
Speaker 1: many examples. I can't think of one of companies that
Speaker 1: are doing that kind of cross company bocus so UM,
Speaker 1: you know, I'm excited UM to continue to build out
Speaker 1: this business with them. It's a very big idea. And
Speaker 1: like I said, UM, in terms of the growth stores
Speaker 1: and and we're growing our digital business to you know,
Speaker 1: looking to grow an eight billion dollar business from six
Speaker 1: billion today, right and I know you're launching some more
Speaker 1: self checkout, buy online pickup in store options which have
Speaker 1: been popular. Michelle gas Cole CEO. Good to have you
Speaker 1: back with us. Thanks Michelle for stopping by coming up.
Speaker 1: Crypto Exchange f t X expanding to Europe and the
Speaker 1: Middle East. We're gonna talk with f t X US
Speaker 1: president Brent Harrison about this new move as calls from
Speaker 1: regulators to block Russian crypto clients. Right, Mr is Bloomberg,
Speaker 1: we have seen some divergences in crypto since the start
Speaker 1: of the Russian invasion of Ukraine. I want to bring
Speaker 1: in our next guest, f t X US president Brett Harrison,
Speaker 1: to talk about their expansion to Europe and the Middle
Speaker 1: East and so much more. Brett, obviously, so much going
Speaker 1: on in the crypto market right now, this question of
Speaker 1: whether crypto is decoupled from more traditional assets or not. Meantime,
Speaker 1: you've got this big launch in Europe in the Middle East.
Speaker 1: Why now and when will we actually see these new
Speaker 1: services begin? Sure, so ft X operates globally. Between f
Speaker 1: t X and f t x US, we operate and
Speaker 1: over a hundred eight jurisdictions, but in many of those
Speaker 1: jurisdictions it hasn't been completely clear exactly what regulation, what
Speaker 1: licensing is required in order to be able to operate
Speaker 1: and expand the services that we can offer to citizens
Speaker 1: and in these have different jurisdictions, and so what we've
Speaker 1: been doing is working in every country possible to get
Speaker 1: license in any way that we can, so that we
Speaker 1: are fully set to offer all the services that we
Speaker 1: can in a licensed way. And this is very much
Speaker 1: to counteract this narrative that crypto companies are operating outside
Speaker 1: of the regulatory regimes and envelopes that they want to
Speaker 1: avoid being able to have the same kind of rules
Speaker 1: applied to them as traditional financial markets. It's the opposite
Speaker 1: for us. We want to be a part of the
Speaker 1: regulatory discussion and work cooperatively with the different agencies in
Speaker 1: these different countries to be able to be regulated. So
Speaker 1: we're very excited about f t X and you. We
Speaker 1: have the sci scum approval to be able to offer
Speaker 1: that f t X dot com slash EU domain two
Speaker 1: in the different places where we can passport that particular license,
Speaker 1: and we'll be able to launch within a couple of
Speaker 1: days all those services. Well. Speaking of changing regulation, there
Speaker 1: has been increasing pressure on crypto exchanges to block Russian
Speaker 1: clients in accordance with sanctions. You've got coin based saying
Speaker 1: that they are now doing this. What is ft x
Speaker 1: is position on this? Are you blocking sanctioned Russian entities
Speaker 1: or users? We have been blocking sanctions Russian entity is
Speaker 1: from the start, from before, even though the war with
Speaker 1: Ukraine has started. FTX as an exchange is required, for example,
Speaker 1: by Finsen to be able to uphold a m L
Speaker 1: and sanctions according to the various sanction lists that we check.
Speaker 1: That includes the O fact sanctions lists, FBI most Wanted
Speaker 1: interpoll consolidated sanctioned lists, and we do an extraordinary job
Speaker 1: of making sure that those sanctioned entities and individuals cannot
Speaker 1: transactryptocurrency through the exchange. It's a different matter entirely to
Speaker 1: consider whether we would on our own make the private
Speaker 1: decision as a company to block every single Russian user,
Speaker 1: regardless of their um appearing on those those lists are not.
Speaker 1: And so we're in constant dialogue with Treasury, with members
Speaker 1: of the Treasury who are telling us what they want
Speaker 1: us to do in terms of helping to uphold the
Speaker 1: global public policy decisions that they are working on with
Speaker 1: the executive branch. UH you know, speaking of keeping an
Speaker 1: eye on what users are doing and what was happening
Speaker 1: over at coin base, I mean the idea that twenty
Speaker 1: five thousand addresses had to be blocked as a result
Speaker 1: of their own kind of internal look under the hood here,
Speaker 1: bring us under the hood over there a little more
Speaker 1: at f t x, because what is the scale of
Speaker 1: which users around the world could be engaged in alist
Speaker 1: of activity and where is it mostly coming from? Right?
Speaker 1: I read that report from coin base, and if you
Speaker 1: dig in, most of those addresses were found from prior
Speaker 1: to when the conflict started, and so I think what
Speaker 1: coin bas was trying to do is show that Look,
Speaker 1: there's been discussion back and forth about whether cryptocurrency exchanges
Speaker 1: like coin based and f t x are actually doing
Speaker 1: their job of holding sanctions. The answer is we are,
Speaker 1: and in fact, every single day we have to block
Speaker 1: sanctioned activity, whether that's from Russia or from any other
Speaker 1: particular nation or individual appearing on these sanctioned lists. And
Speaker 1: that didn't start just now with with with the conflict
Speaker 1: in the Ukraine. I'm wondering also when you take a
Speaker 1: look at kind of the broader way that people are
Speaker 1: thinking about cryptocurrency in this era, you know, as you
Speaker 1: expand into Europe as look at the ruble conversion not
Speaker 1: just a bitcoin but too stable coins, which is apparently
Speaker 1: happening at an even greater scale. How do you see
Speaker 1: this conversion over from traditional currencies moving into digital assets.
Speaker 1: So what we're seeing, for example in the Ukraine and
Speaker 1: is people converting cryptocurrencies into the currency into cryptocurrency. It's
Speaker 1: a natural thing to do in a wartime economy where
Speaker 1: there might be uncertainty about the currency. In other nations
Speaker 1: maybe not during the wartime, but they also might have
Speaker 1: hyper inflating currencies and they're looking for some flight to
Speaker 1: a more safer asset that they are able to transport
Speaker 1: cross border easily as long as they're not sanctioned. And
Speaker 1: so we see that as a very real thing that's
Speaker 1: happening right now, especially if you look at all of
Speaker 1: the activity cryptocurrency activity entering Ukraine to help paid the
Speaker 1: effort there, whether it's directly to Ukraine addresses or two
Speaker 1: NGOs on the ground helping with upanitarian efforts. So I
Speaker 1: think this is showing a lot of the power of
Speaker 1: cryptocurrency as this instant settle and cross border payment that
Speaker 1: can be a flight from currencies that might not be stable, right,
Speaker 1: but is it really I mean, if you look at
Speaker 1: the drop in bitcoin today, it's certainly gone down with
Speaker 1: the rest of the market. And I know we're going
Speaker 1: day by day here, but longer term, you know, what
Speaker 1: is the recommendation to new potentially aspiring crypto investors as
Speaker 1: to how to think about this asset and whether you're
Speaker 1: facing more or less risk here than in something more traditional.
Speaker 1: Of course, if you look at bitcoin prices themselves, there
Speaker 1: is definitely volatility um But if you look at bitcoin
Speaker 1: prices maybe for example, versus the Turkish Lira, that graph
Speaker 1: still tends to go up into the right. If you
Speaker 1: look if you if you have a country with the
Speaker 1: currency of typer inflating, if people don't want to invest
Speaker 1: in the asset itself that might have this volatility risk
Speaker 1: to it, what they can do is they can convert
Speaker 1: to a stable coin like USDC, which based is completely
Speaker 1: one to one reserve back with the dollar in which tastes.
Speaker 1: They can store their assets in a digital form that
Speaker 1: is completely stable and pegged to the dollar, and therefore
Speaker 1: be able to escape the risk from their own currency
Speaker 1: hyperinflating and So that's the way in which people can
Speaker 1: still interact with the digital currency system, but not necessarily
Speaker 1: like into the risks associated with volatile currency, is that
Speaker 1: they may be less certain about Okay, Brett Harrison, f
Speaker 1: t X US President, Apple is hooding its first event
Speaker 1: of joining us now what to expect to our very
Speaker 1: on Mark German who covers Apple, Mark, what are you watching?
Speaker 1: Thank you so much for having me? Yes, this is exciting.
Speaker 1: This will be the first Apple product launch event of
Speaker 1: I'm expecting the Max Studio. This would be sort of
Speaker 1: a hybrid smaller MacPro larger Mac Mini, really aimed at
Speaker 1: the professional market. You'll see Apple's most advanced non Intel
Speaker 1: chip and a Mac to date in this computer. Launching
Speaker 1: alongside that will be a new low cost monitor right
Speaker 1: This will be their first new external monitor in about
Speaker 1: three years. This is likely to be less than half
Speaker 1: the price of the current monitor, which costs between five
Speaker 1: and six thousand dollars depending on the texture you get
Speaker 1: on the front glass depending on the the stand. If
Speaker 1: you get the stand or not with the product. There
Speaker 1: also is going to be a new iPad Air as
Speaker 1: well as a new iPhone SC both with five G
Speaker 1: and potentially a few other things on the docket, So
Speaker 1: should be a fairly exciting day if you're a fan
Speaker 1: of the iPhone, sc if you're a fan of the iPad,
Speaker 1: and you're a fan of the Mac. We've already seen
Speaker 1: Apple take a stand on Russia and its position there.
Speaker 1: I know that Tim Cook often makes a nod to
Speaker 1: world events at the beginning of these presentations. Are we
Speaker 1: expecting to hear some commentary from him on the war
Speaker 1: on Ukraine tomorrow or for Apple to take potentially and
Speaker 1: even stronger stand. You've got ukraining officials calling on Apple
Speaker 1: to cut off the Ice app store to Russia. So
Speaker 1: we know what they did last week by stopping exports
Speaker 1: into the country, stopping sales. They removed spot Nick News
Speaker 1: and our Team News from the app stores outside of Russia. Actually, today, Emily,
Speaker 1: they took another step. They stopped search ads, which is
Speaker 1: the ability for developers to place advertisements for their apps
Speaker 1: in the search results of the app store. They did
Speaker 1: this in Russia. As of now, it appears that most
Speaker 1: of Apple services, whether that is the App store itself,
Speaker 1: I Message, Apple TV plus, Apple Books, etcetera, etcetera, are
Speaker 1: still available in Russia. Of course there have been calls
Speaker 1: for those to be disabled. We will see if Apple
Speaker 1: will do that. In terms of if Tim Cook will
Speaker 1: make a statement about the Ukraine situation. Traditionally they have
Speaker 1: done this right. They have had to rerecord the beginning
Speaker 1: of events because of world you know, matters going on,
Speaker 1: so I would not be surprised if they do this.
Speaker 1: They actually did this for their shareholder meeting last Friday
Speaker 1: as well. Mark German, we'll be watching. You will be
Speaker 1: as well. Thank you so much for giving us that
Speaker 1: round up. That does it for this edition of Bloomberg Technology. Tomorrow,
Speaker 1: International women say, We've got Julie Oscar Forrester Research and'll
Speaker 1: talk about the Apple event as always. Denis Shaquire, prominent
Speaker 1: venture capitalist, and Liz Young of Sophie talking about global
Speaker 1: markets