WEBVTT - FTX Bankruptcy Hearing and Crypto Contagion 0:00:13.560 --> 0:00:16.479 I'm Caroline Higher blobgs World headquarters in New York, and 0:00:16.520 --> 0:00:19.680 I med Ludlow in San Francisco. This is Bloomberg Technology 0:00:19.720 --> 0:00:22.960 coming up. Fd x's attorney says substantial amounts of its 0:00:23.000 --> 0:00:26.680 assets have either been stolen or a missing. Today's bankruptcy 0:00:26.680 --> 0:00:30.000 hearing sheds light on ft x groups current priorities after 0:00:30.080 --> 0:00:35.000 mishandling funds and crypto contagion worsens with Genesis warning of 0:00:35.080 --> 0:00:39.960 possible bankruptcy. Now finance CEO c z who's positioning himself 0:00:39.960 --> 0:00:42.920 as the savior of crypto. He's turned to the Middle 0:00:42.960 --> 0:00:46.320 East for cash for a crypto recovery fund, and Zoom's 0:00:46.400 --> 0:00:50.320 chief financial officer joins us to explain its slowest quarterly 0:00:50.360 --> 0:00:54.200 sales growth on record and plans to navigate the economic headwinds. 0:00:54.640 --> 0:00:56.480 But first, let's bring it back closer to our home. 0:00:56.560 --> 0:00:59.240 It's a global story, of course, because it hits across 0:00:59.640 --> 0:01:02.800 the world, the ft X story, and we emerged well 0:01:02.880 --> 0:01:06.280 from the first ft X bankruptcy hearing on Tuesday, and 0:01:06.280 --> 0:01:09.039 it included an attorney representing the firm saying a substantium 0:01:09.080 --> 0:01:12.560 amount of ft x's assets are well missing. I speak 0:01:12.600 --> 0:01:15.080 it all down, but the most, Katie Greifeld shock Oal, 0:01:15.240 --> 0:01:17.679 we're almost becoming numb to it to certain degree, Katie, 0:01:17.760 --> 0:01:19.759 But what did you take away from the first hearing. 0:01:20.040 --> 0:01:22.160 It was the fiery first day, I would say, in 0:01:22.200 --> 0:01:24.319 addition to what you were saying about, you know, the 0:01:24.360 --> 0:01:27.800 assets either being lost or stolen, this back and forth 0:01:27.959 --> 0:01:30.959 on the top fifty biggest creditors, the fact that their 0:01:31.040 --> 0:01:34.160 names are redacted. We don't know who they are. That 0:01:34.240 --> 0:01:37.839 was an interesting storyline for me because it's really unusual 0:01:37.920 --> 0:01:41.200 that actually their names wouldn't be made public. But there 0:01:41.200 --> 0:01:44.880 were at least two groups of crypto creditors. They sent 0:01:44.920 --> 0:01:48.680 their lawyers there. One of those lawyers was protecting or 0:01:48.760 --> 0:01:51.840 were was working for members of that top fifty group, 0:01:51.960 --> 0:01:55.240 really arguing that their identities should be kept secret, and 0:01:55.280 --> 0:01:58.800 for now we know that they're going to remain unidentified. 0:01:58.840 --> 0:02:01.320 That's interesting when you try to map the contagion about 0:02:01.640 --> 0:02:04.880 what more shoes are we waiting to drop. We would 0:02:04.920 --> 0:02:07.200 like to know who's on that list, but it's going 0:02:07.280 --> 0:02:11.440 to remain under wraps for now. Missing assets also a 0:02:11.520 --> 0:02:14.760 debate around the assets and who should be doing what 0:02:15.000 --> 0:02:17.560 about what talk to us about what's happening in parallel 0:02:17.560 --> 0:02:21.440 in the Bahamas, Katie, Well, that's the thing, who actually, 0:02:22.040 --> 0:02:25.080 what court has jurisdiction here is going to handle it. 0:02:25.320 --> 0:02:28.480 That's been a sort of turf turf war that has 0:02:28.880 --> 0:02:32.720 erupted here. We know that for now, these dueling liquidation 0:02:32.760 --> 0:02:37.120 proceedings in the Bahamas, they're going to be transferred to Delaware. 0:02:37.680 --> 0:02:39.200 You're still going to have f t X as US 0:02:39.240 --> 0:02:42.440 restructuring advisors and regulators in the Bahamas. They're going to 0:02:42.680 --> 0:02:45.880 try to work out rules for sharing the information. But 0:02:46.240 --> 0:02:48.520 for right now, again it looks like that's being transferred 0:02:48.560 --> 0:02:52.960 to Delaware. Alright, bloom bows, Katie Greifeld, thank you very much. 0:02:53.040 --> 0:02:56.840 Let's continue the conversation with regular Allagata, CEO of the 0:02:56.880 --> 0:03:02.120 crypto trading platform Falconnects and Raggy. You have a history 0:03:02.160 --> 0:03:04.600 with ft X, which we'll get to, but I first 0:03:04.600 --> 0:03:06.960 want to ask you what are you seeing among your 0:03:07.080 --> 0:03:11.160 user base customer base in crypto markets? What does that 0:03:11.240 --> 0:03:14.639 reflect based on what's happening with ft X in the 0:03:14.680 --> 0:03:17.680 fallout from it? Absolutely? First off, good to be back. 0:03:18.200 --> 0:03:21.880 What we're seeing in the broader customer sentiment is definitely 0:03:22.480 --> 0:03:25.639 the first few weeks were shocked, right because everyone knew 0:03:25.639 --> 0:03:28.600 that al Meda was a counter party on ft X, 0:03:28.960 --> 0:03:31.480 but the lack of separation between these counterparties was a 0:03:31.520 --> 0:03:36.480 huge shock. Now essentially all the customers chatter is all 0:03:36.520 --> 0:03:39.240 about which shoe is going to drop next. So people 0:03:39.240 --> 0:03:42.440 are paying a lot of attention to exchanges specifically, so 0:03:42.680 --> 0:03:45.760 specifically to Asian exchanges. People are doing extended due diligence 0:03:45.800 --> 0:03:48.320 and making sure that things are okay there. But everyone 0:03:48.440 --> 0:03:51.600 is like very cautious at the moment. So your relationship 0:03:51.640 --> 0:03:54.720 with f t X, you did transact to ft X, 0:03:55.200 --> 0:03:59.360 Explain your historical relationship with FTX and where it stands now. 0:04:00.480 --> 0:04:03.200 So we did have Alameter as one of our trading 0:04:03.240 --> 0:04:06.720 parties as we started the business, but a few weeks 0:04:06.800 --> 0:04:09.880 to a month before this entire contagion we stopped. We 0:04:09.920 --> 0:04:13.040 are on the relationships or zero exposure to Alameter. So 0:04:13.080 --> 0:04:16.000 it's one of the largest brokerages on the planet. We 0:04:16.120 --> 0:04:18.720 do work with one of the largest liquidity providers out there, 0:04:18.720 --> 0:04:21.320 which is ft X. We have a small relative to 0:04:21.400 --> 0:04:23.960 our balance sheet position on ft X, but we're in 0:04:23.960 --> 0:04:26.920 a very good place right now. When with drawls were stopped, 0:04:27.839 --> 0:04:32.279 did you have assets on the platform rather, could you 0:04:32.320 --> 0:04:34.760 repeat that again. When with rolls from ft X was stopped, 0:04:34.800 --> 0:04:38.520 where you left with any assets for other counterparties on 0:04:38.720 --> 0:04:43.560 that platform. So if I understand your question correctly, I 0:04:43.560 --> 0:04:46.640 mean about the assets on the platform. So essentially what 0:04:47.080 --> 0:04:49.040 we're going to see is like this is going to 0:04:49.080 --> 0:04:54.440 be an extremely complex legal situation, some multiple jurisdictions, multiple assets, 0:04:54.839 --> 0:04:58.160 multiple regulators involved. So we're all prepared for a very 0:04:58.320 --> 0:05:02.159 long run out legal process. So that is that's what 0:05:02.480 --> 0:05:04.839 us and a lot of our customers are getting up to. 0:05:05.640 --> 0:05:08.680 The second aspect of it is a lot of information 0:05:08.760 --> 0:05:12.599 is missing. Today's hearing was a very good starting point, 0:05:13.000 --> 0:05:15.520 but at the same time we didn't get a lot 0:05:15.560 --> 0:05:18.120 of material information just yet. So what we're seeing in 0:05:18.160 --> 0:05:20.880 the debt markets is are essentially people trading the claims 0:05:20.960 --> 0:05:23.480 is three to five cents on the dollar is where 0:05:23.600 --> 0:05:26.359 things are being priced in at the moment. Okay, but 0:05:26.520 --> 0:05:31.400 any of any assets that you were helping manage and 0:05:31.440 --> 0:05:33.880 move around, were they trapped in any way? Did you 0:05:34.240 --> 0:05:38.080 for your immediate reaction function at your business when withdrawals 0:05:38.120 --> 0:05:42.840 were halted at ft X. So first thing that we 0:05:42.839 --> 0:05:47.320 were looking at is essentially the news flow and all 0:05:47.360 --> 0:05:51.039 the information was quite confusing at the start for everyone, right, 0:05:51.279 --> 0:05:54.520 because it was a shock to the industry. The notion 0:05:54.600 --> 0:05:57.120 that there is a massive liquidity crisis at ft X 0:05:57.240 --> 0:05:59.600 is definitely a surprise to us as well. But at 0:05:59.640 --> 0:06:03.360 the same time, we were well operating within our risk tolerance, 0:06:03.839 --> 0:06:05.719 and that is the advantage of coming to a broker 0:06:05.839 --> 0:06:08.400 versus going directly to an exchange. So we have a 0:06:08.440 --> 0:06:12.000 specified amount of funds that we did not cross at 0:06:12.080 --> 0:06:14.360 f A, fd X or any other exchange that's out there. 0:06:14.920 --> 0:06:17.279 That was the reason why we walked out of this 0:06:17.480 --> 0:06:21.680 with a small position relative to our balance sheet. Can 0:06:21.760 --> 0:06:24.960 you give us any size or scope on how your 0:06:25.040 --> 0:06:29.359 business has been hit by a lack of faith now 0:06:29.440 --> 0:06:32.560 in the industry broadly, a lack of trust now any 0:06:32.600 --> 0:06:36.719 industry broadly. Yeah. SEQ two Q three were record volumes 0:06:36.960 --> 0:06:38.919 with the record number of customers on boarded for the 0:06:39.200 --> 0:06:41.719 for the company. But if you look at the last 0:06:41.720 --> 0:06:44.880 two or three weeks, trust is fundamentally broken and we 0:06:44.960 --> 0:06:47.600 see that. But one of the very interesting data point 0:06:47.720 --> 0:06:50.120 is even within the last two or three weeks, we 0:06:50.160 --> 0:06:52.920 are not seeing a whole lot of customers actually pause 0:06:53.360 --> 0:06:56.880 and go away. You know from the conversations that was surprising. 0:06:56.960 --> 0:07:00.360 That's actually a good news for the sector. The simitely 0:07:00.400 --> 0:07:02.440 there is a lot of doubt. We need to rebuild trust. 0:07:02.839 --> 0:07:05.159 But at the same time, you're not seeing institutions walk 0:07:05.200 --> 0:07:08.120 away completely from the space just yet. What about some 0:07:08.200 --> 0:07:10.720 of the funders of you? Of course Series D you 0:07:10.800 --> 0:07:13.800 announced on social media for example, a hundred and fifty 0:07:13.840 --> 0:07:17.000 million came to you from backers such as Wellington Management, 0:07:17.000 --> 0:07:22.440 Tiger Global. Are those VC backers and crossover funds asking 0:07:22.440 --> 0:07:25.320 you RAGU for more details on your business? Are they 0:07:25.320 --> 0:07:30.240 are asking for perhaps some over because I think reviews 0:07:30.280 --> 0:07:33.160 lost his his ability to he but Carolines are asking 0:07:33.560 --> 0:07:37.240 about your backers, some of your investors, what about them 0:07:37.280 --> 0:07:40.080 losing faith? Have your investors been phoning you and saying 0:07:40.160 --> 0:07:43.640 what is going on? What is our exposure to FDx? Yeah, 0:07:43.920 --> 0:07:46.960 so a lot of investor conversations, especially if you look 0:07:47.000 --> 0:07:49.440 at the roster of investors that were associated with fd X, 0:07:49.680 --> 0:07:51.520 these are some of the biggest names on the planet. 0:07:51.960 --> 0:07:54.560 As a result, there is definitely a lot of confusion 0:07:54.840 --> 0:07:57.280 and chaos in the early days within our investors as well. 0:07:57.760 --> 0:08:00.520 So we did spend a lot of time thinking this 0:08:00.640 --> 0:08:03.040 through with our investors. In terms of our wist limits, 0:08:03.240 --> 0:08:06.120 we walk them through the balance sheet, our approach. The 0:08:06.240 --> 0:08:09.600 good news here is falconect as a company we never 0:08:09.720 --> 0:08:13.160 take directional bets and that was extremely powerful because the 0:08:13.200 --> 0:08:16.120 biggest learning out of the two thousand eight crisis and 0:08:16.160 --> 0:08:18.880 what eventually led to the Walker rule, is if market 0:08:18.920 --> 0:08:23.360 infrastructure companies start taking directional bets, the cascade amplification is 0:08:23.400 --> 0:08:25.960 going to be huge. And for that reason, when we 0:08:25.960 --> 0:08:28.600 started the company, we always were on the principle of 0:08:28.640 --> 0:08:32.200 never take directional bets. That is ultimately where the customers are. 0:08:32.520 --> 0:08:37.240 Investors got comfortable. But all right, Raggy y'all y'alla Gata, 0:08:37.400 --> 0:08:40.080 a CEO and co founder of falcon X, thank you 0:08:40.679 --> 0:08:45.240 coming out. How economic uncertainty is affecting Zoom. This is 0:08:45.240 --> 0:08:47.800 other tech companies are trimming costs. Will talk all about 0:08:47.800 --> 0:08:51.320 that and more with Zooms CFO Kelly Seckelberg. Next this 0:08:51.480 --> 0:09:04.200 is Bloom. Let's talk about the shares of video conferencing 0:09:04.240 --> 0:09:07.600 player Zoom, and they dropped Tuesday after the company recorded 0:09:07.600 --> 0:09:09.839 its slower sales growth on record. Now a number of 0:09:09.880 --> 0:09:12.079 analysts were reacting to all of it, and you've got 0:09:12.080 --> 0:09:14.920 the breakdown. Yeah, it's interesting. I mean some analyst did 0:09:14.920 --> 0:09:17.640 cut price targets. At one point on Tuesday, the stocks 0:09:17.640 --> 0:09:20.720 down more than ten percent. We closed down almost four percent. 0:09:20.760 --> 0:09:23.360 But what was really interesting for me was Morgan Stanley 0:09:23.400 --> 0:09:26.120 maintaining equal weight on the stock price target eighty five 0:09:26.120 --> 0:09:29.120 dollars a share. But they're saying that even though growth 0:09:29.480 --> 0:09:31.480 was better than expected in other ways, it did not 0:09:31.640 --> 0:09:34.560 slow down as much as feared. They can't get rid 0:09:34.600 --> 0:09:37.959 of this narrative around this stock, this bearish narrative about Zoom. 0:09:37.960 --> 0:09:40.520 You and I have been discussing Zoom for what feels 0:09:40.559 --> 0:09:43.280 like a very long time, but in reality goes back 0:09:43.320 --> 0:09:45.600 to just the beginning of the pandemic, when this name 0:09:45.880 --> 0:09:49.840 became a household name. Right. Still really big under performance 0:09:49.920 --> 0:09:52.120 year today, Zoom is one of the great laggards, right, 0:09:52.240 --> 0:09:54.400 especially when we consider some of the names that you 0:09:54.400 --> 0:09:57.520 and I have tracked so closely down almost six year today. 0:09:57.559 --> 0:10:00.080 A big question I've got, how do they return of 0:10:00.120 --> 0:10:04.560 growth now in this genuine post pandemic period. Carrot Let's 0:10:04.559 --> 0:10:08.160 ask woman who knows that the same CFO Kelly Syckleberg 0:10:08.160 --> 0:10:10.920 WU pieces to say, is with us and talk to us, 0:10:11.000 --> 0:10:14.880 Kelly just about the economic headwinds macro as they are. 0:10:15.120 --> 0:10:17.600 How do you as a company navigate that, How do 0:10:17.640 --> 0:10:22.199 you return to growth with your smaller customers in particular. Yeah, 0:10:22.280 --> 0:10:24.920 So we have two segments of our business, as you 0:10:24.960 --> 0:10:27.320 well know. We have the enterprise which is supported by 0:10:27.320 --> 0:10:30.400 our direct organization, and we have the online portion of 0:10:30.400 --> 0:10:34.240 our business. And the enterprise segment is growing well. We 0:10:34.400 --> 0:10:38.320 had twenty year over year growth in Q three And 0:10:38.360 --> 0:10:41.480 this is where you know, we're seeing this transition from 0:10:41.520 --> 0:10:45.240 being a really really killer meeting app that everyone knows 0:10:45.280 --> 0:10:47.200 and loves, as you say, we became known for during 0:10:47.200 --> 0:10:52.200 the pandemic to becoming a platform that really provides all 0:10:52.200 --> 0:10:55.920 of your collaboration and communication needs with Zoom Phone, Zoom 0:10:55.960 --> 0:10:58.280 Contact Center, Zoom One, which is a bundle that brings 0:10:58.280 --> 0:11:02.440 them all together. The area that we are seeing headwinds 0:11:02.520 --> 0:11:05.920 is in our online segment of our business. And this 0:11:06.040 --> 0:11:10.280 is by its nature more international, so much more impacted 0:11:10.440 --> 0:11:13.200 by the strengthening dollar and you know the impact of 0:11:13.240 --> 0:11:17.160 FX and it's having as well as the impact that 0:11:17.200 --> 0:11:21.040 we're seeing in Europe from the war. And then this 0:11:21.240 --> 0:11:23.400 is the area that we're seeing a little bit of 0:11:23.559 --> 0:11:27.760 macro as well. Some of these customers themselves being impacted 0:11:28.000 --> 0:11:32.920 by seeing contractions and thus returning to you know, cost 0:11:32.960 --> 0:11:37.840 cutting potential considerations. We have seen churn in this segment 0:11:37.880 --> 0:11:41.400 of our business returned to pre pandemic levels. It's down 0:11:41.440 --> 0:11:45.520 to three point one per cent. But we're seeing some challenges, 0:11:45.600 --> 0:11:47.800 as I said, headwinds in the new AD and that's 0:11:47.800 --> 0:11:50.040 what we're really focused on and what we need to 0:11:50.040 --> 0:11:53.000 stabilize in order for not to have that dampening effect 0:11:53.040 --> 0:11:57.520 on our long term growth. Your long term growth could 0:11:57.600 --> 0:11:59.760 M n A drive APOD. I think you've told about 0:11:59.840 --> 0:12:02.200 M and in the past, so I guess my question 0:12:02.240 --> 0:12:04.520 to you is how do you use M and A 0:12:04.520 --> 0:12:07.360 as a tool for growth? What kinds of companies will 0:12:07.360 --> 0:12:09.520 help you grow in those areas that are doing better. 0:12:10.880 --> 0:12:13.320 So what we've seen be successful for us in the 0:12:13.360 --> 0:12:18.040 past is acquiring companies that have technology that accelerate our 0:12:18.559 --> 0:12:21.760 building of those technologies. So for example, last year we 0:12:21.840 --> 0:12:25.199 acquired Solving, which brought conversational AI, which is a much 0:12:25.240 --> 0:12:29.520 needed capability into our Zoom contact Center product. We continue 0:12:29.559 --> 0:12:32.640 to look for opportunities like that which accelerate our development. 0:12:33.080 --> 0:12:36.880 We also look for opportunities that could be a compliment 0:12:36.920 --> 0:12:39.720 to us. So you know, we recently announced at zoom 0:12:39.760 --> 0:12:44.200 Topia that we have an email and calendar integration also 0:12:44.280 --> 0:12:49.160 email and calendar services for SMB customers, and that's a 0:12:49.200 --> 0:12:52.360 perfect example of how we're continuing to extend into productivity 0:12:52.400 --> 0:12:55.760 tools and also a perfect opportunity to continue that expansion 0:12:55.960 --> 0:12:58.840 through possible M and A. Let's talk a little bit 0:12:59.080 --> 0:13:01.400 when there's M and A is also let's talk about 0:13:01.400 --> 0:13:04.240 a focus on costs And actually Alice were impressed by 0:13:04.360 --> 0:13:06.880 that cost control, but how much you having to depend 0:13:07.280 --> 0:13:10.280 and look at the future costs of your labor In particular, 0:13:10.360 --> 0:13:12.560 job cuts were hearing from HP just in the last 0:13:12.559 --> 0:13:16.560 hour or so. So zoom by our nature, we have 0:13:16.600 --> 0:13:19.600 always been a very frugal company. We had a very 0:13:19.640 --> 0:13:24.840 interesting situation that during the pandemic, our growth really outpaced 0:13:24.960 --> 0:13:28.400 our ability to hire an invest and we've been very 0:13:28.440 --> 0:13:30.920 focused on the last couple of years of getting caught up. 0:13:30.960 --> 0:13:33.600 There were areas that we needed to invest in, especially 0:13:33.720 --> 0:13:37.040 R and D. We're very close now to reaching our 0:13:37.080 --> 0:13:40.680 long term targets, which means we will think very thoughtfully 0:13:40.840 --> 0:13:44.320 about hiring and investing going forwards in areas that are 0:13:44.320 --> 0:13:48.240 focused on driving innovation, driving growth. But of course we 0:13:48.320 --> 0:13:52.120 want to be ensured that our expenses are not outpacing 0:13:52.160 --> 0:13:54.760 revenue and need to do that in a very measured way. 0:13:54.800 --> 0:13:57.840 And that is exactly the message um that our leadership 0:13:57.840 --> 0:14:00.200 team has focused on. That we are employeeser for pused 0:14:00.240 --> 0:14:04.040 on it, especially as we're planning for flight twenty four. Kelly, 0:14:04.080 --> 0:14:06.880 I mentioned the stock move tuesday, you know, one point 0:14:06.960 --> 0:14:10.840 down ten percent. All told paid some of those declines, 0:14:11.200 --> 0:14:14.160 but this was the slowest quarter revenue growth you guys 0:14:14.160 --> 0:14:17.360 have recorded. How much pressure do you as a management 0:14:17.400 --> 0:14:22.640 team feel right now? We always talk about this internally. 0:14:22.840 --> 0:14:26.280 What we can control is our own execution, and we 0:14:26.440 --> 0:14:30.600 are aligning our employees around continuing to focus on delivering 0:14:30.600 --> 0:14:34.120 on our customers needs, on building out go to market 0:14:34.160 --> 0:14:36.960 infrastructure where we need it. For example, one of our 0:14:37.000 --> 0:14:40.360 focuses and initiatives is building out our partner ecosystem on 0:14:40.400 --> 0:14:45.440 an international basis, and keeping everybody focused on that rather 0:14:45.480 --> 0:14:49.160 than the stock price is really the message and that's 0:14:49.200 --> 0:14:51.080 what we can control on, So that's what we focus 0:14:51.120 --> 0:14:54.720 on it. Zoom, what about control of the competition and 0:14:54.880 --> 0:14:57.120 of course innovation is to find off some of that. 0:14:57.360 --> 0:14:59.960 Are you hearing from clients that they just have to 0:15:00.040 --> 0:15:02.320 caught the nefle they're going with teams or are you 0:15:02.360 --> 0:15:05.200 hearing that they cannot you know, make the purchase that 0:15:05.200 --> 0:15:08.680 they're estimated in this time. You know, we've been really 0:15:08.840 --> 0:15:12.280 pleased with our renewal rates, especially in the enterprise, as 0:15:12.640 --> 0:15:15.680 I think we are all convinced now that the flexible 0:15:15.720 --> 0:15:18.360 work is here to stay, and so organizations realize in 0:15:18.440 --> 0:15:22.320 order to keep their employees productive and happy, they need 0:15:22.360 --> 0:15:25.240 to provide them the proper technologies, which includes Zoom meeting 0:15:25.320 --> 0:15:28.520 Zoom phones, also ensuring that the proper technology is in 0:15:28.560 --> 0:15:32.600 the rooms. However, you know, they are being very thoughtful 0:15:32.760 --> 0:15:37.840 about those purchases, and so we have a very competitive 0:15:37.880 --> 0:15:42.280 and compelling total cost of ownership. Zoom one is a 0:15:42.320 --> 0:15:45.320 bundle that brings all of our most needed products together 0:15:45.520 --> 0:15:48.360 at a very compelling price point. And so what we 0:15:48.440 --> 0:15:52.480 do see is more scrutiny around deals, but understanding and 0:15:52.520 --> 0:15:55.800 showing how we can create value for customers makes Zoom 0:15:55.840 --> 0:15:59.880 a great alternative even in these environments where my prcf 0:16:00.240 --> 0:16:03.760 are being thoughtful, very very thoughtful about you know, commitments 0:16:03.760 --> 0:16:08.520 and investments for the future. Alright, Zoom CFO Kelly Steckelberg, 0:16:08.600 --> 0:16:18.920 thank you. For joining us here on Bloomberg Technology. EV 0:16:19.080 --> 0:16:23.200 maker Fiska has finally started building its vehicles two years 0:16:23.680 --> 0:16:26.760 after going public. The Ocean SUV just started rolling off 0:16:26.800 --> 0:16:31.240 assembly lines in Austria. It's targeting forty units in year 0:16:31.320 --> 0:16:34.800 one and already has over sixty three thousand reservations. I 0:16:34.880 --> 0:16:38.160 caught up with Henrik Fiske, chairman, CEO and founder of 0:16:38.200 --> 0:16:40.960 Fiske earlier today after he rang the bell at the 0:16:41.080 --> 0:16:45.880 ny SC. I think we actually, in my opinion, are 0:16:46.280 --> 0:16:49.960 maybe just a high point of the recession. I don't 0:16:49.960 --> 0:16:51.880 think they're going into a recession. I think we're in 0:16:51.920 --> 0:16:53.840 the middle of it and getting out of it. And 0:16:53.920 --> 0:16:55.920 I can really feel that when we talked to our 0:16:55.920 --> 0:17:00.360 suppliers to getting people back into their facilities. We have 0:17:00.440 --> 0:17:03.000 had a rough time getting all our suppliers lined up, 0:17:03.400 --> 0:17:05.879 but we managed it. I think together with Magna. Magna 0:17:05.960 --> 0:17:09.800 of course as a powerhouse in the automotive industry, so 0:17:09.920 --> 0:17:12.720 you know, we're taking a kind of cautious approach. We 0:17:12.760 --> 0:17:15.560 are only making three vehicles in Q one next year, 0:17:15.960 --> 0:17:19.000 then jumping really fast up to eight thousand, and the 0:17:19.080 --> 0:17:21.160 reason for the three D because we want to make 0:17:21.200 --> 0:17:24.240 sure all our suppliers come with us, but we actually 0:17:24.240 --> 0:17:28.360 are seeing that our supply chain are very good. It's 0:17:28.359 --> 0:17:31.680 been tough, but they're there and there with us Henrike 0:17:33.040 --> 0:17:36.520 small volume of vehicles. Then in Q one, these vehicles 0:17:36.600 --> 0:17:39.199 coming here to the United States, and how does the 0:17:39.280 --> 0:17:43.240 infrastructure look to service the early customers, how do they 0:17:43.280 --> 0:17:47.119 take delivery? What happens if the car has a servicing issue. 0:17:48.200 --> 0:17:50.840 So we have first of all our own technicians with 0:17:51.000 --> 0:17:53.760 mobile technicians which we can send all over the US. 0:17:54.520 --> 0:17:59.000 We also have a deal with Bridge Down which have 0:17:59.480 --> 0:18:02.960 you know, more than two thousand facilities all over the US, 0:18:03.040 --> 0:18:05.399 so we actually have more service facilities and even some 0:18:05.440 --> 0:18:08.520 of the largest automakers, so we are very well set up. 0:18:08.560 --> 0:18:11.640 We already have a couple of service centers, a special 0:18:11.720 --> 0:18:15.920 power train center in California. If there's any major issues, 0:18:16.000 --> 0:18:18.240 we can bring the vehicle there. But so far, the 0:18:18.359 --> 0:18:21.000 quality I've seen of these vehicles coming off the line 0:18:21.000 --> 0:18:23.679 and Magna is amazing. I've never seen anything like it. 0:18:23.680 --> 0:18:26.320 I've been over thirty years in this industry and I 0:18:26.359 --> 0:18:30.399 feel really good about our product and the quality that 0:18:30.480 --> 0:18:33.400 was Fisker's chairman, CEO and founder Henry Fiske I'm gonna 0:18:33.400 --> 0:18:35.760 tell you, Caroline, I've been writing about that company for 0:18:35.800 --> 0:18:39.520 more than two years. In Monthly Henry Fiske would say November, 0:18:40.560 --> 0:18:44.240 that's when production will start. In to his credit, it did, 0:18:45.000 --> 0:18:48.879 and then the backlog of orders, the production that comes, 0:18:49.400 --> 0:18:53.040 is it actually going to start to be a true competitoriad, Yeah, 0:18:53.400 --> 0:18:57.080 it's impossible to say. Their model rights to outsource manufacturing 0:18:57.080 --> 0:19:00.240 to Magna, a contract manufacturer. And that's why are so 0:19:00.280 --> 0:19:02.959 confident about how many they can build, about why they 0:19:02.960 --> 0:19:05.600 will be able to make it so affordable. And you know, 0:19:05.640 --> 0:19:08.000 you look on the screen there at those pictures, it's 0:19:08.040 --> 0:19:10.760 more in line with what Americans like bigger cars, right, 0:19:10.800 --> 0:19:14.040 But whether it will be successful, it will hit those targets. 0:19:14.040 --> 0:19:17.119 Who knows the world of evs is tricky. Remind me 0:19:17.200 --> 0:19:21.000 the price point. It's about forty U S dollars, which 0:19:21.000 --> 0:19:23.240 if you've got on Tesla's website right now, for example, 0:19:23.280 --> 0:19:25.760 or a riviewan that's nearer to eight tho. That's an 0:19:25.800 --> 0:19:28.639 astonishing price point to commit to. And that's what we 0:19:28.720 --> 0:19:31.200 kept asking him. Or what about supply chains, what about 0:19:31.240 --> 0:19:35.520 input costs? What about semi conductors? He seems unfazed you 0:19:35.560 --> 0:19:37.640 always bring out the best of these people as particularly 0:19:37.680 --> 0:19:39.960 with the long term relationships you have, so he seems 0:19:39.960 --> 0:19:41.520 like quite a character. I'm not sure what the whole 0:19:41.520 --> 0:19:44.000 glove thing was though. Where he rang the bell? Did 0:19:44.000 --> 0:19:46.720 he tell you completely lost on me? It must be 0:19:46.760 --> 0:19:58.960 something to do with electrified magician vibes. Magician vibes, Welcome 0:19:59.000 --> 0:20:00.919 back to Blo meg Technology. M Karine hide in New 0:20:01.000 --> 0:20:04.080 York and ed in San Francisco. We're talking Apple weight 0:20:04.400 --> 0:20:06.560 times to get your hands on the brand new, top 0:20:06.600 --> 0:20:09.359 tier iPhone fourteen Pro, and then they're looking a little 0:20:09.400 --> 0:20:12.000 worrying for analysts ahead of the key hot holiday season. 0:20:12.040 --> 0:20:14.600 Right right, look at the data. If I got on 0:20:14.640 --> 0:20:17.520 Apple's website right now, try and buy myself an iPhone 0:20:17.520 --> 0:20:19.760 fourteen pro or where you are in New York, it 0:20:19.760 --> 0:20:22.359 will tell me the delivery date is December thirty. And 0:20:22.359 --> 0:20:25.159 there's a growing chorus of analysts that are worried that 0:20:25.440 --> 0:20:27.760 either consumers are like, well it's not available right now, 0:20:27.800 --> 0:20:30.840 are wait and that could impact sales for the holiday quarter, 0:20:31.080 --> 0:20:33.040 which could impact the stock. This is a stock that's 0:20:33.080 --> 0:20:36.160 performed just a little better than the SMP five hundred, 0:20:36.240 --> 0:20:39.160 but still down year to day that's really the supply 0:20:39.320 --> 0:20:42.200 side of the story. But the demand side is really 0:20:42.240 --> 0:20:46.320 interesting as well. Ubs Evidence Lab has done it's annual 0:20:46.400 --> 0:20:51.080 global Smartphone consumer survey and it's interesting. Seven thousand respondents 0:20:51.119 --> 0:20:56.000 and survey people surveyed across key markets US, UK, Germany, China, Japan. 0:20:56.359 --> 0:20:59.680 In the U S and China, the number of respondents 0:20:59.720 --> 0:21:02.040 that's said they will buy an iPhone at some point 0:21:02.040 --> 0:21:04.480 in the next twelve months is down around a percentage 0:21:04.520 --> 0:21:06.840 point from the same period last year. But in other 0:21:06.880 --> 0:21:10.200 markets like the UK, like Japan and in Germany, actually 0:21:10.320 --> 0:21:13.360 the number of respondents saying yes affirmatively I will buy 0:21:13.359 --> 0:21:15.480 an iPhone at some point in the next twelve months 0:21:15.840 --> 0:21:18.199 is up. It's really interesting as well to look at 0:21:18.200 --> 0:21:22.560 some of the consumer behavior, especially the installed base age. 0:21:22.560 --> 0:21:24.400 In other words, that's a smart way of saying how 0:21:24.440 --> 0:21:28.080 long consumers holding onto their smartphones. It really crept up 0:21:28.359 --> 0:21:31.560 in the most recent survey to around twenty months. Imagine 0:21:31.560 --> 0:21:34.960 holding onto your smartphone for twenty months. But the reasons 0:21:35.000 --> 0:21:38.240 why are even more informative. Caroline. Why do people upgrade 0:21:38.280 --> 0:21:41.480 their iPhones because the battery is broken or the battery 0:21:41.520 --> 0:21:45.399 life is drained, because it's slow or simply because it's damaged. 0:21:45.440 --> 0:21:49.160 They don't seem motivated by upgrading to the latest handset 0:21:49.200 --> 0:21:52.600 because of the tech, really interesting products watch this holiday season. 0:21:52.680 --> 0:21:55.080 I don't have to imagine twenty months, said I live 0:21:55.160 --> 0:21:58.320 twenty months. I pushed past twenty months. But in fact, 0:21:58.880 --> 0:22:01.320 maybe I'm not going to buy any electronics this holiday season. 0:22:01.359 --> 0:22:03.760 In fact, we came to you our followers on Twitter, 0:22:03.840 --> 0:22:07.360 our audience are engaged audience about what on holiday are 0:22:07.359 --> 0:22:09.640 you wanting? What's your shopping list? What's your Sanders list 0:22:09.720 --> 0:22:14.000 looking like? And actually most people still want experiences. We're 0:22:14.000 --> 0:22:16.320 in this post COVID life where we want to go 0:22:16.359 --> 0:22:19.320 out and enjoy ourselves. Thirty five point five percent of 0:22:19.320 --> 0:22:22.720 you saying that healthy quarter think it's electronics is where 0:22:22.760 --> 0:22:25.560 they want their money to be being put to work, apparel, furnishing. 0:22:25.720 --> 0:22:27.879 Are we stocked up too much in COVID? And clearly 0:22:27.920 --> 0:22:30.360 a few just want cold, hard cash or at least 0:22:30.359 --> 0:22:32.680 a gift version of that and be used to say though, 0:22:32.920 --> 0:22:35.080 ahead of holiday shopping, we want to get a sense 0:22:35.119 --> 0:22:37.560