Speaker 1: I'm Caroline Higher blobgs World headquarters in New York, and
Speaker 1: I med Ludlow in San Francisco. This is Bloomberg Technology
Speaker 1: coming up. Fd x's attorney says substantial amounts of its
Speaker 1: assets have either been stolen or a missing. Today's bankruptcy
Speaker 1: hearing sheds light on ft x groups current priorities after
Speaker 1: mishandling funds and crypto contagion worsens with Genesis warning of
Speaker 1: possible bankruptcy. Now finance CEO c z who's positioning himself
Speaker 1: as the savior of crypto. He's turned to the Middle
Speaker 1: East for cash for a crypto recovery fund, and Zoom's
Speaker 1: chief financial officer joins us to explain its slowest quarterly
Speaker 1: sales growth on record and plans to navigate the economic headwinds.
Speaker 1: But first, let's bring it back closer to our home.
Speaker 1: It's a global story, of course, because it hits across
Speaker 1: the world, the ft X story, and we emerged well
Speaker 1: from the first ft X bankruptcy hearing on Tuesday, and
Speaker 1: it included an attorney representing the firm saying a substantium
Speaker 1: amount of ft x's assets are well missing. I speak
Speaker 1: it all down, but the most, Katie Greifeld shock Oal,
Speaker 1: we're almost becoming numb to it to certain degree, Katie,
Speaker 1: But what did you take away from the first hearing.
Speaker 1: It was the fiery first day, I would say, in
Speaker 1: addition to what you were saying about, you know, the
Speaker 1: assets either being lost or stolen, this back and forth
Speaker 1: on the top fifty biggest creditors, the fact that their
Speaker 1: names are redacted. We don't know who they are. That
Speaker 1: was an interesting storyline for me because it's really unusual
Speaker 1: that actually their names wouldn't be made public. But there
Speaker 1: were at least two groups of crypto creditors. They sent
Speaker 1: their lawyers there. One of those lawyers was protecting or
Speaker 1: were was working for members of that top fifty group,
Speaker 1: really arguing that their identities should be kept secret, and
Speaker 1: for now we know that they're going to remain unidentified.
Speaker 1: That's interesting when you try to map the contagion about
Speaker 1: what more shoes are we waiting to drop. We would
Speaker 1: like to know who's on that list, but it's going
Speaker 1: to remain under wraps for now. Missing assets also a
Speaker 1: debate around the assets and who should be doing what
Speaker 1: about what talk to us about what's happening in parallel
Speaker 1: in the Bahamas, Katie, Well, that's the thing, who actually,
Speaker 1: what court has jurisdiction here is going to handle it.
Speaker 1: That's been a sort of turf turf war that has
Speaker 1: erupted here. We know that for now, these dueling liquidation
Speaker 1: proceedings in the Bahamas, they're going to be transferred to Delaware.
Speaker 1: You're still going to have f t X as US
Speaker 1: restructuring advisors and regulators in the Bahamas. They're going to
Speaker 1: try to work out rules for sharing the information. But
Speaker 1: for right now, again it looks like that's being transferred
Speaker 1: to Delaware. Alright, bloom bows, Katie Greifeld, thank you very much.
Speaker 1: Let's continue the conversation with regular Allagata, CEO of the
Speaker 1: crypto trading platform Falconnects and Raggy. You have a history
Speaker 1: with ft X, which we'll get to, but I first
Speaker 1: want to ask you what are you seeing among your
Speaker 1: user base customer base in crypto markets? What does that
Speaker 1: reflect based on what's happening with ft X in the
Speaker 1: fallout from it? Absolutely? First off, good to be back.
Speaker 1: What we're seeing in the broader customer sentiment is definitely
Speaker 1: the first few weeks were shocked, right because everyone knew
Speaker 1: that al Meda was a counter party on ft X,
Speaker 1: but the lack of separation between these counterparties was a
Speaker 1: huge shock. Now essentially all the customers chatter is all
Speaker 1: about which shoe is going to drop next. So people
Speaker 1: are paying a lot of attention to exchanges specifically, so
Speaker 1: specifically to Asian exchanges. People are doing extended due diligence
Speaker 1: and making sure that things are okay there. But everyone
Speaker 1: is like very cautious at the moment. So your relationship
Speaker 1: with f t X, you did transact to ft X,
Speaker 1: Explain your historical relationship with FTX and where it stands now.
Speaker 1: So we did have Alameter as one of our trading
Speaker 1: parties as we started the business, but a few weeks
Speaker 1: to a month before this entire contagion we stopped. We
Speaker 1: are on the relationships or zero exposure to Alameter. So
Speaker 1: it's one of the largest brokerages on the planet. We
Speaker 1: do work with one of the largest liquidity providers out there,
Speaker 1: which is ft X. We have a small relative to
Speaker 1: our balance sheet position on ft X, but we're in
Speaker 1: a very good place right now. When with drawls were stopped,
Speaker 1: did you have assets on the platform rather, could you
Speaker 1: repeat that again. When with rolls from ft X was stopped,
Speaker 1: where you left with any assets for other counterparties on
Speaker 1: that platform. So if I understand your question correctly, I
Speaker 1: mean about the assets on the platform. So essentially what
Speaker 1: we're going to see is like this is going to
Speaker 1: be an extremely complex legal situation, some multiple jurisdictions, multiple assets,
Speaker 1: multiple regulators involved. So we're all prepared for a very
Speaker 1: long run out legal process. So that is that's what
Speaker 1: us and a lot of our customers are getting up to.
Speaker 1: The second aspect of it is a lot of information
Speaker 1: is missing. Today's hearing was a very good starting point,
Speaker 1: but at the same time we didn't get a lot
Speaker 1: of material information just yet. So what we're seeing in
Speaker 1: the debt markets is are essentially people trading the claims
Speaker 1: is three to five cents on the dollar is where
Speaker 1: things are being priced in at the moment. Okay, but
Speaker 1: any of any assets that you were helping manage and
Speaker 1: move around, were they trapped in any way? Did you
Speaker 1: for your immediate reaction function at your business when withdrawals
Speaker 1: were halted at ft X. So first thing that we
Speaker 1: were looking at is essentially the news flow and all
Speaker 1: the information was quite confusing at the start for everyone, right,
Speaker 1: because it was a shock to the industry. The notion
Speaker 1: that there is a massive liquidity crisis at ft X
Speaker 1: is definitely a surprise to us as well. But at
Speaker 1: the same time, we were well operating within our risk tolerance,
Speaker 1: and that is the advantage of coming to a broker
Speaker 1: versus going directly to an exchange. So we have a
Speaker 1: specified amount of funds that we did not cross at
Speaker 1: f A, fd X or any other exchange that's out there.
Speaker 1: That was the reason why we walked out of this
Speaker 1: with a small position relative to our balance sheet. Can
Speaker 1: you give us any size or scope on how your
Speaker 1: business has been hit by a lack of faith now
Speaker 1: in the industry broadly, a lack of trust now any
Speaker 1: industry broadly. Yeah. SEQ two Q three were record volumes
Speaker 1: with the record number of customers on boarded for the
Speaker 1: for the company. But if you look at the last
Speaker 1: two or three weeks, trust is fundamentally broken and we
Speaker 1: see that. But one of the very interesting data point
Speaker 1: is even within the last two or three weeks, we
Speaker 1: are not seeing a whole lot of customers actually pause
Speaker 1: and go away. You know from the conversations that was surprising.
Speaker 1: That's actually a good news for the sector. The simitely
Speaker 1: there is a lot of doubt. We need to rebuild trust.
Speaker 1: But at the same time, you're not seeing institutions walk
Speaker 1: away completely from the space just yet. What about some
Speaker 1: of the funders of you? Of course Series D you
Speaker 1: announced on social media for example, a hundred and fifty
Speaker 1: million came to you from backers such as Wellington Management,
Speaker 1: Tiger Global. Are those VC backers and crossover funds asking
Speaker 1: you RAGU for more details on your business? Are they
Speaker 1: are asking for perhaps some over because I think reviews
Speaker 1: lost his his ability to he but Carolines are asking
Speaker 1: about your backers, some of your investors, what about them
Speaker 1: losing faith? Have your investors been phoning you and saying
Speaker 1: what is going on? What is our exposure to FDx? Yeah,
Speaker 1: so a lot of investor conversations, especially if you look
Speaker 1: at the roster of investors that were associated with fd X,
Speaker 1: these are some of the biggest names on the planet.
Speaker 1: As a result, there is definitely a lot of confusion
Speaker 1: and chaos in the early days within our investors as well.
Speaker 1: So we did spend a lot of time thinking this
Speaker 1: through with our investors. In terms of our wist limits,
Speaker 1: we walk them through the balance sheet, our approach. The
Speaker 1: good news here is falconect as a company we never
Speaker 1: take directional bets and that was extremely powerful because the
Speaker 1: biggest learning out of the two thousand eight crisis and
Speaker 1: what eventually led to the Walker rule, is if market
Speaker 1: infrastructure companies start taking directional bets, the cascade amplification is
Speaker 1: going to be huge. And for that reason, when we
Speaker 1: started the company, we always were on the principle of
Speaker 1: never take directional bets. That is ultimately where the customers are.
Speaker 1: Investors got comfortable. But all right, Raggy y'all y'alla Gata,
Speaker 1: a CEO and co founder of falcon X, thank you
Speaker 1: coming out. How economic uncertainty is affecting Zoom. This is
Speaker 1: other tech companies are trimming costs. Will talk all about
Speaker 1: that and more with Zooms CFO Kelly Seckelberg. Next this
Speaker 1: is Bloom. Let's talk about the shares of video conferencing
Speaker 1: player Zoom, and they dropped Tuesday after the company recorded
Speaker 1: its slower sales growth on record. Now a number of
Speaker 1: analysts were reacting to all of it, and you've got
Speaker 1: the breakdown. Yeah, it's interesting. I mean some analyst did
Speaker 1: cut price targets. At one point on Tuesday, the stocks
Speaker 1: down more than ten percent. We closed down almost four percent.
Speaker 1: But what was really interesting for me was Morgan Stanley
Speaker 1: maintaining equal weight on the stock price target eighty five
Speaker 1: dollars a share. But they're saying that even though growth
Speaker 1: was better than expected in other ways, it did not
Speaker 1: slow down as much as feared. They can't get rid
Speaker 1: of this narrative around this stock, this bearish narrative about Zoom.
Speaker 1: You and I have been discussing Zoom for what feels
Speaker 1: like a very long time, but in reality goes back
Speaker 1: to just the beginning of the pandemic, when this name
Speaker 1: became a household name. Right. Still really big under performance
Speaker 1: year today, Zoom is one of the great laggards, right,
Speaker 1: especially when we consider some of the names that you
Speaker 1: and I have tracked so closely down almost six year today.
Speaker 1: A big question I've got, how do they return of
Speaker 1: growth now in this genuine post pandemic period. Carrot Let's
Speaker 1: ask woman who knows that the same CFO Kelly Syckleberg
Speaker 1: WU pieces to say, is with us and talk to us,
Speaker 1: Kelly just about the economic headwinds macro as they are.
Speaker 1: How do you as a company navigate that, How do
Speaker 1: you return to growth with your smaller customers in particular. Yeah,
Speaker 1: So we have two segments of our business, as you
Speaker 1: well know. We have the enterprise which is supported by
Speaker 1: our direct organization, and we have the online portion of
Speaker 1: our business. And the enterprise segment is growing well. We
Speaker 1: had twenty year over year growth in Q three And
Speaker 1: this is where you know, we're seeing this transition from
Speaker 1: being a really really killer meeting app that everyone knows
Speaker 1: and loves, as you say, we became known for during
Speaker 1: the pandemic to becoming a platform that really provides all
Speaker 1: of your collaboration and communication needs with Zoom Phone, Zoom
Speaker 1: Contact Center, Zoom One, which is a bundle that brings
Speaker 1: them all together. The area that we are seeing headwinds
Speaker 1: is in our online segment of our business. And this
Speaker 1: is by its nature more international, so much more impacted
Speaker 1: by the strengthening dollar and you know the impact of
Speaker 1: FX and it's having as well as the impact that
Speaker 1: we're seeing in Europe from the war. And then this
Speaker 1: is the area that we're seeing a little bit of
Speaker 1: macro as well. Some of these customers themselves being impacted
Speaker 1: by seeing contractions and thus returning to you know, cost
Speaker 1: cutting potential considerations. We have seen churn in this segment
Speaker 1: of our business returned to pre pandemic levels. It's down
Speaker 1: to three point one per cent. But we're seeing some challenges,
Speaker 1: as I said, headwinds in the new AD and that's
Speaker 1: what we're really focused on and what we need to
Speaker 1: stabilize in order for not to have that dampening effect
Speaker 1: on our long term growth. Your long term growth could
Speaker 1: M n A drive APOD. I think you've told about
Speaker 1: M and in the past, so I guess my question
Speaker 1: to you is how do you use M and A
Speaker 1: as a tool for growth? What kinds of companies will
Speaker 1: help you grow in those areas that are doing better.
Speaker 1: So what we've seen be successful for us in the
Speaker 1: past is acquiring companies that have technology that accelerate our
Speaker 1: building of those technologies. So for example, last year we
Speaker 1: acquired Solving, which brought conversational AI, which is a much
Speaker 1: needed capability into our Zoom contact Center product. We continue
Speaker 1: to look for opportunities like that which accelerate our development.
Speaker 1: We also look for opportunities that could be a compliment
Speaker 1: to us. So you know, we recently announced at zoom
Speaker 1: Topia that we have an email and calendar integration also
Speaker 1: email and calendar services for SMB customers, and that's a
Speaker 1: perfect example of how we're continuing to extend into productivity
Speaker 1: tools and also a perfect opportunity to continue that expansion
Speaker 1: through possible M and A. Let's talk a little bit
Speaker 1: when there's M and A is also let's talk about
Speaker 1: a focus on costs And actually Alice were impressed by
Speaker 1: that cost control, but how much you having to depend
Speaker 1: and look at the future costs of your labor In particular,
Speaker 1: job cuts were hearing from HP just in the last
Speaker 1: hour or so. So zoom by our nature, we have
Speaker 1: always been a very frugal company. We had a very
Speaker 1: interesting situation that during the pandemic, our growth really outpaced
Speaker 1: our ability to hire an invest and we've been very
Speaker 1: focused on the last couple of years of getting caught up.
Speaker 1: There were areas that we needed to invest in, especially
Speaker 1: R and D. We're very close now to reaching our
Speaker 1: long term targets, which means we will think very thoughtfully
Speaker 1: about hiring and investing going forwards in areas that are
Speaker 1: focused on driving innovation, driving growth. But of course we
Speaker 1: want to be ensured that our expenses are not outpacing
Speaker 1: revenue and need to do that in a very measured way.
Speaker 1: And that is exactly the message um that our leadership
Speaker 1: team has focused on. That we are employeeser for pused
Speaker 1: on it, especially as we're planning for flight twenty four. Kelly,
Speaker 1: I mentioned the stock move tuesday, you know, one point
Speaker 1: down ten percent. All told paid some of those declines,
Speaker 1: but this was the slowest quarter revenue growth you guys
Speaker 1: have recorded. How much pressure do you as a management
Speaker 1: team feel right now? We always talk about this internally.
Speaker 1: What we can control is our own execution, and we
Speaker 1: are aligning our employees around continuing to focus on delivering
Speaker 1: on our customers needs, on building out go to market
Speaker 1: infrastructure where we need it. For example, one of our
Speaker 1: focuses and initiatives is building out our partner ecosystem on
Speaker 1: an international basis, and keeping everybody focused on that rather
Speaker 1: than the stock price is really the message and that's
Speaker 1: what we can control on, So that's what we focus
Speaker 1: on it. Zoom, what about control of the competition and
Speaker 1: of course innovation is to find off some of that.
Speaker 1: Are you hearing from clients that they just have to
Speaker 1: caught the nefle they're going with teams or are you
Speaker 1: hearing that they cannot you know, make the purchase that
Speaker 1: they're estimated in this time. You know, we've been really
Speaker 1: pleased with our renewal rates, especially in the enterprise, as
Speaker 1: I think we are all convinced now that the flexible
Speaker 1: work is here to stay, and so organizations realize in
Speaker 1: order to keep their employees productive and happy, they need
Speaker 1: to provide them the proper technologies, which includes Zoom meeting
Speaker 1: Zoom phones, also ensuring that the proper technology is in
Speaker 1: the rooms. However, you know, they are being very thoughtful
Speaker 1: about those purchases, and so we have a very competitive
Speaker 1: and compelling total cost of ownership. Zoom one is a
Speaker 1: bundle that brings all of our most needed products together
Speaker 1: at a very compelling price point. And so what we
Speaker 1: do see is more scrutiny around deals, but understanding and
Speaker 1: showing how we can create value for customers makes Zoom
Speaker 1: a great alternative even in these environments where my prcf
Speaker 1: are being thoughtful, very very thoughtful about you know, commitments
Speaker 1: and investments for the future. Alright, Zoom CFO Kelly Steckelberg,
Speaker 1: thank you. For joining us here on Bloomberg Technology. EV
Speaker 1: maker Fiska has finally started building its vehicles two years
Speaker 1: after going public. The Ocean SUV just started rolling off
Speaker 1: assembly lines in Austria. It's targeting forty units in year
Speaker 1: one and already has over sixty three thousand reservations. I
Speaker 1: caught up with Henrik Fiske, chairman, CEO and founder of
Speaker 1: Fiske earlier today after he rang the bell at the
Speaker 1: ny SC. I think we actually, in my opinion, are
Speaker 1: maybe just a high point of the recession. I don't
Speaker 1: think they're going into a recession. I think we're in
Speaker 1: the middle of it and getting out of it. And
Speaker 1: I can really feel that when we talked to our
Speaker 1: suppliers to getting people back into their facilities. We have
Speaker 1: had a rough time getting all our suppliers lined up,
Speaker 1: but we managed it. I think together with Magna. Magna
Speaker 1: of course as a powerhouse in the automotive industry, so
Speaker 1: you know, we're taking a kind of cautious approach. We
Speaker 1: are only making three vehicles in Q one next year,
Speaker 1: then jumping really fast up to eight thousand, and the
Speaker 1: reason for the three D because we want to make
Speaker 1: sure all our suppliers come with us, but we actually
Speaker 1: are seeing that our supply chain are very good. It's
Speaker 1: been tough, but they're there and there with us Henrike
Speaker 1: small volume of vehicles. Then in Q one, these vehicles
Speaker 1: coming here to the United States, and how does the
Speaker 1: infrastructure look to service the early customers, how do they
Speaker 1: take delivery? What happens if the car has a servicing issue.
Speaker 1: So we have first of all our own technicians with
Speaker 1: mobile technicians which we can send all over the US.
Speaker 1: We also have a deal with Bridge Down which have
Speaker 1: you know, more than two thousand facilities all over the US,
Speaker 1: so we actually have more service facilities and even some
Speaker 1: of the largest automakers, so we are very well set up.
Speaker 1: We already have a couple of service centers, a special
Speaker 1: power train center in California. If there's any major issues,
Speaker 1: we can bring the vehicle there. But so far, the
Speaker 1: quality I've seen of these vehicles coming off the line
Speaker 1: and Magna is amazing. I've never seen anything like it.
Speaker 1: I've been over thirty years in this industry and I
Speaker 1: feel really good about our product and the quality that
Speaker 1: was Fisker's chairman, CEO and founder Henry Fiske I'm gonna
Speaker 1: tell you, Caroline, I've been writing about that company for
Speaker 1: more than two years. In Monthly Henry Fiske would say November,
Speaker 1: that's when production will start. In to his credit, it did,
Speaker 1: and then the backlog of orders, the production that comes,
Speaker 1: is it actually going to start to be a true competitoriad, Yeah,
Speaker 1: it's impossible to say. Their model rights to outsource manufacturing
Speaker 1: to Magna, a contract manufacturer. And that's why are so
Speaker 1: confident about how many they can build, about why they
Speaker 1: will be able to make it so affordable. And you know,
Speaker 1: you look on the screen there at those pictures, it's
Speaker 1: more in line with what Americans like bigger cars, right,
Speaker 1: But whether it will be successful, it will hit those targets.
Speaker 1: Who knows the world of evs is tricky. Remind me
Speaker 1: the price point. It's about forty U S dollars, which
Speaker 1: if you've got on Tesla's website right now, for example,
Speaker 1: or a riviewan that's nearer to eight tho. That's an
Speaker 1: astonishing price point to commit to. And that's what we
Speaker 1: kept asking him. Or what about supply chains, what about
Speaker 1: input costs? What about semi conductors? He seems unfazed you
Speaker 1: always bring out the best of these people as particularly
Speaker 1: with the long term relationships you have, so he seems
Speaker 1: like quite a character. I'm not sure what the whole
Speaker 1: glove thing was though. Where he rang the bell? Did
Speaker 1: he tell you completely lost on me? It must be
Speaker 1: something to do with electrified magician vibes. Magician vibes, Welcome
Speaker 1: back to Blo meg Technology. M Karine hide in New
Speaker 1: York and ed in San Francisco. We're talking Apple weight
Speaker 1: times to get your hands on the brand new, top
Speaker 1: tier iPhone fourteen Pro, and then they're looking a little
Speaker 1: worrying for analysts ahead of the key hot holiday season.
Speaker 1: Right right, look at the data. If I got on
Speaker 1: Apple's website right now, try and buy myself an iPhone
Speaker 1: fourteen pro or where you are in New York, it
Speaker 1: will tell me the delivery date is December thirty. And
Speaker 1: there's a growing chorus of analysts that are worried that
Speaker 1: either consumers are like, well it's not available right now,
Speaker 1: are wait and that could impact sales for the holiday quarter,
Speaker 1: which could impact the stock. This is a stock that's
Speaker 1: performed just a little better than the SMP five hundred,
Speaker 1: but still down year to day that's really the supply
Speaker 1: side of the story. But the demand side is really
Speaker 1: interesting as well. Ubs Evidence Lab has done it's annual
Speaker 1: global Smartphone consumer survey and it's interesting. Seven thousand respondents
Speaker 1: and survey people surveyed across key markets US, UK, Germany, China, Japan.
Speaker 1: In the U S and China, the number of respondents
Speaker 1: that's said they will buy an iPhone at some point
Speaker 1: in the next twelve months is down around a percentage
Speaker 1: point from the same period last year. But in other
Speaker 1: markets like the UK, like Japan and in Germany, actually
Speaker 1: the number of respondents saying yes affirmatively I will buy
Speaker 1: an iPhone at some point in the next twelve months
Speaker 1: is up. It's really interesting as well to look at
Speaker 1: some of the consumer behavior, especially the installed base age.
Speaker 1: In other words, that's a smart way of saying how
Speaker 1: long consumers holding onto their smartphones. It really crept up
Speaker 1: in the most recent survey to around twenty months. Imagine
Speaker 1: holding onto your smartphone for twenty months. But the reasons
Speaker 1: why are even more informative. Caroline. Why do people upgrade
Speaker 1: their iPhones because the battery is broken or the battery
Speaker 1: life is drained, because it's slow or simply because it's damaged.
Speaker 1: They don't seem motivated by upgrading to the latest handset
Speaker 1: because of the tech, really interesting products watch this holiday season.
Speaker 1: I don't have to imagine twenty months, said I live
Speaker 1: twenty months. I pushed past twenty months. But in fact,
Speaker 1: maybe I'm not going to buy any electronics this holiday season.
Speaker 1: In fact, we came to you our followers on Twitter,
Speaker 1: our audience are engaged audience about what on holiday are
Speaker 1: you wanting? What's your shopping list? What's your Sanders list
Speaker 1: looking like? And actually most people still want experiences. We're
Speaker 1: in this post COVID life where we want to go
Speaker 1: out and enjoy ourselves. Thirty five point five percent of
Speaker 1: you saying that healthy quarter think it's electronics is where
Speaker 1: they want their money to be being put to work, apparel, furnishing.
Speaker 1: Are we stocked up too much in COVID? And clearly
Speaker 1: a few just want cold, hard cash or at least
Speaker 1: a gift version of that and be used to say though,
Speaker 1: ahead of holiday shopping, we want to get a sense
Speaker 1: of how people are spending and whether they're being more
Speaker 1: thrifty or more thoughtful. My name Ourn's with us Head
Speaker 1: of sustainability at eBay and re name what you can
Speaker 1: give us is a really interesting take, particularly of where
Speaker 1: gen z are putting their money to work, because I
Speaker 1: certainly have started to rent more of my items, perhaps
Speaker 1: look for second hand And is that more focused on
Speaker 1: money and a recession worry or is that more focused
Speaker 1: on sustainability in the here and that you know, it's
Speaker 1: really oath. I think that re commerce is selling and
Speaker 1: buying of used and pre loved goods is really a
Speaker 1: dual issue. So people have an opportunity to get online,
Speaker 1: sell things are laying around their house and make a
Speaker 1: profit potentially an extra couple of dollars in their pocket
Speaker 1: as we head into the holiday season. But at the
Speaker 1: same time they're holding the environment. Not only does this
Speaker 1: item get a second life and not go to landfill,
Speaker 1: but you're also helping to avoid additional carbon emissions being
Speaker 1: put in the air, which is really critical when we're
Speaker 1: in a time of a climate crisis. But I what
Speaker 1: all people setting right now. They're selling just about everything
Speaker 1: you mentioned that people wanted and then before um electronics
Speaker 1: of parel, handbags, sporting goods, whatever, whatever you can imagine,
Speaker 1: we have it all on eBay. And people are really
Speaker 1: buying um all those items because they are also contributing
Speaker 1: to the circular economy. It's it's a dual win. It's
Speaker 1: a win for your pocket and so win for the planet.
Speaker 1: Renee eBay story technology name to some people a blast
Speaker 1: from the past, to be fair, but a lot of
Speaker 1: the data that I've read throughout Tuesday suggests actually there
Speaker 1: is a younger audience going to eBay in search of
Speaker 1: goods selling goods. My question is why, you know? Are
Speaker 1: they driven by cost consciousness? Are they driven not so
Speaker 1: much about cost consciousness or value for money? I want
Speaker 1: the bang for my buck. Talk us through the spending
Speaker 1: patterns you're seeing with with the gen Z and millennials,
Speaker 1: they're not having the same stigma attached to buying used,
Speaker 1: buying a pre leve item that maybe my generation did. UM.
Speaker 1: They're seeing that there's there's money to be saved while
Speaker 1: you're participating online in the circular economy. But they're also
Speaker 1: having that added benefit of knowing that they're not contributing
Speaker 1: extra ways to the landfill, They're not contributing um extra
Speaker 1: missions to the atmosphere, and so that circularity of seeing
Speaker 1: us goods being sold and being bought online is really increasing. Um.
Speaker 1: Over fifty of our survey participants said that they're selling
Speaker 1: more used goods online and they have in previous years.
Speaker 1: So we're seeing a real trend here. What are some
Speaker 1: of the weird and wonderful things people are buying? Like
Speaker 1: really weird, really wonderful, really weird and wonderful. There is
Speaker 1: an old story floating around about somebody trying to I
Speaker 1: think sell their soul that that didn't really fly, so
Speaker 1: that got squashed pretty quickly. Um. But the wonderful things
Speaker 1: are these unique finds. There's a teacup that your grandmother
Speaker 1: may have had in a set and it was broken,
Speaker 1: and then that one item is online. You were able
Speaker 1: to match it and bring it back and put it
Speaker 1: with the set that your grandmother had. So there's really
Speaker 1: a lot of opportunity I think on eBay, not just
Speaker 1: for the sellers, but for buyers as well. UM. And
Speaker 1: I'd also like to mention a related issue that we're
Speaker 1: working on right now has to actually do with Congress
Speaker 1: in ten ninety nine K forms, so there's a limit
Speaker 1: right now on selling on eBay and other market place
Speaker 1: says of six hundred dollars and if you sell six
Speaker 1: hundred dollars or more worth of items that could be
Speaker 1: laying around your home, you're going to get this tax
Speaker 1: form come January unless Congress acts now to change this
Speaker 1: threshold and raise it back up somewhere near where it
Speaker 1: used to be. Potentially a year ago was twenty dollars.
Speaker 1: So you can see how this distance and advises the
Speaker 1: potential for re commerce, the potential for selling goods online
Speaker 1: that you can make a couple extra dollars as we
Speaker 1: head into the holiday season. You know, I think, um,
Speaker 1: we really do need Congress to take this seriously and
Speaker 1: take a look out of That's interesting because particularly when
Speaker 1: you have lent into luxury items, you've been focusing on authenticity,
Speaker 1: you've been really leaning into well it's now kind of
Speaker 1: pulled back the whole n f T graze, But the
Speaker 1: focus on sneakers, on collections of just what people wanted
Speaker 1: to buy of collectibles, is that going to be hit
Speaker 1: and what's the price point like as we go into
Speaker 1: this slightly slower economy. I don't think I had the
Speaker 1: data to speak specifically to about christ Coin being the
Speaker 1: sustainability professional that I am, but I can tell you
Speaker 1: though that those luxury items that are being resold are
Speaker 1: just as valuable in terms of avoiding emissions and avoiding
Speaker 1: waste as they're lower end items. The sweater there in
Speaker 1: my closet. The average American household from our last service
Speaker 1: four thousand dollars worth of things in their household that
Speaker 1: they can sell. And now we're heading into the holidays.
Speaker 1: That could be the difference between putting a present under
Speaker 1: the Christmas tree, or exchanging gifts during quanza, or even
Speaker 1: putting the turkey on the table. And so we don't
Speaker 1: want to see this Tenani nine cave form, which is
Speaker 1: could be really confusing and distance and advising to casual
Speaker 1: sellers impact. What what we want to see is participation
Speaker 1: in the circular economy. Okay, eBay Head of sustainability Reneme
Speaker 1: More and thank you. It's pivoting to digital assets are convests.
Speaker 1: CEO Cafe Wood is defending blockchain technology after buying shares
Speaker 1: of coin based this week. His just some of her
Speaker 1: conversation with Carol Massa and Tim stand of It on
Speaker 1: bloom Bug Radio. The infrastructure, the technology has not skipped
Speaker 1: a beat throughout this entire crisis. In fact, the hash
Speaker 1: rate Bitcoin's hash rate is at an all time high,
Speaker 1: and that is a real indication of the security of
Speaker 1: the network. On ethereum, we're seeing the total value uh
Speaker 1: staked at twenty four billion, that is an all time high,
Speaker 1: So we think the infrastructure is working beautifully UM. As
Speaker 1: far as coin base, UH, this is an onshore regulated
Speaker 1: UH company and wanting to help shape regulations. Brian Armstrong
Speaker 1: the CEO, and Alicia uh CFO have been leaning in
Speaker 1: into what's going on right now and saying, Okay, regulators,
Speaker 1: we need more clarity in order to protect to protect investors,
Speaker 1: those who wanted to get involved with a certain types
Speaker 1: of crypto were forced off shore and look at what's happened.
Speaker 1: So UM, I think that coin base is going to
Speaker 1: come out here looking very very strong. It just lost
Speaker 1: a very big competitor in f t X. Well what
Speaker 1: is the market missing though, because you know that could
Speaker 1: be one narrative, Cathy, But at the same time, we
Speaker 1: haven't exactly seen shares of coin based rally since f
Speaker 1: t x is collapse. Do you think to you that
Speaker 1: represents potentially broader concern about just people's interest in crypto
Speaker 1: Following ft x is collapse. No, I think it's more fear.
Speaker 1: I think many people say, we don't know what we
Speaker 1: don't know? Uh and uh So what we do is
Speaker 1: we step back, you know, put a little perspective into
Speaker 1: the situation here, and what do we have. So the
Speaker 1: entire crypto asset ecosystem is an eight hundred billion dollar ecosystem.
Speaker 1: Apple is three times larger in terms of market cap.
Speaker 1: So that's some perspective. Many people are saying, well, okay,
Speaker 1: is this another Lehman? Could this be uh you know,
Speaker 1: could could we see the domino effect here? I've just
Speaker 1: given you one reason why. The banking system back in
Speaker 1: oh eight oh nine trillions and trillions of dollars and
Speaker 1: it was the global banking system. Right now we have
Speaker 1: it seems from f t X five to ten billion
Speaker 1: dollars in creditors. If as uh as f t X
Speaker 1: has filed bankruptcy, they will be making claims. If you
Speaker 1: look at Lehman, that was one point to trillion dollars
Speaker 1: in claims. So again, just trying to put perspective, this
Speaker 1: is fraud. That was all confess Ceo caffe Wood coming
Speaker 1: up more on Crypto the Lads. President John wu discusses
Speaker 1: the crypto contagion and its impact on trust in the
Speaker 1: blockchain ecosystem. This is Bloomberg Crypto News abound. Let's get
Speaker 1: you up to speed what they've been following just this
Speaker 1: week alone, because ftx is attorney told a bankruptcy judge
Speaker 1: that a substantial amount of assets have been stolen or
Speaker 1: indeed a missing in what's been considered quote, one of
Speaker 1: the most abrupt and difficult corporate collapses in the history
Speaker 1: of corporate America. That's according to the new ceo class.
Speaker 1: Bloomberg has learned that the Binance ceo, of course cz
Speaker 1: met with Middle East investors to raise money for his
Speaker 1: crypto recovery funds have been talking about, and of course
Speaker 1: we reported yesterday Genesis warning potential investors it may have
Speaker 1: to file for bankruptcy unless it can raise new money,
Speaker 1: while acknowledging there's a two point eight billion dollar in
Speaker 1: outstanding loans on its banners sheet, including two related parties
Speaker 1: such as well as parent company d c G for
Speaker 1: more on the state of the industry. The person who's
Speaker 1: behind a lot of this breaking news is Shenani Bass
Speaker 1: actually with US and other Labs President John who pleased
Speaker 1: to say is with us as well, and first and foremost, John,
Speaker 1: let's let's talk about how exhausted you are. What is
Speaker 1: it like the sentiment you're in the underlying technology, You're
Speaker 1: about getting new rails for financial for traditional finance to
Speaker 1: run on in a more crypto cryptom, more underlying efficient
Speaker 1: technological manner. Are people being put off coming to at
Speaker 1: the moment a little bit um? I would, I have
Speaker 1: to say, definitely lack of trust. Now in the space,
Speaker 1: there were a lot of people who are already distrustful
Speaker 1: in the space to begin with, and with all of
Speaker 1: these things that the drama that's happened in the last
Speaker 1: few months, they feel like they are gonna equate that
Speaker 1: with the entire space. I'm in the middle. I see
Speaker 1: a lot of activity. I speak to all different types
Speaker 1: of partners, builders, exchanges, market makers. I can tell you
Speaker 1: it's actually really just a small percentage of these people.
Speaker 1: But these small percentage of people have a lot of
Speaker 1: control because they're in large, centralized entities, and these are
Speaker 1: the really the bad actors. Most people are good. Speaking
Speaker 1: of large and centralized that news about f t X
Speaker 1: not disclosing the names of the fifty creditors, the top fifty.
Speaker 1: This is supposed to be an industry about trust. Is
Speaker 1: there a problem here to not know who those top
Speaker 1: fifty creditors are? As a crypto native, I generally believe
Speaker 1: in full transparency and disclosing everything. But in the situation
Speaker 1: we're in right now, I almost feel like not disclosing
Speaker 1: the name is actually good because it could create bank
Speaker 1: runs at some of these places. UM, that's there are
Speaker 1: still operating wealth. Talk to us therefore, about what you
Speaker 1: worry in terms of contagion. You've talked about the lack
Speaker 1: of trust. You talked about the worry of a lack
Speaker 1: of transparency. Everyone is now looking at the exchange they use,
Speaker 1: or or the tokens that some of the exchanges have
Speaker 1: of course issued themselves. It's contagion and the most shoes
Speaker 1: to drop. Do you think so? I think you guys
Speaker 1: are in a great job of covering Genesis. Um in
Speaker 1: my seat, I actually think Genesis is a bigger issue
Speaker 1: in terms of the capital markets of crypto than even
Speaker 1: f t X. Genesis was the largest lender out there.
Speaker 1: They've done unsecure as well as colorized lending. There's really
Speaker 1: no one else doing that lending. They without them in
Speaker 1: the markets, all the people in the value chain, all
Speaker 1: the companies like market makers who need to borrow in
Speaker 1: order to do market making. You're gonna see liquid, you
Speaker 1: get sapped out of the markets, spreads widen, no investors
Speaker 1: want to come in, and you have a vicious cycle.
Speaker 1: So the genesis is a very important part of the
Speaker 1: crypto capital markets. And therefore how much does it set
Speaker 1: it back if we do see a bankruptcy filing, for example,
Speaker 1: by such a juggnal such as Genesis many many years um,
Speaker 1: We're gonna need some white knight to come in, maybe
Speaker 1: a traditional UH finance player who's dabble in this space
Speaker 1: and is willing to come in and take some risk.
Speaker 1: If you look at a lot of things out there
Speaker 1: in terms of instruments that trade, there's clearly a different
Speaker 1: sentiment from the ratified community towards crypto versus the crypto
Speaker 1: native community. And you can look at at the prices
Speaker 1: in terms of the futures curve. The CME futures curve
Speaker 1: is so you know, the out months are really negative
Speaker 1: for bitcoin and etherium, whereas the perpetuals in the crypto
Speaker 1: native markets, which are also undated futures are flatter, so
Speaker 1: it's not backwardation like the What do you think about
Speaker 1: trades like that? You look at that CME futures contract arbitrage,
Speaker 1: you look at what's happening with the great scale big contrast.
Speaker 1: These are financial assets like any other financial asset right now.
Speaker 1: Is it a good money making opportunity or is it
Speaker 1: too risky to trade? It's an incredible arbitrage opportunity that
Speaker 1: you can make, you know, on an annualized basis. But
Speaker 1: the issue really is you can't find a counterpart to
Speaker 1: help you put that trade because nothing is flowing in
Speaker 1: the markets right now. The largest lender out there has
Speaker 1: a trickle ripple effect to everyone else is not lending.
Speaker 1: So if they're not lending, counterparties are not taking risk either.
Speaker 1: What does the crypto market look like without that kind
Speaker 1: of leverage anymore? We go back to the previous cycle.
Speaker 1: We're talking about two thousand fifteen to two thousand eighteen UM.
Speaker 1: Leverage needs to be controlled. Leverage is not bad in
Speaker 1: every economy and every marketplace. You need lending and barring
Speaker 1: to some extent, otherwise you don't have money growth, and
Speaker 1: we need some of that back into this market to
Speaker 1: get the markets going again. I'm interested in this talk
Speaker 1: of a traditional finance giant, maybe a kind of crossover
Speaker 1: investor who's doubled already, who could do that and have
Speaker 1: the will of the regulators, the will of well Washington
Speaker 1: on their side. Well, first of all, I think all
Speaker 1: the existing players and this is all done, I think
Speaker 1: the companies in this current crypto capital markets will be
Speaker 1: gone are still around. Um, they're gonna have to take
Speaker 1: a leadership role. They're gonna work. They need to work
Speaker 1: with regulators and come up with good regulation, even if
Speaker 1: it's bad. Regulation is better than no regulation. And then
Speaker 1: you'll have perhaps banks come in to pick up the
Speaker 1: pieces and by parts of the market structure because they'll
Speaker 1: be more comfortable and they'll inject a lot of liquidity.
Speaker 1: Or you have traditional market makers, whether it's Citadel coming
Speaker 1: in they've dabbled in the citical securities, or a Jain
Speaker 1: Street or well known high frequency funds who are very
Speaker 1: adept in this market market making side. But what about
Speaker 1: the traditional players here we reported this morning for example,
Speaker 1: Apollo is looking to list a digital assets strategy on
Speaker 1: a blockchain. You're doing something similar with a bunch of
Speaker 1: counterparties including KKR. So are they concerned given the broader
Speaker 1: rhetoric around crypto because those tokens, your your blockchain has
Speaker 1: a token as well. Everyone is a little concerned. I
Speaker 1: cannot say no, one's concerned. But with that said, even
Speaker 1: if the capital markets and crypto are broken, the technology
Speaker 1: is still continuing. So Apollo's announcement of raising a fund
Speaker 1: using a tokenized version of that of a labs of
Speaker 1: a launch tokenizing part of a KKR fund really shows
Speaker 1: that the technology and the innovation is going to continue
Speaker 1: and the benefits will accrue to the people who are
Speaker 1: in the space. And it's interesting. One of the conversations
Speaker 1: I had with Mike Cagney, who's the CEO figure about
Speaker 1: this particular announcement, was that stable coins could be an
Speaker 1: onboarding ramp for these private equity funds. Can that happen?
Speaker 1: Is there enough security in the stable coin system as
Speaker 1: it exists today for it to be a feeder essentially
Speaker 1: into the traditional financial system in a bigger way? Well, yes,
Speaker 1: in terms of the security, and that's the ultimate benefit.
Speaker 1: When you have multi parties that need to exchange information
Speaker 1: and payment simultaneously, that's the real benefits of a blotching technology.
Speaker 1: So do you need that token in that sense, whether
Speaker 1: it's a stable coin or a different token, that's the
Speaker 1: real benefits. So you can provide to our cutting costs
Speaker 1: and creating more efficiency in existing financial systems. And let's
Speaker 1: not forget it was just last week that the New
Speaker 1: York Fed was talking about digital dollar and pilots there.
Speaker 1: So there's still innovation to be had. And ave Labs
Speaker 1: president John when we thank him for coming on and
Speaker 1: just talking about the space and where we get some
Speaker 1: sleep Gloomberg Shinnali Bassett as well. All over this story
Speaker 1: going viral. Saudi Arabia scoring one of the biggest World
Speaker 1: Cup upsets ever by beating Luna Messi's Argentina to one
Speaker 1: on Tuesday. Messi gave Argentina an early lead with the
Speaker 1: penalty kick, but Saara Arabia scored two goals within five
Speaker 1: minutes of each other in the second half of their
Speaker 1: clinch victory. Now the Argentina loss has spillover effects into
Speaker 1: crypto as well. You wouldn't believe it, but the Argentina
Speaker 1: fan token offered three partnerships with Socios crashed a quarter cent.
Speaker 1: According to reports that Argentina is among international teams and
Speaker 1: some domestic clubs that offer fan tokens. For example, Portugal's
Speaker 1: token is down ahead of the match against Ghana on Thursday,
Speaker 1: and ed I can't get over the amount of things
Speaker 1: that are going viral around soccer at the moment, or
Speaker 1: football as we would call it. Because Renaldo Ronaldo from
Speaker 1: Man United with five hundred million Instagram followers, he's walking
Speaker 1: and I understand Man United is what considering its options
Speaker 1: for sale. Ronaldo is out of United, it is official.
Speaker 1: And then the owners, the Glazers minority equity owners come
Speaker 1: out and say, yeah, we're looking at options for the club.
Speaker 1: And it's all across Instagram, Twitter, you name it. We
Speaker 1: should be talking about the World Cup on the pitch,
Speaker 1: that's what's happening off it that continues to dominate the
Speaker 1: headlines and what people are talking about on social just extraordinary.
Speaker 1: My entire Twitter, Instagram, whatever wall that you're looking at,
Speaker 1: TikTok is a flood of World Cup news. This man
Speaker 1: owning Instagram of course because amount of followers. That does it.
Speaker 1: For this edition D of Gloomberg Technology Wednesday, We've got
Speaker 1: auto desk Okay, yeah, and check out our podcasts and
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