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 memorily check in San Francisco and this
Speaker 1: is Bloomberg Technology. Coming up in the next hour. It
Speaker 1: looks like we are in for a busy holiday travel season.
Speaker 1: Airbnb is preparing a massive share buyback and anticipating the
Speaker 1: best revenue in the company history in the current quarter.
Speaker 1: We will get into the details, plus a being for
Speaker 1: Uber send share story almost my conversation with CEO dar
Speaker 1: Kasra Shai about the shift in demand supply and whether
Speaker 1: Uber really is as he says, recession proof. And the
Speaker 1: results are in Bloomberg survey more than fift hundred investors
Speaker 1: about the musk Twitter saga, only one in four. I
Speaker 1: believe the world which is man will actually end up
Speaker 1: shelling out that four billion dollars. We'll talk about the
Speaker 1: implications for musk Twitter and Tesla. I do want to
Speaker 1: talk a little more about this big visit. US House
Speaker 1: speaker Nancy Pelosi touching down in Taiwan. This makes her
Speaker 1: the highest ranking American politician to visit the island in
Speaker 1: twenty five years, and the timing of her visit is
Speaker 1: particularly sensitive for China, coming one day after the anniversary
Speaker 1: of the People's Liberation Army. I want to bring in
Speaker 1: our Ian Marlow joining us from Washington, who's been covering
Speaker 1: the story and how it is developing. Ian talk to
Speaker 1: us about just how significant this visit is and and
Speaker 1: what is at stake. We've got Isaac stone Fish, the
Speaker 1: founder and CEO of Strategy Risks here as well. But Ian,
Speaker 1: I want to start with you because I think it's
Speaker 1: hard to overstate, uh, just how significant this visit is. Yeah,
Speaker 1: I think it's significant for a couple of reasons. I mean, obviously,
Speaker 1: she's the highest ranking of like the U s official
Speaker 1: to visit in twenty five years, since Sitting House Speaker
Speaker 1: New Grinkoch went in ninete. But it's also a sensitive
Speaker 1: time in US China relations. You've got forces on both sides.
Speaker 1: In the US, you've got midterm elections, you had a
Speaker 1: lot of uh debate about whether she should go or
Speaker 1: not go, and whether that would look weak on China.
Speaker 1: And then in China itself you have Shi jimping kind
Speaker 1: of balancing UH COVID zero policies with a bit of
Speaker 1: a slowing economy, and also a really important party congress
Speaker 1: coming up later in the fall where he's expected to
Speaker 1: secure a third term. So you've got a lot of
Speaker 1: sensitive dynamics internally. And then uh, you know, internationally, we
Speaker 1: just have a situation with the US leaning on on
Speaker 1: China over Russia and the war in Ukraine. You've got
Speaker 1: a lot of high level dialogues that haven't particularly moved
Speaker 1: the needle on the Biden administration's China policy. Uh. And
Speaker 1: then you're playing with this extremely toxic situation with where
Speaker 1: Taiwan is just the most sensitive issue in US China relations.
Speaker 1: Uh and Pelosi visiting at this point, with the rhetoric
Speaker 1: cranked up on on the Chinese side in particular in
Speaker 1: US US officials kind of failing to calm down and
Speaker 1: kind of convince the Chinese side that that they're not
Speaker 1: trying to, you know, erase the status quo here, it's
Speaker 1: kind of got a bit of a mix where we're
Speaker 1: now seeing some of the more the most extreme sort
Speaker 1: of Chinese military responses since since the mid nineties, in
Speaker 1: decades now. ISAAC China has already announced these various military
Speaker 1: drills at missile tests surrounding the island. How much retaliation
Speaker 1: versus posturing are you expecting to see companies should shear
Speaker 1: retaliation asymmetrically, So worry less about military drills, more about
Speaker 1: executive from US corporations getting arrested or detained or harassed
Speaker 1: in China, or Chinese companies treating US companies differently, or
Speaker 1: Beijing suddenly discovering that a major US corporation committed tax
Speaker 1: fraud or has some regularities in their books. Beijing loves
Speaker 1: to play it this way so that there's plausible deniability,
Speaker 1: and so that it reminds the business world that, in
Speaker 1: Beijing's mind, the business world is also responsible for what
Speaker 1: the US government is or isn't doing. We've already seen
Speaker 1: some retaliation from this big battery company that's pushed back
Speaker 1: its plans to announce a big plant UH in North America.
Speaker 1: Of course, Taiwan is a huge tech hub, a huge
Speaker 1: spoke in the global supply chain. What kind of disruption
Speaker 1: potentially longer term, ISAAC, do you think there could be
Speaker 1: to the global and tech economy. It's hard to imagine
Speaker 1: a more concrete reminder that investing in China Chinese supply
Speaker 1: chain U S China relations will be unstable for the
Speaker 1: foreseeable future. Base case and now is these regular fluctuations,
Speaker 1: the regular risk of not getting the goods when you
Speaker 1: need them, not being able to parse or really understand
Speaker 1: Chinese policy. So people just need to throw out their
Speaker 1: old assumptions and work with the assumptions that supply chains
Speaker 1: will continue to be disrupted. Certain companies that say they're
Speaker 1: going to do something won't be able to do what
Speaker 1: they're saying. And not to be alarmists, but it is
Speaker 1: very possible that moves like these do lead to a war,
Speaker 1: or at the very least the proxy war between the
Speaker 1: U S and China, and if that happens, all of
Speaker 1: the assumptions underpinning US China investments for decades will be
Speaker 1: written off. I talk to us about the plans for
Speaker 1: the rest of this trip and the kind of signaling
Speaker 1: you're expecting to see, not just from Beijing but also
Speaker 1: from the White House. Yeah, I mean, I think we've
Speaker 1: seen the White House playbook. Over the last couple of days.
Speaker 1: There was a shift for um, uh you know, denying
Speaker 1: that the trip was even happening, possibly the worst kept
Speaker 1: secret given it was the most tracked plane. Uh you know,
Speaker 1: almost in history here. Um. I think at the moment,
Speaker 1: we're looking at the White House shifting to uh, putting
Speaker 1: the onus for escalation on on China itself, saying Pelosi's trip,
Speaker 1: which we didn't have any say over, doesn't move the needle.
Speaker 1: It doesn't change US policy towards Taiwan either way. And
Speaker 1: so it's the kind of ball is in is in
Speaker 1: China's court. So the the amount of escalation we see, uh,
Speaker 1: you know. And some people are talking about the military
Speaker 1: exercises off off the ports and off the coast amounting
Speaker 1: to a sort of an effective sort of temporary blockade.
Speaker 1: We're also going to see missiles potentially crossing over Taiwan
Speaker 1: and landing off the coast. Um, so there's a potential
Speaker 1: for miscalculation. I think at the moment we're just kind
Speaker 1: of waiting to see how long this last. We know
Speaker 1: there's going to be drills, uh you know, for the
Speaker 1: next few days. Um. And now I think it's just
Speaker 1: a matter of seeing whether China's telegraphing of this stuff
Speaker 1: in advance is enough to allow US officials to sort
Speaker 1: of manage the situation so that there's no you know,
Speaker 1: as they always talk about in US China relations now
Speaker 1: to make sure there's no miscalculation, uh, you know, and
Speaker 1: veering the competition into conflict. As they also like to say,
Speaker 1: all right, thank you both so much for weighing in here,
Speaker 1: strategy risks CEO Isaac Stonefish, along with Bloomer's own in Marlow.
Speaker 1: Of course, we're going to continue to follow every detail
Speaker 1: of this visit as it plays out. Airbnb shares down
Speaker 1: in late training after reporting second quarter results. This despite
Speaker 1: the home sharing giant saying revenue in the current quarter
Speaker 1: will be the highest in its history. Brent Phil Jeffrey's
Speaker 1: managing director and analyst, joins us now to discuss So, look,
Speaker 1: you've had AIRBNBI benefiting from the travel rebound, but investors
Speaker 1: not happy with this report. Why is that booking's actually
Speaker 1: fell emily for the third quarter in terms of below consensus,
Speaker 1: about five percent below where the street was at. And
Speaker 1: I think ultimately there's also a fear that this was
Speaker 1: the summer of travel that everyone went to Europe. You
Speaker 1: can see local destinations inside California, for example, saw their
Speaker 1: bookings down, but Europe saw this huge boom. Many of us,
Speaker 1: including my own family, who went to Europe came back
Speaker 1: and started to look at our credit card and say, wow, okay,
Speaker 1: we haven't been been anywhere for a couple of years
Speaker 1: to look at the bill. And so I think there's
Speaker 1: perhaps a little bit of a travel hangover coming in
Speaker 1: the fall into the winner. And that may also be
Speaker 1: a fear that many investors that are in my position
Speaker 1: now have said, Hey, I just took the big trip,
Speaker 1: tap time, tap the tap the air brakes and put
Speaker 1: money into other things. Uh. That's that's one element. I think.
Speaker 1: Ultimately the macro condition is starting to show signs of weakness.
Speaker 1: You're seeing gas prices in the or uh you know,
Speaker 1: shift where they're spending dollars. If Walmart called this out,
Speaker 1: a lot of other companies are calling this the shift out.
Speaker 1: Williamson our restoration of hardware obviously saying it's not can
Speaker 1: be is good in the back half. You're you're just
Speaker 1: seeing across many consumers. So we call it a discretionary
Speaker 1: recession that many of us may start to rethink were
Speaker 1: these dollars today that AIRBB for the most part, are
Speaker 1: you know, is spent money that is for fun? It's
Speaker 1: not it's not a must have, it's a it's nice
Speaker 1: to have. They'll argue other otherwise for for myself, but
Speaker 1: I'm trying to What I'm trying to put in is
Speaker 1: what what Why would the stock be down? Why would
Speaker 1: people be barished from here? I think those would be
Speaker 1: the reasons to be bullish. Obviously, they're in an incredible position,
Speaker 1: amazing management team, incredible selection of uh and portfolio, and
Speaker 1: I think they're really innovating on the platform, and there's
Speaker 1: just incredible innovation relative to any other consumer brand you
Speaker 1: travel to on the web. I still think this is
Speaker 1: the best you want, best experience. Some of the best
Speaker 1: content They did come out with categories, which was their
Speaker 1: big design change in the last few months. You do
Speaker 1: cover Uber as well, and I'm kind of interested in
Speaker 1: comparing them. But first I want you to hear this
Speaker 1: quote from Dar cause were showing you from our interview
Speaker 1: earlier today. He is said in the past he thinks
Speaker 1: Uber is recession proof. Take a listen to why. Because
Speaker 1: we're in multiple businesses, both in mobility and delivery. I
Speaker 1: think we have a kind of business that can perform
Speaker 1: in all weather. But at the same time, we are
Speaker 1: being disciplined in terms of costs to make sure that
Speaker 1: as the environment if it gets tougher, we are prepared.
Speaker 1: Right you saw Uber's nembers today. Do you think Uber
Speaker 1: really is recession proof and is it more recession proof
Speaker 1: and air being be I think to some degree, because
Speaker 1: we're starting to go back to work or going back
Speaker 1: to events, we're traveling to kids sporting events, like we're
Speaker 1: using we're using their transportation, not only the cars, but
Speaker 1: the bikes and scooters. And again I was a huge
Speaker 1: adopter of of of the line uh scooter line this
Speaker 1: summer with my family in Europe and as a part
Speaker 1: in the partnership with Uber, and and I think ultimately
Speaker 1: I agree with that to to some degree. I think
Speaker 1: ultimately the question mark is going to be around the
Speaker 1: discretionary travel. And again when we look at Airbnb, if
Speaker 1: you look at other travel names, if we start to
Speaker 1: see a little bit of a travel hangover post this summer,
Speaker 1: there could be a little bit of a setback on
Speaker 1: that side. The positive thing for Uber is employers, including
Speaker 1: in our own employer, is saying get back in the office.
Speaker 1: We need you back multiple days a week. Obviously, we
Speaker 1: still have COVID cases flaring, and I think ultimately people
Speaker 1: are still reluctant to want to be a mass transport
Speaker 1: in a big way, and they feel comfortable, you know,
Speaker 1: perhaps being in the back of a car going into
Speaker 1: the winter. If if, if we'd see another UH phase
Speaker 1: of COVID cases. So I think, look, I I don't
Speaker 1: disagree with them. I do think there's an element of
Speaker 1: the business that I could feel the pain. But one
Speaker 1: thing that's going for Uber right now is evaluation. It's
Speaker 1: the worst sentiment of any Internet company and perhaps any
Speaker 1: tech company we cover. And the sentiment going into this
Speaker 1: print was awful, and now they're showing cash flow and
Speaker 1: they're effectively doing what we think is the right thing
Speaker 1: was that it's just not a top it's got a
Speaker 1: bottom line, and they're showing they can be very profitable
Speaker 1: with with their network. Interesting, all right, Brent Phil Jefferies,
Speaker 1: managing Director, Thanks for giving us your quick reacts on
Speaker 1: both of those companies. Coming up a tale of two coasts.
Speaker 1: Uber is seeing a slowdown on the West coast but
Speaker 1: a pickup in the East. I have more of my
Speaker 1: post earnings conversation with Uber CEO dark cosbra Shy, who
Speaker 1: was quite happy about the stock pop when we talked
Speaker 1: this morning. He's coming up next. This is Bloomberg. Uber
Speaker 1: defied inflation in the second quarter, reporting better than expected earnings.
Speaker 1: Shares popped on that news that Lubers gross bookings including
Speaker 1: ride sharing, food delivery, and frank rose to an all
Speaker 1: time high. I spoke with CEO dar Causra Shay about
Speaker 1: everything from surge pricing to a slowdown in demand on
Speaker 1: the West Coast. Take a listen to some extent, it's
Speaker 1: a continuation of the last few quarters, but we're really
Speaker 1: hitting a scale point here. Like you said, twenty nine
Speaker 1: billion dollars in gross bookings of thirty six percent on
Speaker 1: a year on your basis, uh as, it relates on
Speaker 1: a constant currency basis or three sixty two million, well
Speaker 1: above our guidance range. And the guidance that we gave
Speaker 1: forward was well above street estimates, etcetera. So an indication
Speaker 1: of anticipated strength coming. And then a really important factor
Speaker 1: for us is we're free cash full positive two million
Speaker 1: dollars in free cash flow, which is a big positive
Speaker 1: factor in our being self sustaining and profitable going forward.
Speaker 1: And when we look at the environment, the marketplace is
Speaker 1: more balanced. The number of new drivers that we're adding
Speaker 1: in the US is up over seventy on a year
Speaker 1: on your basis surges down E T A s or down. Uh,
Speaker 1: So the business is really hitting on all cylinders and
Speaker 1: it's reflected in the stock press, which is great. I
Speaker 1: do want to ask you a little bit about the
Speaker 1: broader environment, Dara. I still hear people say Uber is expensive,
Speaker 1: and we're seeing Uber benefiting from this. When you look
Speaker 1: at your earnings and the bottom line, how do you
Speaker 1: think about this dynamic longer term? Do you worry at
Speaker 1: all about alienating customers when they're already getting squeezed given
Speaker 1: that this is the worst inflationary environment in Uber's history. Yeah,
Speaker 1: I think inflation is hitting all of us, whether it's
Speaker 1: grocery prices or fuel prices. And remember fuel is a
Speaker 1: big component of our driver costs, so that affects Uber
Speaker 1: prices as well, and you do see it in a result.
Speaker 1: While trips were up, which is really really healthy growth growth,
Speaker 1: bookings were up faster than that, which indicates some inflationary
Speaker 1: effect on our results. I think the good news for
Speaker 1: US is that surge levels are actually coming down E
Speaker 1: T A s are coming down, so as the marketplace
Speaker 1: becomes more balanced, we actually see strength in terms of
Speaker 1: trip growth going forward, and we're hoping if we do
Speaker 1: our jobs and so far, so good onboarding more and
Speaker 1: more drivers, that prices on Uber will ease going forward.
Speaker 1: At the same time, drivers will make really strong earnings
Speaker 1: as well. At the same time, we've heard so many
Speaker 1: dire warnings about the economy. Jamie Diamond has said he's
Speaker 1: prepared for an economic hurricane. I just spoke to Apple
Speaker 1: CEO Tim Cook, who said, you know, he plans to
Speaker 1: be deliberate in Apple spending. You said in the past
Speaker 1: that you think Uber is recession resistant. Do you still
Speaker 1: believe that if we continue to see these down downward
Speaker 1: trends and what is uber strategy to navigate continuing downward trends? Well,
Speaker 1: I think you're certainly seeing in earn results, which is uh.
Speaker 1: There's been a bunch of earnings results out there, and
Speaker 1: and sometimes they've been less than great. I think Uber's
Speaker 1: earnings have been terrific in every way, top line growth,
Speaker 1: profitability growth as well. Um. At the same time, we
Speaker 1: are being disciplined in terms of how we grow going forward.
Speaker 1: This is why our margins are improving so much on
Speaker 1: a year. On your basis free cash flow is now
Speaker 1: positive as well. Because of the scale that we have,
Speaker 1: because we're in multiple businesses, both in mobility and delivery.
Speaker 1: I think we have a kind of business that can
Speaker 1: perform in all weather. But at the same time, we
Speaker 1: are being disciplined in terms of costs to make sure
Speaker 1: that as the environment, if it gets tougher, we are prepared.
Speaker 1: You mentioned on the call that West coast markets are
Speaker 1: taking a little bit longer to come back, and I'm
Speaker 1: I'm thinking about San Francisco and how it's been a
Speaker 1: struggle to get workers back to the office. How are
Speaker 1: you thinking about this and Uber's, for example, Uber's own
Speaker 1: flexible work policies. Do you see the flexibility that you're
Speaker 1: giving workers holding up into next year, for example? Does
Speaker 1: it does feel like the tail of two coasts? You know,
Speaker 1: when we look at the East coast New York, Miami,
Speaker 1: even UH cities, Atlanta, Austin, Dallas. Our business is coming back,
Speaker 1: is roaring back UH at this point, and we feel
Speaker 1: great about that business. Now. The San Francisco market's Los Angeles, Seattle,
Speaker 1: they're certainly coming back. But when you look at the
Speaker 1: absolute levels versus pre pandemic levels, UH, it's a very
Speaker 1: very different story. UM, and you know, we'll keep pushing
Speaker 1: and we will do our part to make sure that
Speaker 1: we've got an ample supply in those markets. Uh. And
Speaker 1: the service works very well. You can check out the
Speaker 1: full interview with uber ceo Dark Cause with Shaw here
Speaker 1: at Bloomberg dot com. Welcome back to Bloomberg Technology. I'm
Speaker 1: Emily checking in San Francisco. I want to get back
Speaker 1: to our top story, and that is US House Speaker
Speaker 1: Nancy Pelosi's visit to Taiwan. We are already seeing a
Speaker 1: major company react. In a Bloomberg scoop c A t L,
Speaker 1: the world's biggest maker of Evy battery cells, has pushed
Speaker 1: back plans to announce a North American plant because of
Speaker 1: this visit to Taiwan. Are at Ludlow help break this
Speaker 1: story at what exactly do we know about this decision? Yes,
Speaker 1: the sources say that CTL was considering sites in Mexico
Speaker 1: and the United States. As we reported a month ago,
Speaker 1: they were close, they were agreeing incentives, they were choosing
Speaker 1: their preferred site. And given the geopolitical tension between the
Speaker 1: United States and China due to Speaker Pelosi's business Taiwan,
Speaker 1: they've decided to push it back to September October. So
Speaker 1: they're not necessarily saying this is not going to happen.
Speaker 1: It's just the announcement has been exactly So there's a
Speaker 1: commitment from CTL, according sources, to do this right. They're
Speaker 1: they're key customers are here. There are a big supplier
Speaker 1: to Tesla for Tesla's China built vehicles. They have an
Speaker 1: agreement to supply Forward in the future. And as we've reported,
Speaker 1: Forward and Tesla were kind of key to those talks.
Speaker 1: But it's too hot right now, and and and you know,
Speaker 1: they are also trying to think about potential incentives in
Speaker 1: the background from the federal government here in the United States.
Speaker 1: They just don't want to get caught up in this
Speaker 1: with what's happening. How strategically important is this company to
Speaker 1: say a Tesla or Afford. Yeah, the reality is CTL
Speaker 1: is a Chinese company. It is the kind of crown
Speaker 1: jewel in China's EV industry. It's the biggest maker, as
Speaker 1: you said, of EV battery cells. But the issue the
Speaker 1: whole industry faces is there is not enough supply. We
Speaker 1: need more battery cells, more players, and having that ct
Speaker 1: L plant, whether it ends up being in the US
Speaker 1: or in Mexico, nearer to where vehicles are actually being
Speaker 1: built by tests or by ford is so important. If
Speaker 1: we've learned one thing in the last two years, it's
Speaker 1: supply chains can on revel really quickly overseas, So on
Speaker 1: shoring this production would really help. Now we have these
Speaker 1: geopolitical issues in the way. Long term though, are you
Speaker 1: seeing this as a company that could have a very
Speaker 1: significant presence on this side of the Pacific Ocean. So
Speaker 1: the commitment that they're making initially is five billion dollars.
Speaker 1: That gets you quite a lot of factory, you know,
Speaker 1: quite a lot of plant. The footprint that we've reported
Speaker 1: on is very big. You know, we're talking about EV
Speaker 1: battery cells at a mass scale and for multiple players.
Speaker 1: Think about the giga factories for example, that the Panasonic
Speaker 1: has a Nevada and others have done deals on the
Speaker 1: West coast, East coast. Sorry, so this is big and
Speaker 1: it's important, all right, I'd love them, thank you well.
Speaker 1: See Bloomberg terminal clients think Elon schiill be forced to
Speaker 1: own Twitter by the end of this saga about and
Speaker 1: more than respondents to include portfolio managers and retail traders
Speaker 1: say Mask won't end up owning Twitter, the deal that
Speaker 1: led Mosque to offload about eight and a half billion
Speaker 1: dollars worth of Tesla shares back in April. One third
Speaker 1: of respondents protect he'll settle with a social media company
Speaker 1: for more than a billion dollars rather than seeing through
Speaker 1: that forty four billion dollar takeover. Joining me now Grace
Speaker 1: Capital founder and chief investment officer Katherine Faddis, who took
Speaker 1: questions about the survey with Luke Ventures Gene Munster. Uh
Speaker 1: this Tuesday morning. So what's your take, Katherine? How does
Speaker 1: this play out in Delaware court? Yeah? I think I'm
Speaker 1: going to agree with the respondents. I think ultimately this
Speaker 1: deal doesn't happen. I'm not It's not clear to me
Speaker 1: why it made sense to begin with. And I understand
Speaker 1: um Elon Musk is very smart. He took testl off
Speaker 1: from loss making deal and he's made it a success.
Speaker 1: He made pay palace success. Maybe there's a theory he
Speaker 1: was going turn around Twitter and you know, pull something
Speaker 1: else out of his hat. But apparently he's lost interest
Speaker 1: and I think it's time to move on Dot Org.
Speaker 1: What does this mean for Twitter and what would it
Speaker 1: mean for Tesla. You know, for Twitter, I think it's
Speaker 1: been quite disruptive and I'm almost wondering if they're going
Speaker 1: to try to get more than the billion dollars. And
Speaker 1: I think if there was the people who believe in
Speaker 1: Elon Must thought wow, he's going to get involved in
Speaker 1: Twitter and he's going to turn it into a gold mine.
Speaker 1: So I think for Twitter it's it's not good either way.
Speaker 1: I think it's been disruptive. I think if there was hope,
Speaker 1: you know, Twitter shareholders were going to get a lot
Speaker 1: of money. Now they're not. It's just not good. And
Speaker 1: I think Twitter's business model is struggling anyway. And for Tesla,
Speaker 1: I think it might be good news because I think
Speaker 1: that it was a distraction. It was a distraction for
Speaker 1: Tesla shareholders. They want Elon must focusing on Tesla, solving
Speaker 1: the problems, bringing you know, the wonderful things he's done operationally,
Speaker 1: supply chain efficiency, all the great things that make Tesla
Speaker 1: what it is. So I think it's good news for Tesla.
Speaker 1: Tesla has a huge footprint in China, and I'm curious
Speaker 1: how you think this big visit Nancy Pelosi going to
Speaker 1: Taiwan against the wishes of the Chinese government. If there's
Speaker 1: an impact for Tesla here, clearly there will be an
Speaker 1: impact because I think China understands the importance of Tesla
Speaker 1: um as an entity, and I think it's a Tesla
Speaker 1: is in many senses, a crown jewel. So if China
Speaker 1: wanted to retaliate, Tesla would be an easy target. And remember,
Speaker 1: Tesla has big plans for China. Not only do they
Speaker 1: produce a lot there, but it was going to be
Speaker 1: a big market for them. So I think certainly this
Speaker 1: would keep me up at night if I were on
Speaker 1: the board of Tesla. But it is what it is,
Speaker 1: and I think he's going to have to figure out
Speaker 1: how to move forward. You wonder if it's keeping up
Speaker 1: elon Musk, how dependent do you think Tesla's valuation, uh,
Speaker 1: space x is valuation is on Musk alone. His cult
Speaker 1: of personality, I think currently a lot, because he really
Speaker 1: does have this fabulous track record and people look at
Speaker 1: what he does. He can take anything and turn it
Speaker 1: into gold, and he's done it, and so he deserves it.
Speaker 1: He deserves the reputation. But I think a lot of
Speaker 1: those things can be learned. So I go back to
Speaker 1: Steve Jobs and Apple. I never thought Apple could make
Speaker 1: it without Steve Jobs. Guess what I was wrong? Uh,
Speaker 1: Since when he died, Apple has beaten the stock market
Speaker 1: by a thousand percent. So there is life after Elon Musk.
Speaker 1: There's life after all of us. But I don't want
Speaker 1: to minimize its importance. Uh two space X and I
Speaker 1: think it's real. I think he really has brought process improvements.
Speaker 1: If it's and see, do you look at the way
Speaker 1: the cars are manufacturers? Did you look at the way
Speaker 1: he's locked up the supply chain for years and years
Speaker 1: to come with lithium technology. I mean he's clearly very smart,
Speaker 1: So he's important. All Right, Grace Capital founder and chief
Speaker 1: investment officer Katherine Faddis really appreciate your thoughts here on
Speaker 1: the show. Thank you for stopping by. All right, Coming
Speaker 1: up over technologists signing a letter to Congress urging for
Speaker 1: more skepticism in crypto. We've talked a lot about the optimists.
Speaker 1: We're gonna talk a little bit about the pessimists. Next.
Speaker 1: This is Bloomberg. The no intermediary system does not scale
Speaker 1: that three to seven transactions per second world. Why that's
Speaker 1: the hard limit? It doesn't do whatonents say it does.
Speaker 1: It's not secure, it's not distributed, it's not reliable, it
Speaker 1: doesn't scale, it doesn't actually do anything that they don't
Speaker 1: actually work for payments if the payments would be processed
Speaker 1: by the normal system. I think eventually it will crash,
Speaker 1: because all bubbles will crash. Ethereum has been promising proof
Speaker 1: of steaks since basically they started. Wake me up when
Speaker 1: the transition happens. The problem is that blockchain adds in security,
Speaker 1: it adds all sorts of inefficiencies and makes things worse.
Speaker 1: It also creates another problem of he who has the
Speaker 1: gold makes the rules. Right now, people are are losing
Speaker 1: their money and people are really getting hurt because there's
Speaker 1: so much fraud. So I think it needs serious regulation.
Speaker 1: From a technological standpoint, there's no innovation. Economically, it is
Speaker 1: a self assembled Ponzi scheme. Nicholas we were there, professor
Speaker 1: in the computer science department at you See Berkeley, along
Speaker 1: with Bruce Nyer, a computer security professional and public policy
Speaker 1: lecture at the Harvard Kennedy School. They're both some of
Speaker 1: the lead signatories of this open letter to Congress, signed
Speaker 1: by fifteen hundred technologists and urging lawmakers to quote take
Speaker 1: a critical skeptical approach toward industry claims that crypto assets
Speaker 1: are an innovative technology that is unreservedly good. Let's break
Speaker 1: it all down in today's Crypto Report with our own
Speaker 1: crypto contributors Snale, Bostic, Shanale. We've talked a lot too.
Speaker 1: We've talked to a lot of the bulls. I haven't
Speaker 1: talked to so many of the bears talked to us
Speaker 1: more about their message to Congress. And what's interesting here
Speaker 1: to Emily is that it's important to remember there's a
Speaker 1: bit of a war in Washington going on when you
Speaker 1: think about cryptocurrency, the people who don't want congressmen and
Speaker 1: women to be supporting them, and the people that do
Speaker 1: and are pouring millions of dollars into lobbying campaigns to
Speaker 1: that effect and into political campaigns to crypto friendly a lawmakers. Remember,
Speaker 1: I talked to Anthony Scarammucci about this earlier this year too,
Speaker 1: and there are men people who believe that this is
Speaker 1: gonna be like him, that believe that this is going
Speaker 1: to be a key issue leading into the midterms and otherwise.
Speaker 1: So what is the problem here for the folks who
Speaker 1: have signed this letter. Some of the issues are quite technical,
Speaker 1: and concern about not being able to reverse transactions, concerns
Speaker 1: about data privacy, and the sense that is crypto something
Speaker 1: that is a solution looking for a problem? Why crypto
Speaker 1: when fintech does the job. In the US we already
Speaker 1: have digital payments at scale to some degree. It's interesting
Speaker 1: because when you look at the data from it, it's
Speaker 1: interesting because you know, you saw cryptocurrency transactions. Bitcoin transaction
Speaker 1: volumes surpass that of VISA, but really come down a
Speaker 1: little more this year. I think which will win out
Speaker 1: at the end is interesting and which technology will be dominant.
Speaker 1: The skeptics and this letter are really attest to the
Speaker 1: idea that bitcoin and frankly blockchain more more broadly, is
Speaker 1: not the solution to these problems. There's a lot of
Speaker 1: complicated dynamics at play here. We've were reported on the
Speaker 1: revolving door between the crypto industry and Capitol Hill. You've
Speaker 1: got crypto companies making big donations ahead of the midterms.
Speaker 1: You've got crypto lobbyists shaping policy. Is there enough skepticism
Speaker 1: on Capitol Hill of this industry. I think time will
Speaker 1: tell on how much there is a pusher of poll
Speaker 1: I mean, you're you're asking this question where it seems
Speaker 1: like there are a lot of lawmakers that very publicly
Speaker 1: go out and support cryptocurrency. But we're also in a
Speaker 1: regime where the head of the SEC has been cracking
Speaker 1: down on massive enforcement issues in a way that we
Speaker 1: have not seen to this scale, and the tensions really
Speaker 1: boil over. So it's a great question, where is the
Speaker 1: support in Washington when so many millions of dollars are
Speaker 1: going into support the industry. Remember, this is not a panacea.
Speaker 1: You're looking at the crypto industry, and really this is
Speaker 1: a really um thorough and long critique of the blockchain
Speaker 1: technology itself. U as as problematic is really how they're
Speaker 1: phrasing this, because fraud mitigation is a big issue when
Speaker 1: it comes to blockchain. Let me give you another perspective here.
Speaker 1: In a conversation I had with the CEO of NASDAC recently,
Speaker 1: she told me that she believes there could be a
Speaker 1: day where every asset on the planet could be digitized. Clearly,
Speaker 1: even current as CEOs of big financial firm seem used
Speaker 1: to blockchain technology that these researchers are disputing, but that
Speaker 1: fraud mitigation part is such a key argument to both
Speaker 1: people who believe in it and the people who don't.
Speaker 1: All right, Shinali, I want to touch you about another
Speaker 1: developing story. I just got off a call with the
Speaker 1: CEO of Robin Hood Lad ten Of and their CFO
Speaker 1: Jason Warnick Robin Hood announcing they're laying off of the company.
Speaker 1: Here are a couple of thoughts from Lad on that call,
Speaker 1: he said, I anticipated that what we saw in one
Speaker 1: in terms of the market conditions would lasts longer than
Speaker 1: it turned out. That's on me. Employees from all functions
Speaker 1: will be impacted by these changes. Are concentrated in OPTS marketing,
Speaker 1: program management. They over hired in these supports functions. He says.
Speaker 1: This is to right size and exercise cost discipline. This
Speaker 1: is a big chunk of jobs from what was a
Speaker 1: hot rising company. But you know they've only been public
Speaker 1: for a year, still a fairly young company. What's your take. Yeah,
Speaker 1: it's interesting because that comment that you had put out
Speaker 1: there really has gone fairly viral online. It's being shared
Speaker 1: pretty broadly that it's on me comment. So if it
Speaker 1: is on him, then you know what other pressure is
Speaker 1: there on him? To really change the course of this business. Uh,
Speaker 1: they did false they pre reported. Remember they were not
Speaker 1: even supposed to report their earnings today, and they did
Speaker 1: fall short of expectations, including in kind of the core business,
Speaker 1: that transaction based revenue, that payment for order flow, money
Speaker 1: that comes in from the stocks and options business. In
Speaker 1: addition to you know, remember that crypto business is still
Speaker 1: a small fraction of what they make overall when you
Speaker 1: compare it to the point I've been making all day, emilies.
Speaker 1: If you look at f t X, and we know
Speaker 1: Sam Bankman Freed is very exposed to Robin Hood. F
Speaker 1: t X has grown massively with a few hundred employees,
Speaker 1: essentially a lot smaller, a lot more nimble, but Robin
Speaker 1: Hood has has hired many, many hundreds of people. And
Speaker 1: now you're seeing such a sharp reversal of that that
Speaker 1: is really going to impact an entire industry here, all right,
Speaker 1: we are going to continue to watch that one play out. Shanali,
Speaker 1: thank you for your insight there, Bloomberg's Shanali Bossi sticking
Speaker 1: with Robin Hood, the company's crypto arm is gonna have
Speaker 1: to pay thirty million dollars a penalty to New York
Speaker 1: state more not good news. A statement from the New
Speaker 1: York Department of Financial Services points to quote significant failures
Speaker 1: in the areas of bank secrecy, anti money laundering obligations,
Speaker 1: and cyber security. Robin Hood Crypto will also be required
Speaker 1: to retain an independent consultant to perform a comprehensive evaluation
Speaker 1: of the company's compliance with the Department's regulations. Cohe City
Speaker 1: has a new CEO on board. Former vm Ware CEO
Speaker 1: and SAP president san j pun And joining the data
Speaker 1: management company as the cloud wars continue in the midst
Speaker 1: of rising inflation ing and a looming macro economic downturn.
Speaker 1: Newly minted Cohesity President and CEO, Sanja pun And joins us. Now,
Speaker 1: it's always been good to get your thoughts on big
Speaker 1: picture trends over the years, and in the middle of
Speaker 1: the pandemic. I remember reading the story about you. You
Speaker 1: voluntarily decided to leave your last job and take some
Speaker 1: time off in the pandemic, and that was kind of
Speaker 1: a trend among you know, tech veterans like yourself. How
Speaker 1: did you decide that this was the right move. Yeah,
Speaker 1: it's been great. It's a day two. I've got my
Speaker 1: COHESI shirt. I'm excited. But it's been a great year sabbatical,
Speaker 1: almost twenty since I took one. What did you learn
Speaker 1: from your sabbatical? How to spend more time with family.
Speaker 1: That's always the thing that all executives are hard charging
Speaker 1: need to do. Spend more time with your o ones.
Speaker 1: Kidding omen and that as I think the piece that
Speaker 1: you read talked about executives doing that. So it's been
Speaker 1: great investing in companies are joined two boards, met a
Speaker 1: lot of entrepreneurs and it was in that context that
Speaker 1: I met Mohi who is the current founder of Cohesively,
Speaker 1: and I spent the last few months really vetting out.
Speaker 1: I'd heard great things about them and followed them from
Speaker 1: VM or was there a big partner of ours And
Speaker 1: these guys are the best tech in the platform, obviously
Speaker 1: doing credit will and data management, data security and a
Speaker 1: few weeks ago decide today CS and today's day two.
Speaker 1: So do you think burnout is real and that more
Speaker 1: tech executives could use a break. I think all of
Speaker 1: us need to build work life balance into our lives,
Speaker 1: so it isn't burnout. I wasn't you know, taking that
Speaker 1: down for burnout, But when you do have a point
Speaker 1: in time where you can take that time off. What's
Speaker 1: the things that are closest to you, whether it's family,
Speaker 1: whether it's a hobby, whatever it is. And that's what
Speaker 1: it was very fortunate we will do. But I was
Speaker 1: also felt there was a lot of gas in my tank.
Speaker 1: I wasn't ready to retire for life and I want
Speaker 1: to get back in the saddle. So what's your take
Speaker 1: on what's happening in the big cloud wars and the
Speaker 1: trends that we should be watching, especially as you know
Speaker 1: rising inflation, all of these businesses talking about being more disciplined.
Speaker 1: We just talked about Robin Hood laying off of its workforce.
Speaker 1: I think they out in the enterprise spending market. Yeah,
Speaker 1: and the point is his enterprise. The B two B
Speaker 1: enterprise side of cloud is doing well. You just look
Speaker 1: at the recent results and even the last three quarters
Speaker 1: of Amazon, Azure, Google, I build relationship with them. I
Speaker 1: think that also has a tremendous opportunity for us at
Speaker 1: Cohesive because we're at the junction of data, cloud and security.
Speaker 1: So I think cloud and cybersecurity are doing well. So
Speaker 1: if you're in those sectors and B two B there's
Speaker 1: some resilience. You have to prepare for potentially recession, whether
Speaker 1: we go through once, You've got to be careful about
Speaker 1: your spending. This is a smaller company than what I've
Speaker 1: seen before VM. We're n s a P. But if
Speaker 1: you've got great customers like we do a global One
Speaker 1: customer told me they haven't seen tech like this Emily
Speaker 1: since VM. We're twenty years ago, Amazon ten years ago,
Speaker 1: and most recently Go Easy. That's the list of customers
Speaker 1: you want that will take you through even tough times.
Speaker 1: The huge news today in the world and also the
Speaker 1: business world is this visit by Nancy Pelosi to Taiwan,
Speaker 1: which could have broad implications for the U. China relationship
Speaker 1: and the tech industry, which obviously has deep ties to China.
Speaker 1: What do you think the longer term implications of this
Speaker 1: are you know, as a business leader, does it worry you?
Speaker 1: I think we have to have an ad policy. I'm
Speaker 1: super excited that Chip sack was was was signed and
Speaker 1: it really strengthens companies like Intel, all the ones that
Speaker 1: do manufacturing. That's good for us, but we also need
Speaker 1: a strong tie with Taiwan and Taiwan s and a conductor.
Speaker 1: They're also a somewhat of a beneficiary there, but a
Speaker 1: strong relationship with especially Taiwan s and a conductor that's
Speaker 1: super important. Chips are inside every fabric wildlife, whether it's cars,
Speaker 1: or whether it's healthcare devices, whether it's your smartphones. And
Speaker 1: a strong relations with Taiwan and US, I think signals
Speaker 1: to other people who may not want to see that happen,
Speaker 1: that we're standing by neighbor and friend. How concerned are
Speaker 1: you about a recession? Are we already in a recession?
Speaker 1: Should they just call it? I'm not an economist, so
Speaker 1: I can't speculate. Many people do I I certainly think
Speaker 1: you have to brace yourself when you have these for
Speaker 1: these sort of trifactor of inflation, war in Russia, Ukraine. Uh.
Speaker 1: You know all of these kinds of factors, and you
Speaker 1: know the currency issues. So you're a brace for yourself.
Speaker 1: And what do you do? The strong should hopefully get
Speaker 1: stronger if you're a company, you learn how to. I've
Speaker 1: seen this in two thousand eight, and I saw this
Speaker 1: in two thousand It's not the first one I've seen.
Speaker 1: I think great companies get stronger. Some great companies were
Speaker 1: born during the recession. You talked to uber. Google was
Speaker 1: formed in two thousands, so I think great companies ubers
Speaker 1: in two thousand eight and Google was two thousand. So
Speaker 1: that's my my message to our employees of Cohesive, great
Speaker 1: companies can thrive you and further if you're focusing your customers,
Speaker 1: if you use the ecosystem to force multiply you and
Speaker 1: you keep retaining and recruiting good people. All right, Sanji Puna,
Speaker 1: CEO and president of Cohesity, We'll be watching you on
Speaker 1: your next adventure. Thank you, thank you very much everything.
Speaker 1: And that does it for this edition of Bloomberg Technology. Tomorrow,
Speaker 1: I'm gonna be speaking with airbnbco Brian Chesky, also Anthony Nodo,
Speaker 1: CEO of so FI post earnings results and well it's
Speaker 1: a big day micro Strategies Michael Sailor about his clans
Speaker 1: to step down and focus more on bitcoin acquisitions. Definitely
Speaker 1: in a show you don't want to miss, and don't
Speaker 1: forget to check out our podcast wherever you get your podcasts.
Speaker 1: I'm Emily checking in San Francisco. This is Bloomberg