Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Chang in San Francisco, and this
Speaker 1: is Bloomberg Technology. Coming up in the next hour. Elon
Speaker 1: Musk suggests a path to peace for Russia and Ukraine
Speaker 1: and gets roasted on Twitter, including by President Zelinski himself.
Speaker 1: Will walk you through the latest in the back and forth.
Speaker 1: Plus Tesla down more than eight percent at the close,
Speaker 1: the biggest one day drop in four months, this after
Speaker 1: announcing disappointing delivery numbers. How Musk's plan to localize production
Speaker 1: may help. And Kim Kardashian gets fined by the SEC
Speaker 1: after promoting a crypto token without disclosing she was paid
Speaker 1: for it. We'll have the last. There's also this developing
Speaker 1: story Elon Musk drawing the wrath of Ukrainians all the
Speaker 1: way from President Zelinsky on down after this series of
Speaker 1: tweets urging Ukraine to seek a negotiated solution to the
Speaker 1: invasion by Russia and seed crimea for good. Um. David Kirkpatrick,
Speaker 1: founder of Techonomy, is also with us now. But and
Speaker 1: I just want you to walk us through the latest
Speaker 1: in the pack, and fourth it's started with a poll
Speaker 1: by Elon Musk. Yeah. So Elon Musk has sent several
Speaker 1: tweets throughout Monday. The kind of two key points on
Speaker 1: them were, first that he suggested that there should be
Speaker 1: a negotiated settlement over the war in Ukraine between Ukraine
Speaker 1: and Russia. In a separate tweet and the one you
Speaker 1: see on your screen, he implies that Crimea, which is
Speaker 1: an annexation of Russia's, should remain with Russia for good.
Speaker 1: And you know, obviously these are strong words for me,
Speaker 1: for Elon must to be be saying. What I would
Speaker 1: also say is he sent a further pole later in
Speaker 1: the day saying that the citizens of those areas of
Speaker 1: Ukrainian territory that that Russia is currently trying to annex
Speaker 1: should be whether or not they should be given their
Speaker 1: opportunity to vote on their own futures. But there's been
Speaker 1: a pretty sharp reaction from all corners of social media
Speaker 1: and diplomatically to what Elon Musk has had to say, well,
Speaker 1: including from President Zolynsky himself. Zalnsky responding with a Twitter
Speaker 1: poll of his own, which Elon Musk do you like
Speaker 1: more one who supports Ukraine or one who supports Russia.
Speaker 1: H David, what's your take on all this? It's a
Speaker 1: fairly easy one to have a take on. I must say,
Speaker 1: I think it must falls prey to a number of
Speaker 1: dangerous ideas. One is, if I'm so rich, I must
Speaker 1: be smart enough to do anything to solve anything. That's
Speaker 1: loup us um. He He also is an attention hog,
Speaker 1: and his stock drop today tremendously in relation to the market,
Speaker 1: which might not even be unrelated. It may be that
Speaker 1: he's in a bad mood because of that, and he's
Speaker 1: trying to get attention to distract himself. It's all crazy stuff.
Speaker 1: He should not be involved in this issue, and talked
Speaker 1: to us a little bit more about the reaction that
Speaker 1: we're seeing here. Obviously, we've heard from President Selinsky, We've
Speaker 1: heard from Tavor Kirkpatrick. Now, we've heard from analysts who
Speaker 1: cover Tesla, who cover Elon Musk's companies. What else are
Speaker 1: people saying? Yeah, we've heard from Ukraine's ambassador to Germany,
Speaker 1: Andrew Melanik. I won't show or say what he said
Speaker 1: in his tweet due to the coarse language that he
Speaker 1: used but he essentially implied that no Ukrainian or I'm
Speaker 1: paraphrasing no Ukrainian would now buy a Tesla product in
Speaker 1: the future based on what Musk had said. That was
Speaker 1: Andrew Melnik, the Ukrainian ambassador to Germany. This is slightly anecdotal,
Speaker 1: but many kind of well followed Tesla fans, Tesla vehicle
Speaker 1: owners and shareholders who have a presence on Twitter did
Speaker 1: come out and say, you know, this is not something
Speaker 1: that Elon must should be doing that. You know, many
Speaker 1: labeled it as a mistake as well. So it has
Speaker 1: invoked a pretty broad and sharp reaction, including from some
Speaker 1: of those that are fans and supporters of both Tesland
Speaker 1: of Elon Musk personally. This, of course, as the takeover
Speaker 1: discovery process, the Twitter takeover discovery process continues. Kind of
Speaker 1: a difficult week from us last week, I imagine, with
Speaker 1: that delusion of text um being made public David. Also
Speaker 1: today in San Francisco, the CEO of Twitter, Parague Aggrawall,
Speaker 1: was just deposed in a closed door session. We're not
Speaker 1: sure exactly what happened inside that session. Yeah, but but
Speaker 1: what do you make of all of this happening for
Speaker 1: Elon Musk and be of Elon Musk really at once. Okay,
Speaker 1: maybe you think I'm a bad armchair psychologist, but even
Speaker 1: before this development today about Ukraine, it was occurring to
Speaker 1: me that it might be that this whole folder all
Speaker 1: about Twitter buying it, not wanting to buy it, being
Speaker 1: sued suing, was a bid for attention it. You know,
Speaker 1: it's hard to explain why he would have tried so
Speaker 1: hard to buy Twitter and then tried so hard to
Speaker 1: get out of it without any real fundamental changes in
Speaker 1: the business landscape. My dog just it is bold because
Speaker 1: he has to have attention, just like Elon Musk. Um.
Speaker 1: And you know, of course we're we're still waiting for
Speaker 1: headlines to come out of this deposition of Parague. But
Speaker 1: it should be said that Elon Musk's companies actually have
Speaker 1: had some involvement in the war on Ukraine, especially Starlink. Yes,
Speaker 1: the SpaceX of which Elon Musk is a found under
Speaker 1: and the chief executive officer had for quite some time
Speaker 1: throughout the duration of the war in Ukraine been sending
Speaker 1: Starlink equipment to essentially keep the country connected during a
Speaker 1: time of war. You know, this fantastic reporting on the
Speaker 1: Bloomberg Terminal and Bloomberg dot Com about some of the
Speaker 1: background of how that came about in coordination with the US.
Speaker 1: But you know, they are providing that service, They are
Speaker 1: providing that hardware, and and Musk had tweeted earlier on
Speaker 1: in the war about SpaceX's efforts to get that equipment
Speaker 1: into the country and how that they how they had
Speaker 1: been involved in keeping the Ukrainian people online essentially during
Speaker 1: this war. All right, well, certainly this one is still developing.
Speaker 1: We're going to continue to watch the tweets um al
Speaker 1: though our ownered blow Thank you so much, David Kirkpatrick
Speaker 1: to Economy founder David. You're gonna stick with us and
Speaker 1: talk about the next story as well. A big challenge
Speaker 1: is coming to court for social media companies. The U. S.
Speaker 1: Supreme Court taking up two cases where they'll decide whether
Speaker 1: social media companies can be sued for hosting and recommending
Speaker 1: terrorist content. And it's a big test of an old
Speaker 1: law Section to thirty. Let's break it down with Bloomberg's
Speaker 1: Supreme Court reporter Greg Store and Economy founder David Kirkpatrick. So, Greg,
Speaker 1: talk to us about how you're expecting this to play
Speaker 1: out in core and whether this is something that could
Speaker 1: divide the Court on ideological lines. Yeah, there's certainly reasons
Speaker 1: to think it could. This Section to thirty, which is
Speaker 1: the big issue, it's the issue that's involved in the
Speaker 1: Google case. It's the law that generally provides very broad
Speaker 1: immunity to social media companies for things that their users
Speaker 1: post um that has come under fire from conservatives, including
Speaker 1: Donald Trump, uh and at the Supreme Court. The one
Speaker 1: Justice who has said something about Section two thirty is
Speaker 1: Justice Clarence Thomas, who is one of the most conservative justices.
Speaker 1: He has expressed concern that it gives social media companies
Speaker 1: too much liability, and he's been calling on the Supreme
Speaker 1: Court to get involved for years. Section two thirty, of course,
Speaker 1: is the Communications Decency Act, which for so many years,
Speaker 1: decades in fact, David has protected and shielded these companies
Speaker 1: from responsibility for a lot of the content hosted on
Speaker 1: their platform. David, what do you think is the most
Speaker 1: likely outcome here? Well, I'm not a Supreme Court expert,
Speaker 1: so it's hard to know what the I think it
Speaker 1: is possible that the Supreme Court is taking this these
Speaker 1: cases for ideological reasons. Um. But the bottom line. Long
Speaker 1: term outcome, in my opinion is we do need a
Speaker 1: different regulatory regime for social media and internet content. Section
Speaker 1: two thirty, for whatever pluses and minuses it might add
Speaker 1: to the dialogue is not doing what it ought to do,
Speaker 1: and Um, content that shouldn't be up there is up there.
Speaker 1: The companies are behaving irresponsibly and don't have an incentive
Speaker 1: to do the right thing. We need change. Absolutely. Greg
Speaker 1: give us the bigger picture on these two particular cases
Speaker 1: and how significant they are how we might deal with
Speaker 1: social media in the future. Yeah, well, let me separate
Speaker 1: the two out. So the Twitter case that the court
Speaker 1: has is kind of terrorism specific. It has to do
Speaker 1: with the law called the Anti Terrorism Act, and the
Speaker 1: question is whether, um, the allegation that social media companies
Speaker 1: is actually not just Twitter but also Google and Facebook,
Speaker 1: the allegation that they didn't do enough to take down
Speaker 1: identify and takedown post by isis whether that's enough to
Speaker 1: go forward in court. The other case, the Google case,
Speaker 1: is the broader one that applies beyond terrorists. It has
Speaker 1: to do with claims that by making recommendations. This is
Speaker 1: a YouTube case that by making recommendations about videos to
Speaker 1: look at uh, YouTube encourage terrorism, and the question is
Speaker 1: whether that is covered by the immunity. Immunity conferred on
Speaker 1: your Section to thirty that says you can't be held
Speaker 1: liable for what you do as a publisher for just
Speaker 1: posting content. But the question is what about these targeted
Speaker 1: recommendations that are based on users viewing history and are
Speaker 1: done by algorithms, David. If the Supreme Court erode Section
Speaker 1: to thirty immunity, how dramatic would that be for companies
Speaker 1: like Meta and Twitter and YouTube. It depends on how
Speaker 1: they were to do it. It's easy to imagine a
Speaker 1: scenario in which it could cause serious chaos in the marketplace.
Speaker 1: UM So, I don't think we could. If I were
Speaker 1: at the company's I would be very concerned. They claim
Speaker 1: to want a rewrite of Section to thirty, but it's
Speaker 1: not clear how this is going to play out in
Speaker 1: a good way for them. Um I would say quickly.
Speaker 1: On this YouTube case, I think there is a good
Speaker 1: argument that since Section to thirty was implemented in order
Speaker 1: to indemnify companies against excesses of speech by people they
Speaker 1: couldn't control, that is logical. But once they apply their
Speaker 1: algorithms to that content. I don't see section to thirty
Speaker 1: being a very good defense for their behavior. Now across
Speaker 1: upon in Europe, Greg, you've got social media companies being
Speaker 1: questioned with the British ruling that social media was to
Speaker 1: blame for the death of a teenage girl. Um, you know,
Speaker 1: what's your take on how that case could potentially impact
Speaker 1: these Yeah, you know, the Supreme Court justices here uh
Speaker 1: tend to ignore what's happening overseas. They look at US law,
Speaker 1: and they, particularly conservatives, are very proud of not paying
Speaker 1: attention to what's happening with foreign lass. I wouldn't expect
Speaker 1: a direct impact that being said, you know, these justices
Speaker 1: do read. They understand that social media is controversial, that
Speaker 1: there are a lot of folks who blame it for
Speaker 1: a lot of society's ills, and they may feel that
Speaker 1: way themselves. And we'll we'll have to see when when
Speaker 1: they get to get to hear arguments, probably early next year,
Speaker 1: whether some of that uh sort of skepticism towards social
Speaker 1: media comes out from some of the conservative justices. All right, Well,
Speaker 1: two cases here that will certainly be following Blueberg's Greg Store,
Speaker 1: who covers the Supreme Court and economies, David Kirkpatrick, thank
Speaker 1: you both. Coming up, we're gonna hear from the pay
Speaker 1: equity startups Cyndio talking about progress closing gaps across tech
Speaker 1: and business as a new law is about to shine
Speaker 1: a light on salaries across California. This is Bloomberg ready
Speaker 1: or not? What your job pays is about to get
Speaker 1: a lot less private. California has become the latest state
Speaker 1: to join a quickly growing nationwide salary transparency movement, which
Speaker 1: means companies like Alphabet, Meta, even Disney will have to
Speaker 1: comply and share pay expectations for open roles on demand
Speaker 1: by January. To break it all down with Cyndio CEO
Speaker 1: Maria Cola Curcio, Cindio out with a new report that
Speaker 1: shows that well, most employers aren't ready. So Maria, let's
Speaker 1: start with this new transparency law. What what exactly will
Speaker 1: this do and what will companies have to do as
Speaker 1: a result? Yeah, great question. So Governor Newsom signed the
Speaker 1: law sp last week September. And as we all know,
Speaker 1: California is the fifth largest economy in the world, so
Speaker 1: this is going to have tremendous impact because it's any
Speaker 1: company with fifteen or more employees with even one employee
Speaker 1: in California. So that has a huge, huge dramification on tech.
Speaker 1: And so what it actually does is it requires companies
Speaker 1: to include pay ranges on job postings, as you said,
Speaker 1: starting January and report median and mean pay gaps and
Speaker 1: contractor pay to the state starting March. So you're out
Speaker 1: with a new report that shows employers they're not ready. Yeah,
Speaker 1: how's not ready? Are they? Maybe at least this report today,
Speaker 1: So it's pretty fresh. And what we found is two
Speaker 1: thirds of companies are saying that they are completely unprepared
Speaker 1: to post salary ranges. And I think a big part
Speaker 1: of that is because companies don't yet understand why they
Speaker 1: pay what they pay. And if you don't know that,
Speaker 1: that's obviously the first question and employee is going to
Speaker 1: come to you asking once they see those ranges. Blick.
Speaker 1: Why is that so tricky for companies to know why
Speaker 1: they pay what they pay and even what they pay
Speaker 1: and where there are gaps. Yeah, it's tricky because of
Speaker 1: the old way of doing pay equity analyses. So obviously
Speaker 1: this is what we do. We're innovating this with tech,
Speaker 1: but the old ways to outsource it to a law firm,
Speaker 1: You get back a report once a year that just
Speaker 1: tells you your remediation or what you need to pay
Speaker 1: people to get out of the woods, and you learn
Speaker 1: nothing about the underlying policies or programs that are driving pay.
Speaker 1: So companies really need to start using analytics to figure
Speaker 1: out are there pay policies and programs actually working as
Speaker 1: intended If they say they pay for performance for example,
Speaker 1: which a lot of companies say that, but very few
Speaker 1: actually do. So let's take alphabet and meta for example,
Speaker 1: what would this mean for companies like them, which you know,
Speaker 1: compete with each other for talent um historically, you know,
Speaker 1: are known for paying folks quite well. But like all
Speaker 1: most companies probably have pretty big pay gaps. Yeah, so
Speaker 1: the first thing they're gonna have to do is get
Speaker 1: on top of their pay gaps. Because starting pay is
Speaker 1: the biggest factor in any pay equity analysis. So if
Speaker 1: you have issues or as a company, if you have
Speaker 1: a philosophy of start low, stay low, or pay top
Speaker 1: dollar to the best negotiator, that's going to very quickly
Speaker 1: catch up with you. From a pay equity and meeting
Speaker 1: pay gap perspective, You're going to start to have disparities
Speaker 1: that you can't rule out are because of something like gender, race,
Speaker 1: or ethnicity. So the way they would address this as
Speaker 1: a Google or a Meta or an Apple is to
Speaker 1: make sure you're not doing pay equity analyses just once
Speaker 1: a year, but you're looking at this constantly as you hire,
Speaker 1: as you you know, God forbid, have to lay people off.
Speaker 1: Are you having adverse impact? Are you letting bias creep in?
Speaker 1: Because bias requires discretion. It's oxygen, and there's so much
Speaker 1: discretion in these decisions, and the only way to avoid
Speaker 1: that is to really use data and analytics to make
Speaker 1: sure you're informing those and guiding the decisions. Well do
Speaker 1: you think this is going to impact the labor market
Speaker 1: and if so, how, especially given that we are, you know,
Speaker 1: potentially heading into a recession. I think the interesting thing
Speaker 1: will be to see how this impacts competitiveness in tech talent.
Speaker 1: So one of the maybe unintended benefits of what's happening
Speaker 1: with the market right now is we're going to see
Speaker 1: a little bit of loosening as it relates to that
Speaker 1: fierce competition for engineers in tech, and so with pay
Speaker 1: transparency on top of that, now you're going to see
Speaker 1: sort of that competitive nature of everyone trying to one
Speaker 1: up each other on the salary and the packages. Maybe
Speaker 1: that will have a bit because there will be transparency
Speaker 1: and so folks will understand exactly what their opportunities and
Speaker 1: offers are and will be, so it might make the
Speaker 1: talent race a little bit easier to manage. Last quick question,
Speaker 1: I'm just curious what you're seeing in the labor market
Speaker 1: right now. We've heard about, you know, um, the Great Resignation,
Speaker 1: and then we also heard that kind of been on pause.
Speaker 1: You know, job employees aren't necessarily moving around right now
Speaker 1: because there aren't so many choices out there. How would
Speaker 1: you describe the state of play right now? Yeah, I
Speaker 1: think we keep sort of groping around for a term
Speaker 1: that gets at the essence of what's happening, whether it's
Speaker 1: the Great Resignation, the Great reshuffle, quiet quitting, all of
Speaker 1: it to me is just a massive reflection that we've
Speaker 1: seen a total fracturing of trust between employees and employers,
Speaker 1: and so the way to fix that is to really
Speaker 1: take workplace equity and the title wave of pay transparency
Speaker 1: that's coming at employers through some of these laws and
Speaker 1: dive right into it, because that is really the way
Speaker 1: to rebuild the trust that has broken. All right, Maria Colcuccio,
Speaker 1: CEO of Cyndio, thank you for shining all light on
Speaker 1: that for us here today. Meantime, Elizabeth Holmes prison sentencing
Speaker 1: has been delayed. The judge overseeing the Sinist fraud case
Speaker 1: is looking into whether a key government witness gave truthful
Speaker 1: testimony at trial after her lawyers said he voiced mixed
Speaker 1: givings during a visit to her home. She was found
Speaker 1: guilty in January of defrauding investors in conspiracy for her
Speaker 1: role in the collapse of the blood testing startups she
Speaker 1: founded that reached a peak valuation of nine billion dollars.
Speaker 1: Welcome back to Bloomberg Technology and Emily Chain in San Francisco.
Speaker 1: Let's get back to the markets now. Shares of Tesla
Speaker 1: following the most since June after third quarter deliveries came
Speaker 1: in below expectations. Even so, there was another record setting
Speaker 1: period from Musk and Co. Dan, i'ves of wet Bush
Speaker 1: Securities joining us now to discuss. So, Dan, how alarming
Speaker 1: is this delivery situation to you? Well, I think at
Speaker 1: first glance, clearly the streets going to be disappointed. You
Speaker 1: saw that in the stock. But I believe it's more
Speaker 1: logistical rather than demand rin and that's our view, especially
Speaker 1: coming at China. A lot of balls in the air,
Speaker 1: but I do not believe this is men driven. Ultimately,
Speaker 1: that's really going to be the narrative now between the
Speaker 1: bulls and the barras. So the narrative from Elon Musk
Speaker 1: is this, uh, he tweeted, smoothing out crazy end of
Speaker 1: quarter delivery wave to reduce expedite costs and relieve stress
Speaker 1: on Tesla team aiming for steadier deliveries intra quarter. What's
Speaker 1: your expectation that that will happen. Well, that's really the
Speaker 1: balancing act because if you look, I mean, they've had
Speaker 1: a pay significant dollar then the quarters and some of
Speaker 1: the logistical challenges they've had in the US and Europe
Speaker 1: as well as in China. Clearly they put a line
Speaker 1: in the sand this quarter. But obviously investors they're gonna
Speaker 1: be focused on that Q four delivery can be four
Speaker 1: sevent k you know, or higher, because ultimately that's really
Speaker 1: the focus. I mean, you really need to see this
Speaker 1: smooth out, but we you know, to really stress we
Speaker 1: do not believe it's demand driven. I do believe it's
Speaker 1: logistical rather than anything other. And look, and that's gonna
Speaker 1: be guilty till proven is in situation until we hear
Speaker 1: god in and the call in a few weeks. So
Speaker 1: our investor is going to be convinced by this narrative.
Speaker 1: And you're you're seeing a pretty strong reaction here at
Speaker 1: least today. Look in a white knuckle market and TESTA
Speaker 1: is held to a higher standard, especially with a higher multiple.
Speaker 1: It's it's not when investors want to see. I mean,
Speaker 1: there's nothing right home about you can't sugarcoat it. And
Speaker 1: now it's going to be approved me it's gonna be
Speaker 1: in the penalty box until we go into Q four.
Speaker 1: But I believe, as we've seen before, this is a
Speaker 1: back against the wall moment from Musk and Tests and
Speaker 1: nothing more. Meantime, you've got Ellen with a lot of
Speaker 1: things going on, this big Twitter takeover trials set to
Speaker 1: start in just a couple of weeks. How worried do
Speaker 1: you think investors are about all of these other potential distractions.
Speaker 1: It's created a bit of a perfect storm. I mean,
Speaker 1: if you look, you know you have a soft delivery number.
Speaker 1: You've got the Twitter trial come up October seventeenth, and
Speaker 1: then just an overall risk off mar get. I think
Speaker 1: going to Twitter trial that there's a lot of questions.
Speaker 1: Is there a settlement before the trial begins. If not,
Speaker 1: you know, then it starts to ultimately be a cascade
Speaker 1: where you could see musk. You know, still what I
Speaker 1: believe is owning Twitter at twenty we we've a settlement
Speaker 1: likely could happen before in the high forties fifty range,
Speaker 1: but once he steps in the court, it's likely easither
Speaker 1: going to own Twitter have to pay a five billion
Speaker 1: dollars settlement. And that's definitely been a bit of what
Speaker 1: I'll say that. You know, it's another cloud over the
Speaker 1: Tesla story. Well, and you know, I don't know if
Speaker 1: the perfect storm could get even more perfect or more stormy.
Speaker 1: But you have Ellen setting off an uproar with a
Speaker 1: series of tweets suggesting uh negotiation between Ukraine and Russia. UM,
Speaker 1: a lot of folks commenting on this, analyst commenting on
Speaker 1: this all the way up to the President of Ukraine himself,
Speaker 1: Altamir Zelinsky clapping back with a poll of his own. UM,
Speaker 1: you know, as somebody who follows twist Tesla and Musk
Speaker 1: so closely. You know what's your what's your take on
Speaker 1: this and and and you know the potential impact it
Speaker 1: can have on real world companies and real world investors
Speaker 1: who put who put their money behind Elon Musk look
Speaker 1: their black eye moments from Musk because it goes back
Speaker 1: instead of staying in his own swim ling, and you know,
Speaker 1: he just adds more and more controversy. And obviously Twitter,
Speaker 1: as we've seen that, that's sort of had a cascade effect.
Speaker 1: And ironically he could own Twitter as a platform, right,
Speaker 1: so that just creates more worries. And I think this
Speaker 1: has just been a broader what I'll call really a
Speaker 1: night marriage. Nine months you know four Musk none decided
Speaker 1: for Tesla, and it's something where investors, patients is wearing
Speaker 1: thin in this type of mark is the last thing
Speaker 1: you want to see. And it speaks to some of
Speaker 1: the frustration that you're seeing, because I think today was
Speaker 1: a lot of frustration selling. You do an AI day
Speaker 1: on Friday and then you have a soft delivery Sunday morning.
Speaker 1: It's not good walk yeah, and then you have frustration
Speaker 1: from some of Musk's biggest supporters in his own Tesla
Speaker 1: fans Um about this latest series of tweets Um. Of course,
Speaker 1: the next couple of weeks are going to be very
Speaker 1: interesting as we head into that Twitter trial. Dan Ives
Speaker 1: of Wedbush Security is always good to have you here.
Speaker 1: Thank you. Meantime, I want to talk a little bit
Speaker 1: about Peloton and that deal with Hilton to put its
Speaker 1: exercise bikes in Hilton's fifty four hundred US hotels. Peloton
Speaker 1: will also offer members of Hilton's Honors program a free
Speaker 1: trial to its app and a hundred dollars off a
Speaker 1: bike or a treadmill purchase. Bloomberg Smark German with us
Speaker 1: now for more Mark. How significant is this deal? It's
Speaker 1: just one of a few. With this point, Peloton is
Speaker 1: basically pulling every lover they can, pushing every potential partnership
Speaker 1: they can, doing whatever they can to perverse the sales
Speaker 1: fall in the stock price decline. I remember when the
Speaker 1: stock was well north of a hundred dollars about a
Speaker 1: year ago per share. We hit an all time low
Speaker 1: for Peloton, I believe even either today or on Friday,
Speaker 1: coming in it under seven dollars a share. This Hilton
Speaker 1: news brought the stock up a little bit, and now
Speaker 1: it's a little bit north of seven, still below eight.
Speaker 1: You can see right there it's about it seven dollars
Speaker 1: and forty seven cents. So clearly things are not looking
Speaker 1: so hot for Peloton. The stock price at its worst
Speaker 1: point really ever, and they're hoping that more and more
Speaker 1: of these deals will help turn that around. I'm not
Speaker 1: certain that this Hilton deal on its own will do
Speaker 1: much for the company. We're talking about hotels here. I
Speaker 1: believe it's probably only going to be one, two or
Speaker 1: three bikes per hotel, so we're talking about twenty thousand units,
Speaker 1: maybe twenty five thousand units at the very most, and
Speaker 1: that's really not going to move the needle for the company.
Speaker 1: But I think what Barry McCarthy, Peloton CEO, has said
Speaker 1: about better prioritizing the digital app and better partority prioritizing
Speaker 1: the subscription instead of the hardware is where Peloton is
Speaker 1: going to be long term. The question is this Peloton
Speaker 1: have enough money and runway investor patients, board of director patients,
Speaker 1: UH to really see that vision through. What's your understanding
Speaker 1: of the level of confidence under Barry McCarthy from the
Speaker 1: rank and file at this point, Yeah, I mean at
Speaker 1: this point, you know Barry in that new leadership team
Speaker 1: has implemented this plan. Uh, they're executing this plan and
Speaker 1: they're doing exactly what they said they would be doing. Uh.
Speaker 1: They really changed how the company functions operationally. They're allowing
Speaker 1: the company to generate more margin and more profit. They
Speaker 1: plan to shut most of their retail outlets next year.
Speaker 1: They're doing everything they possibly can. Unfortunately, for the stock
Speaker 1: price for the company, that's not changing anything. And as
Speaker 1: we know, a lot of the employee pay at companies
Speaker 1: like Peloton is very much tied to the stock UH,
Speaker 1: Mark German. As always, thanks for your reporting. Come up
Speaker 1: as we head into fall, where is the crypto winter headed?
Speaker 1: We're going to talk about that and more as the
Speaker 1: SEC slaps Kim Kardashian with a one point three million
Speaker 1: dollar fine for promoting crypto without disclosing she was paid
Speaker 1: to do it. Coin Shair CSL Melton Demiraz just with
Speaker 1: us to discuss next. This is Bloomberg time now for
Speaker 1: a crypto report, and we've got to talk about Kim Kardashian,
Speaker 1: who just got fined by the SEC. The reality star
Speaker 1: will pay close to one point three million dollars to
Speaker 1: settle allegations that she broke US rules by touting the
Speaker 1: crypto token ethereum max, but without disclosing that she was
Speaker 1: paid for that promotion. Let's talk about this and more
Speaker 1: with coin Chairs Chief strategy officer Melton's Mirrors and our
Speaker 1: cryptic contributor Shinali Boss. So, Melton, I got asked for
Speaker 1: your take on this Kim k situation getting fined by
Speaker 1: the SEC. It's kind of a big deal, it is.
Speaker 1: I mean, Kim Kardashian is one of the most influential
Speaker 1: people on the Internet. She has hundreds of millions of followers.
Speaker 1: But I think there are two big issues here. Number one,
Speaker 1: the SEC doesn't oversee advertising, the FTC does, so that
Speaker 1: should be in the FTC matter to begin with. And
Speaker 1: number two, in order for these allegations to be true,
Speaker 1: Etherium max or the EMACS token has to be security
Speaker 1: and I have not seen a statement come out or
Speaker 1: ruling come out from the SEC to indicate that. So
Speaker 1: while it's an attention grabbing headline, I think it's another
Speaker 1: example of Gensler's SEC pursuing rulemaking via litigation, which is disappointing.
Speaker 1: It's interesting you say that because, uh, we just interviewed
Speaker 1: Katie Hahn of Han Ventures last week and she also
Speaker 1: believes that Gary Gensler's approach is creating a lot of confusion.
Speaker 1: Take a listen to what she had to say. But
Speaker 1: I'll just tell you what I hear from founders is
Speaker 1: that they're very confused because they get told come in register,
Speaker 1: just come in and talk to us. But you have
Speaker 1: the one company who has done the shi an act
Speaker 1: of going in and registering coin based file, the ne
Speaker 1: S one UM and still, you know, there's a lot
Speaker 1: of saber rattling still going on. I think, Nelson, what
Speaker 1: do you think is there is there a lot of
Speaker 1: confusion happening because of regulation or if the SEC you know,
Speaker 1: is trying to create a path to do a little
Speaker 1: bit more certainty. Um, you know, along the lines of yes,
Speaker 1: there could be consequences if you do something that we
Speaker 1: believe is wrong. I absolutely agree with Katie's perspective and
Speaker 1: great respect for Katie. She has been in the belly
Speaker 1: of the beast, she's been on the hill. Um, She's
Speaker 1: seen how these policies get made. I do think it's
Speaker 1: really confusing and one of the biggest costs for crypto
Speaker 1: companies and crypto projects today is compliance. These are early
Speaker 1: stage financial technology startups and they are spending millions of
Speaker 1: dollars not only on trying to untangle current rolemaking and
Speaker 1: the alphabets super different regulators in the United States who
Speaker 1: they may need to engage with, but also been the
Speaker 1: precedent that's been set, they need to set aside a
Speaker 1: lot of capital for future litigation. So I think it
Speaker 1: really hampers innovation, It really hampers the ability for innovators
Speaker 1: to compete, and it definitely favors larger financial institutions who
Speaker 1: have relationships on the Hill, who have lobbyists, and who
Speaker 1: have pre existing relationships with these agencies. So I would
Speaker 1: love to see clarity. I have not seen it yet,
Speaker 1: and I think it's a huge challenge going forward. Nothing
Speaker 1: what about other agencies, because you know, the SEC is
Speaker 1: obviously moving in a very different direction than it has
Speaker 1: the last several years prior to against her when it
Speaker 1: comes to crypto enforcement in particular. But then you see
Speaker 1: something like the CFTC recently suing a Dow and I'm
Speaker 1: wondering if you look at the agency's overall you know,
Speaker 1: even despite the issue of is it as security? Is
Speaker 1: it not a security? With the SEC? How complicated is
Speaker 1: it to navigate the web here of agencies that are
Speaker 1: going after different types of investment vehicles in crypto? Well,
Speaker 1: as I said before, it's all for the SUP there's
Speaker 1: so many three letter acronyms. There's so many different agencies.
Speaker 1: It started really with the CFTC and the SEC. Now
Speaker 1: there are a number of different agencies involved. Intelligence is involved.
Speaker 1: If we look at the recent Tornado cash o' fact
Speaker 1: issues and sanctions issues, if we look at some of
Speaker 1: what's happening on the Russia side with people concerned about
Speaker 1: money movement, there's a lot to navigate. There's not a
Speaker 1: whole lot of clarity. Now, the Biden administration did put
Speaker 1: out an executive order, but again, how long will it
Speaker 1: take for the research phase to move forward? How long
Speaker 1: will it take for actual practical, practicable policy to be implemented.
Speaker 1: I haven't seen it yet. I've been doing this for
Speaker 1: eight years. I am hopeful, but I've not been impressed
Speaker 1: by what I've seen so far, and I think the
Speaker 1: challenges the blockchain doesn't have a physical jurisdiction, unlike the
Speaker 1: banking sector. There is no ceo you can call. It
Speaker 1: doesn't have physical jurisdiction. So some of these issues are
Speaker 1: just really nuanced and I think challenging to untangle without
Speaker 1: really understanding what it is this technology does. So I empathize,
Speaker 1: but I'm also incredibly impatient because this is a very
Speaker 1: very expensive process. Well, speaking of in patients, you recently
Speaker 1: tweeted that vcs are going to start asking for refunds.
Speaker 1: What do you mean by that? Yeah, Look, I think
Speaker 1: one was the year of the crypto BC. We saw
Speaker 1: a ton of new funds, a lot of money coming
Speaker 1: into the space, crazy valuations. Um. Last Q four we
Speaker 1: had an all time high plus to seven billion dollars
Speaker 1: of crypto deals done, which comprised for the first time
Speaker 1: close to six percent of the total for venture. Doesn't
Speaker 1: seem like a lot, but that's a lot for a
Speaker 1: fairly nascent sector. Now reality is setting in. People are
Speaker 1: realizing a lot of these businesses don't necessarily have a
Speaker 1: pathway to revenue. Burn was really high. People are spending
Speaker 1: a lot of money. So I think over the next
Speaker 1: few quarters we're going to see consolidation, We're gonna see
Speaker 1: less dealmaking, and we're gonna see fewer exits in the
Speaker 1: form of M and A in the form of I
Speaker 1: p O s and even specs which a lot of
Speaker 1: investors and their LPs were counting on to deliver those returns.
Speaker 1: You know, something we're talking about at length tomorrow, I
Speaker 1: know during our weekly crypto show is the idea here
Speaker 1: of traditional finance versus defy And you know, how much
Speaker 1: does traditional finance still need to to move and mold
Speaker 1: when you are still seeing crypto. Of course, the market
Speaker 1: value has gone down for a lot of these tokens,
Speaker 1: but money being raised that way through dows clearly a
Speaker 1: whole generation of young people thinking about investing differently. And
Speaker 1: so if vcs are asking for their money back, the
Speaker 1: I p O model is under question, so are spects.
Speaker 1: How important is it for cryptocurrency, crypto markets, blockchain to
Speaker 1: be a new part of the financial system even within
Speaker 1: the existing companies. Here's what's really exciting. So even though
Speaker 1: the cryptocurrency market cap might be down, what we see
Speaker 1: is the integration of cryptocurrencies, digital assets and blockchain technology
Speaker 1: into financial system is continuing at a really rapid pace.
Speaker 1: So we see firms like Apollo, KKR, black Croft, Fidelity
Speaker 1: just to name, some that are not only offering asset
Speaker 1: management products are bolting on crypto, They're actually looking at
Speaker 1: innovative ways they can use the underlying technology to deliver
Speaker 1: products and services that are faster, cheaper, and in new ways.
Speaker 1: So I'm really excited about this trend. It's not necessarily
Speaker 1: cryptocurrency in the traditional sense, but I think that a
Speaker 1: lot of institutions are looking at the speed at which
Speaker 1: one money can move, some of the programmatic capabilities of
Speaker 1: defined being able to actually program financial assets digitally on
Speaker 1: a global medium, and that's really exciting. So I think
Speaker 1: we're going to continue to see that integration between traditional
Speaker 1: financial services and the crypto sector. Will it be digital
Speaker 1: assets UM in the sense that these are assets on
Speaker 1: a public ledger, absolutely, Will it be cryptocurrencies this typically,
Speaker 1: I think that's an open question that you can create
Speaker 1: anything and call it a cryptocurrency. I think UM institutional
Speaker 1: adoption is still limited to fairly small set of proven cryptocurrencies.
Speaker 1: But I think again that integration is starting to happen,
Speaker 1: and that is an area that we had coined. Shares
Speaker 1: are just really excited about, all right. Maldom de Miror's
Speaker 1: chief strategy officer, at coin Chairs. Thanks so much for
Speaker 1: joining us as well as our own appreciate it. A
Speaker 1: bagel with fewer cars, That is what a new celebrity
Speaker 1: back bagel venture is promising. It's called Better Brand, and
Speaker 1: the startup has raised more than five million dollars. Let's
Speaker 1: talk about it with Bloomberg Cypriya anand who investigated and
Speaker 1: pre I assume this involved a taste test? Okay, they
Speaker 1: say every bagel contains the same sugar content of a
Speaker 1: stock of salary and the protein content of four eggs.
Speaker 1: Does it actually taste good? You missed the taste test
Speaker 1: that we had in the office a couple of days ago, Emily.
Speaker 1: But the consensus among Bloomberg staffers was that it doesn't
Speaker 1: quite taste like a bagel, and by doesn't quite um
Speaker 1: Most folks thought it was pretty far off from a
Speaker 1: standard bagel and a grocery store bagel. So what's the
Speaker 1: broader consensus here? And not that you know, our Bloomberg
Speaker 1: team isn't enough, But is this company having success? Well,
Speaker 1: this company actually has just rolled out across various supermarkets.
Speaker 1: They had a big rollout in Whole Foods. It's in
Speaker 1: the frozen section of whole food stores. Now they've got
Speaker 1: a couple of different flavors, classic cinnamon, They've got a
Speaker 1: pumpkin size spice flavor for the holiday season. Um, they
Speaker 1: have a chocolate chip flavor for those who love sweets.
Speaker 1: And they seem to be expanding quickly. They're looking to
Speaker 1: roll out in Europe and across Latin America as well,
Speaker 1: and they're closing another round of funding, they said pretty shortly.
Speaker 1: There's a bigger question here. Can you call it a
Speaker 1: bagel if it's not full of carbs? Or is it
Speaker 1: something else? Entirely? I wonder, But you've got Alexis Ohanian
Speaker 1: back in this startup. Um, there's some celebrity uh folks involved.
Speaker 1: Is there a need maybe a real need that they're
Speaker 1: filling here. Well, the company says it wants to be
Speaker 1: the beyond meat of carbs and create a very low
Speaker 1: carb breadline for folks who maybe have health issues and
Speaker 1: can't eat as many carbs as they're in a standard
Speaker 1: a loaf of bread or a standard bagel. Um, and
Speaker 1: you know this could be a substitute for folks who
Speaker 1: are really trying to change their diet in in a
Speaker 1: very specific way. Right. Um, you know so well, it
Speaker 1: doesn't necessarily taste exactly like a standard bagel. There might
Speaker 1: be folks out there who say, you know what this resembles.
Speaker 1: It evokes that memory for me in some kind way. Um.
Speaker 1: And it is attracting investment from some Hollywood celebrities as well.
Speaker 1: And so the company says it plans to expand into
Speaker 1: other bread products like pretzels, eventually have its own ready
Speaker 1: made pizza bagel option as well in the frozen aisle. UM,
Speaker 1: and they're also talking to airlines about putting this in
Speaker 1: airport lounges. All right, well, I'm gonna need to do
Speaker 1: a taste test, PRIA, so maybe maybe you can see
Speaker 1: if there are so left overs. Thank you, um, Bloomberg's
Speaker 1: Pria and non thank you for joining us. And that
Speaker 1: does it for this edition of Bloomberg Technology. And make
Speaker 1: sure you tune in tomorrow our conversation with Cisco's Chief
Speaker 1: People Officer, Francott suit us. We'll be joining us how
Speaker 1: Cisco is approaching hybrid work and the future of the office.
Speaker 1: I'm Emily changing in San Francisco. This is Bloomberg