WEBVTT - Stocks Sink and the Gig Economy Faces Challenges 0:00:02.240 --> 0:00:05.520 From the heart of where innovation, money and power colli 0:00:06.360 --> 0:00:10.880 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.920 --> 0:00:27.520 Emily jay I. Remember we check in San Francisco and 0:00:27.560 --> 0:00:29.880 this is Bloomberg Technology coming up. In the next hour, 0:00:30.200 --> 0:00:34.360 tech stocks turn sharply lower as the semiconductor slowdown takes 0:00:34.360 --> 0:00:37.280 the industry down with it. We're gonna have more on 0:00:37.560 --> 0:00:41.720 the warnings from chipmakers and when we might see a recovery. Plus, 0:00:41.840 --> 0:00:44.600 the gig economy faces a new reality after the labor 0:00:44.600 --> 0:00:49.840 department proposes some gig workers be classified as employees, sending 0:00:49.840 --> 0:00:52.279 shares of Uber down more than We're going to talk 0:00:52.320 --> 0:00:55.480 about what it means for Uberlift, door, dash, and more, 0:00:56.400 --> 0:00:59.600 and we get a glimpse into Mark Zaggerberg's vision for 0:00:59.760 --> 0:01:02.960 them be averse. The company is leaning into the virtual 0:01:03.000 --> 0:01:07.720 workplace with new partnerships with Zoom and Microsoft. Zuckerberg also 0:01:07.840 --> 0:01:12.080 unveiling the new Quest pro headset and showing off his 0:01:12.200 --> 0:01:16.759 Avatar legs. Hundreds of billions of dollars have been wiped 0:01:16.920 --> 0:01:21.480 off the chip industry following a worldwide drop in demand 0:01:21.520 --> 0:01:25.200 for reference Taiwan Semiconductor, the most valuable chip maker in 0:01:25.200 --> 0:01:30.280 the world, suffering its biggest drop since for more, Let's 0:01:30.280 --> 0:01:33.039 bring back our Bloomberg Intelligence Senior Alice ujin Ho, who 0:01:33.040 --> 0:01:34.959 has been of course following all the moves and chips 0:01:34.959 --> 0:01:38.360 and you know, Lu, we were talking about potential glut 0:01:38.560 --> 0:01:41.720 in UH supply for months, but it seems to have 0:01:41.840 --> 0:01:45.640 taken everyone by surprise, just this idea that we didn't 0:01:45.640 --> 0:01:48.880 have enough and now we have too much. You know, why? 0:01:48.960 --> 0:01:52.200 Why is this all happened so fast? Sure? So thanks 0:01:52.200 --> 0:01:54.280 for having me on again, Emily So So a couple 0:01:54.320 --> 0:01:57.520 of things, right, um, I think the recessionary environment, the 0:01:57.520 --> 0:02:02.200 recessionary concerns going to they started to hit the U, 0:02:02.360 --> 0:02:06.520 the end markets, servers, PCs, UH, TV so on and 0:02:06.560 --> 0:02:09.440 self worth, any any electronic goods UH that seems to 0:02:09.440 --> 0:02:12.280 be pairing that back. And we saw evidence of that 0:02:12.480 --> 0:02:15.160 last quarter as in with respect to a m D 0:02:15.240 --> 0:02:17.600 and Intel UH they made their first round of cuts. 0:02:17.600 --> 0:02:20.280 And I think what's surprised everyone else is that when 0:02:20.320 --> 0:02:22.480 we thought it was over, there was another round of 0:02:22.480 --> 0:02:25.120 cuts by Micron as well as a m D. And 0:02:25.160 --> 0:02:28.079 then layer that on with the geopolitical risk which is 0:02:28.120 --> 0:02:31.760 also weighing on t SMC. So would you say a 0:02:31.840 --> 0:02:34.560 downturn in chips is a leading or lagging indicator for 0:02:34.600 --> 0:02:37.960 the rest of the technology industry. Sure so, so why 0:02:37.960 --> 0:02:40.000 don't I take you back into history if we look 0:02:40.040 --> 0:02:44.320 at pre COVID, UH, the chip makers were an early 0:02:44.360 --> 0:02:47.680 cycle has always been an early cycle UH industry, and 0:02:47.880 --> 0:02:50.680 they were the first one to come down once UH 0:02:50.800 --> 0:02:53.120 COVID hit. But once we figured out that COVID was 0:02:53.160 --> 0:02:55.480 not going to be bad as bad as initially thought, 0:02:55.520 --> 0:02:57.959 they were the first ones to come back up. From 0:02:58.000 --> 0:03:00.680 an evaluation perspective, right, it's gonna take a while for 0:03:00.840 --> 0:03:03.600 estimates to to catch up. So I know that there 0:03:03.600 --> 0:03:05.639 were a couple of rounds of cuts on the chip 0:03:05.680 --> 0:03:09.440 sector already. But even at fourteen times, it's still not 0:03:09.520 --> 0:03:13.040 a trough multiple is going back to. It's still seventeen 0:03:13.120 --> 0:03:16.480 times seventeen percent premium to trough multiple. So there's still 0:03:16.520 --> 0:03:20.560 maybe another round of learnings. Because to reflect three expectations, 0:03:20.880 --> 0:03:23.200 which companies are in the worst position based on what 0:03:23.400 --> 0:03:27.280 chips they make? And what is most you know, in 0:03:27.320 --> 0:03:31.080 the most in oversupply? Sure so so, UM, if we 0:03:31.160 --> 0:03:34.760 think about it from an end market perspective, UH companies 0:03:34.800 --> 0:03:38.640 that are over indexed on the consumer side are hurt 0:03:39.160 --> 0:03:41.000 uh if and and one of the reasons why tm 0:03:41.000 --> 0:03:44.320 SMC is hurt so badly is because some of the 0:03:44.440 --> 0:03:49.280 leading chip manufacturers rely on t S, MCS, fabs and 0:03:49.280 --> 0:03:53.240 and think about it, Apple smartphone manufacturers as well as 0:03:53.440 --> 0:03:56.760 A A M d uh for for their PCs chips. 0:03:56.840 --> 0:04:01.360 So those three buckets alone is going to create that lie. Um. 0:04:01.400 --> 0:04:05.160 I think if you think about companies that that manufactured 0:04:05.200 --> 0:04:08.600 their own ships, you have companies like analog devices that 0:04:08.640 --> 0:04:11.400 do not have as much consumer exposure, but they do 0:04:11.480 --> 0:04:15.920 have a fair amount of consumer exposure as well that 0:04:16.040 --> 0:04:18.719 may see a negative impact, as well as companies like 0:04:18.720 --> 0:04:21.719 a video that's already warned on on weakness on the 0:04:21.760 --> 0:04:24.640 consumer side. All right, uh went, how thank you for 0:04:24.720 --> 0:04:27.920 helping us work through all of this new information. Are 0:04:27.920 --> 0:04:31.680 bloomberk Sen your intelligence analysts appreciate it? Meantime, a new 0:04:31.800 --> 0:04:35.560 proposal from the Biden administration would classify millions of gig 0:04:35.600 --> 0:04:40.200 workers as employees rather than independent contractors. That could have 0:04:40.360 --> 0:04:44.240 extreme repercussions for companies like Uber and Left, which plunged 0:04:44.640 --> 0:04:47.120 on this news. Let's bring in Bloomberg's Jackie Dablos. So 0:04:47.200 --> 0:04:50.200 Jackie tell us exactly what this new law involved and 0:04:50.240 --> 0:04:54.360 how it would impact the companies that you cover. So 0:04:54.440 --> 0:04:58.719 the proposal, which is still being considered, UM, is essentially 0:04:58.720 --> 0:05:02.960 a new outline for how companies can determine whether their 0:05:03.000 --> 0:05:08.800 workers are independent contractors or employees which carry certain legal 0:05:08.920 --> 0:05:12.520 and wage benefits. UM, things like dental and medical. We 0:05:12.600 --> 0:05:15.960 all enjoy those as full time employees. However, uh, independent 0:05:16.000 --> 0:05:19.440 contractors like careers and delivery drivers just don't have those 0:05:19.440 --> 0:05:23.320 same kinds of benefits. So this new proposal is effectively 0:05:23.400 --> 0:05:26.880 making it easier for companies to look at this certain 0:05:26.920 --> 0:05:30.279 criteria UM, some of it which has been refined from 0:05:30.279 --> 0:05:34.479 the Trump era rule that it's replacing, like how integral 0:05:34.640 --> 0:05:39.680 are workers uh to the business overall? Um? You know, 0:05:39.880 --> 0:05:43.480 how much control do they have over their earnings? How 0:05:43.560 --> 0:05:45.279 much control do they have over how they can do 0:05:45.320 --> 0:05:49.239 their jobs? And these types of questions which are really um, 0:05:49.279 --> 0:05:52.480 you know, new ones compared to even the Obama era rule. 0:05:52.760 --> 0:05:57.119 UM that that it's mirroring. UM, it's effectively more gig 0:05:57.160 --> 0:06:02.800 worker friendly and Uber Live, Door, Dash, insta cart all 0:06:02.920 --> 0:06:05.559 have workers that have been clamoring for for these types 0:06:05.600 --> 0:06:08.400 of benefits, so for them it's certainly a positive. So 0:06:08.720 --> 0:06:12.120 what happens next. You know, there is a little bit 0:06:12.120 --> 0:06:16.080 of confusion around, uh, just how much of an impact 0:06:16.120 --> 0:06:17.920 this is actually going to have. And if you look 0:06:17.920 --> 0:06:20.880 at the statements that Uber and door Dash and Lift released, 0:06:21.000 --> 0:06:23.479 you know, they just weren't surprised. This is something that 0:06:23.520 --> 0:06:26.960 they were expecting since day one of the Biden administration. 0:06:27.480 --> 0:06:30.880 But what this really does, it's more of an interpretive guidance. 0:06:30.920 --> 0:06:34.800 So it's not going to wipe out the gig worker 0:06:34.880 --> 0:06:39.159 classification system. What it's doing is saying, look, this is 0:06:39.160 --> 0:06:41.440 how we're going to look on it, look at it 0:06:41.440 --> 0:06:44.280 from here on out, and it has more ramifications, say 0:06:44.360 --> 0:06:47.159 and you know, litigation if someone sues one of the 0:06:47.200 --> 0:06:50.520 companies for misclassification. This is the basis that can be 0:06:50.600 --> 0:06:53.960 used now for the companies. You know, we we look 0:06:54.000 --> 0:06:56.400 at Uber, who's kind of had to deal with this 0:06:56.520 --> 0:06:59.599 in London when the Supreme Court over there ruled that 0:07:00.160 --> 0:07:02.839 they had to classify their London drivers as employees. So 0:07:02.920 --> 0:07:06.479 they're not totally new to kind of the uh, the 0:07:06.560 --> 0:07:08.599 impact of what it will take if they have to 0:07:08.640 --> 0:07:11.240 switch the model around a bit, but it's certainly going 0:07:11.280 --> 0:07:14.440 to be somewhat of a hybrid from what legal experts 0:07:14.960 --> 0:07:18.720 UM as well as analysts are are are saying right now. Meantime, 0:07:19.200 --> 0:07:22.840 Uber's former security chief, in another story dealing with some 0:07:22.920 --> 0:07:27.000 old legal issues, was found guilty of hiding information in 0:07:27.040 --> 0:07:30.480 a corporate hack attack dating back to sixteen. You know, 0:07:30.560 --> 0:07:35.440 a pretty astounding verdict here. What was your reaction to this, 0:07:35.520 --> 0:07:39.400 What's been the reaction internally and within the industry to 0:07:39.560 --> 0:07:42.760 this and in terms of what it means for corporate transparency? 0:07:43.640 --> 0:07:47.440 You know, Emily, it's funny because that ruling actually, uh, 0:07:47.480 --> 0:07:51.880 that trial was going ongoing while Uber actually had a 0:07:51.920 --> 0:07:56.240 recent hack for UM, I don't it was their slack 0:07:56.280 --> 0:08:00.280 systems that actually been hacked by by some one, and 0:08:00.920 --> 0:08:04.160 it was incredible to kind of see the UM the 0:08:04.240 --> 0:08:07.320 different reaction the company had. There was a blog post 0:08:07.400 --> 0:08:10.520 that outlined, you know, uh, day by day, what the 0:08:10.640 --> 0:08:14.360 updates were, what the impact were to customer data UM 0:08:15.200 --> 0:08:19.600 and coming out of that trial, it's really two different Ubers. 0:08:19.600 --> 0:08:24.560 Now the Travis Kallinik yours really trickled down into just 0:08:24.760 --> 0:08:30.760 how the company helped handled corporate transparency. Now under new leadership, 0:08:30.800 --> 0:08:34.000 you've really seen that shift. The company is really UM 0:08:34.040 --> 0:08:37.000 I think more focused on just putting everything out on 0:08:37.000 --> 0:08:41.920 the table, all right, uh so intriguing their blooms. Jacky 0:08:41.960 --> 0:08:45.000 Javelos will of course follow what's happening with this new law, 0:08:45.160 --> 0:08:56.760 appreciate it. We build Horizon workrooms as a first step 0:08:56.800 --> 0:08:59.720 towards a virtual office in the metaverse. It feels more 0:08:59.800 --> 0:09:02.280 like being there than any video call. You see more 0:09:02.280 --> 0:09:04.720 of people's body language, and the spatial audio gives you 0:09:04.760 --> 0:09:07.000 a sense of each person's place in the room, and 0:09:07.080 --> 0:09:09.440 you can have side conversations with the people sitting next 0:09:09.440 --> 0:09:12.400 to you or a gesture without physically being there together. 0:09:12.880 --> 0:09:15.200 It's hard to fully wrap your head around this until 0:09:15.480 --> 0:09:19.479 you get to experience it. Just some of Mark Zuckerberg's 0:09:19.520 --> 0:09:22.960 vision there for the workplace of the metaverse, and among 0:09:23.040 --> 0:09:26.200 other news at the Medicannect event, Zuckerberg announced partnerships with 0:09:26.240 --> 0:09:31.240 Microsoft and Zoom to promote virtual collaboration unmail the fifteen 0:09:31.320 --> 0:09:34.880 hundred dollar Quest pro headset, and says Meta will add 0:09:35.240 --> 0:09:39.040 legs soon to avatars. There they are let's bring in 0:09:39.080 --> 0:09:43.360 food works Kurt Wagner and to Economy founder David Kirkpatrick. So, Kurt, 0:09:44.240 --> 0:09:46.959 what are your big takeaways today? Is it the avatar legs? 0:09:48.240 --> 0:09:52.000 The avatar legs was a pretty easy one to point 0:09:52.040 --> 0:09:54.600 out and fun obviously a little bit better than just 0:09:54.600 --> 0:09:57.520 floating around in the metaverse. But now, I mean the 0:09:57.520 --> 0:10:00.160 headset was sort of the flying ship product that was 0:10:00.200 --> 0:10:03.880 announced today, This new kind of high end b our device. Um, 0:10:03.920 --> 0:10:06.319 you know, it's it's as Mark said in that video, 0:10:06.360 --> 0:10:09.719 it's more tailored towards working professionals. They're kind of going 0:10:09.760 --> 0:10:12.080 after a higher end clientele than I think they have 0:10:12.120 --> 0:10:14.200 with some of their other stuff. But you know, a 0:10:14.200 --> 0:10:16.400 lot of the technology that they kind of showed off 0:10:16.400 --> 0:10:19.000 towards the end of the presentation is the stuff, in 0:10:19.000 --> 0:10:21.880 my opinion, that's most interesting. Uh. You know, this is, 0:10:21.920 --> 0:10:26.080 for example, like lifelike avatars, right or even uh you know, 0:10:26.120 --> 0:10:27.960 the ability to kind of use your hand or your 0:10:27.960 --> 0:10:31.800 wrist as a controller. Um, all of that is very cool, 0:10:31.920 --> 0:10:34.360 And the problem is it's just years and years away, right, 0:10:34.400 --> 0:10:36.600 So now you're asking people to be very patient. You're 0:10:36.600 --> 0:10:38.920 asking investors to be very patient as they build and 0:10:39.160 --> 0:10:41.280 work on this stuff. And so I think, you know, 0:10:41.440 --> 0:10:43.200 that's where the issue comes in. It's not that the 0:10:43.240 --> 0:10:46.400 technology is not cool, it's just it's really far off. David, 0:10:46.520 --> 0:10:50.680 the staff dropped almost fo why do you think that is? Well, 0:10:50.960 --> 0:10:52.959 one way to look at it would be, this is 0:10:53.000 --> 0:10:55.840 a company with three and a half billion people in 0:10:55.880 --> 0:10:59.120 a business that's generating like forty billion a year in 0:10:59.240 --> 0:11:02.640 after checks profit. That is talking about a business that 0:11:02.840 --> 0:11:06.360 for which they've sold fifteen million devices and a metaverse 0:11:06.400 --> 0:11:09.600 product that has three thousand users a day, and that's 0:11:09.640 --> 0:11:12.760 what the management is putting its primary focus on. It 0:11:12.800 --> 0:11:16.040 would seem if you're an investor in a company that 0:11:16.200 --> 0:11:20.600 is has such misguided priorities, I think you would be 0:11:20.720 --> 0:11:28.400 very disappointed. Is the workplace David ready for metaverse technology? No, 0:11:28.520 --> 0:11:30.640 not at all. No, it is not. It is not. 0:11:30.760 --> 0:11:33.880 It's simply not. We don't want to meet in the metaverse. 0:11:33.920 --> 0:11:37.680 It's very nice that Zoom and Microsoft have talked meta 0:11:37.720 --> 0:11:42.040 about possibly making a three D version of their meeting products, 0:11:42.040 --> 0:11:43.880 but that is not what most people want to do. 0:11:44.200 --> 0:11:47.400 The company's behaving as if it was a gaming company. 0:11:47.480 --> 0:11:50.200 I mean everything today was talked about as if it 0:11:50.280 --> 0:11:52.800 was a company for gaming, the kind of technologies or 0:11:52.840 --> 0:11:58.520 gaming technologies. It's kind of a gaming psychology, gaming aesthetics, um, 0:11:58.559 --> 0:12:01.240 but that isn't really what this company he is, and 0:12:01.679 --> 0:12:05.280 it's it's a it's a scary, scary situation this company 0:12:05.360 --> 0:12:08.880 has put itself in, in my opinion, what's your response 0:12:09.520 --> 0:12:12.360 to that? I think David's right, I mean, as I 0:12:12.400 --> 0:12:14.560 kind of alluded to their right to tech school, but 0:12:14.679 --> 0:12:17.439 can they convince investors that it's worth waiting ten years 0:12:17.480 --> 0:12:20.280 for right? And and uh, as David points out, like 0:12:20.480 --> 0:12:22.880 they have a business here that that needs at tension 0:12:22.960 --> 0:12:25.319 right now, which is the advertising business, right, I mean, 0:12:25.360 --> 0:12:27.760 they're they're kind of dealing with a real serious threat 0:12:28.120 --> 0:12:30.880 right here and now with TikTok uh and and young 0:12:30.920 --> 0:12:33.600 people not necessarily wanted to use their apps. And so 0:12:33.960 --> 0:12:36.599 when you think about that, that's the current state of 0:12:36.640 --> 0:12:38.440 the business, and then you look at you know, what 0:12:38.520 --> 0:12:42.000 the priorities seem to be from Mark Zuckerberg. It doesn't 0:12:42.000 --> 0:12:44.200 necessarily align. And I imagine that there are a lot 0:12:44.240 --> 0:12:47.400 of people, clearly, I guess given the stock movement today 0:12:47.720 --> 0:12:50.800 that saw this and thought, man, why are they spending 0:12:50.840 --> 0:12:53.640 so much time and money on this problem when they 0:12:53.679 --> 0:12:55.800 have others that they need to be addressing. Now. We 0:12:55.880 --> 0:12:59.920 spoke to Francis Hogan uh last week, of course, that's 0:13:00.000 --> 0:13:04.720 Facebook whistleblower, and she had an interesting thought about Cheryl 0:13:04.760 --> 0:13:08.600 Sandberg leaving the company, and you know the company now, 0:13:09.240 --> 0:13:11.360 you know, for of course being fully in the hands 0:13:11.360 --> 0:13:13.960 of of Mark Zuckerberg. Take a listen to what she 0:13:14.040 --> 0:13:16.960 had to say. You know, Marcus surrounded himself with people 0:13:16.960 --> 0:13:19.280 who tell him the same kinds of stories over and 0:13:19.280 --> 0:13:21.600 over again. You know, Facebook is just a mirror. It 0:13:21.600 --> 0:13:24.760 doesn't have responsibility. All these things that we're complaining about 0:13:24.760 --> 0:13:27.160 have always been present. We're just showing them to people 0:13:27.160 --> 0:13:28.840 who don't. We don't play any role in this. We 0:13:28.880 --> 0:13:33.280 have no power. David curious what your thoughts are on that. Well, 0:13:33.320 --> 0:13:37.480 I completely agree with her analysis of how they see this. 0:13:38.120 --> 0:13:42.160 I mean, to the degree Zuckerberg thinks about the sort 0:13:42.200 --> 0:13:45.840 of socio cultural impact of the products that he's built. 0:13:46.240 --> 0:13:50.160 He's still basically in the mindset of making the world 0:13:50.200 --> 0:13:53.080 more open and connected is really cool, and he thinks 0:13:53.120 --> 0:13:56.160 the metaverse is the next stage of that. He doesn't 0:13:56.240 --> 0:13:59.840 want to take responsibility for the ongoing problems that he 0:14:00.040 --> 0:14:02.920 is not resolved. And I continue to think that the 0:14:02.960 --> 0:14:06.440 reason the company changed its name almost exactly a year ago, 0:14:06.760 --> 0:14:11.200 at the height of Francis Hogan's revelations about numerous misdeeds 0:14:11.200 --> 0:14:15.720 and errors and unresolved problems. Was to change the narrative, which, 0:14:16.200 --> 0:14:18.760 for their to their credit, was very successful as a 0:14:18.800 --> 0:14:22.800 PR move, but isn't really successful as a business move 0:14:22.920 --> 0:14:25.040 long term. And now they're stuck with a new name 0:14:25.520 --> 0:14:30.200 and a sensible direction that isn't really rational. Um. So 0:14:30.360 --> 0:14:33.960 they have such serious problems. And if any other company 0:14:34.120 --> 0:14:36.400 had these problems, the CEO would be out. But this 0:14:36.480 --> 0:14:39.080 is a company with no governance, with a board that 0:14:39.280 --> 0:14:42.560 is just a paperboard. Because Zuckerberg completely controls that he 0:14:42.600 --> 0:14:45.480 can't be fired. He don't. He controls all the shares. 0:14:45.880 --> 0:14:48.080 I mean, he controls a majority of the shares, so 0:14:48.160 --> 0:14:50.400 he can do whatever he wants. And that is a 0:14:50.520 --> 0:14:54.480 very dangerous situation. And it is dangerous for investors to 0:14:54.680 --> 0:14:57.040 be in this company. Even though it's PE is lower 0:14:57.080 --> 0:15:00.000 than any other major company tech company by a substantial mark, 0:15:00.440 --> 0:15:02.840 it's not a good investment going forward. Well, and that's 0:15:02.840 --> 0:15:06.120 in part because it's market captives drops so much since uh, 0:15:06.200 --> 0:15:09.000 Frances how good, And since the company changed its name, 0:15:09.040 --> 0:15:13.320 this is now a million dollar company. David, how bad 0:15:13.320 --> 0:15:16.960 would things have to get before Mark Zuckerberg considers something 0:15:17.360 --> 0:15:21.000 as as extreme as taking it private? Well, you know, 0:15:21.080 --> 0:15:24.280 that that's something that I have thought about as a 0:15:24.360 --> 0:15:28.120 possible remedy for the problems the company has, because then 0:15:28.120 --> 0:15:31.880 it could address the serious challenges it faces without the 0:15:31.880 --> 0:15:34.720 stock market breathing down its neck and judging it, you know, 0:15:35.000 --> 0:15:38.280 with the voting machine of the stock every single day. 0:15:38.320 --> 0:15:41.440 They have a lot of expensive problems to fix, and 0:15:41.480 --> 0:15:43.040 it would be a lot better to do it if 0:15:43.080 --> 0:15:45.000 they were private. But I think it would have to 0:15:45.040 --> 0:15:47.200 get a lot a lot worse. I mean, look, the 0:15:47.240 --> 0:15:49.560 stock is down from almost a trillion to three d 0:15:49.680 --> 0:15:52.240 and fifty billion now it could go down to two 0:15:52.280 --> 0:15:54.200 hundred and fifty billion, at which point I don't think 0:15:54.240 --> 0:15:56.760 it would be irrational for him to consider taking it 0:15:56.840 --> 0:16:00.320 private since he completely controls it. You know, we talked 0:16:00.360 --> 0:16:03.040 and seeing so much of their vision for virtual reality. 0:16:03.120 --> 0:16:08.600 What about augmented reality? How much further does this go? Yeah, well, 0:16:08.640 --> 0:16:11.000 we saw some glimpses of that in the headset right there. 0:16:11.000 --> 0:16:13.520 They're calling it mixed reality, but it's this idea that 0:16:13.600 --> 0:16:15.880 while you're wearing the headset, you can actually see the 0:16:15.880 --> 0:16:18.680 world around you. You can overlay graphics or or you know, 0:16:19.000 --> 0:16:22.400 digital objects on that world, and that's ultimately the vision 0:16:22.520 --> 0:16:25.440 that Zuckerberg has for a our glasses right that we 0:16:25.520 --> 0:16:27.760 might wear them to look sort of like reading spectacles. 0:16:28.000 --> 0:16:30.600 But you'll wear those and that's how you'll interact without 0:16:30.640 --> 0:16:33.920 more you know, not really a bulky headset. But you know, 0:16:34.000 --> 0:16:36.680 I think that David's point here. What's interesting is like 0:16:36.720 --> 0:16:39.320 Mark Zuckerberg would probably tell you, hey, listen, you're betting 0:16:39.360 --> 0:16:42.440 on me, right. I've made, for the most part, pretty 0:16:42.480 --> 0:16:45.840 good business decisions for almost twenty years, um, and that's 0:16:45.840 --> 0:16:48.440 why he has control and that's why people, you know, 0:16:48.520 --> 0:16:51.120 invest in this company. But over the last year or so, 0:16:51.520 --> 0:16:53.760 I think he's really raised some questions as to whether 0:16:53.800 --> 0:16:56.080 this is a pet project of his or whether this 0:16:56.160 --> 0:16:59.280 is actually a good you know, use of of you know, 0:16:59.320 --> 0:17:01.720 funds and attend and we won't know that for like 0:17:01.760 --> 0:17:03.800 ten years, and so that's I think the big trouble 0:17:03.840 --> 0:17:05.960 here is it's hard to say whether or not he's right. 0:17:06.160 --> 0:17:10.040 Ten years very long time, especially if you're an investor 0:17:10.080 --> 0:17:13.480 thinking about the near term. Bloomberg's Kurt Wagner and Economy 0:17:13.560 --> 0:17:17.959 founder David Kirkpatrick, thank you both. We're gonna be right 0:17:17.960 --> 0:17:32.440 back with more of Bloomberg technology. This is Bloomberg More 0:17:32.480 --> 0:17:36.000 allegations in the Elon Musk Twitter battle. Bloomberg has learned 0:17:36.000 --> 0:17:38.840 that just before the billionaire revived his proposal to buy 0:17:38.840 --> 0:17:41.960 the social media company, he accused Twitter of ordering a 0:17:42.000 --> 0:17:45.440 whistle blower to destroy evidence. According to court filings, Peter 0:17:45.680 --> 0:17:49.960 Zack Co said he burned ten handwritten notebooks and deleted 0:17:50.000 --> 0:17:52.320 a hundred computer files at the request of managers as 0:17:52.359 --> 0:17:55.960 part of a seven point eight million dollar sefferance package. 0:17:56.440 --> 0:17:59.760 The SEC is weighing an investigation of Yuga Labs, the 0:18:00.000 --> 0:18:02.639 creator of the popular board Ape yacht club n f 0:18:02.720 --> 0:18:06.040 T S. Sources say the SEC is deciding whether the 0:18:06.119 --> 0:18:09.040 n f T should follow the same disclosure rules as stocks. 0:18:09.440 --> 0:18:11.720 Board Apes are among the most high profile and f 0:18:11.760 --> 0:18:13.840 T s and have been traded for as much as 0:18:13.840 --> 0:18:16.879 two million dollars. The SEC has brought dozens of cases 0:18:16.920 --> 0:18:20.800 against digital asset managers, including the fifteen million dollar fine 0:18:20.960 --> 0:18:34.200 to Block five back in February, Welcome Back to Bonebar Technology, 0:18:34.200 --> 0:18:37.760 and Emily Changing in San Francisco after VC spent years 0:18:37.920 --> 0:18:41.040 aggressively buying steaks in cash burning tech startups. The current 0:18:41.119 --> 0:18:45.200 environment and cretering share prices of even mature tech companies 0:18:45.200 --> 0:18:48.280 have dimmed the prospects for startups that we're working towards 0:18:48.320 --> 0:18:51.000 their own I p O s. What does that mean? 0:18:51.359 --> 0:18:53.720 What does the future hold for them? Let's talk about 0:18:53.720 --> 0:18:55.439 all that and more with Henry Wards, CEO of the 0:18:55.440 --> 0:19:00.400 equity management solutions provider Carter. So Carter has some ascinity 0:19:00.400 --> 0:19:03.480 the insights into these pre I p O companies. Henry, 0:19:03.520 --> 0:19:06.600 what's happening inside these companies right now? And what's the 0:19:06.640 --> 0:19:10.960 mood like? Yeah, sure, it's a tailor two stories. Uh Here, 0:19:11.000 --> 0:19:14.199 there's a growth stage uh story where a lot of 0:19:14.200 --> 0:19:16.760 these gross companies are sort of in a frozen capital 0:19:16.800 --> 0:19:20.840 markets uh rang where they can't raise capital right now 0:19:20.880 --> 0:19:23.600 because they can't justify the prices that they raised previous 0:19:24.119 --> 0:19:26.720 rounds at. They're not willing to do down rounds because 0:19:27.400 --> 0:19:31.359 uh these rounds trigger anti dilution provisions for early investors 0:19:31.359 --> 0:19:34.359 and it penalizes management. And so they're kind of stuck 0:19:34.359 --> 0:19:37.720 in limbo with these high prices that they priced, you know, 0:19:37.800 --> 0:19:40.560 six months a year ago, but the public markets won't 0:19:40.560 --> 0:19:42.320 support and they're trying to figure out what to do. 0:19:42.640 --> 0:19:45.920 In the early stage uh markets, there are a lot 0:19:45.960 --> 0:19:49.560 more active prices are resetting quickly. We're seeing investors continue 0:19:49.600 --> 0:19:51.080 to be active. There's a lot of dry powder, and 0:19:51.119 --> 0:19:52.879 so it's it's a very interesting market. We see this 0:19:52.920 --> 0:19:55.840 in our business a lot where early stage ventures still active. 0:19:55.840 --> 0:19:57.760 There's still a lot of deals happening with growth trade 0:19:57.840 --> 0:20:03.160 ventures at a standstill. What seeing happening with hiring and layoffs. 0:20:03.240 --> 0:20:05.160 We had a guest on an investor a few months 0:20:05.160 --> 0:20:07.280 ago who said he was expecting to see two to 0:20:07.359 --> 0:20:11.119 three million job cuts across the tech industry. Is that 0:20:11.200 --> 0:20:14.440 even close to happening? Not even close? You know, it's 0:20:14.440 --> 0:20:18.360 really interesting in in h when we saw the massive 0:20:18.840 --> 0:20:22.600 set of layoffs happening, we saw headcount growth among our 0:20:22.640 --> 0:20:25.399 customer base grow about seven percent this year. In the 0:20:25.400 --> 0:20:27.560 first half of this year, we've seen about twelve percent 0:20:27.640 --> 0:20:29.840 growth rates. So it's not as high as you know, 0:20:30.040 --> 0:20:32.600 the boom boom years of two, eighteen and nineteen, where 0:20:32.600 --> 0:20:36.600 we're growing at fifteen depending on the year, but twelve 0:20:36.640 --> 0:20:38.639 percent somewhere in the middle. It's not as bad as 0:20:38.680 --> 0:20:41.320 twenty it's not as great as eighteen and nineteen. But 0:20:41.400 --> 0:20:44.160 we're still seeing a lot of startups grow, really being 0:20:44.320 --> 0:20:46.639 led by B two B sas business. So if you 0:20:46.680 --> 0:20:49.720 look at other sectors like healthcare biotech, they're suffering a 0:20:49.720 --> 0:20:52.080 little bit more, but B two B SAS continues to 0:20:52.440 --> 0:20:55.760 trend strongly. So how do you square that with we've 0:20:55.800 --> 0:20:59.080 heard from so many big tech companies there you know, freezing, 0:20:59.160 --> 0:21:03.320 hiring slow and hiring down, there being more deliberate. Uh. 0:21:03.440 --> 0:21:05.880 Do the numbers translate? Yeah, So if you look what's 0:21:05.880 --> 0:21:08.240 happening in the public markets that's translating to the private 0:21:08.240 --> 0:21:10.800 markets is there's you know, in earlier this year, there's 0:21:10.840 --> 0:21:13.680 sort of a massive capitulation of investors saying, hey, these 0:21:13.720 --> 0:21:16.919 all these companies are overpriced. We don't know which companies 0:21:16.960 --> 0:21:19.280 are going to survive, which companies are gonna succeed, which 0:21:19.320 --> 0:21:22.040 companies aren't, and so they punish the entire TUCH sector. 0:21:22.440 --> 0:21:25.520 What's happening now is the emergence of investors deciding, well, 0:21:25.560 --> 0:21:30.439 they're they're all companies aren't created equal. Some are more, Uh, 0:21:30.520 --> 0:21:33.360 will will grow better and and and and survive through 0:21:33.359 --> 0:21:35.600 this period, and others won't. And we have to sift 0:21:35.640 --> 0:21:37.480 through these companies and decide which ones are gonna be 0:21:37.520 --> 0:21:39.600 the winners and which ones aren't. And what you're seeing 0:21:39.680 --> 0:21:42.119 is the bigger companies and even the smaller Companies that 0:21:42.119 --> 0:21:45.520 are transactional revenue based where the revenue can be volatile, 0:21:45.800 --> 0:21:50.560 are punished more more by investors than recurring revenue contractual 0:21:50.600 --> 0:21:52.879 revenue businesses. So when you look at like the great 0:21:53.040 --> 0:21:56.239 you know, software business like Salesforce and Snowflake, where they 0:21:56.240 --> 0:21:59.480 have contractual, recurring revenue and high net dollar retention and 0:21:59.760 --> 0:22:02.760 high growth rates. Uh, they're doing quite well, they're starting 0:22:02.760 --> 0:22:06.200 to recover. But you see other transactional businesses or business 0:22:06.240 --> 0:22:09.399 bad on based on media or other types of revenue models, 0:22:09.560 --> 0:22:12.680 They're being punished more more severely. And so you're starting 0:22:12.680 --> 0:22:15.600 to see a sector or sick rotation between the high 0:22:15.680 --> 0:22:18.080 quality companies and the lower quality companies. And that's that's 0:22:18.119 --> 0:22:20.360 trickling into the to the venture world, where you're starting 0:22:20.359 --> 0:22:23.320 to see investors just be more selective in the business 0:22:23.400 --> 0:22:25.520 models that they're willing to support, rather than just support 0:22:25.560 --> 0:22:29.399 anything that seems like a great idea. Meantime, Carter is 0:22:29.520 --> 0:22:34.080 expanding internationally. I understand you've bought three companies since June. 0:22:34.520 --> 0:22:38.800 How are you expanding uh so quickly in the middle 0:22:38.840 --> 0:22:41.960 of a downturn or is it that you're seeing, um, 0:22:42.000 --> 0:22:45.719