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 taking San Francisco and this is
Speaker 1: Bloomberg Technology coming up in the next hour. A big
Speaker 1: miss for coin based on revenue and earnings, total assets
Speaker 1: plunging by sixty three percent. My conversation with coin based
Speaker 1: president and CEO Emily Joy right after the numbers crossed.
Speaker 1: This hour plus timing is everything. Just as the US
Speaker 1: signs the Chips Act into law to make more chips,
Speaker 1: there are signs chip demand is on the brink of
Speaker 1: a major slowdown. We'll discuss and would you rather subscribe
Speaker 1: to an electric car than own one. We're going to
Speaker 1: talk to the founder of Autonomy and Evie too, a
Speaker 1: company that allows customers to reserve their own tesla in
Speaker 1: just minutes. We will get to all of that in
Speaker 1: a moment, but first I want to stick with coin
Speaker 1: base and bringing Bloomberg Shannalibos, Sticctionnale. Let's walk through the
Speaker 1: top line numbers, miss on revenue, miss on earnings. They
Speaker 1: narrowed their user forecast, and what I thought was really
Speaker 1: interesting is the assets on the platform plunge by more
Speaker 1: than sixty three percent. I mean that seems pretty significant. Yeah,
Speaker 1: that drop off an assets, that drop off you saw
Speaker 1: in monthly transacting users, and that drop off you saw
Speaker 1: on transaction revenue. Really that's a reflection of what you're
Speaker 1: seeing at the retail business mostly there, Emily. You heard
Speaker 1: it from Emily Joy and her conversation with you, is
Speaker 1: that a lot of retail traders are on the sidelines
Speaker 1: and this is still such a pivotal business for coin base.
Speaker 1: You're seeing the stock reacting down more than five percent
Speaker 1: after hours already. Remember this is after a steep drop
Speaker 1: off this year. It has had quite a run up
Speaker 1: in the last couple of days, so it's giving a
Speaker 1: little bit of that back. You were also seeing, you know,
Speaker 1: a lot of its uh investors really reacting here. You're
Speaker 1: seeing bonds also drop, which is really interesting. You're seeing
Speaker 1: coin basis then cost of borrowing rise because bond holders
Speaker 1: are also losing a little bit of confidence there. Uh.
Speaker 1: The question is what is the forward outlook. The question
Speaker 1: is that the outlook for the third quarter also does
Speaker 1: not look so rosy. Those monthly transacting users and trading
Speaker 1: volumes are expected to be down again. So a little
Speaker 1: bit of that run up we've seen in crypto prices
Speaker 1: more recently is not enough yet to offset some of
Speaker 1: the pains we're seeing in those trading businesses over at
Speaker 1: coin base. Now here's a quick listen to part of
Speaker 1: what Emily Joy had to say. She didn't necessarily sugarcoat anything.
Speaker 1: She used the word russ herself. Take a listen. I
Speaker 1: think it was a rough quarter for most companies in
Speaker 1: the crypto space. We we obviously had some big episodic
Speaker 1: events that happened during the quarter, and so some of
Speaker 1: those asset prices shrunk, which then impacts things like the
Speaker 1: assets on platform and other numbers. Now, when I tried
Speaker 1: to ask for her her sort of forecast on you know,
Speaker 1: when this winter thaws, she said, you know, I shouldn't
Speaker 1: be prognosticating, but said that she thinks, you know, some
Speaker 1: of these are crypto industry specific factors that are driving
Speaker 1: these trends. Some of it has to do with the
Speaker 1: broader economy. When it came to hiring, yes, they did
Speaker 1: get a little over exuberant. What did you make of
Speaker 1: what she had to say. I think it's interesting, it's
Speaker 1: certainly true that a lot of other companies did feel
Speaker 1: some pain when it came to impairment charges. For example,
Speaker 1: you're getting pretty close there to a half a billion
Speaker 1: dollars in terms of impairment charges. We've seen similar things
Speaker 1: in terms of charges at micro Strategy and the Block.
Speaker 1: But what about or Block rather the black is the
Speaker 1: crypto publication, But what about um what you're seeing over
Speaker 1: there in terms of their cash burn as well? That's
Speaker 1: another half a billion dollars pretty much right there nearly,
Speaker 1: And so our own Bloomberg Intelligence analysts are saying that
Speaker 1: they're going to have to probably tighten the belt a
Speaker 1: little bit more when it comes to their cash burn
Speaker 1: given some of the top line pressures you're seeing, uh,
Speaker 1: when it comes to transaction revenues. All right, well, we're
Speaker 1: going to catch that full interview with Emily Joy later
Speaker 1: this hour. Shanali Bloomberg Shinney boss as always, thank you
Speaker 1: for your additional context there, Emily Choi coming up. Meantime,
Speaker 1: the US Justice Department is preparing to sue Google as
Speaker 1: soon as next month, capping years of work to build
Speaker 1: a case that it illegally dominates the digital ad market.
Speaker 1: This according to people familiar with the matter. I want
Speaker 1: to bring in Julia Love who just started covering Google
Speaker 1: for Bloomberg. So first of all, welcome. UM. You know,
Speaker 1: this is a case that the DJ has been working
Speaker 1: on for years. What's been the big breakthrough? Um, so
Speaker 1: thank you so much for having me Emily. And yes,
Speaker 1: as you mentioned, you know, this case is a long
Speaker 1: time in the making. UM. D o J first started
Speaker 1: looking into these questions in twenty nineteen. Um, they brought it.
Speaker 1: They brought their first taste related to search. But now
Speaker 1: we're hearing that they're getting very close to finally bring
Speaker 1: Bernina case in the ad tech market. So what could
Speaker 1: come of this lawsuit? What are we expecting? Yeah, there's
Speaker 1: a lot at stake for you know, there was a
Speaker 1: very similar taste brought by the Texas Attorney General in
Speaker 1: which they are actually seeking to force Goodle to sell
Speaker 1: off parts of its ad business. Doodle currently plays various
Speaker 1: roles in this market. It orchestrates the market. It also
Speaker 1: does business with publishers and advertisers and so so the
Speaker 1: state of Texas is arguing that Goodle simply must sell
Speaker 1: off part of its business. It can't see it can't
Speaker 1: play all those roles, and it's possible that d o
Speaker 1: J could seek to do something similar. You know, we've
Speaker 1: spoken with Google executives. You know, I speak to Ruth
Speaker 1: poor Ad on the call every quarter. You know, they
Speaker 1: always talk about how their construction constructively engaging with regulators.
Speaker 1: What's been their comment on this particular report so far,
Speaker 1: they haven't said much. They argue that there that their
Speaker 1: role in the advertising market brings um efficiencies to both
Speaker 1: publishers and advertisers um. But behind the scenes, my colleagues
Speaker 1: have reported that that they have made settlement offers to
Speaker 1: the Justice Department. That's so fire have not done the
Speaker 1: trick and a loss. It seems slightly all right, Julia Love,
Speaker 1: who covers alphabet for us, thank you so much. We're
Speaker 1: going and we'll keep following. President Biden signed a broad
Speaker 1: competition bill into law, including fifty two billion dollars for
Speaker 1: domestic chip R and D. The bill is at the
Speaker 1: center of the administration's effort to reduce dependence on countries
Speaker 1: like Taiwan and South Korea, whose homegrown companies are leading
Speaker 1: the market. Meantime, Micron Technology plans to invest forty billion
Speaker 1: dollars chip manufacturing in the US is part of a
Speaker 1: broader billion dollar investment strategy. But Micron CEO San Jamie
Speaker 1: Rota told Bloomberg earlier there could be trouble ahead for
Speaker 1: the chip sector, especially on the demand side, due to
Speaker 1: the macroeconomic uncertainties, as well as due to high levels
Speaker 1: of inventories that customers have built across various end mark
Speaker 1: gets segments. For US, those in mentalities are being adjusted
Speaker 1: down and that is what is resulting in the duo's
Speaker 1: demand flawed US. Here's Gus Burnstein researched senior Analystacy Rascon,
Speaker 1: as well as our Bloomberg executive editor Free Technology Tom Giles. So,
Speaker 1: first of all, Tom walk us through more of what
Speaker 1: the Micron CEO had to say. This on top of
Speaker 1: what we saw from in video this week and Intel
Speaker 1: and a m D last week, right the picture from
Speaker 1: the chip makers is becoming increasingly dour. Um this morning, basically,
Speaker 1: Micron said already are lowered. Forecast for how revenue is
Speaker 1: going to shake out in the fiscal fourth quarter is
Speaker 1: going to be worse than we expected. It's going to
Speaker 1: be at the low end or possibly below the low end.
Speaker 1: That sent shivers across the chip chip Chip making industry. Um.
Speaker 1: You know, he talked about demand, Uh, talked about build
Speaker 1: up of inventories. There's this question about all these PCs
Speaker 1: that we were snapping up during the pandemic that's starting
Speaker 1: to level out. So, Stacy, what's your read on this?
Speaker 1: Is this just you know, periodic correction or is there
Speaker 1: something more fundamental going on here? Could we be at
Speaker 1: the beginning of a recession level collapse and chips Well,
Speaker 1: I mean collapse is a harsh word, but there's been
Speaker 1: a lot of worries that the very strong demand that
Speaker 1: we've been seeing over the last couple of years in
Speaker 1: the wake of COVID was not sustainable. Um, that some
Speaker 1: of it was was pulled forward as as work happits
Speaker 1: change anything, work from home, study from home, play from home.
Speaker 1: So I elevated demand and that can't last forever. There's
Speaker 1: also been worries that, you know, in the wake of
Speaker 1: all the shortages and everything that we've been seeing, that
Speaker 1: the demand that we saw because of that was actually
Speaker 1: stronger than it looked like. There's a phenomenon that happens
Speaker 1: when customers can't get the parts that they want in
Speaker 1: the time when that they need them, and they tend
Speaker 1: to order more. It's called double ordering. It's a very
Speaker 1: sort of normal behavior. But the problem is to the industry,
Speaker 1: they never know that it's double ordering. They just they
Speaker 1: just see demand going through to the moon. And as
Speaker 1: as actual end demand starts to lag off, and it
Speaker 1: is in some of these especially these consumer areas, supplying
Speaker 1: demand starts to get back into balance, and then you
Speaker 1: discover how much of the actual demand profile that the
Speaker 1: customers are seeing as real and how much of it
Speaker 1: is phantom. The the one thing that Micron said that
Speaker 1: it was a little different was they started pointing out
Speaker 1: inventory corrections things like auto and industrial. These are end
Speaker 1: markets that have been holding up very well. I personally
Speaker 1: have been concerned about these kind of double ordering phenomenons
Speaker 1: in these kind of end markets. And if it turns
Speaker 1: out that they were holding a ton of like memory inventory,
Speaker 1: like I don't know why they wouldn't be holding inventory
Speaker 1: of other parts as well. So people will potentially look
Speaker 1: at that statement as low sort of like the next
Speaker 1: like potential leg down, especially in some of these end
Speaker 1: markets there was right now the demanding them still looks
Speaker 1: pretty strong. The timing tom is just so ironic because
Speaker 1: you've got the US poise to spend billions of dollars
Speaker 1: on chip manufacturing in the United States. But two, we
Speaker 1: really need it. This was supposed to this was supposed
Speaker 1: to be a big day of celebration for the chip industry.
Speaker 1: I listened to the Di Biden and his press conference
Speaker 1: earlier today, and there was hooping and holler and an
Speaker 1: applause and the audience that's talking about innovation and creating jobs.
Speaker 1: And at the same time, you have these companies like
Speaker 1: Intel talking about like slowing down hiring, talking about cutting
Speaker 1: back on spending. And at the same and then and
Speaker 1: this is the industry that has been lobbying for months
Speaker 1: to get the Chips Act through. When's it gonna pass?
Speaker 1: When's it gonna pass? And finally they got what they wanted,
Speaker 1: and it lands with a thud on the worst day
Speaker 1: possible when Micron makes this announcement a day after in
Speaker 1: video makes the announcement. But remember, what they're trying to
Speaker 1: do with the Chips Act is a very long term investment.
Speaker 1: It takes years and billions of dollars to build these factories.
Speaker 1: And clearly we saw during the supply chain crisis, during
Speaker 1: the pandemic that the US has fallen behind in production
Speaker 1: of key chips to countries that you mentioned already, Taiwan
Speaker 1: and South Korea. Stacy, what are your thoughts on this
Speaker 1: and if there you know, are are are any chip
Speaker 1: makers poised to what of this better than others or not?
Speaker 1: You know, I'm thinking Intel, which as Tom mentioned, is
Speaker 1: investing a lot of money in America's heartland. They are,
Speaker 1: and we can argue whether or not Intel has actually
Speaker 1: been able to productively deploy all of the money that
Speaker 1: they that they're gonna They're gonna get a lot of money,
Speaker 1: but you know, it doesn't like go on their balance
Speaker 1: sheet and then they can do whatever they want. They
Speaker 1: actually have to sink it into the ground and make
Speaker 1: productive investments. And given their their near term issues again,
Speaker 1: they've been over earning for a long time and they
Speaker 1: they're ex biting them now. And frankly, I mean even
Speaker 1: the forecast that they were giving like to justify these investments.
Speaker 1: My own personal opinion is that that long term forecast
Speaker 1: at Intel had was outlandish. So I don't actually know
Speaker 1: that Intel is gonna be able to deploy this stuff
Speaker 1: in a value add manner for the industry. We don't
Speaker 1: we won't know for years. The stuff takes years. As
Speaker 1: you said to um uh to add now this go ahead.
Speaker 1: I'm just gonna say the general idea of like the
Speaker 1: whole long term versus the short term. The industry goes
Speaker 1: through down terms. It's happening now probably and we'll see
Speaker 1: where it's now that things said, like over time, we
Speaker 1: will probably need this stuff, and you sort of think
Speaker 1: about this. The industry is big. We five and fifty
Speaker 1: six billion dollars in revenues last year. Maybe we go
Speaker 1: into a DOWNTRENI but like if even at mid single
Speaker 1: digit growth over the cycle some years up here, when
Speaker 1: you're done, it's a trillion dollar industry, and you know,
Speaker 1: ten years plus or minus. So I think in ten
Speaker 1: years will probably be glad like like on a broad
Speaker 1: basis that some of these investments are being made, does
Speaker 1: that mean that they were that we're gonna need him now? No,
Speaker 1: So you're saying we're not going to need this stuff
Speaker 1: for ten years, it's gonna be a decade before supply
Speaker 1: meets demand. It's well, I think supplies already meeting demand, right,
Speaker 1: I mean, supplied near term is coming up and demand
Speaker 1: is coming down. But you have to remember, even if
Speaker 1: we go hole whole hog into this, you're not gonna
Speaker 1: see any material amounts of capacity for years. Even Mike
Speaker 1: run talked about they said, we're gonna do like forty
Speaker 1: billion dollars. They're even planning on bringing any of that
Speaker 1: stuff online for production until the second half of the decade.
Speaker 1: This this stuff takes years and many, many billions of diligion.
Speaker 1: And by the way, you could argue in that context,
Speaker 1: and I've been saying this, the fifty two billion dollars
Speaker 1: or whatever the numbers is a rounding error in the
Speaker 1: grand scheme of things. This is not really, in my opinion,
Speaker 1: going to structurally improve the amount of the percentage of
Speaker 1: capacity that is installed in the US relative to the world.
Speaker 1: It's not big enough, but it isn't get some of
Speaker 1: these projects started in the US, and so you have
Speaker 1: to start somewhere, and don't forget that. In the meantime,
Speaker 1: South Korea, Taiwan, these chip makers, they're not going to
Speaker 1: slow down. They're gonna keep barreling ahead with their innovation
Speaker 1: and they're spending and the US is going to have
Speaker 1: to work all the harder to catch up. Very good point.
Speaker 1: Tom Giles are Bloomberg Executive editor and Stacy rascon Bernstein. Stacy,
Speaker 1: great to have you back here on the show. Thanks
Speaker 1: for stopping by. Alright, coming up, Lemonade shares popping on
Speaker 1: the back of the next gen insurance companies earnies. We're
Speaker 1: gonna talk to the CEO next, Mrs Bloomberg. The insurance
Speaker 1: startup Lemonade says it's on its way to profitability. Shares
Speaker 1: popped after reporting smaller than expected losses in the third quarter.
Speaker 1: Lemonade saying can reach profitability without quote any further infusion
Speaker 1: of capital. Here's Guss Lemonade chair and co CEO Daniel Schreiber. So, Daniel,
Speaker 1: when do you get to that coveted profitability? Well, we're
Speaker 1: turning a corner right now. We've let it be known
Speaker 1: that within amount of weeks we will see peak losses,
Speaker 1: so our losses are going to begin to edge downwards.
Speaker 1: Already in Q four we're going to see shrinking losses
Speaker 1: even as a business continues to grow. We reported sevent
Speaker 1: revenue growth year on year, so we're seeing strong growth
Speaker 1: and drinking losses. So we're very much on the path
Speaker 1: and this is really a reflection of the business doing
Speaker 1: what it was designed to do. This is the output
Speaker 1: of many product launches, many market launches, well thousands pushes
Speaker 1: of production software just during the core to the last
Speaker 1: year alone, and all of these investments are beginning to
Speaker 1: pay off. It's very gratifying. Now you said you've moderated
Speaker 1: spending and the pace of hiring and that you basically
Speaker 1: have enough gas in the tank, you know, not to
Speaker 1: need any additional capital and to subsist on you know,
Speaker 1: the capital that you have until you get to that point. Um,
Speaker 1: what's your outlook if the macro environment continues to be
Speaker 1: very challenged, if we go into a recession. Now, we're
Speaker 1: fortunate to be working in an industry that is pretty
Speaker 1: resilient when it comes to recessions. So we are seeing
Speaker 1: green indicators flashing on our screens really across the business,
Speaker 1: strong demand, strong unit economics, strong marketing efficiencies, strong operational efficiencies.
Speaker 1: There are a couple of areas where we're impacted by
Speaker 1: the macro. For example, loss of capital has definitely shut up,
Speaker 1: which is why we'll be spending it much more cautiously.
Speaker 1: But actually, in terms of the fundamentals of our business,
Speaker 1: insurance as a space, as an industry is reasonably resilient.
Speaker 1: Inflation impacts us somewhat. Cross of capital would impact us
Speaker 1: if it weren't for the fact that we're already well funded.
Speaker 1: But other than that, we're reasonably impervious to what's happening
Speaker 1: out there, which is a fortunate position to be in
Speaker 1: now since the acquisition of Metro mile a third of
Speaker 1: the business, as I understand it, is renters. The business
Speaker 1: is cars. What's what are trends are you seeing? Uh
Speaker 1: in the insurance industry given rising inflation, given consumers under pressure,
Speaker 1: you know when it comes to basic gas and groceries.
Speaker 1: So inflation does affect our industry, and it affects the
Speaker 1: insurance space perhaps more than others, just because the supply
Speaker 1: chain impact on the car industry has been pretty profound.
Speaker 1: You take a kind to a shop today to get repaired,
Speaker 1: you'll pay a lot more than you would otherwise. And
Speaker 1: we're not talking about the nine percent inflation. You're talking
Speaker 1: here about twenty or thirty percent inflation specifically within that
Speaker 1: industy street. So definitely an impact there in in an
Speaker 1: industry where you can't raise prices willing Nearly everything has
Speaker 1: to be approved by regulators and fifty regulators at that
Speaker 1: you can often get timing mismatches between the time that
Speaker 1: you apply to change rates and when you can actually
Speaker 1: change those rates, and inflation does impact you that way.
Speaker 1: We do have the advantage now having acquired Metromile, though,
Speaker 1: of being in a unique position of having a far richer,
Speaker 1: more textured, more precise data set on which to price.
Speaker 1: So the industry at large uses broad stroke proxies, gender
Speaker 1: credit scores, marital status. Metromile has really been spending last
Speaker 1: ten years with precision senses driving billions of miles so
Speaker 1: that they can price and really estimate the risk of
Speaker 1: every mile driven for every individual ensured. And having inherited
Speaker 1: all of that data and now ingesting it into the
Speaker 1: Lemonade Text Act, we should be in a position to
Speaker 1: have an advantage play even in the cast space, even
Speaker 1: under these relatively duress condition that the industry is experiencing. Now,
Speaker 1: I understand you're also exploring blockchain technology for climate change
Speaker 1: related insurance for farmers. You know, what's the status of
Speaker 1: that and the potential of that. Yeah, it's a fabulous initiative.
Speaker 1: This is part of the Lemonade Foundation, which is a
Speaker 1: nonprofit arm So this is entirely nonprofit and we've launched
Speaker 1: the Lemonade Climate Coalition, So this is the crypto climate
Speaker 1: Coalition where we're using an avalanche based smart contract to
Speaker 1: enable subsistent farmers in Africa to ensure their crops. And
Speaker 1: you're talking about something like five dollars worth of creams
Speaker 1: over the course of a season, something like sixty dollars
Speaker 1: of claims. At those levels, traditional insurance just cannot operate
Speaker 1: the cost of just selling a policy, of supporting it,
Speaker 1: of them handling a claim. All of those dwarfs dwarf
Speaker 1: the kind of fees that I just mentioned, But a
Speaker 1: smart contract can execute those kind of insurance policies instantaneously
Speaker 1: and zero overhead. So we're really shifting the higher policy
Speaker 1: into a smart contract where a farmer in Africa will
Speaker 1: be able to use their feature phone to buy coverage instantaneously.
Speaker 1: That will be translated into a wallet on chain which
Speaker 1: will execute against a smart contract which will then be
Speaker 1: parametrically driven so that if there's a climate event, they'll
Speaker 1: get paid instantaneously with no overheads. It's part of a
Speaker 1: non profit initiative we're very pout of fascinating, all right,
Speaker 1: Lemonade co CEO Daniel Trevor, Thank you. Welcome back to
Speaker 1: Bloomberg Technology, Emily Chang in San Francisco. Let's get back
Speaker 1: to the markets now and chairs of Tesla, one of
Speaker 1: the biggest drags on the Nasdaq. One just after a
Speaker 1: slew of new single stock e t s that will
Speaker 1: amplify bets on the notoriously volatile shares hit the market.
Speaker 1: Bloomberg's at Ludlow here with the details at ticket This
Speaker 1: is one that caught my eye. We're looking at single
Speaker 1: name or single stock ETFs, but leveraged and inverse e
Speaker 1: t S and test is really interesting example some new
Speaker 1: products on the market launched Tuesday on a day where
Speaker 1: the stock is down almost two and a half percent.
Speaker 1: The whole point of a leverage and inverse e t
Speaker 1: F is that you want to look for those outsize
Speaker 1: gains when there's movement in the stock, but there are
Speaker 1: also the risk, of course of outside the clients. So
Speaker 1: Direction is one of those providers launching this EATF this
Speaker 1: Tuesday to take the daily testla ble one point five
Speaker 1: x one point five times shares e t F ticker
Speaker 1: t s l L. Now the stock was down two
Speaker 1: and a half percent. That's the risk with the leverage
Speaker 1: ETF because at one and a half times, that meant
Speaker 1: that that e t F actually fell nearer to five
Speaker 1: percent or four point six percent during Tuesday's session. Now,
Speaker 1: if you're a bear and you think the stock is
Speaker 1: going to go down, direction offers you a bear one
Speaker 1: x shares E t F t S l S is
Speaker 1: the ticker. On a day where the stock was two
Speaker 1: and a half percent lower, this inverse ETF was up
Speaker 1: two and a half percent on a one to one ratio.
Speaker 1: So regulators have been talking about this for about a
Speaker 1: month because it's not a new product. A XSS came
Speaker 1: on to the market thirty days ago with a single
Speaker 1: name Tesla inverse et F, and this is the demand
Speaker 1: that they've seen. They're offering a number of products across
Speaker 1: a number of names, but testers where they're seeing trading
Speaker 1: volume and influence. So market regulators are getting a little
Speaker 1: bit worried about this because you're making an outsized bet
Speaker 1: on a stock that can move in other direction depending
Speaker 1: on your conviction. And given what we've seen in the
Speaker 1: markets of late with volatility, this is an area we
Speaker 1: should keep an eye on him. And thank you meantime,
Speaker 1: would you rather subscribe to a Tesla than own one?
Speaker 1: Joining me now, the founder of Autonomy and ev rental
Speaker 1: company that allows customers to reserve their own Tesla and
Speaker 1: other electric cars in just minutes, CEO Scott Painter with me. Now, So, Scott,
Speaker 1: how would you describe what you do differently here than
Speaker 1: let's say, just a typical rental car company. Well, a
Speaker 1: rental car is just something that's going to cost you
Speaker 1: a lot more. Number one, it's a it's a good
Speaker 1: option if you're gonna need a car in a city
Speaker 1: where you're just visiting for a couple of days. But
Speaker 1: flexible access to mobility is really about avoiding going into debt,
Speaker 1: and it's about making it easier, faster, and less expensive.
Speaker 1: Our belief is that one of the big barriers to
Speaker 1: mass adoption for electric vehicles is affordability. Uh the average
Speaker 1: car payment in America today's about six fifty dollars. We've
Speaker 1: got a product that gets you into a Testle Model
Speaker 1: three tomorrow for four a month. Talk to us about
Speaker 1: your partnerships. Obviously, we know you can get Testla's, but
Speaker 1: you're also working to increase the supply of other kinds
Speaker 1: of cars, what kind of inventory or I should say
Speaker 1: options are there. Well, we've been operating in California throughout
Speaker 1: the first part of this year, and what we've really
Speaker 1: proved is that the unit economics and the business really
Speaker 1: does work. We've created a very robust demand list and
Speaker 1: we are now expanding into the model why and we've
Speaker 1: also today announced in order for twenty three thousand vehicles
Speaker 1: across seventeen different automakers. So we're really going to be
Speaker 1: expanding the offer the offering to give customers more choice,
Speaker 1: and it's going to be the entire electric vehicle buffet,
Speaker 1: everything from an entry level vehicle like the Bolt e
Speaker 1: V all the way up to a Hummer V that
Speaker 1: might cost you a little bit more. We expect that
Speaker 1: our order for twenty three thousand vehicle is going to
Speaker 1: get filled differently by every manufacturer. Step one for us
Speaker 1: is to place the order, talk with each of these
Speaker 1: manufacturers about their production timetable when we can expect this
Speaker 1: order to be filled. But we do expect our biggest
Speaker 1: customer or biggest purchase order, which is going to be
Speaker 1: with Tesla, to start being filled right away. Um, We've
Speaker 1: we've placed an order for as many as eight thousand
Speaker 1: three D cars from Tesla alone. How do you finance
Speaker 1: all of these orders? I mean, you know, rental car companies,
Speaker 1: it's it's you know, historically kind of a difficult business. Well,
Speaker 1: you know, fundamentally, we believe that owning an electric car
Speaker 1: is a good asset at this moment. Right now, you've
Speaker 1: got structural scarcity for electric cars, just simply not enough
Speaker 1: cars being made. The factory that makes used electric cars,
Speaker 1: which is what drives future value of electric cars, is
Speaker 1: the new Car factory three years ago. So we're looking
Speaker 1: very closely at what gets produced, what's going into production.
Speaker 1: The announcement everybody has said they're going all in on electric.
Speaker 1: It's not as though General Motors and Forward in Volkswa
Speaker 1: can have said they're gonna make an electric car. They
Speaker 1: said they're going all electric, So for is going to
Speaker 1: be all electric gener Motors by as these production facilities
Speaker 1: come online and these products become available to consumers, autonomy
Speaker 1: is just another way to get access. We also are
Speaker 1: interestingly not selling you a car. We're not lending you money,
Speaker 1: and as such you can put this on your credit card.
Speaker 1: It is a month to month offering. So far less commitment.
Speaker 1: It does not show up as debt, so it leaves
Speaker 1: you with available borrowing capability. So it is really modern
Speaker 1: in the sense that it's also one percent digital. You
Speaker 1: don't have to do anything offline, there's no negotiation. Everything's
Speaker 1: men you driven. What about what gets bought? What are
Speaker 1: you seeing in your market research about consumer adoption of
Speaker 1: electric cars? Yeah, our order is really following consumer adopts,
Speaker 1: and if you look carefully at the cars that we've
Speaker 1: ordered by manufacturer, these are the cars that we feel
Speaker 1: are going to be most popular. We're ordering fewer volumes
Speaker 1: of the higher end or more expensive cars. Our medium
Speaker 1: price point tends to be right around fifty thousand dollars.
Speaker 1: Our primary vehicle, our launch vehicle with the Tesla Model three.
Speaker 1: We've now expanded into the model why we believe, for example,
Speaker 1: that the Model three is really this generation's prius, but
Speaker 1: at fifty dollars, it does represent the medium price point
Speaker 1: in the pack, and that allows us to deliver a
Speaker 1: monthly payment. Something will continue to follow. Autonomy founder and
Speaker 1: CEO Scott Painter, well widely recognized as one of the
Speaker 1: greatest athletes of all times. Serena Williams plans to retire
Speaker 1: from tennis after playing in this month's US Open. Williams,
Speaker 1: now forty, has won twenty three Grand Slam titles and
Speaker 1: almost a hundred million dollars in prize money. I asked
Speaker 1: if she was thinking about retirement just a few months
Speaker 1: ago when she joined us on the show Take a
Speaker 1: Listen to what she had to say. That every tennis
Speaker 1: player thinks about our word as soon as they hit
Speaker 1: five years, because so this is so intense, it's literally
Speaker 1: eleven months out of the year. Um. But I always
Speaker 1: tell people I'm not planning for tomorrow, only in business.
Speaker 1: While here we are a few months later and she
Speaker 1: has made a decision about the R word, And speaking
Speaker 1: of business, she says she's also going to focus on
Speaker 1: her venture capital firm, Serena Ventures, which mostly invests in
Speaker 1: companies started by women and people of color. I wake
Speaker 1: up every morning thinking, oh my gosh, I cannot wait
Speaker 1: to open my computer and look at decks or just
Speaker 1: talk to the company, or just see how what we're
Speaker 1: gonna do today. Um, And it's something that is I'm
Speaker 1: super passionate about. Serena Williams, all right, coming up my
Speaker 1: exclusive conversation with the President and Chief operating officer of
Speaker 1: coin Base. What Emily Troy has to say about a
Speaker 1: quote unquote rough forter She's with us next, Mrs Bloomberg,
Speaker 1: onto our crypto report. Now. I sat down with coin
Speaker 1: base at president and CEO Emily Joy just moments after
Speaker 1: earnings crossed. It was a miss on revenue and earnings,
Speaker 1: while assets on the platform plunged more than coin Base
Speaker 1: also narrowed its user forecast. Here's what Choi had to
Speaker 1: say about the quarter. I think it was a rough
Speaker 1: quarter for most companies in the crypto space. We we
Speaker 1: obviously had some big episodic events that happened during the quarter,
Speaker 1: and so some of those asset prices shrunk, which then
Speaker 1: impacts things like the assets on platform and other numbers.
Speaker 1: So the monthly transacting users actually beat. But according to
Speaker 1: many analysts, coin bases losing share. Losing market share? Is
Speaker 1: that your take and if so, what are you doing
Speaker 1: to stop the decline? So let me on pipe. I
Speaker 1: think there's different pieces of this puzzle. So one is
Speaker 1: our core retail customer is somewhat sitting on the sidelines
Speaker 1: in this type of a turbulent market, and we've seen
Speaker 1: that in past cycles. What happens is they want to
Speaker 1: sit it out, they want to hoddle for a little bit,
Speaker 1: and then they come back on and they'll engage with
Speaker 1: with certain features such as staking and other things. UM.
Speaker 1: We did talk about the fact that there were some
Speaker 1: episodic bankruptcies that happened this quarter, and as a result
Speaker 1: of that, you know, we were untouched by that. We
Speaker 1: have incredible risk management UM and we we had zero
Speaker 1: exposure to that, but there was an aspect of it
Speaker 1: where we didn't also benefit from some of the liquidity
Speaker 1: flows that happened during the course of the quarter. And
Speaker 1: there also is a reality that during these types of
Speaker 1: cycles you have market makers and high frequency traders making
Speaker 1: up the bulk of activity. A lot of that activity
Speaker 1: happens offshore, and so to that extent, like we might
Speaker 1: not have participated as much as others in the ecosystem,
Speaker 1: the way that we focus on that over the longer
Speaker 1: term is we drive more international growth to make sure
Speaker 1: we participate in that upside. And we also are investing
Speaker 1: heavily in products like derivatives, where which our users are
Speaker 1: showing a lot of demand for. So what's your take
Speaker 1: on where we are in the crypto winter. Are you
Speaker 1: seeing signs of you know, starting to thaw or are
Speaker 1: we still deep freeze. I am smart enough to know
Speaker 1: not to make a prognostication on where we are in
Speaker 1: the cycle. Um, what I can say is that coin
Speaker 1: Base has now been through for major cycles, ten years
Speaker 1: of operating this company, and so we just know how
Speaker 1: to run a long term business. We know how to
Speaker 1: preserve cash, we know how to operate it so that
Speaker 1: we're investing in the long term and that's all we're
Speaker 1: gonna keep doing. How much of what's happening do you
Speaker 1: think is tied to the overall economy, to what the
Speaker 1: FED is doing versus crypto industry specific factors. It's a mix,
Speaker 1: and it's it's hard to say what exactly comes from
Speaker 1: the macro what exactly comes from the crypto winter. You know,
Speaker 1: in some cases they were intertwined because some of the
Speaker 1: macro conditions caused the run on the assets that created
Speaker 1: some of those bankruptcies. So, you know, ultimately, the way
Speaker 1: that we approach that market condition is we think about
Speaker 1: how do we drive higher revenue generating activities, how do
Speaker 1: we cause cut in these types of environments, and then
Speaker 1: how do we also make sure that we have the
Speaker 1: absolute risk management in place so that we avoid any
Speaker 1: any of the contagion that happened, which is exactly what
Speaker 1: we did. You do say you're going to have limited
Speaker 1: ongoing hiring. You had a big round of layoffs back
Speaker 1: in June. Several companies have had layoffs. I know you
Speaker 1: and Brian have always talked about you're thinking about the
Speaker 1: long term, You're looking ahead in the cycle. So what
Speaker 1: do you think was the miscalculation here? Where do you
Speaker 1: think things went wrong? You know, it's entirely possible that
Speaker 1: we got a little too exuberant um as the market
Speaker 1: got really frothy, and I think that's a natural consequence.
Speaker 1: I mean, I think we're not the only company to
Speaker 1: have experience that. What you saw then was that we
Speaker 1: took some of the earliest, swiftest decisive action with the cuts.
Speaker 1: As hard as they were, they were the right thing
Speaker 1: for the company, and so we're always going to be
Speaker 1: nimble and adjust to the market as we need to.
Speaker 1: You did do this big partnership with black Rock. I
Speaker 1: know investors were really excited about that. Are you expecting
Speaker 1: more of these kinds of institutional partnerships and what kind
Speaker 1: of partnerships. Yeah, Emily, I have one in to do
Speaker 1: that black Rock partnership since the day I joined coin Base,
Speaker 1: And to be totally honest, we wouldn't have been ready
Speaker 1: for it back when I first joined because we didn't
Speaker 1: have everything in place that we needed to in terms
Speaker 1: of the product suite and the compliance and everything that
Speaker 1: we needed um and black Rock wouldn't have been ready
Speaker 1: because their institutional customers weren't necessarily demanding crypto is a
Speaker 1: new form of asset class. It was kind of an idea.
Speaker 1: So for this to come together now actually during the
Speaker 1: crypto winter, is such an incredible testament to where we are,
Speaker 1: where they are, where their customers are. And I think
Speaker 1: the most important point is it speaks to institutional customers,
Speaker 1: very traditional institutional customers wanting to get crypto asset exposure.
Speaker 1: So will we see more of these or are there
Speaker 1: other institutional partners that potential partners that you're talking to
Speaker 1: that are interested. You will see more of these, And honestly,
Speaker 1: we are the number one partner to partner with those folks,
Speaker 1: given our focus on regulation, compliance and security of assets.
Speaker 1: Coin Base has had a bit of a back and
Speaker 1: forth with the SEC. There are still I believe nine
Speaker 1: tokens coin base has listed continues to list as tokens
Speaker 1: that the SEC claims or securities. Why. Yeah, So we
Speaker 1: have never shied away from regulation. It's part of our lifeblood. Frankly,
Speaker 1: it's it was counterintuitively something that we invested in from
Speaker 1: the early days of the company. So we welcome healthy,
Speaker 1: sensible regulation. In this case, the SEC has launched an
Speaker 1: inquiry about nine assets on our platform. As you know,
Speaker 1: we spend a tremendous amount of time and effort and
Speaker 1: resources classifying assets and whether we believe they fall into
Speaker 1: the security or utility space. UM. If this is an
Speaker 1: opportunity to have that dialogue again and to make sure
Speaker 1: that we agree on a sensible framework for that, we
Speaker 1: welcome it, and we're of course going to partner with
Speaker 1: the SEC, CFTC and any other regulators or lawmakers on
Speaker 1: any of us. There's also this insider trading case where
Speaker 1: a former coin based employee has been charged. What's your
Speaker 1: relationship with the SEC at this point and what's your
Speaker 1: comment on that particular case. We have a zero tolerance
Speaker 1: policy for front running. UM. We pride ourselves on the
Speaker 1: amount of security and detection that we invest in to
Speaker 1: make sure that we can detect for front running. We
Speaker 1: worked very closely with the d o J on this case.
Speaker 1: In fact, they publicly lauded us, which is a very
Speaker 1: unusual thing because we spent a ton of time getting
Speaker 1: them up to speed on the nuances of the case.
Speaker 1: And we'll continue to work with with any regulators and
Speaker 1: law enforcement on making sure that we nip that activity
Speaker 1: in the bud Coin based president and CEO Emily Joy.
Speaker 1: Over Time Sports has just raised a hundred million dollars
Speaker 1: in funding to expand its leads for the next generation
Speaker 1: of athletes. The company started out posting high school sports
Speaker 1: highlights on social media back in in an effort to
Speaker 1: build an audience of fifteen year olds who love sports.
Speaker 1: Over Time now boasts eighty channels across six platforms spanning football, basketball, soccer,
Speaker 1: and gaming, and over the last year, the company has
Speaker 1: branched out into running its own sports leagues. I want
Speaker 1: to bring in overtime CEO Dan Porter now for more so. Dan,
Speaker 1: I know you started out making this bet on high school,
Speaker 1: but you've evolved quite a bit since that time, and
Speaker 1: now you're focusing on sort of next generation athletes maybe
Speaker 1: just out of high school, talk to us about give
Speaker 1: us a snapshot of where the company is today. So
Speaker 1: today we still have our kind of our core business.
Speaker 1: Where we went after the audience. You know, the average
Speaker 1: age of the kind of sports fan and season ticket
Speaker 1: holder of the Big four sports is still in the
Speaker 1: forties and fifties, and we made a big bet that
Speaker 1: we could go out and get that younger audience, and
Speaker 1: that younger audience is the core of our community. And
Speaker 1: what we did is we said, Okay, we have this
Speaker 1: active community, We're on every social platform, they're super engaged
Speaker 1: with us, and let's launch our own leagues on top
Speaker 1: of that. And so we saw some opportunity in the marketplace.
Speaker 1: We saw opportunities for athlete empowerment. And we've built these
Speaker 1: leagues with kind of seventeen to nineteen year old players,
Speaker 1: some are high school age, some are out of high school.
Speaker 1: But really it's about the audience. And I think that
Speaker 1: professional sports is incredible, but every generation kind of wants
Speaker 1: its own things spoken in its own voice. And so
Speaker 1: we've launched a league in basketball, in the league in
Speaker 1: football where we think there's an opportunity to build millions
Speaker 1: and millions of fans and deliver them kind of sports
Speaker 1: in their own voice. And that's our big bed and
Speaker 1: that's where the hundred million dollars is going. So what's
Speaker 1: the vision to expand these leagues and also you know,
Speaker 1: potentially cash in on media rights. So really our our
Speaker 1: goal over the next three years is to grow audience.
Speaker 1: It's kind of an interesting thing because you become a
Speaker 1: sports fan because you have an emotional attachment to a team,
Speaker 1: to your city, to anything else like that. And we've
Speaker 1: got to get out there in front of all of
Speaker 1: our tens of millions of fans and convince them that
Speaker 1: our league is the league that they want to pay
Speaker 1: attention to. And as we do that, and you know,
Speaker 1: we have already millions of followers on these leagues themselves,
Speaker 1: we want to bring on more sponsors. And I think
Speaker 1: the value that all investors see in sports leagues is rights. Right,
Speaker 1: you have Amazon and Apple, you have more competitors in
Speaker 1: the market than you've ever had before, and and we
Speaker 1: want to we want to build a league the fans like,
Speaker 1: but also that buyers and media rights like. Now, the
Speaker 1: goal I know initially was to build this audience. Fifteen
Speaker 1: twenty eight year old who love sports but aren't consumed
Speaker 1: by it the way their parents are. What is a young, healthy,
Speaker 1: sports loving audience actually look like. So, I'd say, first
Speaker 1: and foremost, they probably consume it in a lot of
Speaker 1: different places. And I think that's probably true of you
Speaker 1: and me to some extent as well. There's no single
Speaker 1: platform for sports anymore. You're kind of aggregating your information.
Speaker 1: But I'd say, really two things. One is they want
Speaker 1: to see athletes who kind of are like them. They
Speaker 1: can be aspirational towards. Doesn't mean that NBA or NFL
Speaker 1: athletes aren't amazing. They are, but the gap between those
Speaker 1: athletes and I think our athletes in the fan is smaller.
Speaker 1: And I'd say they want to be participants. They want
Speaker 1: to not just be expected to sit on the couch
Speaker 1: and watch, but they want to have input. They want
Speaker 1: to be spoken to. You know, when I talked to
Speaker 1: young fans, they tell me like, I want to be seen,
Speaker 1: I want to be heard for what I bring. And
Speaker 1: I think that that's obviously true across content and music
Speaker 1: and all aspects of culture. Like gen Z and millennials,
Speaker 1: they want to put their stamp on it. They don't
Speaker 1: just want to consume it, and that's what we have
Speaker 1: to figure out how to continue to do as sports leagues.
Speaker 1: I know you're also working on n f T s.
Speaker 1: Of course, there's been some skepticism about how big the
Speaker 1: n f T market can actually be. What are you betting.
Speaker 1: I'm betting that n f t s are not an
Speaker 1: didn't of themselves, but there are means to an end,
Speaker 1: and so if we can use n f t s
Speaker 1: to give our audience a chance to participate, to empower
Speaker 1: them to activate their voice in the space, then that's
Speaker 1: that's amazing. If if we just think about it as oh,
Speaker 1: here's another revenue stream, or we should do the same
Speaker 1: thing as everyone else, I don't think we'll realize the
Speaker 1: full potential. But really, at the core, blockchain and n
Speaker 1: f t s are about decentralized participation and activating the audience,
Speaker 1: and that's always at the core of what we do.
Speaker 1: So in some way I think of n f T
Speaker 1: is the same way I think it's social media, not
Speaker 1: in an end of themselves, but like a platform to
Speaker 1: do more for the audience. Interesting, We'll keep watching overtime CEO,
Speaker 1: Dan Porter, thanks for thank you for having me all right,
Speaker 1: that does it For this edition of Bloomberg Technology. Tune
Speaker 1: in on Wednesday. We're gonna hear from Roadblocks CEO David
Speaker 1: Buzuki after their second quarter results. Shares are plunging in
Speaker 1: late trading after a miss on booking. We're going to
Speaker 1: talk about that, plus what's next for the metaverse, of course,
Speaker 1: and David Sachs, one of the many people in Elon
Speaker 1: Musk's inner circles subpoenaed by Twitter. This is Bloomberg