>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE, IN SILICON VALLEY AND BEYOND, THIS IS "BLOOMBERG TECHNOLOGY." WITH EMILY CHANG. ♪ EMILY: I'M EMILY CHANG IN SAN FRANCISCO AND THIS IS "BLOOMBERG TECHNOLOGY." ELON MUSK SUGGEST A PATH TO PEACE FOR RUSSIA AND UKRAINE, AND GETS ROASTED ON TWITTER, INCLUDING BY PRESIDENT ZELENSKYY HIMSELF. WE'LL BRING YOU THE LATEST IN THE BACK-AND-FORTH.
PLUS TESLA DOWN MORE THAN A PERCENT, THE BIGGEST ONE-DAY DROP IN FOUR MONTHS, AFTER ANNOUNCING DISAPPOINTING DELIVERY NUMBERS. HOW MUSK'S PLAN TO LOCALIZE PRODUCTION MAY HELP. FIRST, LOOK AT THE MARKETS, KICKING OFF THE WEEK WITH BIG GAINS AFTER SUFFERING THE WORST SEPTEMBER IN TWO DECADES.
>> WELCOME MAT, SOME GREEN ON THE SCREEN. THE BEST DAY FOR THE S&P 500 SINCE JULY, WE FINALLY SEEN THE PULLBACK IN YIELDS THAT HAVE BEEN SURGING FOR SO LONG AND SHOWING NO SIGNS OF ABATING. WE SAW IN MONDAY'S MARKET, THE S&P MARKET COMING OFF THE WORST RUN SINCE 2009. A LOT OF GREEN IN THE TECH SPACE THIS MONDAY. LOOKING AT THE MOVERS AND SHAKERS, 95 NAMES ON THE NASDAQ 100 IN THE GREEN.
THIS SHOWS US WHAT WAS GOING ON, A LOT OF TECH GAINS -- NAMES MAKING GAINS. A MARKED REACTION TO THE THIRD QUARTER PRODUCTION NUMBERS THAT MISSED ESTIMATES. IT ON MY SAYING THE NUMBER OF CARS LEFT IN TRANSIT, AND PELOTON AS WELL, REALLY INTERESTING GAINS PENDING A DEAL WITH HILTON, GOING TO USE PELOTON HARDWARE IN THEIR HOTELS . I KNOW YOU HAVE MORE ON THAT LATER ON. EMILY:
ELON MUSK DRAWING THE WRATH OF UKRAINIANS AFTER A SERIES OF TWEETS URGING A NEGOTIATED SOLUTION TO THE INVASION BY RUSSIA AND SEATING CRIMEA FOR GOOD. DAVID KIRKPATRICK IS WITH US. IT STARTED WITH THE POLE BY ELON MUSK. >> HE SENT SEVERAL TWEETS THROUGHOUT MONDAY. THE TWO KEY POINTS WHERE THAT FIRST HE SHOULD JUST A THEY SHOULD BE -- HE SUGGESTED A NEGOTIATED SETTLEMENT BETWEEN UKRAINE AND RUSSIA, IMPLYING THAT CRIMEA, WHICH IS AN ANNEXATION OF RUSSIA, SHOULD REMAIN WITH RUSSIA FOR GOOD.
OBVIOUSLY THESE ARE STRONG WORDS FROM ELON MUSK, AND A FURTHER POLL LATER IN THE DAY SAYING CITIZENS OF THOSE AREAS OF UKRAINIAN TERRITORY THAT RUSSIA IS TRYING TO ANNEX, WHETHER OR NOT THEY SHOULD BE GIVEN AN OPPORTUNITY, THERE HAS BEEN A PRETTY SHARP REACTION FROM ALL CORNERS OF SOCIAL MEDIA AND DIPLOMATICALLY, WITH WHAT ELON MUSK HAD TO SAY. EMILY: WHICH ELON MUSK DO YOU LIKE MORE, ONE WHO SUPPORTS UKRAINE, OR ONE WHO SUPPORTS RUSSIA? DAVID, WHAT IS YOUR TAKE ON ALL THIS? DAVID: IT'S FAIRLY EASY TO HAVE A TAKE ON, I MUST SAY. MUSK FALLS PREY TO A NUMBER OF DANGEROUS IDEAS, ONE IS, IF I'M SO RICH, I MUST BE SMART ENOUGH TO SOLVE ANYTHING.
THAT IS LUDICROUS. HE ALSO IS AN ATTENTION HOG, AND IS STARKS -- HIS STOCKS ARE OFF TREMENDOUSLY, IT MIGHT BE THAT HE IS IN A BAD MOOD BECAUSE OF THAT AND HE'S TRYING TO GET ATTENTION TO DISTRACT HIMSELF. IT IS ALL CRAZY STUFF, HE SHOULD NOT BE INVOLVED IN THIS ISSUE. EMILY: ED, TALK ABOUT THE REACTION WE ARE SEEING HERE. WE'VE HEARD FROM DAVID KIRKPATRICK NOW AND WE HEARD FROM ANALYSTS WHO COVER TESLA AND COVER ELON MUSK FOSS COMPANIES. WHAT ELSE ARE PEOPLE SAYING? ED:
WE HEARD FROM UKRAINE'S AMBASSADOR TO GERMANY. I WON'T SHOW YOU ALL HE SAID IN THE COURSE OF HIS TWEET DUE TO THE COARSE LANGUAGE HE USED. HE IMPLIED THAT NO UKRAINIAN WOULD NOW BUY A TESLA PRODUCT IN THE FUTURE, BASED ON WHAT ELON MUSK HAD SAID. THIS IS SLIGHTLY ANECDOTAL, BUT MANY TESLA VEHICLE OWNERS AND SHAREHOLDERS WHO HAVE A PRESENCE ON TWITTER DID COME OUT AND SAY THIS IS NOT SOMETHING ELON MUSK SHOULD BE DOING. MANY LABELED IT AS A MISTAKE AS
WELL. SO IT HAS CAUSED BROAD AND SHARP REACTION INCLUDING AND 10 SUPPORTERS OF TESLA AND ELON MUSK PERSONALLY. EMILY: THIS OF COURSE AS THE TAKEOVER -- TWITTER TAKEOVER DISCOVERY PROCESS CONTINUES, KIND OF A DIFFICULT WEEK FOR MUSK.
ALSO THE CEO OF TWITTER TODAY WAS DEPOSED IN A SESSION AND WE ARE NOT SURE WHAT HAPPENED INSIDE THAT SESSION. WHAT DO YOU MAKE OF ALL OF THIS HAPPENING FOR ELON MUSK AND BECAUSE OF ELON MUSK, REALLY, AT ONCE? >> MAYBE I AM A BAD ARMCHAIR PSYCHOLOGIST, BUT EVEN BEFORE THIS DEVELOPMENT TODAY ABOUT UKRAINE, IT OCCURRED TO ME THAT IT MIGHT BE THAT ALL THE SMOKE OVER TWITTER WAS A BID FOR ATTENTION. IT'S HARD TO EXPLAIN HOW WHY HE WOULD'VE TRIED SO HARD TO BUY TWITTER AND THEN TRIED SO HARD TO GET OUT OF IT, WITHOUT ANY REAL FUNDAMENTAL CHANGES IN HIS BUSINESS PLAN STRATEGY.
I THINK IT IS ALL BECAUSE HE HAS TO HAVE ATTENTION, JUST LIKE ELON MUSK. EMILY: OF COURSE WE ARE STILL WAITING FOR HEADLINES TO COME OUT OF THIS DEPOSITION, BUT IT SHOULD BE SAID THAT ELON MUSK'S COMPANIES HAVE HAD SOME INVOLVEMENT IN THE WAR ON UKRAINE. >> SPACEX, OF WHICH HE IS A FOUNDER AND CHIEF EXECUTIVE OFFICER, HAS FOR SOME TIME BEEN SENDING STAR LINK EQUIPMENT TO ESSENTIALLY KEEP THE COUNTRY CONNECTED DURING THE TIME OF WAR. THE FANTASTIC REPORTING ON THE BLOOMBERG TERMINAL ABOUT THE BACKGROUND AND HOW THAT CAME ABOUT IN COORDINATION WITH THE U.S., BUT THEY ARE ALL PROVIDING THAT SERVICE AND HARDWARE AND MUSK HAD TWEETED EARLIER ON IN THE WAR ABOUT SPACEX'S EFFORT TO GET THAT EQUIPMENT INTO THE COUNTRY AND HOW THEY HAVE BEEN INVOLVED IN KEEPING THE UKRAINIAN PEOPLE ONLINE ESSENTIALLY DURING THIS WAR. EMILY: CERTAINLY THIS ONE IS STILL DEVELOPING AND WE WILL CONTINUE TO WATCH IT.
ED LUDLOW, DAVID KIRKPATRICK. COMING UP COME THE SUPREME COURT WILL WEIGH IN ON SOCIAL MEDIA COMPANIES AND WHAT THEY ARE AND ARE NOT RESPONSIBLE FOR WHEN IT COMES TO REAL-WORLD CONSEQUENCES OF CONTENT ON THEIR PLATFORM. THIS IS BLOOMBERG.
♪ EMILY: A BIG CHALLENGE FOR SOCIAL MEDIA COMPANIES, THE U.S. SUPREME COURT TAKING UP TWO CASES ON WHETHER SOCIAL MEDIA COMPANIES CAN BE SUED FOR RECOMMENDING CERTAIN CONTENT. IT'S A BIG TEST OF AN OLD LAW, SECTION 230. TALK TO US ABOUT HOW YOU EXPECT THIS TO PLAY OUT IN COURT, WHETHER IT SOMETHING THAT COULD DIVIDE THE COURT ON IDEOLOGICAL LINES.
>> THERE ARE CERTAIN REASONS TO THINK IT COULD. THIS SECTION 230 WHICH IS INVOLVING THE GOOGLE CASE, THE LAW THAT GENERALLY PROVIDES SOCIAL MEDIA COMPANIES -- THAT HAS COME UNDER FIRE FROM CONSERVATIVES AND AT THE SUPREME COURT, THE ONE JUSTICE IS CLARENCE THOMAS WHO IS ONE OF THE MOST CONSERVATIVE JUSTICES. HE HAS EXPRESSED THE CONCERN THAT IT GIVES SOCIAL -- SOCIAL MEDIA COMPANIES TOO MUCH LATITUDE. EMILY: SECTION 230 IS THE COMMUNICATION PIECE OF THE ACT WHICH FOR SO MANY DECADES HAS PROTECTED AND SHIELDED THESE COMPANIES OF RESPONSIBILITY FOR A LOT OF THE CONTENT POSTED IT -- POSTED ON THEIR PLATFORM. DAVID, WHAT DO YOU THINK IS THE
MOST LIKELY OUTCOME HERE? DAVID: I'M NOT A SUPREME COURT EXPERT, SO IT IS HARD TO KNOW. I THINK IT IS POSSIBLE THAT THE SUPREME COURT IS TAKING THESE CASES FOR IDEOLOGICAL REASONS. BUT THE BOTTOM LINE, LONG-TERM OUTCOME, IN MY OPINION, IS WE DO NEED A DIFFERENT REGULATORY REGIME FOR SOCIAL MEDIA AND INTERNET CONTENT. SECTION 230, FOR WHATEVER PLUSES AND MINUSES IT MIGHT ADD TO THE DIALOGUE, IS NOT DOING WHAT IT WAS MEANT TO. CONTENT THAT SHOULD NOT BE UP THERE IS UP THERE AND COMPANIES ARE BEHAVING IRRESPONSIBLY AND NOT DOING THE RIGHT THING. WE NEED CHANGE, ABSOLUTELY.
EMILY: GRAD, GIVE US A BIGGER PICTURE ON THESE TWO CASES AND HOW SIGNIFICANT THEY ARE, HOW WE MIGHT DEAL WITH SOCIAL MEDIA IN THE FUTURE. GREG: LET ME SEPARATE THE TWO OUT. THE TWITTER CASE THAT THE COURT HAS HAS TO DO WITH THE LAW CALLED THE ANTITERRORISM ACT.
THE QUESTION IS WHETHER THE ALLEGATION THAT SOCIAL MEDIA COMPANIES DID NOT DO ENOUGH TO TAKE DOWN POSTS BY ISIS, WHETHER THAT IS ENOUGH TO GO FORWARD WITH IN COURT. THE OTHER CASE, THE GOOGLE CASE GOES BEYOND TERRORISM. IT HAS TO DO WITH CLAIMS THAT BY MAKING RECOMMENDATIONS, AND THIS IS A YOUTUBE CASE, MAKING RECOMMENDATIONS ABOUT VIDEOS TO LOOK AT ACTUALLY ENCOURAGES TERRORISM.
AND THE QUESTION IS WHETHER THAT IS COVERED UNDER SECTION 230, THAT SAYS YOU CANNOT BE HELD LIABLE AS A PUBLISHER FOR JUST POSTING CONTENT. THE QUESTION IS WHAT ABOUT THE TARGETED RECOMMENDATIONS MADE BY ALGORITHMS. EMILY: DAVID, IF THE SUPREME COURT ERODES SECTION TWO 30 IMMUNITY, HOW DRAMATIC WOULD THAT BE FOR COMPANIES LIKE META AND TWITTER AND YOUTUBE? DAVID: IT DEPENDS ON HOW THEY WERE TO DO IT.
IT'S EASY TO IMAGINE A SCENARIO WHERE IT COULD CAUSE SERIOUS CHAOS IN THE MARKETPLACE. IF I WERE THE COMPANIES, I WOULD BE VERY CONCERNED. THE CLAIM TO WANT A REWRITE OF SECTION 230, BUT IT'S NOT CLEAR HOW THIS IS GOING TO PLAY OUT IN A GOOD WAY FOR THEM.
I WOULD SAY ON THE YOUTUBE CASE, I THINK THERE'S A GOOD ARGUMENT THAT SINCE SECTION 230 WAS IMPLEMENTED IN ORDER TO INDEMNIFY COMPANIES AGAINST EXCESSES OF SPEECH BY PEOPLE THEY COULDN'T CONTROL, THAT IS ILLOGICAL, BUT ONCE THEY APPLY THAT ALGORITHM TO THEIR CONTENT, I DON'T SEE SECTION 230 BEING A VERY GOOD DEFENSE FOR THEIR BEHAVIOR. EMILY: IN EUROPE YOU'VE GOT SOCIAL MEDIA COMPANIES BEING QUESTION WITH THE BRITISH RULING THAT SOCIAL MEDIA WAS TO BLAME FOR THE DEATHS OF A TEENAGE GIRL. WHAT IS YOUR TAKE ON HOW THAT CASE COULD POTENTIALLY IMPACT THESE? >> SUPREME COURT JUSTICE IS HERE TEND TO IGNORE WHAT IS HAPPENING OVERSEAS AND LOOK AT U.S. LAW. CONSERVATIVES ARE VERY PROUD OF NOT PAYING ATTENTION TO WHAT IS HAPPENING WITH FOREIGN LAW. SO I WOULD NOT EXPECT A DIRECT IMPACT. THAT BEING SAID, DO THEY UNDERSTAND THAT SOCIAL MEDIA IS CONTROVERSIAL, THERE ARE A LOT OF FOLKS TO BLAME FOR A LOT OF SOCIETY'S ILLS. THEY MAY FEEL THAT WAY
THEMSELVES, WE WILL HAVE TO SEE, PROBABLY EARLY NEXT YEAR, WHETHER SOME OF THE SKEPTICISM TOWARD SOCIAL MEDIA COMES OUT FROM SOME OF THE CONSERVATIVE JUSTICES. EMILY: TWO CASES WE WILL CERTAINLY BE FOLLOWING HERE. GRADE AND DAVID, -- GREG AND DAVID, THANK YOU BOTH. COMING UP, CLOSING THE GAP ACROSS TECH AND BUSINESS AS A NEW LAW IS ABOUT TO SHINE A LIGHT ON SALARIES ACROSS CALIFORNIA. THIS IS BLOOMBERG.
♪ EMILY: READY OR NOT, WHAT YOUR JOB PAYS IS ABOUT TO GET A LOT LESS PRIVATE. CALIFORNIA HAS BECOME THE LATEST STATE WITH A TRANSPARENCY MOVEMENT WHERE BUSINESSES WILL HAVE TO COMPLY AND SHARE PAY EXPECTATIONS ON DEMAND BY JANUARY 2023. WILL BREAK IT DOWN WITH MARIA. NEW REPORT SHOWS MOST EMPLOYERS ARE NOT READY. LET'S START WITH THIS NEW
TRANSPARENCY LAW. WHAT EXACTLY WILL THIS DO, AND WHAT WILL COMPANIES HAVE TO DO AS A RESULT? MARIA: RIGHT QUESTION, THE LAW WAS SIGNED LAST WEEK AND AS WE ALL KNOW, CALIFORNIA IS THE FIFTH LARGEST ECONOMY IN THE WORLD. SO THIS WILL HAVE TREMENDOUS IMPACT, BECAUSE IF ANY COMPANY WITH 15 MORE EMPLOYEES, AND EVEN ONE EMPLOYEE IN CALIFORNIA, WHAT IT DOES IS REQUIRE COMPANIES TO INCLUDE PAY RANGES ON JOB POSTINGS, STARTING IN JANUARY 2023.
AND REPORT MEDIAN AND MEAN PAY GAPS AND CONTRACTOR PAY TO THE STATE, STARTING MARCH 2023. EMILY: YOU ARE OUT WITH A NEW REPORT THAT SHOWS EMPLOYERS ARE NOT READY. HOUT NOT READY ARE THEY? MARIA: WHAT WE FOUND THIS TWO THIRDS OF COMPANIES ARE SAYING THEY'RE COMPLETELY UNPREPARED TO POST SALARY RANGES. I THINK A BIG PART OF THAT IS
BECAUSE COMPANIES DON'T YET UNDERSTAND WHY THEY PAY WHAT THEY PAY. THAT IS THE FIRST QUESTION AN EMPLOYEE IS GOING TO COME TO YOU ASKING ONCE THEY SEE THOSE RANGES POSTED. EMILY: WHY IS IT SO TRICKY FOR COMPANIES TO KNOW WHY THEY PAY WHAT THEY PAY, AND EVEN WHAT THEY PAY AND WHERE THERE ARE GAPS? MARIA: IT'S BECAUSE OF THE OLD WAY OF DOING EQUITY ANALYSIS. THE OLD WAY IS TO OUTSOURCE IT TO A LAW FIRM. YOU GET BACK REPORT ONCE A YEAR THAT TELLS YOU YOUR REMEDIATION OR WHAT YOU NEED TO PAY PEOPLE TO GET OUT OF THE WOODS. YOU LEARN NOTHING ABOUT THE UNDERLYING POLICIES OR PROGRAMS THAT ARE DRIVING PAY. COMPANIES REALLY NEED TO START
USING ANALYTICS TO FIGURE OUT ARE THERE PROGRAMS WORKING AS THEY INTENDED, IF THEY SAY THEY PAY FOR PERFORMANCE, FOR EXAMPLE , WHEN A LOT OF COMPANIES SAY THEY DO THAT, BUT VERY FEW ACTUALLY DO. EMILY: LET'S TAKE ALPHABET AND META, FOR EXAMPLE. WHAT WOULD THIS MEAN FOR COMPANIES LIKE THAT WHICH COMPETE WITH EACH OTHER FOR TALENT, HISTORICALLY ARE KNOWN FOR PAYING FOLKS QUITE WELL, BUT LIKE MOST COMPANIES, PROBABLY A PRETTY BIG PAY GAPS. MARIA: THE FIRST THING THEY HAVE TO DO IS GET ON TOP OF THEIR PAY GAPS. IF YOU HAVE ISSUES OR AT THE
COMPANY IF YOU HAVE A PHILOSOPHY OF START LOW, STAY LOW, OR PAY TOP DOLLAR FOR THE BEST, THAT'S GOING TO CATCH UP WITH YOU FROM EIGHT PAY EQUITY PERSPECTIVE. YOU WILL HAVE DISPARITIES THAT YOU CANNOT RULE OUT BECAUSE OF GENDER-BASED ACTIVITY. YOU ARE -- NEED TO BE LOOKING AT THIS CONSTANTLY AS YOU HIRE OR IF YOU HAVE TO LAY PEOPLE OFF, ARE YOU HAVING ADVERSE IMPACTS? ARE YOU LETTING BIAS CREEP IN, BECAUSE BIAS REQUIRES DISCRETION AND OXYGEN. THE ONLY WAY TO AVOID IT IS TO USE DATA
ANALYTICS TO MAKE SURE YOU ARE INFORMING THOSE DECISIONS WELL. EMILY: DO YOU THINK IT WILL IMPACT THE LABOR MARKET, AND IF SO, HOW? ESPECIALLY GIVEN THAT WE ARE HEADING INTO A RECESSION. MARIA: THE INTERESTING THING WILL BE TO SEE HOW IT IMPACTS COMPETITIVENESS IN TECH TALENT. MAYBE AN UNINTENDED BENEFIT IS WE WILL SEE A LITTLE BIT OF LOOSENING AS IT RELATES TO THAT FIERCE COMPETITION FOR ENGINEERS AND TECH. WITH PAY TRANSPARENCY ON TOP OF THAT, NOW YOU WILL SEE THAT COMPETITIVE NATURE OF EVERYONE TRYING TO ONE UP EACH OTHER ON SALARY AND THE PACKAGES, AND MAYBE THAT WILL HAVE A BIT BECAUSE THERE IS AND FOLKS WILL UNDERSTAND -- MAYBE IT WILL EBB A BIT. MAYBE IT WILL MAKE THE TALENT PACE A LITTLE EASIER TO MANAGE.
EMILY: AND I'M CURIOUS WHAT YOU'RE SEEING IN THE LABOR MARKET RIGHT NOW. WE'VE HEARD ABOUT THE GREAT RESIGNATION, THAT HAS KINDA BEEN ON PAUSE AS EMPLOYEES ARE NOT MOVING AROUND RIGHT NOW BECAUSE THERE ARE NOT SO MANY CHOICES RIGHT NOW. HOW WOULD YOU DESCRIBE THE STATE OF PLAY RIGHT NOW? MARIA: I THINK WE KEEP GROPING AROUND FOR A TERM THAT GETS AT THE ESSENCE OF WHAT IS HAPPENING. WHETHER IT'S THE GREAT
RESIGNATION, QUIET QUITTING, ALL OF THIS IS JUST A MASSIVE REFLECTION THAT WE'RE SEEING A TOTAL FRACTURING OF TRUST BETWEEN EMPLOYEES AND EMPLOYERS. THE WAY TO FIX THAT IS TO TAKE WORKPLACE EQUITY AND TRANSPARENCY THAT IS COMING AT EMPLOYERS THROUGH SOME OF THESE LAWS AND DIVE RIGHT INTO IT. THAT IS A WAY TO REALLY BUILD THE TRUST THAT HAS BROKEN BETWEEN EMPLOYERS AND EMPLOYEES. I THINK IT'S KIND OF A REFLECTION OF ALL THESE TERMS THAT WE KEEP HEARING. EMILY:
MARIA, THANK YOU FOR SHINING A LIGHT ON THAT FOR US HERE TODAY. MEANTIME, ELIZABETH'S HOMES PRISON SENTENCING HAS BEEN DELAYED. A JUDGE IS LOOKING INTO WHETHER A KEY GOVERNMENT WITNESS GAVE TRUTHFUL TESTIMONY AT TRIAL AFTER HER LAWYER SAID SHE HAD MISGIVINGS DURING A VISIT TO HER HOME. SHE WAS FOUND GUILTY IN JANUARY
OF CONSPIRACY FOR THE COMPANY SHE FOUNDED, THAT REACHED A PEAK VALUATION OF $9 BILLION. TESLA SHARES DROPPED AFTER CARMAKERS CLAIMED DISAPPOINTING NUMBERS ON SHIPMENTS. THAT IS NEXT. THIS IS BLOOMBERG. ♪ EMILY: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." LET'S GET BACK TO THE MARKETS, SHARES OF TESLA FOLLOWING THE MOST SINCE JUNE AFTER DELIVERIES CAME IN BELOW EXPECTATIONS. ANOTHER RECORD-SETTING PERIOD. HOW ALARMING IS THIS DELIVERY
SITUATION TO YOU? >> I THINK AT FIRST GLANCE, CLEARLY THE STREET IS GOING TO BE DISAPPOINTED. WE SAW THAT IN THE STOCK. I THINK IT IS CYCLICAL. A LOT OF BALLS IN THE AIR BUT I DON'T BELIEVE IT IS DEMAND DRIVEN, ULTIMATELY. THAT WILL BE THE NARRATIVE FROM THE BULLS IN EMILY: THE BEARS. EMILY:THE NARRATIVE FROM ELON MUSK IS THIS, AIMING FOR STEADIER DELIVERIES. WHAT IS YOUR EXPECTATION THAT THAT WILL HAPPEN? DAN: IT'S A BALANCING ACT.
SOME OF THE LOGISTICAL CHALLENGES THEY'VE HAD IN THE U.S. AND FROM CHINA, CLEARLY THEY PUT UP LINED IN THE SAND THIS QUARTER. ULTIMATELY THE FOCUS, WE NEED TO SEE THIS MOVED OUT. I DO NOT BELIEVE IT IS DEMAND DRIVEN, I BELIEVE IT IS LOGISTICAL RATHER THAN ANYTHING ELSE. THAT WILL BE DIFFICULT TO PROVE IN THIS SITUATION. EMILY: OUR INVESTORS GOING TO BE CONVINCED BY THIS NARRATIVE? WE ARE SEEING A PRETTY STRONG REACTION HERE.
DAN: IT'S A WHITE KNUCKLE MARKET AND TESLA IS HELD TO A HIGHER STANDARD, ESPECIALLY WITH THE HIGHER MULTIPLE. YOU CANNOT SUGARCOAT IT. NOW IT'S GOING TO BE IN THE PENALTY BOX GOING INTO Q4. I BELIEVE AS WE HAVE SEEN FOR, IT'S A BACK AGAINST THE WALL MOMENT FOR MUSK. EMILY: MEANTIME YOU'VE GOT WITH A LOT OF THINGS GOING ON -- YOU'VE GOT ELON WITH A LOT GOING ON. HOW WORRIED DO YOU THINK INVESTORS ARE WITH ALL OF THESE OTHER POTENTIAL ACTIONS? DAN: IT'S CREATED A BIT OF A PERFECT STORM.
YOU'VE GOT THE TWITTER TRIAL COMING UP OCTOBER 17, AND THERE'S A LOT OF QUESTIONS. IT STARTS TO ULTIMATELY BE A CASCADE WHERE YOU SEE MUSK -- A SETTLEMENT LIKELY COULD HAPPEN IN THE HIGH 40'S. ONCE HE STEPS INTO COURT, -- IT'S ANOTHER CLOUD OVER THE TESLA STORY. EMILY: I DON'T KNOW IF THE PERFECT STORM CAN GET EVEN MORE PERFECT OR MORE STORMY, BUT YOU HAVE ELON SETTING UP AN UPROAR WITH A SERIES OF TWEETS SUGGESTING NEGOTIATION BETWEEN UKRAINE AND RUSSIA, WITH A LOT OF FOLKS COMMENTING ON THIS, ANALYST COMMENTING ON -- ON THIS ALL THE WAY UP TO THE PRESIDENT OF UKRAINE HIMSELF, CLAPPING BACK WITH A POLL OF HIS OWN.
AS SOMEONE WHO FOLLOWS TESLA AND MUSK SO CLOSELY, WHAT IS YOUR TAKE ON THIS? IN THE POTENTIAL IMPACT CAN HAVE ON REAL-WORLD COMPANIES AND INVESTORS WHO PUT THEIR MONEY BEHIND ELON MUSK. DAN: THEY ARE BLACKEYE MOMENTS FOR MUSK. HE JUST ADDS MORE AND MORE CONTROVERSY. IT HAS HAD A CASCADE EFFECT. AND IRONICALLY, USING TWITTER AS A PLATFORM CREATES MORE AND MORE WORRIES. IT'S BEEN A NIGHTMARISH NINE MONTHS FOR MUSK. FOR INVESTORS, THEIR PATIENCE IS WEARING THIN.
THERE IS A LOT OF FRUSTRATION THERE. WITH A SOFT DELIVERY SUNDAY MORNING, GOOD LUCK. EMILY: AND THEN YOU HAVE FRUSTRATION FROM SOME OF HIS BIGGEST SUPPORTERS AND TESLA FANS. THE NEXT COUPLE OF WEEKS WILL BE VERY INTERESTING AS WE HEAD INTO THAT TWITTER TRIAL.
DAN, THANKS FOR BEING HERE. I WANT TO TALK ABOUT PELOTON AND THE DEAL TO PUT EXERCISE BIKES IN HILTONS 5400 HOTELS. AND IT WILL OFFER A FREE TRIAL TO THE APP AND $100 OFF A BIKE OR TREADMILL PURCHASE. HOW SIGNIFICANT IS THIS DEAL?
>> IT'S JUST ONE OF A FEW AT THIS POINT. PELOTON IS PUSHING EVERY POTENTIAL PARTNERSHIP THEY CAN, DOING WHATEVER THEY CAN TO REVERSE THE STOCK PRICE DECLINE. I REMEMBER WHEN THE STOCK WAS WELL NORTH OF $100 PER SHARE ABOUT A YEAR AGO. WE'VE HIT THE ALL-TIME LOW FOR PELOTON EITHER TODAY OR ON FRIDAY, COMING IN AT UNDER SEVEN DOLLARS A SHARE. THIS HILTON NEWS BROUGHT THE STOCK UP A LITTLE BIT. THINGS ARE NOT LOOKING SO HOT FOR PELOTON, THE STOCK PRICE AT ITS WORST POINT EVER. THEY ARE HOPING MORE AND MORE
NEW DEALS WILL HELP TURN THAT AROUND. I'M NOT SURE THIS HILTON DEAL ON IT'S ON WILL DO MUCH FOR THE COMPANY. WERE TALKING ABOUT 5400 HOTELS, I BELIEVE IT WILL BE ONLY TWO OR THREE BIKES PER HOTEL. WERE TALKING MAYBE 25,000 UNITS AT THE VERY MOST AND THAT'S REALLY NOT GOING TO MOVE THE NEEDLE FOR THE COMPANY. BUT I THINK WHAT THE PELOTON CEO SAID ABOUT BETTER PRIORITIZING THE SUBSCRIPTION INSTEAD OF THE HARDWARE IS WHERE PELOTON WILL BE LONG-TERM. THE QUESTION IS WHETHER PELOTON
HAS ENOUGH RUNWAY AND MONEY, INVESTOR AND BOARD OF DIRECTOR PATIENTS TO SEE IT THROUGH. EMILY: YOU REPORTED ON THE ROWING MACHINE AS WELL AS SOME OF THESE OTHER PARTNERSHIPS, WE'VE SEEN SOME DEPARTURES. WHAT IS YOUR UNDERSTANDING OF THE LEVEL OF CONFIDENCE UNDER BARRY MCCARTHY FROM THE RANK-AND-FILE AT THIS POINT? >> THE NEW LEADERSHIP TEAM HAS IMPLEMENTED A PLAN AND THEY ARE EXECUTING THE PLAN AND DOING EXACTLY WHAT THEY SAID THEY WOULD BE DOING.
THEY CHANGED SOME COMPANY FUNCTIONS OPERATIONALLY AND ARE ALLOWING THE COMPANY TO GENERATE MORE MARGIN AND MORE PROFIT. THEY PLAN TO SHUT MOST RETAIL OUTLETS NEXT YEAR IN 2023, DOING EVERYTHING THEY POSSIBLY CAN. UNFORTUNATELY FOR THE STOCK PRICE, IT'S NOT CHANGING ANYTHING. A LOT OF THE EMPLOYEE PAY AT
COMPANIES LIKE PELOTON IS VERY MUCH TIED TO THE STOCK. IT'S DIFFICULT FOR THE MORALE TO BE SKY HIGH OR EVEN VERY POSITIVE WHEN THEY'RE TRYING EVERYTHING THEY CAN POSSIBLY DO. THEY'RE MOVING PRETTY QUICKLY, THEY'VE DONE A WHOLE REVAMP OF OPERATIONS IN A MATTER OF MONTHS AND IT IS NOT DOING ANYTHING FOR THE START PRICE, WHICH IS JUST GOING LOWER AND LOWER. SO I DON'T THINK MORALE IS VERY GOOD AT THIS POINT. EMILY: MARK GURMAN, AS ALWAYS, THANKS FOR YOUR REPORTING. AS WE HEAD INTO FALL, WHERE WILL WE GO IN THE WINTER? KIM KARDASHIAN SLAPPED WITH A FINE ON CRYPTO.
WE WILL DISCUSS,. THIS IS BLOOMBERG. EMILY: TIME FOR CRYPTO REPORT AND WE HAVE TO TALK ABOUT KIM KARDASHIAN WHO WAS JUST FIND THE FCC FOR $1.3 MILLION. THEY SAY SHE BROKE U.S. RULES BY NOT DISCLOSING SHE WAS PAID FOR A PROMOTION. I GOT TO ASK FOR YOUR TAKE ON THIS SITUATION, GETTING FINED BY THE FCC.
>> KIM KARDASHIAN IS ONE OF THE MOST INFLUENTIAL PEOPLE ON THE INTERNET. SHE HAS HUNDREDS OF MILLIONS OF FOLLOWERS. THERE ARE TWO BIG ISSUES HERE. NUMBER ONE, THE FCC DOESN'T OVERSEE ADVERTISING -- THE FTC DOESN'T OVERSEE ADVERTISING, THE FCC DOES. THE FOCUS HAS TO BE SECURITY, AND I'M NOT SEEN A STATEMENT OR RULING COME OUT YET TO INDICATE THAT. WHILE IT IS AN ATTENTION
GRABBING HEADLINE, THINK IT'S ANOTHER EXAMPLE OF RULEMAKING BY LITIGATION, WHICH IS DISAPPOINTING. EMILY: IT'S INTERESTING YOU SAY THAT, BECAUSE WE JUST INTERVIEWED KATIE HANH LAST WEEK AND SHE ALSO BELIEVES THAT THE APPROACH IS CREATING A LOT OF CONFUSION. TAKE A LISTEN TO WHAT SHE HAD TO SAY. >> THEY ARE VERY CONFUSED BECAUSE THEY GET TOLD, COME IN, REGISTER, JUST COME IN AND TALK TO US, BUT YOU HAVE THE ONE COMPANY WHO'S DONE THE ULTIMATE ACT OF GOING IN AND REGISTERING, COINBASE. THERE'S A LOT OF SABER RATTLING STILL GOING ON, I THINK. EMILY: WHAT DO YOU THINK, IS THERE A LOT OF CONFUSION HAPPENING BECAUSE OF REGULATION, OR IS THE FTC JUST TRYING TO CREATE A PASS TO A LITTLE MORE CERTAINTY ALONG THE LINES OF YES, THERE COULD BE CONSEQUENCES IF YOU DO SOMETHING OUT THAT WE BELIEVE IS WRONG? >> I ABSOLUTELY AGREE WITH KATIE'S PERSPECTIVE.
SHE HAS BEEN IN THE BELLY OF THE BEAST, SHE HAS BEEN ON THE HILL, SHE HAS SEEN HOW THESE POLICIES GET MADE. IT IS REALLY CONFUSING. ONE OF THE BIGGEST COSTS FOR CRYPTO COMPANIES AND CRYPTO PROJECTS TODAY IS COMPLIANCE. THESE ARE EARLY-STAGE FINANCIAL TECHNOLOGY START UPS AND THEY ARE SPENDING MILLIONS OF DOLLARS, NOT ONLY ON TRYING TO UNTANGLE CURRENT RULEMAKING AND GIVEN THE CAPITAL FOR FUTURE LITIGATION, IT HAMPERS OVATION. IT REALLY HAMPERS THE ABILITY
TO COMPETE AND IT DEFINITELY FAVORS LARGER FINANCIAL INSTITUTIONS WHO HAVE RELATIONSHIPS ON THE HILL, WHO HAVE LOBBYISTS AND RELATIONSHIPS WITH THESE AGENCIES. I WOULD LOVE TO SEE CLARITY, I HAVE NOT SEEN IT YET IT IS A HUGE CHALLENGE GOING FORWARD. >> THE SEC IS OBVIOUSLY MOVING IN A DIFFERENT DIRECTION THAN IT HAS THE LAST SEVERAL YEARS AND IT COMES TO CRYPTO ENFORCEMENT IN PARTICULAR. THEN YOU SEE SOMETHING LIKE THE FTC, AND IF YOU LOOK AT THE AGENCY'S OVERALL, DESPITE THE ISSUE OF IS IT A SECURITY OR NOT, HOW COMPLICATED IS IT TO NAVIGATE THE WEB OF AGENCIES THAT ARE GOING AFTER DIFFERENT TYPES OF INVESTMENT WITH CRYPTO? >> AS WE SAID BEFORE, IT'S ALPHABET SOUP.
THERE ARE SO MANY ACRONYMS, SO MANY DIFFERENT AGENCIES. THERE ARE NUMBER OF DIFFERENT AGENCIES INVOLVED, INTELLIGENCE IS INVOLVED, SANCTION ISSUES AS WE WORK OUT SOME OF WHAT IS HAPPENING ON THE RUSSIA SIDE WITH PEOPLE CONCERNED ABOUT MONEY MOVEMENT. THERE IS A LOT TO NAVIGATE AND THERE IS NOT A LOT OF CLARITY. THE BIDEN ADMINISTRATION PUT
OUT AN EXECUTIVE ORDER, BUT HOW LONG WILL IT TAKE FOR THE RESEARCH PHASE TO MOVE FORWARD? HOW LONG FOR ACTUAL PRACTICAL POLICY TO BE IMPLEMENTED? I HAVEN'T SEEN IT YET, AND I'VE BEEN DOING THIS FOR EIGHT YEARS. THE CHALLENGE IS, BLOCKCHAIN IS A CULTURE OF FICTION. UNLIKE THE BANKING SECTOR, THERE IS NO CEO YOU CAN CALL FOR JURISDICTION. IT IS CHALLENGING TO UNTANGLE WITHOUT REALLY UNDERSTANDING WHAT THE TECHNOLOGY IS. IT'S A VERY EXPENSIVE PROCESS.
EMILY: SPEAKING OF IMPATIENCE, YOU RECENTLY TWEETED THAT VCS ARE GOING TO START ASKING FOR REFUNDS. WHAT DO YOU MEAN BY THAT? >> I THINK 2021 WAS THE YEAR WHERE WE SAW A LOT OF MONEY COMING INTO THE SPACE, CRAZY VALUATIONS. THE LAST TO FORT WE HAD AN ALL-TIME HIGH IN CRYPTO STOCKS WHICH COMPRISED CLOSE OF -- CLOSE TO 6% OF THE TOTAL VENTURE. NOW REALITY IS SETTING IN AND A LOT OF THESE BUSINESSES DO NOT HAVE A PATHWAY TO REVENUE. OVER THE NEXT FEW QUARTERS WE WILL SEE CONSOLIDATIONS, A LOT OF DEALMAKING IN THE FORM OF MNA AND IPO'S, WHICH A LOT OF INVESTORS WERE COUNTING ON TO DELIVER THOSE RETURNS.
>> THERE'S THE IDEA OF TRADITIONAL FINANCE AND HOW MUCH TRADITIONAL FINANCE STILL NEEDS TO MOVE AND MOLD, WHEN YOU'RE SEEING THE MARKET GOING DOWN FOR A LOT OF THESE TOKENS, BUT MONEY BEING RAISED THAT WAY, CLEARLY A WHOLE GENERATION OF YOUNG PEOPLE . VCS ARE ASKING FOR THEIR MONEY BACK, THE IPL MODEL IS UNDER QUESTION. HOW IMPORTANT IS IT FOR CRYPTO CURRENCY, BLOCKCHAIN, TO BE A NEW PART OF THE FINANCIAL SYSTEM WITH THESE COMPANIES? >> HERE IS WHAT IS REALLY EXCITING, EVEN THOUGH CRYPTO CURRENCY MARKETS MIGHT BE DOWN, WHAT WE SEE IS THE INTEGRATION OF CRYPTOCURRENCY, DIGITAL ASSETS AND BLOCKCHAIN TECHNOLOGY INTO THE FINANCIAL SYSTEM, CONTINUING AT A REALLY RAPID PACE. WE SEE FIRMS LIKE APOLLO, KKR, AND FIDELITY THAT ARE LOOKING AT INNOVATIVE WAYS TO USE THE UNDERLYING TECHNOLOGY TO DELIVER PRODUCTS AND SERVICES THAT ARE BETTER, FASTER, AND CHEAPER, IN A NEW WAY. IS NOT NECESSARILY
CRYPTOCURRENCY IN THE TRADITIONAL SENSE, BUT A LOT OF INSTITUTIONS ARE LOOKING TO SEE HOW MUCH MONEY CAN MOVE, WITH SOME OF THE PROGRAM CAPABILITIES TO PROGRAM FINANCIAL ASSETS DIGITALLY ON A GLOBAL MEDIUM, AND THAT'S REALLY EXCITING. I THINK WE WILL CONTINUE TO SEE THAT INTEGRATION BETWEEN TRADITIONAL FINANCIAL SERVICES AND THE CRYPTO SECTOR. WILL IT BE DIGITAL ASSETS IN THE SENSE OF CRYPTOCURRENCY SPECIFICALLY? THAT IS AN OPEN QUESTION.
I THINK THE OPTIONS ARE STILL LIMITED TO A SMALL SET OF CRYPTOCURRENCIES BUT THAT INTEGRATION IS STARTING TO HAPPEN, AND THAT IS IN AREA WE ARE EXCITED ABOUT. EMILY: THANKS SO MUCH FOR JOINING US. COMING UP, WE'LL TALK ABOUT A NEW STARTUP AND THEIR LOCAL ARE -- CABLES. THIS IS BLOOMBERG. ♪ EMILY: A BAGEL WITH 90% FEWER CARBS, THAT'S WHAT A NEW CELEBRITY ACT EGLE VENTURE IS PROMISING. IS CALLED BETTER BREAD AND THE START OF HAS RAISED MORE THAN $5 MILLION. WE WENT TO INVESTIGATE IT. I ASSUME INVOLVED A TASTE TEST.
THEY SAY EVERY BAGEL CONTAINS THE SAME SUGAR CONTENT OF A STALK OF CELERY AND THE PROTEIN CONTENT OF FOUR EGGS. DOES IT ACTUALLY TASTE GOOD? >> YOU MISSED THE TASTE TEST WE HAD IN THE OFFICE A COUPLE OF DAYS AGO. THE CONSENSUS WAS DOESN'T QUITE TASTE LIKE A BAGEL, MOST FOLKS THOUGHT IT WAS PRETTY FAR OFF FROM A STANDARD BAGEL AND A GROCERY STORE BAGEL. EMILY:
SO WHAT'S THE BROADER CONSENSUS HERE? NOT THAT OUR BLOOMBERG TEAM ISN'T ENOUGH, BUT IS THE COMPANY HAVING SUCCESS? >> THE COMPANY HAS JUST ROLLED OUT ACROSS VARIOUS SUPERMARKETS, THEY HAD A BIG ROLLOUT IN THE FROZEN SECTION OF WHOLE FOODS. THEY HAVE A COUPLE OF DIFFERENT FLAVORS, CLASSIC, CINNAMON, THEY HAVE A PUMPKIN SPICE LABOR FOR HOLIDAY SEASON, THEY HAVE A CHOCOLATE CHIP FLAVOR FOR THOSE WHO LOVE SWEETS. THEY SEEM TO BE EXPANDING QUICKLY. THEY'RE LOOKING TO ROLLOUT IN EUROPE AND ACROSS LATIN AMERICA AS WELL AND ARE POSING ANOTHER ROUND OF FUNDING SHORTLY. EMILY: THE BIGGER QUESTION HERE, CAN YOU CALL IT A BAGEL IF IT'S NOT FULL OF CARBS? OR IS IT SOMETHING ELSE ENTIRELY? THERE ARE SOME CELEBRITY FOLKS INVOLVED.
IS THERE A REAL NEED THEY ARE FILLING HERE? >> THE COMPANY SAYS IT WANTS TO BE THE BEYOND MEAT OF CARBS AND CREATE A VERY LOW-CARB REDLINE FOR FOLKS WHO HAVE HEALTH ISSUES AND CANNOT EAT AS MANY CARBS AS ARE IN A STANDARD LOAF OF BREAD OR BAGEL. THIS COULD BE A SUBSTITUTE FOR FOLKS ARE REALLY TRYING TO CHANGE THEIR DIET IN A VERY SPECIFIC WAY. WHILE IT DOESN'T NECESSARILY TASTE EXACTLY LIKE A STANDARD BAGEL, THERE ARE PEOPLE OUT THERE SAYING IT RESEMBLES IT AND FEELS THAT NEED FOR ME IN SOME KIND OF WAY.
IT ISN'T ATTRACTING -- IS ATTRACTING INVESTMENT FROM SOME HOLLYWOOD CELEBRITIES AS WELL. THEY PLAN TO EXPAND TO OTHER BREAD PRODUCTS LIKE PRETZELS, THERE IS A PIZZA BAGEL OPTION AS WELL IN THE FROZEN FOOD AISLE AND THERE TALKING TO AIRLINES ABOUT PUTTING IT IN AIRPORT LOUNGES. EMILY: I WILL HAVE TO DO A TASTE TEST. THANK YOU FOR JOINING US.
THAT'S IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY." MAKE SURE YOU TUNE IN TOMORROW, OUR CONVERSATION WITH CISCO'S CHIEF WHO WILL BE JOINING US.
2022-10-04