'Bloomberg Technology' Full Show (10/07/2022)
>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE, IN SILICON VALLEY AND BEYOND, THIS IS "BLOOMBERG TECHNOLOGY" WITH EMILY CHANG. ♪ >> WE WILL TALK ABOUT WHY TECH IS IN A PARTICULARLY TOUGH POSITION. CHIPMAKERS WARN OF A MAJOR INDUSTRY SLOWDOWN SENDING TECH SHARES EVEN LOWER THE BIGGEST NAMES HIM AND D, SAMSUNG, MICRON ARE ALL SAYING THE SAME THINGS. DEMAND IS TUMBLING. WE'LL HAVE ON THAT AND A MOMENT. FACEBOOK IS SENDING ITS OWN WANTING TO USERS YOU MAY HAVE BEEN HACKED.
MEDA SAYS ONE MILLION USER LOGINS MAY HAVE BEEN STOLEN, COMPROMISE, WILL TALK TO THEIR SECURITY POLICY DIRECTOR. ALL THAT IN A MOMENT, LOOK AT THE ARCHITECT STOCKS -- MARKET STOCKS COME ACROSS FRIDAY AFTER THE IDEA THAT THE FED WILL BE AGGRESSIVE IN ITS HIKING. >> IT HAS BEEN A INTERESTING WEEK AND ENDED WITH A LOT OF RED ON THE SCREEN. GOOD ECONOMIC DATA IS BAD FOR THE MARKET. WHY? WITH EVIDENCE THAT STRENGTHEN THE LABOR MARKET THERE IS ALSO EVIDENCE THE ECONOMY CAN WITHSTAND HIGHER RATES. THE MARKET IS RESIGNED TO THE IDEA, THE FED WILL KEEP RAISING RATES.
WHY DO WE CARE IN THE CONCEPT OF TECH? THEY TRADE AT PRE-PROFIT OR HIGHER MULTIPLES, DISCOUNTING THE PRESENT VALUE OF YOUR PROFITS. THERE IS A LOT OF ANXIETY TO END THE WEEK PARTICULARLY IN METAL CAPS AND YIELDS THAT PULLBACK EARLIER IN THE WEEK AS WE SOLVE THE RALLY AND EQUITIES -- SAW THE RALLY AND EQUITIES GO HIGHER. WE ARE WORRIED ABOUT WHAT HAPPENS NEXT IN THE GLOBAL ECONOMY. >> TALK ABOUT THE CONCERNS OF THE FED, PLUNGING US POTENTIALLY INTO A RECESSION AND HOW IT WEIGHS ON INVESTORS. >> WE HAVE MOVED PAST THE MARKET MECHANICS CONVERSATION INTO WHAT HAPPENS IF WE DO THAT INTO A RECESSION. WHICH CORNERS OF THE TECHNOLOGY MARKET WILL FARE BEST, WALL STREET HAS BEEN GOING BACK ITS EXPECTATIONS, I HAVE THE 50 GLOBAL REVISION INDEX, FOR WEEKS AND WEEKS AND WEEKS NO EARNING EXPECTATIONS HAVE BEEN PULLBACK.
17TH STRAIGHT WEEK ON -- IN THE ROPE ON THE INDEX -- IN A ROW THAT WE SAW THE INDEX. STRATEGIST AT CITIGROUP ARE OVERWEIGHT GLOBAL TECHNOLOGIES. THE OTHER SCHOOL THOUGHT, IF WE HAVE A RECESSION, WHAT TECHNOLOGY -- WHAT SECTORS FARE BETTER? MANY CORNERS OF THE TECH MARKET HAVE ENTRENCHED MARKET POSITIONS COMING TO THINK OF APPLE, AMAZON, MICROSOFT HAVE A VERY STRONG BALANCE SHEET WEATHER THAT STORM.
IT IS A MIX FEELING, THE CONSENSUS FEELING -- THAT THE FED WILL CONTINUE, WE HAVE MOVED AWAY FROM THE IDEA OF A FED PIVOT WHERE WE SEE THE FED DIAL DOWN ITS RATE INCREASES AND EVENTUALLY START TO CUT RATES. IT IS BEEN A TOUGH WEEK I LIKE TO END THINGS ON THE POSITIVE NOTE, WE WERE ON THE RED FRIDAY, ON THE WEEK THE S&P 500 AND HAD GOOD WEEKS. >> OF COURSE WE HAD TO TALK ABOUT CHIPS, THE MARKET RATTLED BY WHAT AMD HAD TO SAY AND SAMSUNG HAD TO SAY. WRAP IT UP.
>> AMD GAVE SALES NUMBERS THAT CAME IN $1 BILLION BELOW EXPECTATIONS BLAMING SLOWDOWN THE CONSUMER MARKET. SAMSUNG THIS WAS THE FIRST DROP IN MARKET SINCE 2019, THEY ARE THE BIGGEST PLAYER IN MEMORY CHIPS. WE ARE GOING HARD IN THE IDEA THAT THEY CHIP SECTOR WOULD HAVE MULTIPLE YEARS OF EXPANSION NOW THERE IS A SLOWDOWN. YOU LOOK AT THE DECLINES, AMD DOWN 13.9%, THAT IS THE BIGGEST DROP SINCE MARCH 2020, CLEARLY THE MARKETS RATTLED AT THE SAME TIME WE SEE THE BIDEN ADMINISTRATION TRYING TO IMPROVE THE COMPETITIVENESS. I LOVE THIS CHART, IT IS THE NEW VERSUS OLD, I BORROW THIS FROM TAYLOR RIGGS.
WHEN WE LOOKED AT RECESSION RECENT LOOK AT TRANSPORT AND INDUSTRIAL,. . THESE DAYS IT IS EVERYTHING. WHEN WE SEE PAIN IN THAT SECTOR WOULD LOOK AT THIS CHART WE LOOK AT THE CRYSTAL BALL FOR THE GLOBAL ECONOMY THAT IS A LOT OF FUN FOR ME TO HAVE ON A FRIDAY AFTERNOON. >> THAT IS A DEEP CUT, THANK YOU, I WILL BE BACK WITH YOU LATER IN THE SHOW. CHIPMAKERS WARNING, DEMAND IS FALLING AS SURGING SHIPPING AND MATERIAL COST AND A LATEST SIGN OF TROUBLE SAMSUNG AND AMD REPORTING DISAPPOINT RESULTS. OUR RESIDENT CHIP EXPERT'S
RHYTHMS NOW. -- IS WITH US NOW. DID WE KNOW DEMAND WAS THAT? >> WE HAVE HAD COMPANY SAY FOR A WHILE NOW THAT THINGS ARE GETTING BAD AND WE HAVE A LOT OF INVENTORY. WHAT HAPPENED YESTERDAY PROVOKED ANALYST TO BE WRITING REPORTS WITH EXPLETIVES IN THE HEADLINE. IT WAS REALLY BAD FOR AMD. THEY SOLD SAMSUNG A BIG -- A BIT SHORT, THEY MAKE MEMORY BUT THEY ARE ALSO THE WORLD'S BIGGEST CHIPMAKER. IT IS BAD, IT IS WAY WORSE THAN WE THOUGHT.
RECALIBRATING PEOPLE SITE DICTATIONS, NO LONGER LOOKING FOR THE BOTTOM, THEY ARE BACK TO WORRYING ABOUT HOW BAD IT GETS [NO AUDIO] . >> YOU HAVE THE WHITE HOUSE ADDING NEW RESTRICTIONS ON CHINA'S ACCESS TO U.S. CHIP TECHNOLOGY IS THAT MAKING IT WORSE HERE? >> ABSOLUTELY, THAT IS AN ONGOING CONCERN. THIS IS NOT ONE ISOLATED INCIDENT THIS IS AN INCREMENTAL SET OF INTENT -- INTENSIFICATION OF DISPUTE BETWEEN THE TWO WORLD'S LARGEST ECONOMIES. IF YOU ARE AN INVESTOR YOU HAVE TO THINK WHAT WILL HAPPEN NEXT.
THE TREND IN SECURITY-RELATED, NATIONAL SECURITY-RELATED MEASURES IS TO INTENSIFY. THAT WILL PLACE GREATER RESTRICTIONS ON CHIPMAKERS THAT WANT TO DO BUSINESS IN CHINA. >> TALK A LITTLE MORE ABOUT WHAT IS BEHIND THE RULES FROM WASHINGTON AND HOW YOU EXPECT THEM TO EVOLVE. >> TO GIVE YOU AN EXAMPLE, WE HAD A STORY OUT EARLIER THIS WEEK WHICH, WHICH SAID THAT WHILE WAY -- A CHINESE COMPANY THAT HAS BEEN ON THE ENTITY LIST FOR A LONG TIME BEING CUT OFF FROM U.S. TECHNOLOGY WAS TAKING STEPS TO
WORK ALONG -- AROUND THAT. THERE IS CONCERN. WE NEED TO GET TOUGHER, WE NEED YOU MORE AND MORE TO CHOKE OFF CHINA'S ABILITY. JUST BEING BETTER THAN CHINA IN TECHNOLOGY IS NOT GOOD ENOUGH. WE NEED TO MAKE SURE WE FREEZE TECHNOLOGY -- CHINA'S TECHNOLOGY WE ARE MULTIPLE GENERATIONS AHEAD. >> HOW DO YOU THINK THIS WILL IMPACT THE ONGOING RELATIONSHIP BETWEEN THE U.S. AND CHINA AS IT PERTAINS TO CHIPS? >> WE HAVE NOT SEEN ANY REACTION FROM BEIJING YET.
PEOPLE WERE SURPRISED THAT BEIJING HAS BEEN SO RESTRAINED AND SO FAR. CHINA IS THE LARGEST MARKET FOR SEMICONDUCTORS, IF YOU ARE A U.S. COMPANY, EUROPEAN COMPANY AND THE INDUSTRY YOU HAVE TO BE THERE.
YOU HAVE TO HAVE THOSE SALES COME THAT REVENUE TO FUEL NEW INNOVATIONS THEY HAD. IT IS -- TUESDAY A -- TO ST AY AHEAD. IT IS A FINE LINE WASHINGTON HAS TO WALK, NOT CUTTING OFF THE MONEY SO THEY CAN KEEP THE MONEY FLOWING TO STAY HAD IN TECHNOLOGY. >> IAN HAS COVERED CHIPS FOR A COUPLE OF DECADES, THANK YOU FOR YOUR EXPERTISE TODAY. MEANTIME, TESLA'S ALL ELECTRIC TRUCK WILL ROLL OUT BEFORE THE END OF THE YEAR.
AND A TWEET ELON MUSK SAID PRODUCTION HAD BEGUN AND THE FIRST DELIVERY WILL HEAD TO PEPSICO TO SEVER FIRST -- DECEMBER 1. THE LAUNCH WAS DELAYED MANY TIMES DUE TO BATTERY ALE SHORTAGES AND FOCUSING ON CONSUMER MODELS. COMING UP ROSE -- IT WAS AN EMOTIONAL ROLLER COASTER, MARKET VOLATILITY, AND A SAFE >> AS WE DISCUSSED AT THE TOP OF THE SHOW IT WAS A BRUTAL DAY ON WALL STREET AFTER THE SEPTEMBER JOBS REPORT THE NASDAQ 100 HUNDRED MORE THAN 4%, AND MORE THAN SEVERE -- MORE SEVERE FED RATE HIKES PRICED INTO THE MARKET. CHIPS GOT CRUSHED AFTER THE THAT -- AFTER THEY WARNED OF AN INDUSTRYWIDE SLOWDOWN IN DEMAND. >> THE ONLY CHIPS RIGHT NOW ANYONE WANTS RIGHT NOW IS POTATO. THIS IS NOT GOOD FOR CHIPMAKERS. THERE ARE TWIN PRESSURES, THE
WEEKEND -- WE CAN CONSUMER DEMAND TO PCS, AND THE RESTRICTIONS ON SELLING TO CHINA MEANS A MASSIVE MARKET IS OFF LIMITS. IT WILL CAUSE PROBLEMS WITH THE HARDWARE COMPANIES. THEY ARE THE ONES WHO ARE BUYING THE CHIPS, THEY ARE NOT BUILDING HARDWARE, APPLE LOWERED FORECAST FOR SOME OF THE MODELS OF ITS NEW IPHONE, AN EARLY INDICATOR OF THE TROUBLE TO COME. >> WHEN YOU LOOK AT OTHER AREAS OF TECHNOLOGY, SOCIAL MEDIA, ADVERTISING, THERE IS STREAMING. WHERE YOU SEE OTHER POTENTIAL
PROBLEM AREAS? >> EVERYWHERE. I THINK IT IS JUST GOING TO BE A TOUGH QUARTER. WITH ADVERTISING WAS SEEN BASED ON THE WANING CONSUMER DEMAND, GOOGLE, PINTEREST, SNAP, META ARE IN FOR A TOUGH HOLIDAY SEASON. MOST OF THE RALLIES IN TECH ARE NOT BASED ON FUNDAMENTALS. THE RALLY -- THE REALITY IS THE FACTUAL PICTURE FOR THE HIGH-PRICED UNPROFITABLE COMPANIES HAS BEEN SO HIGH OVER THE LAST FEW YEARS. EVEN NOW AS STOCK PRICES COME DOWN, YOU LOOK AT THEIR PE RATIOS THEY ARE STILL INSANE THEIR EXCESSIVE COMPANIES.
>> HOW MUCH MORE TECH ALSO THE ARE YOU PREPARING FOR? ARE YOU PREPARING FOR THIS DOWNTURN TO LAST A GOOD LONG TIME? >> YES. I AM A BEAR PREPARING FOR A LONG COLD WINTER. THERE IS NOT A LOT TO BE BULLISH ABOUT RIGHT NOW IN THE U.S.. WITH THE FED VERY HAWKISH STANCE EVEN TODAY ABOUT INFLATION. THE RATE HIKES WILL CONTINUE UNTIL THE MORALE IMPROVES AND THAT IS PROBABLY NOT UNTIL MID TO LATE 23. GLOBALLY THINGS HER WAY WORST. WE ARE THE BRIGHT SPOTS
GLOBALLY. THE U.K.'S AND -- IS IN CHAOS. RUSSIA AND CHINA'S, ALL THE PROBLEMS GLOBAL CENTRAL BANKS ARE HAVING BE HUG -- BECAUSE OF THE DOLLAR STRENGTH RIGHT NOW. THERE ARE A LOT OF PROBLEMS AND YOU HAVE TO BEND DOWN THE HATCHES, I AM A FAN OF SELLING IF YOU CAN GET OUT WITH A PROFIT. THEN BUYING THE DIPS, IF YOU ARE PASSIONATE ABOUT A BUSINESS AND CA REASONABLE PE -- SEE A REASONABLE PE RATIO, CONSIDER BUYING. I AM LOOKING AT THE FIVE YOUR CHARTS AND SAYING, IS THIS COMPANY WHERE IT WAS BEFORE COVID? OR IS IT STILL PRICED WAY HIGHER BECAUSE OF THE BUMP IT GOT DURING THE PANDEMIC? >> HOW IS THIS IMPACTING YOUR STRATEGY AND OTHER VENTURE CAPITALIST STRATEGY? WE HAVE BEEN TALKING ABOUT ALL THIS DRY POWDER THAT IS STACKING UP ON THE SIDELINE WITH NOWHERE TO GO. >> I THINK M&A'S ARE THE NEW IPO FOR COMPANIES, STARTUPS ARE LESS FOCUSED ON AN IPO, WE SAW THAT A LOT OF THE TECH IPOS ARE NOT WORKING, THE EXIT FROM THE PUBLIC MARKET WAS A BIG PIECE OF THAT, THE ELLA THANH CEO FLAT OUT SAYING, SIX-MONTH -- MORE MONTHS AND THEY WILL SELL OUT AND GO PRIVATE. IT IS A GOOD INDICATOR THAT
STAYING PUBLIC AS AN UNPROFITABLE TECH COMPANY RIGHT NOW IS --. WE WILL SEE A LOT MORE LATE STAGE M&A ACTIVITY. WHEN IT COMES THE DRY POWDER, VCS HAVE A LOT OF IT BUT THEY ARE SITTING ON IT. WHAT I'M HEARING FROM MY PEERS, THEY ARE SPENDING MORE TIME IN MONDAY EVENINGS TRIAGING THE CURRENT PORTFOLIO THAN THEY ARE LOOKING AT NEW DEALS. THIS IS IN LARGE PART BECAUSE COME OF NEW DEALS ARE SOMETIMES REACTING FROM 2021 PRICES COME IN VC'S ARE VERY MUCH MADE BETWEEN 22 RECESSION MINDSET. --2022 RECESSION MINDSET. UNTIL PRICES REFLECT THIS
MOMENT, A LOT OF MY PEERS ARE SITTING ON THE SIDELINE. EMILY: TALKING ABOUT LATE STAGE M&A I HAVE TO ASK YOUR THOUGHTS ON THE LATEST IN THE ELON MUSK TWITTER SAUCE -- SAGA. TWITTER HOLDING MUSK TO THE DEAL, MUSKA SAYING OK. WHAT IS YOUR TAKE ON WHAT IS HAPPENING AND IF THIS DEAL HAPPEN? >> SO MANY BIT -- EMBARRASSING TEXT MESSAGES, JUST SO MANY. I THINK, THE WHOLE SITUATION IS JUST GETTING TO A POINT WHERE ELON IS DISPLAYING WHAT SEEMS TO BE A RARE ALMOND OF ACCEPTING -- MOMENT OF ACCEPTING REALITY. I AGREED TO BUY IT SO I WILL HAVE TO BUY IT.
I THINK THAT IS THE BEST OUTCOME FOR SHAREHOLDERS. WILL THAT BE THE BEST OUTCOME FOR TWITTER USERS AND EMPLOYEES? I DO NOT KNOW, AT THIS POINT THAT LOOKS LIKE THAT WILL HAPPEN. EMILY: SARAH, MANAGING DIRECTOR AT CLIO CAPITAL, LOVE HAVING YOU, THANK YOU SO MUCH FOR JOINING US ON THIS VOLATILE FRIDAY AFTERNOON. BLOOMBERG REPORT ABOUT DRAFTKINGS ESPN DEAL IN THE WORKS, SANDED SHARES HIGHER, HOW DOES THE FAMILY BRAND EMBRACE -- SEND SHARES HIGHER COME HOW DOES A FAMILY BRAND EMBRACE SPORTS GAMBLING? THIS IS BLOOMBERG.
♪ EMILY: ESPN IS NEARING A LARGE NEW PARTNERSHIP WITH SPORTS BETTING FIRM DRAFTKINGS, THE DEAL WOULD PAVE THE WAY FOR THE MEDIA DRIED TO CAPITALIZE ON THE GROWING WAVE OF LEGALIZED SPORTS BETTING. ON THIS BLOOMBERG REPORT, DISNEY ALREADY OWNS A STAKE IN DRAFTKINGS, HERE TO DISCUSS IS OUR DEALS REPORTER. WHAT DO WE KNOW? >> WE KNOW THAT THERE IS AN INTENTION FOR A LARGE PARTNERSHIP BETWEEN DRAFTKINGS AND ESPN'S WHICH IS OWNED BY DISNEY. HOW EXACTLY THE DEAL WOULD BE STRUCTURED, HOW IT WILL BE PAID, WE DO.
NOT HAVE MUCH DETAIL. . IT WOULD BE A BIG STEP FOR ESPN TO REALLY TAKE ADVANTAGE OF THE LEGALIZING SPORTS BETTING AND ALMOST HALF THE COUNTRY NOW. -- IN ALMOST HALF THE COUNTRY NOW.
WOULD BE A CULTURE SHOCK, WITH THE WHOLESOME IMAGE THAT THEY HAVE A NEW BE A BIG STEP. >> THERE HAS BEEN SPECULATION ABOUT AN ACQUISITION IS IS A STEP IN THAT DIRECTION? >> BECAUSE OF THE CULTURE DIFFERENT, RIGHT NOW WE ARE NOT HEARING ABOUT AN OUTRIGHT ACQUISITION. IN ORDER TO DO THAT, DRAFTKINGS IS THE LIFE IN FLORIDA SPORTS BETTING, ESPN WANTS TO GET INTO IT IN A BIG WAY IT WOULD MAKE SENSE FOR THEM TO BUY IT. DRAFTING -- DRAFTKINGS STOCK PRICE IS TRADING AROUND $16, THE HIGH IN MARCH OF LAST YEAR'S 72.
YOU COULD SAY IT IS ACHIEVED BY. -- AJIT PAI -- A CHEAP BUY. WE ARE NOT SURE OF DISNEY SHAREHOLDERS ARE READY TO MAKE THAT STEP YET. EMILY: WHAT ABOUT WHEN IT COMES TO OTHER SPORTS GAMBLING PLATFORMS MORE BROADLY? I FEEL LIKE I HAVE HEARD DRAFTKINGS M&A SPECULATION FOR A COUPLE OF YEARS.
>> DRAFTKINGS IS IN A REALLY COMPETITIVE SPACE THEY ARE CONSTANTLY AT WAR WITH PLACES LIKE BAND DUAL COME -- FAN DUEL, THEY ARE OFFERING CHEAP DISCOUNTS OR GIVING USERS FREE MONEY TOGETHER PLATFORMS. THERE IS A LOT OF ROOM FOR CONSOLIDATION. WITH THIS PARTNERSHIP WITH ESPN HOW IT LOOKS LIKE IT WILL BE UNCLEAR. IT COULD ON -- EMERGE LOOKING LIKE A NEW PLATFORM, LIKE IN ES AGAIN -- ESPN PLATFORM, OR COULD BE ON THE ESPN APP.
IT COULD BE MORE DEALS, DRAFTKINGS HAS NOT BEEN PUBLIC FOR THAT LONG. THEY ONLY WENT PUBLIC TO RACE BACK ABOUT A YEAR AGO -- THROUGH A SPAK A YEAR AGO. THE STOCK PRICE IS NOT DOING THEM TO OUTCOME OF THEM TO SELL EQUITY WOULD BE CHALLENGING. THERE WILL BE CONSOLIDATION IN THE SPACE WE DO NOT KNOW WHO IS BUYING AND WHO IS SELLING? EMILY: WHAT IS YOUR TAKE ON THE PACE OF M&A AND IPO'S TO THE END OF THE YEAR? GIVEN THIS IS YOUR BEAT AND WE HAD A GUEST SAYING SHE HAS BUNDLING UP FOR THE WINTER. >> SHE SAYS E-MINIS ARE THE NEW IPO'S, WE HAVE NOT SEEN A LOT OF -- SHE SAYS E-MINIS ARE THE NEW IPO'S, HISTORICALLY PRE-THANKSGIVING HAS BEEN A GOOD TIME FOR IPO'S.
WE HAVE NOT SEEN A LOT OF THEM. THERE HAVE BEEN ONE OR TWO COMPANIES THAT COULD GO PUBLIC THIS YEAR, IT HAS BEEN QUITE. M&A IS COMING BACK IN SOME WAYS, THE FINANCING IS EXTREMELY CHALLENGING. IF YOU LOOK AT TECHNOLOGY THAT IS GROWING, AND NOT REALLY GENERATING CASH FLOW, THOSE NOTHINGS INVESTORS LIKE RIGHT NOW. ALL IN ALL IF YOU ARE GROWTH COMPANY LOOKING TO IPO OR M&A IT IS A TOUGH ENVIRONMENT. A LOT OF DEALMAKERS ARE SAYING
WE SHOULD EXPECT IT TO COME BACK IN 2023, EVEN THE SECOND QUARTER, NOT EVEN THE SECOND -- FIRST QUARTER. ALL OF WILL BE MARKET DEPENDENT. WE WILL CONTINUE TO TRACK IT. EMILY: SECOND QUARTER OF 2023 WILL BE LOOKING FOR TO THAT. THANK YOU SO MUCH FOR STOPPING
BY CRYSTAL. AS WE TALK ABOUT MEDIA COMPANIES LOOKING TO CASH IN AS MORE U.S. ESTATE LEGALIZED SPORTS -- STATES LEGALIZED SPORTS BETTING, BLOOMBERG THE LINEUP CONTINUES TONIGHT. YOU DO NOT WANT TO MISS IT. COMING UP HOW SOME 400 MALICIOUS ANDROID AND IOS APPS MAY BE TARGETING YOU TO STEEL YOUR LOGIN INFORMATION. THE DIRECTOR OF GLOBAL THREAT
DETECTION AT META JOINS US FOR MORE. HOW THE LOOMING ENERGY CRISIS WILL IMPACT THE CAR AND TECH INDUSTRY. THIS IS BLOOMBERG. ♪ EMILY: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." I AM EMILY CHANG IN SAN FRANCISCO, GET BACK TO THE MARKETS THE VICTORY OF THE WEEK ELON AND HIS TWITTER TAKE, POTENTIALLY NOT A DONE DEAL YET. ED LUDLOW HAS BEEN LOOKING LOOK DEEPER. WHAT DO WE KNOW?
>> FRIDAY, THERE WAS NO NEWS ABOUT THE DEAL AT ALL, MASSIVELY FOR ME BECAUSE I HAD NOT SLEPT IN FOUR DAYS, LOOK AT THE DISCLOSURE, ELON HAS COME BACK TO TWITTER FOR THE ORIGINAL OFFER, IN THE FOUR SESSIONS THAT FOLLOWED THE STOCK TRICKLE LOWER AGAIN. THEY HAVE CONCERNS ABOUT THE FINANCING OF THE DEAL AND HOW LIKELY IT IS TO HAPPEN, WE CONTINUE TO LOOK AT THIS SPREAD. THIS IS THE GAP BETWEEN THE $54.20 PER SHARE OFFER AND THE CURRENT SHARE PRICE. HAS NOTICEABLY COME DOWN IN RECENT SHIP -- SESSIONS. THE COURT HAS SUSPENDED, PULLED THE TRIAL UNTIL OCTOBER 20, TELLING THE TWO SIDES THAT THEY NEED TO CLOSE THE DEAL BY 5 P.M. OCTOBER 28. IF NOT THEY WILL HEAD TO TRIAL
IN NOVEMBER, IN THE BROADER CONTEXT OF MARKET THE INTEREST -- THE INTERESTING STUFF TO WATCH IS TESLA. THEY HAVE HAD THEIR WORST WEEK SINCE MARCH OF 2020. IT IS NOT THE IDEA THAT ELON MUSK HAS TO SELL TESLA SHARES TO FIND THAT SOME OF THE CHAIR BUYING OF TWITTER, THERE IS THIS RISK THAT YOU WILL BE DESK HE WILL BE DISTRACTED RUNNING A THIRD COMPANY -- THAT HE WILL BE DISTRACTED BY RUNNING A THIRD COMPANY. IS NOT JUST A NEW SKYPE -- CYCLE, TESLA TRADES AT HIGHER MULTIPLES, IT IS VULNERABLE TO THE NAME -- NARRATIVE OF HIGHER RATES. WE ARE NOT GOING TO DELAWARE,
ON A DAILY GREAT -- DAILY BASIS WE CONTINUE TO TRACK THIS DEAL. EMILY: ED LUDLOW COME I HOPE YOU GET SOME SLEEP THIS WEEK AND -- I HOPE YOU GET SOME SLEEP THIS WEEKEND. EMILY: META HAS REPORTED MORE THAN 400 CREDENTIAL THEFT MALWARE APPS TO GOOGLE AND APPLE, THEY WERE DISGUISED APPS AS GAMES, HEALTH RECORDS, AND CAN TARGET MORE THAN JUST FACEBOOK ACCOUNT.
FOR MORE ON THIS, META'S DIRECTOR OF GLOBAL THREAT DISRUPTION DAVID AGRANOVICH. >> THANK YOU SO MUCH FOR HAVING ME, AND I APPRECIATE HAVING THE OPPORTUNITY TO TALK ABOUT THIS REPORT. TODAY WE RELEASED RESEARCH ABOUT 400 MILITIAS APPLICATION -- MALICIOUS GLOBAL APPLICATIONS, THERE WERE LISTED ON THE GOOGLE PLAY STORE AND THE APPLE APP STORE. THEY WOULD BE VPN SERVICES, BUSINESS APPS, MOBILE GAMES, THEIR UTILITIES TO YOUR PHONES TO TRICK PEOPLE INTO DOWNLOADING THEM. EMILY: HOW DO YOU KNOW IF YOU HAVE BEEN AFFECTED? HOW CAN YOU TELL? >> BECAUSE THESE APPLICATIONS ARE AVAILABLE ON THE OPEN INTERNET THERE IS NO SINGLE COMPANY TO PROTECT PEOPLE.
WE KNOW THAT SCAMMERS ADAPT TO PROTECTION BY APP STORES, RESEARCHERS. HERE WE REPORTED FINDINGS TO APPLE AND GOOGLE, ALL THESE APPLICATIONS HAVE BEEN TAKEN DOWN AS FAR AS WE KNOW. WE ARE SENDING TO NAVIGATIONS USES ON OUR PLATFORM WHO MAY HAVE BEEN IMPACTED BY THE APPLICATIONS. THOSE NOTIFICATIONS WILL INCLUDE STEPS PEOPLE CAN TAKE TO PROTECT THEIR ACCOUNTS MORE EFFECTIVELY AS WELL AS SOME TIPS ON HOW TO SPOT THESE TYPES OF APPLICATIONS ELSEWHERE ON THE INTERNET. EMILY: WHY ARE YOU DOING THIS NOW?
SURELY THIS HAPPENED BEFORE, RIGHT? >> OUR TEAMS HAVE BEEN INVESTIGATING THIS TYPE OF APPLICATION ACTIVITY FOR YEARS. WE ARE ALWAYS LOOKING FOR MALWARE OR OTHER EFFORTS TO -- TO STEEL PEOPLE -- TO STEAL. PEOPLE'S CREDENTIALS. THIS PARTICULAR PSA IS THE FIRST TIME WE ARE RELEASING THIS. IN ADDITION TO GETTING THE APPS TAKEN DOWN AND PROVIDED TOOLS FOR PEOPLE DIE DEAD BY THE APPS, WE FELT IT WAS IMPORTANT FOR PEOPLE -- TO IDENTIFY THE APPS, WE FELT WAS IMPORTANT FOR PEOPLE TO HAVE THE ABILITY STAY SAFE ACROSS THE INTERNET. TO KNOW WAS A LOOK FOR SOME IS TRYING TO TARGET THEM WITH AN APPLICATION LIKE THIS. EMILY: YOU WORKED WITH THE U.S.
GOVERNMENT YOU LEAD EFFORTS TO ADDRESS FORM -- FOREIGN INTERFERENCE IN DEMOCRATIC SYSTEMS AND ELECTIONS, WE HAVE A MIDTERM ELECTION COMING UP, WHAT ARE YOU CONCERNED ABOUT WHAT IS META DOING THIS TIME? >> WHENEVER THERE IS ELECTION WE KNOW WE HAVE TO STAY VIGILANT, OUR TEAMS ARE MONITORING STRESS ON OUR PLATFORM. A GOOD EXAMPLE IS LAST WEEK. WE RELEASED A REPORT INTO TO INFLUENCE OPERATIONS, ONE FROM RUSSIA AND ONE FROM CHINA THAT WE CAUGHT EARLY. IN THAT REPORT WE CAUGHT -- WE SHOWED A BUNCH OF INFORMATION ABOUT WHAT THEY WERE DOING, WHAT WE HAD DOWN, WHO WE BELIEVE WAS BEHIND THE ACTIVITY. IN THAT CASE LIKE WE DID WITH
THE MOSYS APP ACTIVITY TODAY, WE SHARED -- MALICIOUS APP ACTIVITY TODAY WE SHARED INFORMATION WITH GOVERNMENT AGENCIES AND THE PUBLIC SO THEY KNEW WHAT TO EXPECT. EMILY: I SPOKE WITH FRANCIS EARLIER THIS WEEK, THE FACEBOOK WHISTLEBLOWER, SHE RAISED CONCERNS ABOUT SECURITY IN SOCIAL MEDIA. SHE USED AN INTERESTING METAPHOR, TAKE A LOOK AT THIS. >> RIGHT NOW WE CANNOT SEE BEHIND THE CURTAIN OF SOCIAL MEDIA. WE WERE ABLE TO PUSH FOR SAFETY FEATURES IN CARS FROM THE DEPARTMENT OF REDUCING THE FERTILITY RATE OF -- FATALITY RATE OF AUTOMOBILE ACCIDENTS. WE CANNOT CRASH TEST SOCIAL MEDIA.
WE DO NOT KNOW WHAT TO DEMAND. EMILY: WHAT YOU THINK OF HER THOUGHT THERE? DO YOU THINK MORE REGULATION WOULD HELP? >> I THINK THE SECURITY AREA OF MY TEAM FOCUSED ON IS AN AREA WE HAVE WORKED VERY HARD TO BE TRANSPARENT ABOUT OUR WORK. WE HAVE REPORTED ON MORE THAN 150 COORDINATED INAUTHENTIC INFLUENCE OPERATIONS ARE THE LAST SEVERAL YEARS THAT HAVE ORIGINATED FROM 50 DIV AND COUNTRIES OPERATING IN 30 DIFFERENT LINKAGES -- DIFFERENT COUNTRIES AND OPERATING DIFFERENT LINKAGES -- LINKAGES. I THINK THERE IS MORE WORK TO BE DONE IN THE SECURITY SPACE, THE MORE IMPORTANT WORK HERE IS THAT WE ARE SHARING INFORMATION WITH OUR INDUSTRY PARTNERS. SHARING WITH GOVERNMENT WHERE APPROPRIATE, AND MORE IMPORTANTLY SHARING WITH THE PUBLIC AND PUBLICIZING THE FINDINGS, ENABLING THE RESEARCH INTO THESE TYPES OF BEHAVIORS. NOT JUST ON BE -- PLATFORM, BUT ON THE INTERNET IN GENERAL.
EMILY: THERE HAVE BEEN BROADER QUESTIONS LATELY ABOUT HOW MUCH META IS INVESTING, NOT JUST ENGLISH-LANGUAGE PLATFORMS. YOU HAVE TENS OF THOUSANDS OF PEOPLE WORKING ON TRUST AND SAFETY AROUND THE WORLD. WHAT CAN YOU TELL US ABOUT HOW MUCH OF THAT INVESTMENT IS FOCUSED ON LANGUAGES OTHER THAN ENGLISH? >> OUR SECURITY WORK IS GLOBAL. AS I MENTIONED WE HAVE TAKEN
DOWN MORE THAN 150 COORDINATED INAUTHENTIC OPERATIONS AROUND THE WORLD. THEY OPERATED FROM MORE THAN 50 DIFFERENT COUNTRIES IN MORE THAN 30 EVENT LANGUAGES. WE ARE WORKING TO PROTECT PEOPLE ON THE PLATFORM WHEREVER THEY HAPPEN TO BE. THERE IS MORE WORK TO BE DONE, BY FOCUSING ON BEHAVIORS ACROSS FIVE ON WE CAN DO THE MOST KEEP PEOPLE SAFE -- >> WHAT IS KEEPING YOU UP AT NIGHT? >> WE ARE LASER FOCUSED ON PROTECTING ELECTIONS AROUND THE WORLD, THE U.S. MIDTERMS COMING UP SOON. THE RESULT ELECTION THAT JUST HAPPENED. OUR TEAMS ARE MONITORING FOR SECURITY THREATS RELATED TO THOSE ELECTIONS AS WELL AS BROADER GLOBAL POTENTIAL THREATS. IT IS A POTENTIAL WE CAN HAVE
AFTER THE MIDTERMS COME IT WILL BE INTERESTING. EMILY: I WOULD LIKE THAT, DAVID AGRANOVICH META DIRECTOR OF THREAT DISRUPTION. THANK YOU FOR STOPPING BY. OUR NEXT GUEST RAISED $11 MILLION DESPITE THE WORST CRYPTO DOWNTURN IN YEARS, LET'S TALK ABOUT THE GROWING DEMAND FOR CRYPTO ACCOUNTING SOFTWARE NEXT. THIS IS BLOOMBERG. EMILY: TIME NOW FOR OUR CRYPTO REPORT TODAY WE ARE FOCUSING ON CRYPTO ACCOUNTING.
AFTER THEIR $11 MILLION FUNDING ROUND, WE ARE IN NEW YORK. >> THANK YOU SO MUCH WE WILL BRING IN TACTICS FOUNDER AND CEO. IS SUCH AN INTERESTING TO SEE -- THING TO SEE ANOTHER COMPANY RAISE MONEY IN THE CRYPTO DOWNTURN, WITH SO MUCH VOLATILITY IN THE CRYPTO MARKET THE CLIENTS MUST HAVE A HARD TIME HERE IN TERMS OF GETTING A HANDLE OF WHAT IS WORTH AND HOW TO ACCOUNT FOR IT. WHAT IS THE BIGGEST CHALLENGES YOUR CLIENTS ARE FACING AMID THE VOLATILITY NOT JUST BITCOIN, BY ALL SORTS OF WEB THREE ASSETS? >> WE ARE SEEING PEOPLE USE DIFFERENT WALLETS ACROSS DIFFERENT LODGINGS IN DIFFERENT CURRENCIES IS HARD TO GET A VIEW OF THE ENTIRE ECOSYSTEM. >> CURRENCIES ARE ALSO FLUCTUATING LIKE CRAZY, HOW DOES THAT COMPOUND THE ISSUE HERE? IS A HARDENED OUT TO ACCOUNT FOR CRYPTOCURRENCIES AND IT WAS A YEAR AGO FOR SOME REASON? >> I DO NOT KNOW IF IT WAS INHERENTLY MORE DIFFICULT IT IS INHERENTLY MORE IMPORTANT GIVEN THE INCREASED REGULATORY SCRUTINY.
>> THE SCRUTINY ALSO, RULES HAVE CHANGED YOU HAVE SEEN OTHER COMPANIES LIKE MICROSTRATEGY MOLD TO THE ACCOUNTING WHEN IT COMES TO BITCOIN. HOW WILL RULES CHANGED, MAKING IT DIFFERENT FOR FIRMS TO -- TO WHAT REGULATORS ARE ASKING OF THEM? >> WE HAVE A LOT OF ACTIVITY IN TECH COMPANIES, VENTURE CAPITAL FIRMS REMAIN EXTREMELY BULLISH ON APPLICATIONS OF BLOCKCHAIN TECHNOLOGIES AND THAT TRANSLATES FOR MORE CAPITAL FOR TECH COMPANIES. VENTURE CAPITAL IS COOLING IN ALL SECTORS INCLUDING THE CRYPTO SPACE. VENTURE FIRMS STILL HAVE A LOT OF COMMITTED CAPITAL TO DEPLOY. THEY ARE SLOWING THE PACE, BUT THEY ARE LOOKING MUCH MORE CLOSELY AT FINANCIALS OF CRYPTO COMPANIES BEFORE THEY CONTINUE TO FUND THEM. RIGHT NOW THE LANDSCAPE IS SO COMPLICATED AND FRAGMENTED, IT IS INCREASINGLY DIFFICULT FOR THE COMPANIES TO SURVIVE.
>> THAT IS INTERESTING, YOU YOURSELF WERE JUST IN THE MARKET WHEN IT COME TO DASHCAM TO FUNDRAISING. WHAT ARE -- WHEN IT CAME TO FUNDRAISING. WHAT RBCS ASKING OF THE CRYPTO WORLD? >> THEY WANT A CLEARER VIEW OF FINANCIALS.
THE SAME AS ANY TRADITIONAL COMPANY ALLOW THAT REVENUE AND ALLOW THAT SPEND IS COMING IN THE FORM OF TOKENS. IT IS MORE DIFFICULT TO TRACK THAN AN ORDINARY U.S. DOLLAR. >> IF IT IS IN THE FORM OF A TOKEN, EVEN FOR YOURSELF, HOW ARE YOU TAKING MONEY FROM CLIENTS? HOW HAS YOUR BUSINESS BEEN IMPACTED IN A CRYPTO WINTER? >> WE OPERATE ALMOST ENTIRELY IN TRADITIONAL U.S. DOLLARS AND CONTINUE TO USE TRADITIONAL PRODUCTS IN THAT SPACE. THAT IS THE WAY OUR CLIENTS
OPERATE FOR THE MOST PART. WE ADMITTEDLY CONTINUE TO LIVE IN A FIAT WORLD, A PRIVATE COPY WILL PAY FOR OFFICE SPACE, AND PAY EMPLOYEE SALARIES IN U.S. DOLLARS. TOKEN SPEND, IN VARIOUS CRYPTOCURRENCIES IS GOING TO BE AN INCREASING PART OF THEIR BALANCE SHEET AS DIGITAL AS ADOPTION CONTINUES. >> WHEN YOU'RE LOOKING AT CRYPTO YOU TALK ABOUT TOKENS, YOU ALREADY MENTION HERE THE DIFFICULTIES WHEN IT COMES TO ACCOUNTING FOR THEM. WHAT ABOUT OTHER ASSETS? NFT'S AND OTHER TYPES OF WEB THREE ASSETS, HOW IS THAT WHEN IT COMES TO BEING ACCOUNTABLE SHAREHOLDERS AND REGULATORS? >> I THINK THAT IS AN EXTREMELY DIFFICULT QUESTION RIGHT NOW TO ANSWER AND IT WILL BE UNFOLDING IN THE NEXT SEVERAL MONTHS. HOW DO WE GOVERN SOMETHING THAT IS THEORETICALLY DECENTRALIZED AND IS NOT INCORPORATED THE SAME WAY A TRADITIONAL COMPANY IS.
>> THE THING THAT MAKES THIS EVEN POSSIBLE IS YOU ARE WORKING WITH COINBASE AND CUSTODIAN AND THINGS LIKE THAT. HOW MUCH -- HOW MUCH EASIER WORK GROWING BOTH ON THE CRYPTO SIDE AND THE TRADITIONAL FINANCE SIDE? >> I THINK IT WILL BE ABSOLUTE CRUCIAL HERE, THAT'S WHY WE ARE EXCITED TO BE BACKED AS A LEADER IN THIS SPACE. WE ARE BACKED BY COINBASE AS WELL BECAUSE THERE WILL BE A LOT OF PLAYERS AND ECOSYSTEM. >> EVEN THOUGH THERE IS A LONGER-TERM VIEW OF THE LETTER PLAYERS IN THE ECOSYSTEM THE REALITY IS IT IS A TOUGH MARKET NOW. IF THAT IS A CASE, YOU SAID YOU ARE IN FIAT, HOW DO YOU NAVIGATE YOUR BUSINESS ANYTIME YOUR CLIENTS ALSO HAVE A TOUGH TIME? >> WE ARE LUCKY TO WORK WITH PEOPLE HAVE A LONG-TERM TIME.
DIGITAL ASSETS SUCH AS ENTITIES AND VERY -- VARIOUS DIGITAL TOKENS, MANY OF RETAIL INVESTORS WHO HAVE LOST MONEY STAY AWAY FROM CRYPTOCURRENCIES. WHEN YOU LOOK AT FINANCIAL INSTITUTIONS WITH MUCH LONGER TIME HORIZONS THEY LOOK AT FIVE TO 10 YEARS OUT THEY HAVE NOT ABANDONED IT AS A AS A CLASS. -- AS AN ASSET CLASS. >> THANK YOU FOR WALKING US THROUGH IT. EMILY, BACK TO YOU. EMILY: TECH AND EV COMPONENTS MAKER IS MAKING BIG INVESTMENTS IN THE FUTURE OF GREEN ENERGY WHILE FIGHTING A SHORTAGE AND CHIPS. AN EXCLUSIVE INTERVIEW WITH A TOP EXECUTIVE COMING UP NEXT. THIS IS BLOOMBERG.
♪ EMILY: CARMAKERS IN TECH COMPANIES AROUND THE WORLD ARE FACING THE PROSPECT OF AN ENERGY CRISIS AND VOLATILITY IN CHIP SUPPLIES, THIS WILL CONTINUE ACCORDING TO THIS TECH AND EV BOSS. THE TOP EXECUTIVE AT BOSH SPOKE WITH ED LUDLOW. >> WE ARE FIGHTING AGAINST THE SUPPLY SHORTAGE, BUT WE WILL SEE, EVEN IF THE DEMAND IS SLOWING, SOME PARTS OF PRODUCTIONS ARE REALLOCATED, THERE IS STILL A DEMAND THAT WILL LAST FOR MONTHS, EVEN IF WE SEE EXCESSIVE MOTIONS, ESPECIALLY ON THE CAR SIDE WE REMAIN STABLE FOR SOME AMOUNT OF TIME. >> GIVING US SOME GRANULARITY IN THE SUPPLY CHAIN COME WHERE ARE THE PAIN POINTS PRESENT? WHERE ARE THINGS IMPROVING? WHEN IT COMES TO ENERGY AND INCOME -- COSTS WHERE YOU STILL FIGHTING INFLATION? >> IT IS THE SEMICONDUCTORS, THE SEMICONDUCTORS USED IN MOTORS, WE ARE TALKING ABOUT HUNDRED NANOMETER OR 90 NANOMETER, THERE ARE 40 OR 23 FOR THE CONTROLLERS WE USE, EVEN IF WE SEE THE SLOWING DOWN IN THE MARKET, THAT UNLOCKS -- THE SUPPLY WOULD STILL BE CONSTRAINED FOR THE NEXT YEAR, THEY WOULD NOT BE A COMPLETE -- THERE WILL ALWAYS BE A BIT OF A FIGHT FOR COMPONENTS. THE ENERGY PART IS A RISK FOR THE PARTS OF THE SUPPLY CHAIN ON THE RAW SERIAL SIDE ENERGY INTENSIVE. IT IS A SUPPLIER QUESTION WE HAVE AT OUR PARTNERS IN TIGHT CONTROL, WHERE ARE THINGS GOING, WHAT IS IN THE PRICING, AND IT DOES NOT MAKE THINGS CHEAPER IT MAKES IT MORE EXPENSIVE.
>> WHAT DO YOU MAKE OF THE PRESIDENT BIDEN'S BIG'S PUSH TO MAKE MANUFACTURING CAPACITY AND THAT STATES, A PLAN THAT WILL LAST A DECADE TO GET FULLY OPERATIONAL. IS THAT SOMETHING YOU ARE POSITIONING FOR OR PREPARING FOR? >> IT RESONATES VERY MUCH WITH US. WE ARE VERY STRONG WITH EUROPE, REASONABLY STRONG IN ASIA, WE SEE OURSELVES UNDERREPRESENTED HERE, WE ARE STRONG, BUT WE SHOULD BE MUCH STRONGER, THAT RESONATES VERY WELL, I AM VERY HAPPY OF THIS POLICY. WE ARE EXPANDING, GROWING, BUYING COMPANIES, INVESTING. WE WILL ANNOUNCE FURTHER
INVESTMENT IN OUR FACILITIES. WE INVEST IN MEXICO, WE EXPANDED A NEW COMPANIES WE BUY. IN THE AMERICAN SPACE, IN USA IT IS COST FOR US. >> TESLA ON THE FACT THAT IS GOING TO BE PRODUCING TRUST AND TESLA IS TRYING TO DELIVER TRUCKS TO PEPSI.
THEY ARE LOOKING TO DELIVER THEM. DO YOU THINK THE AUTO INDUSTRY, THE TRUCK INDUSTRY HAS BEEN TOO FOCUSED ON BATTERY TECHNOLOGY? >> >> THEY ARE BOTH RIGHT, JUST SO INTERESTING THAT IN THE AUTOMOTIVE AND ABILITY -- AND MOBILITY WORLD YOU HAVE TO GO HEAVILY WITH TRUCKS. MEDIUM-SIZE AND HEAVY TRUCKS THAT GO SHORT RANGES WE NEED ELECTRIFIED TRUCKS.
OTHER MACHINERY DO NOT WHAT ELECTRIC -- ELECTRIFICATION BECAUSE THE BATTERY IS TOO HEAVY. OR YOU DRIVER FOR THE WHOLE DAY, WHICH ALSO MAY BE A PROBLEM THERE. I WOULD SAY, YES, WE NEED TO SEE WHICH TECHNOLOGY FINDS WHICH APPLICATION AND THAT WHAT WE HAVE THE MARKET. EMILY: BOSCH CHAIR OF THE MANAGEMENT BOARD WITH OUR OWN LETLOW -- OUR OWN ED LUDLOW. THAT DOES IT FOR "BLOOMBERG
TECHNOLOGY." STAY WITH US, WE HAVE THE LINEUP, TALKING ABOUT HOW MEDIA COMPANIES ARE TRYING TO MAKE A PROFIT OFF OF THE LEGALIZATION OF SPORTS BETTING. 7:00 P.M. EASTERN, DO NOT FORGET TO CHECK OUT OUR PODCAST WHERE YOU GET YOUR PODCASTS. I AM EMILY CHANG, HAVE A WONDERFUL WEEKEND EVERYONE. THIS IS BLOOMBERG. ♪
2022-10-08 18:13
