'Bloomberg Technology' Full Show (10/19/2022)
EMILY: WELCOME TO THE NATIONAL ASSOCIATION OF BROADCASTERS CONFERENCE IN NEW YORK CITY. MIXED RESULTS, TESLA FALLS FOLLOWING THE REPORT SAYING THE EMILY SUPPLY CONSTRAINTS WILL BE THE BIGGEST HURDLE GOING FORWARD . ALL OF THE DETAILS. I KNEW PRODUCT TO MAKE IT EASIER TO SHOP ON THE PLATFORM, BUT THE GIANT FACING HEADWINDS WITH CONSUMER CONFIDENCE PLUMMETING. THE CEO IS WITH US LATER THIS HOUR.
HOW HAS THE DIRECT CONSUMER TREND SURVIVED POTENTIAL RECESSIONS? I WEAR DARLING WARBY PARKER WILL TALK TO US ABOUT THE EVOLUTION OF DTC IN 2023. ALL OF THAT AND MORE. WE GET BREAK -- WE GET STRAIGHT TO THE MARKET. WE DID NOT SEE THE RALLY OR COME BACK THOUGH SUMMER HOPING FOR? >> THE NASDAQ 100 IS SOFTER, THE STORY IS A PUSH HIGHER IN YIELDS WITH MULTIYEAR HIGHS ACROSS THE CURVE.
A OUTPERFORMANCE IN SEMICONDUCTORS, STOCKS UP .8% AND THIS PLAYS A RISK OFF ATTITUDE. BITCOIN TRADING IS PRETTY SIDEWAYS IN RECENT SESSIONS IN A NARROW RANGE BETWEEN 19,000-20,000 U.S. DOLLARS. THERE WERE SOME BRIGHT SPOTS IN THE MARKET. LET US TALK ABOUT NETFLIX, DUMPING BY THE MOST SINCE JANUARY OF 2021. WE KNOW THE STORY, TWO POINT
FOUR ONE MILLION SUBSCRIBERS ADDED IN THE QUARTER. MORE THAN DOUBLED IN THE FIRM ESTIMATED. THIS VERY SANGUINE AND OPTIMISTIC ABOUT THE PROSPECTS OF AD SUPPORTED TIERS. THIS WOULD BE GOING INTO 2023, THE BIG ONE AFTER THE BELL WAS TESLA, THE FIRST TIME TESLA HAS MISSED ON THE TOP LINE SINCE THE THIRD QUARTER. THE ESTIMATE WAS FOR THE DOLLAR AND ONE CENT A SHARE.
HIGHER INPUT COSTS, CHALLENGES WITH LOGISTICS AT THE END OF THE QUARTER AND LIVE AGAIN -- DELIVERING VEHICLES. THEY ALSO HAVE THE NEXGEN, BOTH IN BERLIN GERMANY AND AUSTIN TEXAS. IS IMPACTING PROFITABILITY VERY CRUCIALLY, REITERATION OF GUIDANCE. ANNUAL GROWTH IS 50%. THE FIRST TIME AS OF THIS YEAR, THE TRACKING AT THE RATE OF 40% -- 39%. ALL EYES TURNED TO ELON MUSK. WE WANT TO KNOW ABOUT HIM AND WHAT HE IS DOING GOING FORWARD IF HE DOES BUY TWITTER HE WILL BE A BUSY MAN. EMILY:
WE WILL CONTINUE WITH TESLA. WE BRING IN DAN IVES OF WHITE BUSH SECURITY. SO GOOD TO SEE YOU. WHAT IS YOUR TAKE AWAY FROM THE RESULTS WE JUST SAW? >> THE DELIVERY, THERE WAS AN EXPECTATION THAT REVENUES COULD BE LIGHT. MARGINS WILL BE IN FOCUS, THEY CAME IN LIKE TO TAKE, OFFERING A BETTER MARGIN. I THINK THE HEADLINE WAS STICKING TO THE UNDERLYING 50% GROWTH IN TERMS OF DELIBERATE. THE CONFERENCE CALL WILL BE KEY IN TERMS OF GETTING AWAY FROM THAT, THEY ARE NOT.
THE CHINA GROWTH STORY IS GOING TO BE THERE. EMILY: LET US TALK ABOUT THE DEMAND STORY. WHERE IS THE DIFFERENCE BETWEEN THE U.S. AND CHINA? THEY'RE SAYING THAT IT IS SHRINKING AND MAYBE THAT IS NOT A GOOD SIGN? >> IN CHINA PRODUCTION RAN THREE ACTS.
THE PRODUCTION AD CONTINUES TO INCREASE. THE HEART AND LUNGS OF THE TESLA STORY IN TERMS OF CHINA, WHAT IS HAPPENED FROM A MACRO PERSPECTIVE, WE ARE SEEING IN TESLA IS MUCH MORE LOGISTICS DRIVEN RATHER THAN DEMAND DRIVEN . THAT IS WHY I THINK THIS IS MORE A MASSIVE SPEEDBUMP. FOR MUSKET IS A MOMENT OF TRUTH -- MUSK IT IS A MOMENT OF TRUTH. EMILY: HOW CONCERNED ARE YOU ABOUT THE BATTERY SITUATION? >> AS WE GO INTO NEXT YEAR I BELIEVE THAT DOES START TO STABILIZE. I BELIEVE DEMAND IS OUTSTRIPPING SUPPLY FOR TESLA AND THAT IS WHY IT IS ALL ABOUT CAN THEY FULFILL 2 MILLION UNITS IN TERMS OF GOING 2023? IF THEY CAN, TESLA IS A STOCK THAT WILL BE 40% TO 50% UP.
I THINK IT IS MUSK'S MOST IMPORTANT CONFERENCE CALL IN THE PAST TWO OR THREE YEARS. EMILY: A TWITTER DEAL COULD BE SEALED IN A MATTER OF DAYS AND WE HAVE SEEN TESLA'S SHARE IS HAPPENING WITH TWITTER. >> THAT IS WHAT IS THE ALBATROSS AROUND THE TI TESLA STORY. DOES HE HAVE TO COME UP WITH MORE CAPITAL? DOES HE SELL AN INCREMENTAL 510 BILLION DOLLARS OF TESLA STOCK TO FUND TWITTER? THE FRUSTRATION FOR THE TESLA INVESTORS IS IT FEELS LIKE MUSK IS JUGGLING A LOT OF BALLS.
HE IS TRADING CAVIAR FOR TWO DOLLARS WORTH IN PIZZA. MUSK IS THE KID OF THE TESLA STORY, HE IS THE REASON THAT TESLA HAS BEEN ABLE TO GET IN THIS POSITION. HE NEEDS TO ULTIMATELY GIVE INVESTORS CONFIDENCE HE IS THERE AND YOU ARE NOT ULTIMATELY GOING TO SEE THE SHORTFALLS AS WE GO INTO Q4 AND Q5 -- 2023. EMILY: WHAT DO YOU AND TESLA INVESTORS WANT TO SEE? MANAGING TWITTER AT ALL -- NOT MANAGING TWITTER AT ALL? >> YOU WANT TO SEE HIM NAVIGATE THIS AND GIVE THE RAIN THROUGH SOCIAL MEDIA EXPERTS THAT COULD ULTIMATELY BE THE ONES THAT COULD TRY TO TURN TWITTER AROUND. FOR MOST OF THE EASIEST THING WAS BUYING TWITTER.
THE HARDEST PART IS FIXING IT AND THAT WILL BE AN UPHILL BATTLE IN TERMS OF FIXING TWITTER. AS A TESLA INVESTOR, AT SUCH A CRUCIAL TIME, YOU NEED A STEADY HANDS AND THAT IS WHY THIS CONFERENCE CALL AND THE NEXT FEW QUARTERS ALSO CRUCIAL IN THE HISTORY OF THE TESLA STORY. EMILY: THAT IS ALMOST EVERY COMPANY GIVEN THE CONDITIONS WE ARE FACING AND MUSK WILL OWN MULTIPLE COMPANIES THAT ARE FACING THESE ECONOMIC CONDITIONS. WHAT IS YOUR OUTLOOK AS WE POTENTIALLY HAD INTO A RECESSION AND A DOWNTURN THAT COULD LAST SOME PEOPLE ARE TELLING ME 2-3 YEARS? >> THE DISRUPTIVE TECHNOLOGY, TESLA IS FRONT AND CENTER AND NAMES LIKE MICROSOFT. LOOK AT TESLA, AS WE WENT BACK THREE YEARS AGO, LOOK AT HOW THEY NAVIGATED THROUGH IT. ALMOST HISTORIC CHALLENGES. MUSK'S CHALLENGE IS NOT DEMAND.
, IT IS LOGISTICS. IF YOU LOOK AT CHINA, THIS WILL BE A PERIOD OF TIME THAT TESLA IS ABLE TO NAVIGATE AND THE MARGIN START TO COME BACK. WE LOOK AT THIS AS A BLIP ON THE RADAR OVER AN OVERALL FIVE OR SIX YEARS. EMILY: CYBER TRUCK, WHAT DO YOU WANT TO HEAR? >> YOU HAVE ALL OF THE STALWARTS THAT ARE READY TO GET THOSE TRUCKS OUT THERE. HAVE RIVIAN AND OTHERS. -- YOU HAVE RIVIAN AND OTHERS. MAKE SURE THAT IT DOES NOT CONTINUE TO GET DELAYED. IT GOES BACK YOU ARE NAVIGATING
SPACEX, TESLA, NOW TWITTER. WHICH KID DO YOU LOVE THE MOST? THAT WILL BE THE ISSUE FOR MUSK. THE GOLDEN CHILD CONTINUES TO BE TESLA. EMILY: WE HEAR SO MUCH ABOUT WHEN SHOTWELL AT SPACEX -- WHEN GWEN SHOTWELL AT SPACEX. >> ULTIMATELY MUSK HAS CONTINUED TO BE THE KEY TO THE TESLA STORY. LET US BE CLEAR, THAT IS THE BIGGEST WORRY RIGHT NOW IN THE STORY.
TIME IS TICKING, NEXT FRIDAY IS THE TWITTER DEAL. OTHERWISE WE ARE IN -- ON THE ROAD TO NOWHERE. EMILY: IT IS SO GOOD TO SEE YOU HERE IN PERSON. COMING UP, THEN JOINS US TO TALK ABOUT THE FUTURE OF MEDIA. THE BETSY IS PLACING FOR 2023. THIS IS BLOOMBERG. ♪ EMILY: I WANT TO LOOK MORE BROADLY NOW AT INVESTMENT SENTIMENT.
CONSUMER FACING INVESTMENTS, WE HAVE BEEN, HE HAS INVESTED IN COMPANIES FROM ALBERTA TO WARBY PARKER. YOU CAME BACK, FULL TIME, HOW SHOULD WE TALK ABOUT YOUR LIFE? BEN: I WAS OPERATING AND INVESTING AND WE SOLD THE OPERATING COMPANY AND I AM A FULL-TIME. EMILY: YOU SOLD MEDIA IN A BOX. TALK ABOUT THE MEDIA SPACE AND WE WILL MOVE ON. THERE IS SO MUCH DISRUPTION.
AND CONTRACTION THERE. WHAT IS THE FUTURE OF THE MEDIA BUSINESS? BEN: I THINK IT IS A TOUGH MARKET. WE WERE VERY ACTIVE IN MEDIA AND WE WERE ONE OF THE FIRST INVESTORS IN BUZZFEED AND A LOT OF STUFF THAT DID WELL. WE ALMOST DO NOTE INVESTING -- DO NO INVESTING THERE. I THINK SOCIAL MEDIA HAS SCREWED UP THE INDUSTRY. TIKTOK IS SOCKING AWAY ATTENTION IN WAYS THAT WE NEVER COULD EVEN IMAGINE. THE ADVERTISING INDUSTRY IS
CHALLENGING. THERE ARE GOING TO BE WINNERS IN THE DIGITAL ISSUES, I DO NOT THINK THERE IS A LOT OF VENTURE MONEY TO FUND NEW BUSINESSES. THERE'LL BE MORE AND MORE CONSOLIDATION. YOU WILL SEE A CONTINUED. EMILY: LET US WALK THAT OUT A LITTLE BIT. HOW DOES THAT PLAY OUT? WHERE DO YOU SEE THE CONSOLIDATION? ARE WE ON A PATH TO BEING DESTROYED? BEN: I WOULD NOT SAY ON A PATH TO BEING DESTROYED, I THINK PEOPLE WANT CONTENT. NEWS MEDIA IS IN A PARTICULARLY DARK PLACE WITH WHAT HAS HAPPENED TO TRUST OF MEDIA IN THE COUNTRY. THE BUSINESS MODEL IS NEWS IS
CHALLENGING. A FEW ORGANIZATIONS ARE DOING A GOOD JOB. ONE OF THE BIG PROBLEMS AS ADVERTISERS DO NOT SUPPORT NEEDS MEDIA. IT IS THE MOST IMPORTANT AREA TO PUT YOUR DOLLAR BUT THEY DO NOT WANT TO BE AROUND DONALD TRUMP OR THE WAR IN RUSSIA OR HORRIBLE STORIES. YOU SEE THE INDUSTRY REALLY SUFFERING. ENTERTAINMENT MEDIA IS GENERALLY MOVING IN THE DIRECTION OF THE CREATOR.
YOUTUBE AND TIKTOK TIKTOK AND PLATFORMS THAT EMPOWER A LOT OF PEOPLE TO CREATE REAMS OF GENERALLY LOWER QUALITY ARE EATING UP ADVERTISING DOLLARS THEY USED TO GO TO PREMIUM CON CONTENT CREATORS. I THINK ON ONE LEVEL, I DO NOT THINK THE TRUTH IS AT STAKE. I THINK THE TRUTH IS ALREADY GONE FOR THE MOMENT.
THERE IS, WE ARE IN A BAD SITUATION. I HAVE LITTLE KIDS AND I AM TERRIFIED FOR THE WAY THAT THEY ARE GOING TO GET TRUTHFUL INFORMATION. THE PROBLEM IS THAT IT IS NOT GOOD BUSINESS TO INVEST IN THE NEWS CATEGORY. THAT HAS TO CHANGE. THE PENDULUM ALWAYS SHIFTS. PEOPLE WANT TO FIX THIS PROBLEM. WE CONTINUE TO BE INTERESTED. EMILY: WHERE DO YOU THINK RESPONSIBILITY LIES? BEN: WE LIVE IN A CAPITALIST SOCIETY, IT IS HARD TO MAKE THIS ABOUT RESPONSIBILITY. WE HAVE TO FIND BUSINESS MODELS
THAT MAKE IT WORK FOR EVERYONE. NO ONE IS GOING TO DO WHAT IS -- SOME PEOPLE WILL DO WHAT IS RIGHT FOR THE WORLD, BUT MOST PEOPLE DO WHAT IS RIGHT FOR THEIR WALLET. AT THE END OF THE DAY THE SOCIAL MEDIA COMPANIES, HUGE OPPORTUNITY WAS MISSED AT 20 YEARS AGO TO REGULATE THESE COMPANIES. THIS STARTED AND WE ARE LEARNING MORE ABOUT THIS AND IT STARTED AROUND SEPTEMBER 11. THERE WAS A GREAT OPPORTUNITY TO REGULATE THESE COMPANIES AND IT DID NOT HAPPEN. WE ARE IN A WORLD WHERE IF ALLOWED TO RUN AMOK, THEY ARE MONOPOLIES AND THEY HAVE MADE IT CHALLENGING. IT IS NOT TOO LATE AND THERE
ARE AMAZING BRANDS TO DO GREAT JOURNALISM. I WILL SAY I CONTINUE TO BE AS A BOARD MEMBER, BIASED AND IMPRESSED WITH THE QUALITY OF JOURNALISM AND THE QUALITY OF COMMUNITIES AND THE DIVERSIFICATION OF REVENUE GENERATED. IT IS HARD TO SEE AND THE DISCOVERY NEEDING TO CONSOLIDATE.
WHAT DOES THAT DO TO SMALLER, INDEPENDENT BRANDS AND WANT TO CONTINUE TO BE INDEPENDENT? WHEN THE TOP OF THE FOOD CHAIN IS JOINING FORCES BECAUSE THEY ARE FEELING THE PRESSURE FROM SOCIAL MEDIA? EMILY: LET US TALK ABOUT CAPITALISM. YOU ARE CONTINUING TO INVEST. HOW BAD IS THE DOWNTURN? HOW BAD IS IT GOING TO GET? ARE YOU FINDING PLACES TO PUT YOUR MONEY? ARE YOU JUST WAITING ON THE SIDELINES? EMILY: OUR MODEL IS TO BE FIRST MONEY IN. BEN: WE ARE PACKING FOUNDERS WHO
WANT TO CHANGE THE WORLD AND THERE ARE PLENTY OF GREAT FOUNDERS WHO WANT TO CHANGE THE WORLD. MOST OF THE COMPANIES WE ARE AT TODAY ARE GOING TO BE RAISING MONEY IN THE FUTURE IN DIFFERENT MARKETS. I DO THINK THIS DOWNTURN WILL BE SIGNIFICANTLY PROLONGED. THE PUBLIC MARKETS HAVE EXPERIENCED A LOT OF THE PAIN. I THINK THE PRIVATE MARKETS TALK ABOUT EXPERIENCING THE PAIN. WE ARE A YEAR AWAY FROM SEEING WHAT THIS LOOKS LIKE. A BUNCH OF COMPANIES WHO HAVE
RAISED CAPITAL START TO RUN OUT OF MONEY. LAST YEAR, EVERYONE GOT CAPITALIZED. LET US SEE WHAT THE BACK HALF OF LAST YEAR -- NEXT YEAR LOOKS LIKE. I THINK IT WILL BE ROUGH. EMILY: THERE WILL BE CASUALTIES? BEN: YES. GOOD COMPANIES WILL BE FINE. ALL OF THE MONEY ON THE SIDELINES WILL BE CONSOLIDATING AROUND THE BETTER COMPANIES. YOU ARE NOT GOING TO SEE THE
VALUATIONS GO DOWN MUCH. YOU WILL SEE FEWER COMPANIES GET FUNDED. EMILY: WHERE WILL WE SEE THE WRECKAGE AND WHERE ARE YOU PLACING YOUR BETS? BEN: PRETTY MUCH EVERYWHERE. IT IS HEALTHY.
THIS IS HEALTHY WRECKAGE AND WHEN YOU BUILD COMPANIES IN AN ENVIRONMENT WHERE MONEY FEELS FREE OR CHEAP, YOU BUILD COMPANIES THAT ARE NECESSARILY AS STRONG WITH SOME OF THE WRONG DISCIPLINES AND RIGHT NOW, WE ARE GOING TO BUILD A NEW GENERATION OF COMPANIES THAT WILL GIVE BUILD THE RIGHT WAY. I AM INCREDIBLY OPTIMISTIC ABOUT EARLY STAGE INVESTING. I FEEL MORE EXCITED THAN I EVER HAVE. THERE IS A TON OF DATA. THERE ARE SO MUCH DATA THAT SUPPORTS THE IDEA THAT INVESTING WHEN TIMES ARE TOUGH PRODUCES GREAT COMPANIES. I KNOW THAT NEIL FROM OR BE -- WARBY'S IS COMING ON. A PERFECT EXAMPLE OF A COMPANY THAT WAS BUILT IN A TOUGH TIME TO BUILD AN EXTRAORDINARY BUSINESS. YOU WILL SEE A NEW.
GENERATION OF NEW COMPANIES BUILT FROM THIS. I WAS NOT ENOUGH OF A FULLY FORMED HUMAN TO REALLY HAVE PERFECT CONTEXT FOR THE FINANCIAL CRISIS. THIS WILL BE HARD. TECHNOLOGY IS STILL ENABLING UNBELIEVABLE THINGS. LOOK AT HOW WE WERE ABLE TO WEATHER THE LAST TWO YEARS. OF THAT SAYS ANYTHING, IT SAYS TECHNOLOGY, EVEN WHILE IT IS BEING USED IN WEIRD WAYS, IS ULTIMATELY AN INCREDIBLE THING.
EMILY: THAT WAS A REALITY CHECK. BEN: THANK YOU FOR HAVING ME. EMILY: THANK YOU FOR GIVING IT TO US STRAIGHT. GOOD TO SEE YOU AGAIN. COMING UP, THE RISKS OF TIKTOK USER DATA LINKING TO CHINA IS STILL LIKELY EVEN IF THE BIDEN ADMINISTRATION FORTIS THE AGREEMENT WITH A VIDEO PLATFORM. THE NEW BLOOMBERG ANALYSIS, NEXT. THIS IS BLOOMBERG. ♪ EMILY: PERSONAL DATA FOR MILLIONS OF U.S. TIKTOK USERS WOULD BE AT RISK
EVEN IF THE BIDEN ADMINISTRATION REACHES A DEAL WITH BYTEDANCE. A NEWS ANALYSIS WITH THE DETAILS, ED LUDLOW, EXPLAIN. ED: THIS IS SPACE WITH -- THIS IS WITH PEOPLE WHO HAVE NEGOTIATED THIS KIND OF DEAL BEFORE. IN EVERY SCENARIO, EVEN IF THE DEAL IS REACHED, THE VULNERABILITY IS THAT THERE WILL BE A HUMAN COMPONENT. THIS IS A BUSINESS THAT WAS BUILT IN CHINA.
EVEN IF YOU SEPARATE OFF THE U.S. ASSET SO TO SPEAK, IT IS GOING TO BE SOMEBODY IN CHINA WHO IS FIXING ANY ISSUE. I HAVE BEEN TRANSPARENT, THERE ARE PERSONNEL IN CHINA WHO HAVE ACCESS TO PUBLIC INFORMATION FROM THE PLATFORM EVEN IF NOT PRIVATE. THE RANGE OF CONCERNS ARE WORRYING AND EVEN IF THEY DO REACH A DEAL, SUCH AS THE CONTROL OF THE ADMINISTRATION THAT EVEN IF THEY CANNOT HOLD TIKTOK TO ANY RESPONSIBILITY, THEY CAN PULL THE PLUG ON ANY DEAL. EMILY: HOW DOES TIKTOK HANDLE U.S. USER DATA? ED: ALL USER DATA IS SIPHON THROUGH THE UNITED STATES THROUGH SERVERS THAT ARE OWNED BY ORACLE AND HOSTED IN THE UNITED STATES. THE DATA IS HOUSED HERE AND PROCESSED U.S. USERS.
THE VULNERABILITY AND THE CONCERN IS WHAT IF SOMETHING GOES WRONG? WHO IS THE ACTUAL HUMAN BEING IN CHARGE OR IN CONTROL ABLE TO MAKE A FIX? THAT PERSON IS PROBABLY IN CHINA. EMILY: WHAT IS TIKTOK'S POSITION ON THIS? ED: THEY WILL NOT TALK ABOUT THE U.S. GOVERNMENT, THEY THINK THEY CAN REACH A DEAL. THEY HAVE TRIED A NUMBER OF MECHANISMS OVER THE YEAR INCLUDING SELLING A STAKE OF THE COMPANY TO REFLECT THE U.S. USER SHIP THROUGH THE LIKES OF ORACLE. WHAT YOU SEE ON YOUR SCREEN IS
THE COMPANY'S POSITION. THEY ARE HOPING THAT THE DATA MANAGEMENT PROCESS THROUGH ORACLE AND IDEAS LIKE SUPERVISION FROM VARIOUS U.S. GOVERNMENT BODIES CAN GET IT DONE.
EMILY: ED LUDLOW, THANK YOU FOR BREAKING THAT DOWN FOR US. COMING UP, KLARNA UP WITH NEW TOOLS THAT WILL HELP WITH A NEW ERA OF SHOPPING. OUR CONVERSATION WITH THE CEO, NEXT. THIS IS BLOOMBERG.
♪ EMILY: THIS IS BLOOMBERG TECHNOLOGY AT THE NATIONAL ASSOCIATION OF BROADCASTERS CONFERENCE IN NEW YORK CITY. BY NOW PAY LATER GIANT KLARNA HAS UNVEILED A NEW SEARCH TOOL THAT WILL COMPARE PRICES ACROSS RETAILERS AND ENABLE SHOPPERS TO FILTER BY COLOR, SIZE, RATINGS, THE CEO IS WITH ME NOW. SO GOOD TO SEE YOU. YOU SAY THIS WILL USHER IN A NEW ERA OF SHOPPING. HOW SO? >> I THINK IT IS EXCITING TO SEE. ONE FUN ASPECT OF THIS IS DUE TO THE DOMINANCE OF THE BIGGEST RETAILERS IN THE WORLD AND IN THE U.S., IT IS PUTTING DEVELOPMENT OF GREAT SERVICES ON THE SHOPPING SIDE.
WE HAVE TAKEN A SERVICE THAT HAS BEEN HIGHLY APPRECIATED BY INDIVIDUALS IN EUROPE ABOUT FINDING PRICES AND PRODUCTS AND BASICALLY MAKING IT ACCESSIBLE. EMILY: HOW SUCCESSFUL HAS THIS BEEN AND WHAT MAKES YOU THINK YOU CAN CHALLENGE U.S. TECHNOLOGY GIANTS? SEBASTIAN: FIRST YOU HAVE TO TRY! WE WANT TO SEE IF WE CAN! IT IS THE STARTING POINT FOR PEOPLE'S SHOPPING EXPERIENCE. THEY GO THROUGH THE RETAILERS.
IT IS THE STARTING POINT. EMILY: YOU ARE INTEGRATING COMPARABLE VIDEO. WHAT ARE YOU THINKING OF THE IMPACT OF THAT CAN BE? SEBASTIAN: THE MARKET HAS GROWN TREMENDOUSLY. WE DO BUSINESS WITH MARKETING SERVICES, OUR DEMAND IS FOR FIVE TIMES HIGHER THAN THE SUPPLY.
OUR IDEAS TO SEE HOW CAN WE GET THE AUDIENCE WILL ALREADY HAVE, 30 MILLION AMERICANS ARE USING THE APP, HOW DO WE PROVIDE IT WITH MORE INTERESTING CONTENT SO THAT WE CAN ALSO GROW AND OFFER MORE SUPPLY FOR EVERYONE WHO WANTS TO MARKET IN THAT ENVIRONMENT? EMILY: THEY HAVE FACEBOOK, INSTAGRAM, SOME OF THESE FEATURES ARE BUILT INTO THEIR APPS. WHAT MAKES YOU THINK YOU CAN COMPETE WITH THEM SPECIFICALLY? SEBASTIAN: MULTIPLE PLACES TO ENTERTAIN YOURSELF. TO SOME DEGREE IF YOU LOOK AT INSTAGRAM, YOU ARE DOING A LOT OF THINGS THERE. YOU ARE WATCHING KITCHEN VIDEOS, FOLLOWING DIFFERENT TYPES OF THINGS. HERE IT IS A LOT MORE CONCENTRATED AROUND SHOPPING. I THINK THERE ARE MULTIPLE CHANNELS FOR PEOPLE TO EXPLORE CONTENT. EMILY:
INFLATION RATES ARE AT RECORD HIGHS, HOW IS KLARNA NAVIGATING THIS? SEBASTIAN: WE ARE A BANK, FULLY LICENSED IN EUROPE. WE HAVE DEPOSITS THAT ARE IN THE EUROPEAN INTEREST ENVIRONMENT. OUR MARKETS ARE STILL FAIRLY LOW. THAT GIVES YOU A NICE, COMPETITIVE ADVANTAGE VERSUS U.S. PLAYERS. IN ADDITION TO WHAT WE ARE SEEING IS IT IS INCREASING THE DEMAND OF OUR PRODUCT.
OUR CONSUMERS IN THE U.S. HAVE SAVED OVER 100 MILLION DOLLARS IN INTEREST FEES, LATE FEES, BY USING OUR PRODUCT BECAUSE OUR INDUSTRY -- INTEREST RATE IS SO LOW. THERE IS MORE DEMAND FOR THAT IN AN INTEREST RATE ENVIRONMENT. WE SEE HIGHER DEMAND AND WE HAVE A VERY EFFICIENT COST STRUCTURE THANKS TO THAT. EMILY: ARE YOU TAKING ACTION TO
MITIGATE POTENTIAL LOSSES FROM THE MDL? SEBASTIAN: WE HAVE TIGHTENED OUR UNDERWRITING. THERE IS A DIFFERENT ENVIRONMENT WE ARE GOING INTO. EMILY: PEOPLE ARE COMPLAINING THAT THEIR PURCHASING POWER IS DECREASING. EXPLAIN HOW YOU SET PURCHASING POWER AND IF YOU ARE RECONSIDERING HOW YOU SET THAT GIVEN THE CHANGING CONDITIONS? SEBASTIAN: THE BIG THING TO REMEMBER IS WHEN PEOPLE USE OUR PRODUCT, THE AVERAGE BALANCE IS $75, THE AVERAGE ON A CREDIT CARD IS LIKE $1000. THEY PUSHED DELIMIT INTO YOUR FACE TO MAKE YOU SPEND MORE THAN YOU WANT. YOU CAN FIND OUT ABOUT YOUR PURCHASE POWER. WE ARE MINDFUL OF SHOWING IT TO
YOU SO THAT YOU DO NOT OVERSPEND. WE TAKE A NEW DECISION EVERY TIME YOU MAKE A TRANSACTION. WITH A CREDIT CARD, YOU CAN SPEND AS MUCH AS YOU WANT.
FOR US, WE ARE ASKING YOU TO MAKE A NEW DECISION ON EVERY PURCHASE. EMILY: YOU HAVE BEEN DOING RESTRUCTURING AND YOU HAVE BEEN UPFRONT ABOUT THIS, ARE YOU DOING MORE OF THAT OR WILL YOU HAVE MORE BEFORE THE END OF THE YEAR? HOW MANY EMPLOYEES WILL YOU HAVE AT THE END OF THIS YEAR? HOW MUCH OF THAT IN THE U.S.? SEBASTIAN: THE BIG RESTRUCTURING WE HAD WAS BACK IN MAY.
IT HAS BEEN MINOR CHANGES TO THE ORGANIZATION. I THINK AS MUCH AS IT WAS PAINFUL AND HARD AND IT IS OBVIOUSLY A VERY SAD THING TO SEE, AT THE SAME TIME, WHAT I THINK WAS GOOD ABOUT IT IS VERY EARLY ON, WE TOOK THE DECISION AND I AM HEARING FROM A LOT OF PEOPLE THAT THEY'RE COMING TO THOSE DECISIONS NOW. I AM PROUD ABOUT THE FACT THAT WE FACED THE FACT THAT TIMES HAVE CHANGED AND WE ACTED ON IT.
THAT IS WHAT SETS YOU APART. EMILY: HOW ARE YOU THINKING ABOUT THE IPO AND POTENTIAL FUNDRAISING AND THE CHANGING ENVIRONMENT? SEBASTIAN: I THINK I DO NOT LIKE THE VOLATILITY OF THIS ENVIRONMENT BECAUSE I THOUGHT IT WAS A HIKED ENVIRONMENT. MY DREAM HAS ALWAYS BEEN TO OWN A COMPANY WHERE IT IS IN A SIMILAR POSITION OF GOOGLE IN 2005, IT WAS STABLE, AND YOU ALSO HAS SO MUCH GROWTH LEFT IN THE U.S.. YOU SEE TREMENDOUS SUCCESS HERE. I WANT AN AMAZING UPSIDE LIKE GOOGLE HAD. I THINK THE MARKET CAP WAS $35
BILLION. WE ARE GETTING CLOSE TO THAT. EMILY: I DO NOT NEED TO ASK YOU THIS NEXT QUESTION, THEN? IT IS SO GREAT TO HAVE YOU. IT IS GREAT TO SEE YOU HERE IN PERSON. COMING UP, IS THIS BEAR MARKET THE BEST OPPORTUNITY TO INVEST IN CRYPTO FOR THE LONG-TERM? SOME BANKS SEEM TO THINK MAYBE. WE DISCUSSED, NEXT. THIS IS BLOOMBERG.
♪ >> FOR BITCOIN, IT IS ABOUT THE MACRO. LAYER ONE AND LAYER TWO. THE BLOCKCHAIN IS BEING BUILT. THAT IS AN INEVITABLE MARCH. THERE IS VENTURE CAPITAL THAT CONTINUES TO COME INTO THE SPACE, IF YOU LOOK AT IT FROM CITADEL FROM JP MORGAN TO THE BANK OF NEW YORK, BLACKROCK.
TYCHO BIGGEST PLAYERS ARE MAKING HUGE INVESTMENTS IN AND AROUND THIS ARCHITECTURE -- THE BIGGEST PLAYERS ARE MAKING HUGE INVESTMENTS IN AND AROUND THIS ARCHITECTURE. EMILY: WE HAVE THE FOUNDER OF THE DELTA BLOCKCHAIN, 20 ME NOW AT THE CONFERENCE. DO YOU AGREE OR DISAGREE? >> YES. ALL OF THESE INSTITUTIONAL MONEY IS COMING INTO CRYPTO. IS IT COMING IN THE MICRO SIDE? SOME OF THE HEDGE FUNDS ARE GOING ONLY ON HER DASHBOARDS AND NOT CONTRIBUTING TO BUILDING THE ECONOMY. IS THAT EFFECTIVE ON CRYPTO PRICES? INSTITUTIONAL BANKS LIKE JP MORGAN, THEY CAN DO MORE, THEY ARE GOING BOLD ON THE CRYPTO WITH COINBASE AND OTHER PLATFORMS TO BE ABLE TO HAVE THEIR MANAGERS HAVE THE ASSET CLASS.
THEY ARE INVESTING IN A BUNCH OF OTHER TECHNICAL TECHNOLOGY COMPANIES. EMILY: IS NOW THE TIME TO INVEST? SHOULD EVERYONE BUY THE DIP? >> IS IT A DIP? EMILY: MAYBE IT WILL GO FURTHER DOWN OR MAYBE IT STABILIZES? >> IT IS NOT A FINANCIAL ADVISOR. MY PERSONAL OPINION IS IT IS NOT THE BOTTOM YET. I SICK TO MY PRICES, I SAID -- EMILY: REMIND ME WHAT THOSE WERE. >> I AM STILL HOLDING MY PERSONAL CAPACITY.
I WILL GO IN 600 TO 800. I THINK DECEMBER TO MARCH WE WILL SEE THE DIP. IT IS NOT THERE YET. THAT IS WHAT I AM TELLING OUR INVESTORS. EMILY:
LET US SAY YOU COME IN AT THOSE PRICES, HOW LONG DO YOU WAIT TO SEE GAINS? HOW LONG IS THIS DOWNTURN GOING TO LAST? >> I FEEL I CRYPTO IS A UNIQUE CASE. THE WHOLE MARKET GOES DOWN AND SOMETIMES IT IS THE BOTTOM OF THE FIRST COMMODITY TO GO DOWN. LOOK AT THE LAST TIME DURING COVID, IT WAS ONE OF THE FIRST ASSET CLASSES WHO STARTED GOING UP. I BELIEVE THAT 2000 24, IT WILL
BE GOOD FOR CRYPTO. HE WILL SEE ALL-TIME HIGHS, MAYBE AROUND MAY, JUNE, AND JULY. EMILY: WHAT AREAS OF THE BLOCKCHAIN DO YOU THINK COME BACK FIRST? OR ARE GOING TO BE THE BEST BETS FOR NEXT YEAR? >> INFRASTRUCTURE, CRUSTING ANALYTICS, INSTITUTIONAL ADOPTION, THAT HAPPENED TO BLOCKCHAIN AND A CHAINS. NOT A LOT OF PROBLEMS, THE BLOCKCHAIN SAID WE WILL DELIVER AT THIS AND THEN THE MARKET CAME IN AND EVERYONE WAS EXCITED ABOUT THE CRYPTO NATIVE USE CASE.
I FEEL LIKE THE MARKET IS WHERE THIS WILL COME OUT AND THE BILLION-DOLLAR INSTITUTIONAL ADOPTION IN TECHNOLOGY IN THE REAL INFRASTRUCTURE PROBLEMS ARE GOING TO TAKE IT. EMILY: WHAT ARE YOUR CONCERNS? WHY SHOULD PEOPLE WHO ARE THINKING ABOUT BECOMING INVESTORS KNOW? EMILY: CRYPTO INVESTORS, I LOVE SAYING BY THE DIP. EXPERIMENT WITH THE CRYPTO IN THE REAL USE CASES. IF YOU WANT TO HAVE AN EXIT, HAVE AN EXIT.
FOR THE TECHNOLOGY INVESTORS I SAY BUILDERS ARE GOING TO BUILD. THOSE WHO GO THROUGH THE BEARISH MARKET AND BUILD THEIR PRODUCT AND COME UP IN THE BULLISH MARKET, THOSE ARE THE FOUNDERS YOU STICK TO. I AM EXCITED ABOUT THIS. EMILY: THAT IS THE DELTA BLOCKCHAIN FOUNDER. GOOD TO SEE YOU IN PERSON. COMING UP, WE TALK ABOUT THE WORLD OF DIRECT CONSUMERS OF THE LENS, WARBY PARKER'S CO-CEO IS WITH US, NEXT. THIS IS BLOOMBERG. EMILY: WITH THE PANDEMIC PROMPTING A BIG SHIFT TOWARDS E-COMMERCE, RETAIL COMPANIES ARE RETHINKING EVERYTHING FROM THE CUSTOMER AND THE EMPLOYEE EXPERIENCE, ONLINE AND HOW MANY PHYSICAL STORES TO OPEN? THAT IS THE CHALLENGE FACING WARBY PARKER AND IS CO-CEO NEIL.
I WOULD LOVE TO HEAR HOW YOUR STRATEGY IS EVOLVING IN A POST-PANDEMIC WORLD. YOU HAVE THIS THRIVING ONLINE BUSINESS. YOU HAD TO CLOSE 120 STORES AND YOU HAVE OPENED ALMOST 200? HOW DO YOU FIND A BALANCE OF HOW MANY AND HOW MUCH? NEIL: THE KEY IS TO HAVE A MULTICHANNEL APPROACH. MEET CUSTOMERS WHERE THEY WANT TO BE.
WE KNOW THAT CUSTOMERS ARE SHOPPING AS THEY LIVE PHYSICALLY AND DIGITALLY. THANKFULLY, BECAUSE WE ARE DIRECT TO CONSUMER AND HOW THEY DIRECT RELATIONSHIPS WITH OUR CUSTOMERS, THEY'RE ABLE TO GIVE FEEDBACK AND HEAR FROM THEM. THAT HELPS US. IT HELPS US DICTATE WHERE TO OPEN UP STORES, SIMILARLY, WE ARE ABLE TO INVEST IN EYE EXAMS AND VIRTUAL PRISON -- VISION TESTS. ONLINE OR IN STORE. EMILY: CONSUMERS ARE PAYING MORE FOR EVERYTHING. HOW ARE YOU EVOLVING TO MEET THEIR NEEDS IN A HIGH INFLATION ENVIRONMENT? YOU TALKED ABOUT FEEDBACK, WHAT FEEDBACK ARE YOU GETTING? NEIL: WE ARE HEARING THAT VALUE IS SUPER IMPORTANT AND WE ALWAYS THINK ABOUT VALUE AS THE PRICE OF QUALITY -- PRICE TO QUALITY RATIO. SELLING $75 WORTH OF CLASSES
VERSUS $100 ELSEWHERE. OTHER RETAILERS IN OTHER CATEGORIES, OVER THE LAST YEAR OR TWO, THEY RAISED PRICES TO DO HEAVY DISCOUNTING AS THEY ESTABLISHED LARGE INVENTORIES. WE HAVE BEEN ABLE TO BE MORE CONSISTENT WITH OUR CUSTOMERS AND KEEP PRICING AS IT HAS BEEN OVER THE LAST TWO YEARS. WE CAN HAVE SIMPLE, UNIFIED PRICING. MAKE IT EASIER FOR OUR
CUSTOMERS AND WE CONTINUE TO DELIVER EXCEPTIONAL VALUE AND WE GAIN MORE MARKET SHARE. EMILY: WHAT IS THE DRIVER OF MARKET SHARE GAINS? ARE YOU GOING TO KEEP FOCUSING ON THE U.S.? THINK MORE BROADLY? NEIL: WE WILL FOCUS ON THE U.S. AND OPEN UP STORES. WE HAVE 40 STORES THIS YEAR WHILE INVESTING IN OUR ONLINE EXPERIENCE. OUR VIRTUAL VISION TEST ALLOWS PEOPLE TO RENEW THEIR PRESCRIPTION ONLINE TO OUR APP OR VIRTUAL TRY ON. WE HAVE BEEN INVESTING IN CONTACTS.
THAT HAS BEEN GROWING 100% A YEAR. OUR CUSTOMERS REALLY WANT TO COME TO US FOR A ONE STOP SHOP IN A HOLISTIC VISION CARE EXPERIENCE. EMILY: TALK ABOUT THE CRITERIA TO REOPEN STORES OR NEW STORES? GIVEN THE POTENTIAL FOR THE FOOTPRINT TO BE 900? WHERE ARE THESE GOING TO BE? MALLS ARE ELSEWHERE? EMILY: MALLS, TRANSPORTATION HUBS. NEIL: WE SAW MASSIVE SHIFTS IN TRAFFIC AS PEOPLE'S ROUTINES CHANGE AND WE SAW TRAFFIC INCREASE IN OUR SUBURBAN LOCATIONS AND BIG DELTAS BETWEEN URBAN AND SUBURBAN LOCATIONS. WE ARE STARTING TO NARROW NOW, ESPECIALLY AFTER LABOR DAY.
A LOT OF OFFICES HAVE REOPENED AND FOLKS HAVE STARTED TO RETURN TO THEIR PRE-PANDEMIC LOW TEENS -- ROUTINES. WE ARE OPENING UP STORES CLOSE TO OUR COMPASS TUMORS -- CUSTOMERS. EMILY: AIRPORTS? WHAT ARE THE TRENDS. IS IT THE THICK RIMS, CAT EYES? NEIL: I WAS JUST VISITING SOME STORES IN THE BAY AREA AND WE HAVE CUSTOMERS COME IN ASKING FOR JEFFREY DAHMER GLASSES. THE NETFLIX SERIES. THAT IS SICK, THAT GUY WAS A MONSTER! HE MAY BE DRIVING SOME FASHION TRENDS. EMILY:
LET US END ON A HAPPIER NOTE! [LAUGHTER] WHAT DO PEOPLE WANT TO WEAR ASIDE FROM THAT? NEIL: BRIGHT COLORS AND HAPPINESS OVER THE LAST TWO YEARS. IT HAS BEEN TOUGH FOR MOST AMERICANS. EMILY: A MONSTER OR BRIGHT COLORS? THAT IS THE CO-CEO OF WARBY PARKER, THANK YOU. WE GO BACK TO TESLA, ED LUDLOW HAS BEEN LISTENING IN TO THE CALL. WHAT ARE YOU HEARING? A:
AN EPIC -- ED: AN EPIC AND BREAKING DELIVERY, WE HEARD FROM ZACH, WHO SAID EVEN IF PRODUCTION IS AT AN ANNUAL GROWTH RATE OF 50% ALL TOLD BY THE END OF THE YEAR, DELIVERY WILL FALL SHORT OF 60%. ELON MUSK IS THINKING ABOUT A BUYBACK. THAT IS POSSIBLE NEXT YEAR PENDING BOARD APPROVAL. SOMETHING A LOT OF INVESTORS HAVE BEEN CALLING FOR AND A BIG ONE THAT JUMPED OUT OF NOWHERE, ELON MUSK SEES A PATH FOR TESLA TO HAVE A GREATER MARKET CAP THAN APPLE. TWICE THE MARKET CAP THAT SAUDI ARAMCO HAS. THAT SHOWS HIS CONFIDENCE IN
WHERE THE COMPANY IS GOING. EMILY: QUITE A PROCLAMATION EVEN FROM ELON MUSK. ARE WE EXPECTING TO HEAR ANYTHING FROM HIM ABOUT THE POTENTIAL PUTTER DEAL -- TWITTER DEAL? FOR HIM TO TAKE QUESTIONS? ED: TESLA STARTED BY TAKING QUESTIONS FROM RETAIL INVESTORS THAT ARE VOTED ON ON THE SAME PLATFORM.
IT HAS NOT COME UP YET. YOU WOULD EXPECT IT. NOT ONLY THE ISSUE OF WHETHER HE HAS TO SELL TESLA STOCK BUT ALSO THE IDEA OF KEY MAN RISK. HOW DESTRUCTIVE WOULD AN ELON MUSK BE? I WOULD SAY A NUMBER OF NAMES IN THE STREET HAS COME OUT TO SAY THAT TESLA HAS BECOME A WLL ORGANIZED -- WELL ORGANIZED MACHINE. THEY ARE AWARE OF THE HEADWINDS THAT TH ESLA IS FACING. IT IS NOT SO MUCH OF A DEMAND A STORY. EMILY: IT IS A SUPPLY STORY. ED: THE DEMAND IS THERE. THEY THINK THAT THEY CAN SELL
EVERY VEHICLE THAT THEY HAVE BUILT. ON THE SUPPLY SIDE, ONE THIRD OF ALL OF THE VEHICLES CAME IN THE LAST TWO WEEKS WE KNOW ABOUT THE MAD SCRAMBLE TO SMOOTH THAT OUT. THIS IS HOW ELON MUSK PUT IT. THERE WERE NO TRAINS AND NO CARRIERS WHEN THEY GOT TO THE END OF THE COURSE. THAT IS WHY VEHICLES WERE IN TRANSIT AND NUMBERS FELL SHORT OF ESTIMATES. THAT IS WHY ESTIMATES ON THE TOP LINE SINCE THE THIRD QUARTER OF LAST YEAR. 3 HE TEASED --EMILY: HE TEASED FUTURE PRODUCTS AND DISCUSSED FUTURE PRODUCTS AND SAID THEY COULD NOT JUMP THE GUN. HE TALKED ABOUT THE TRUCK.
WHAT DID HE SAY? ED: WE HAVE MOVED TO THE NEXT STAGE, FROM DEVELOPMENT STAGE TWO TOOLING STAGE. THE PARTS BEING USED TO MAKE THE MACHINERY THAT MAKES THE CYBER TRUCK ARE ON THEIR WAY. IT WILL BE IN 2023 PRODUCT. THE SEMI-TRUCK, THE BIGGER TRUCK IS AHEAD OF SCHEDULE. PRODUCTION AT AN PRODUCTION OF THAT IS UNDERWAY. THE LAST NUGGET IS THAT FSD BETA IS EXPECTING A WIDER ROLLOUT IN THE UNITED STATES.
FSD BETA IN TESTING WITH ITS CUSTOMER TEST BASE IS PROVING TO BE SAFE ON THE ROAD. EMILY: THANK YOU FOR BREAKING IT DOWN. WE WILL CONTINUE TO LOOK TO YOU FOR MORE HEADLINES. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY. WE HAVE A GREAT SHOW COMING UP, THURSDAY, ARIANNA HUFFINGTON WILL BE TALKING ABOUT WHAT SHE CALLS THE PRODUCTIVITY PARADOX.
EMPLOYEES WORK MORE BUT GET LESS DONE. DO NOT FORGET TO CHECK OUT OUR PODCAST WHEREVER YOU GET YOUR PODCAST. THIS IS BLOOMBERG. ♪
2022-10-20 22:28
