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tv   Bloomberg Technology  Bloomberg  December 6, 2021 5:00pm-6:00pm EST

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announcer: 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. this is bloomberg technology. i you turn for tesla -- shares reversed earlier losses. shrugging off a report regulators opened an investigation into the electric
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carmaker. we will have all the details. plus a rough streak for bitcoin. back below $50,000. we will talk about why investors are heading safe havens instead of risky assets. and the greatest thing to happen to art? non-fungible tokens -- what do you have to say but the nft phenomenon? we will get to all of that in a moment. but u.s. market he ash u.s. equities rebounding after reports that cases of the omicron variant have been pretty mild. >> green on the screen, all 11 sectors closing in the positive. a lot of this has to do with -- with what is going on in the chip sector. but i want to point out yields getting higher, up nine basis points today but not the tech move the major indexes would
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see. some of the correlations we relied on in 2021 are being flipped on their head. the s&p 500 outperformance i want to bring to your attention because let's take a step back. this comes after nine days with a 4% pullback which brings me to the shallow pullback we have had all this year. the question is at what point do you start to buy the dip? one of the staples has been the many corrections that have been met with a pretty aggressive buy-in. could this be the by the dip mentality? you will have to see if that trend sticks around. you did see tech lag, but that wasn't necessarily the story from every subsector. the biotech sector really caught a good chunk of the pain. implied by a
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better-than-expected news on the omicron variant and news from bernie sanders saying moderna and pfizer have to stop being greedy. that directly translating into that part of the tech universal stop -- tech universe. >> the s&p 500 down 13%, the biggest drop -- investors are trying to take on board this omicron variant. how long is covid going to be around for? it was such a good performing stock last week in context of the s&p 500, but how long will vaccinations play a role in the battle against covid-19 going forward? you talked about electric vehicle stocks -- welcome to monday. lucent kicks us off disclosing a subpoena that hit their desk on friday. they say they don't know much -- the usual caveats.
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it is about their merge with the spac churchill capital run by a well-known financier backed by the saudi government and its investments. that set the tone. a few hours later, writers reporting tesla is subject to an sec investigation, citing a letter sent on september to any to a whistleblower who had come forward in 2019 outlined some concerns though whistleblower had about solar technology. no response from tesla, no comment from the sec, but though whistleblower went on to resign in august of 2020 by the end of the session, a complete turnaround. investors don't know -- partly because the solar business is a small part of the bigger actor.
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emily: i want to bring in an analyst that covers tesla. how badly does this impact your outlook for tesla? >> thank you for having me. the reality is it doesn't really affect our opinion very much of the stock. as was just referenced, the solar part of the business is only about 6% of tesla's overall revenue. i think most analysts view it as a non-core business. it's really the automobile business that is the primary driver of the topline and bottom-line. that's doing to be the case for some time going forward. if you want to disclose every risk related to the company i think they will argue this risk was covered in their filings.
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we don't really see it having a major impact, but it is one of many risks, anything related to tesla, whether it is a vehicle recall or whistleblower complaint really makes headlines. i think that's what we are seeing. ed: i think you remember walmart sued tesla because of some defects with solar roofs and amazon had similar complaints. we know about some of the issues and we know it has been slower to market but this is a stock that has been under pressure. was there a knee-jerk reaction or are there big, long-term questions? garrett: the stock is almost 20% off its high just over a month ago it has been a difficult few weeks for the electric vehicle space. we had the lucid news today.
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rivian has sold off sharply in the last couple of weeks. i think you are seeing a group of stocks that has run up significantly and a lot of investors are starting to ask questions about valuation, which is are primarily -- primary hang up with tesla right now. that's primarily due to valuations but also competition. you've seen some profit taking in tesla and other names in this space over the last few weeks. emily: how much do you think this has to do with musk selling his own shares and does that concern you? garrett: that's another can treating factor. obviously, elon musk has sold a lot of stock over the last month or so. it -- the optics are not good if you are considering buying stock and the number one shareholder in -- and the individual who owns almost 20% of the company is selling stock, the optics are
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not good. i think that is another can treating factor to the selloff here in recent weeks. ed: let's talk about lucid. this is an sec that has not been hesitant about looking into spac mergers. you are not so worried about this disclosure? garrett: we are not. but we are seeing is a lot more regulatory scrutiny and it goes back to another company we follow and their founder and former was charged with three counts of fraud. he is currently pending trial, which will happen next spring. there are some pretty serious federal charges against him. a lot of these companies have gone public through spac's, which is a reverse merger which entails less disclosure to investors when a company goes that route. so i think the sec is going back and really looking at the
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disclosures that were made. it's not a concern for lucid because we know they have a brand-new factory in arizona. they have a terrific product, the specs of that product would stack up to any electric vehicle today. you look at 1100 plus horsepower and 520 miles of single charge range. it was just named the motor trend car of the year for 2020 two. we view the subpoena that they received as a buying opportunity. we are confident in their disclosures that they made in their documents leading up to their july trade back and the forecasts they had for the next five years seem very reasonable to us. we are telling investors that it is a buying opportunity. emily: back to tesla, how do you
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make your assessment of the company when the company doesn't communicate much and mostly we are just reading elon musk loss tweets. -- elon musk's tweets. garrett: we have to base our price targets on a 12 month time horizon. we think most investors are taking a 5-10 year view of the company. tesla wants to grow their volume by a factor of 40 over the next decade. they are going from about half of million vehicles to about 20 million in 2030. that is why the stock trades in such lofty multiples. these triple digit multiples on a pe basis for that growth in the coming years. but tesla is really in a class of its own. you have traditional automakers who tend to trade at single-digit multiples, mid to
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high single digits. you look at ford or general motors, then you have a company like tesla trading north of 100 times years earning estimates. emily: garrett nelson and ed ludlow, thank you. the sec is also interested in a company involved with former president trump. digital world acquisition merging with trump's new media company revealed the sec may request for information into trade as well as the board of directors and investor. trump is trying to launch his own social media app after being kicked off both twitter and facebook after the deadly attack on the u.s. capitol on generally six. coming up, with the increasing threat of omicron, new york city is about to them -- about to initiate mandatory investigations -- mandatory vaccinations. how does it plan to do that? that's next.
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this is bloomberg. ♪
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>> a lot of folks in the private sector have said to me they believe in vaccinations, but they are not quite sure how they can do it themselves, so we are going to do it. we are going to do this so every employer is a level playing field, one universal standard starting december 27. emily: new york city mayor, bill de blasio, announcing the city will be the first in the nation to impose a private sector vaccine mandate on all businesses. joining us now is the bureau chief who oversees our return to
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office coverage. talk to us about the details about this mandate and what makes it different from what president biden has already mandated. >> this is the first major mandate to go for private employers in a major city. it's notably different from the biden administration mandate which is caught up in federal court, so it hasn't taken effect and may be delayed. this mandate applies to all private employers and it doesn't have any options for testing. the biden mandate says for people with more than 100 workers, they, instead of requiring vaccines, they can test employees weekly. de blasio says this is going to go to all private workers, no testing option. pretty strict and we will see how that goes. and he has just days in office, as you mentioned. emily: are other cities going to follow? kara: that's a good question.
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here in san francisco, they were the first to mandate vaccines for public workers. we have cities that have required full vaccinations for restaurants. we will have to see how this plays out in new york. emily: how is the city going to implement this, enforce it, and could it be overturned when he leaves office? kara: that's the big question, how eric adams, who will take over on january 1 will review this. we actually don't know. more details are set to be announced next week, so we don't know how this will be implemented. emily: thank you for joining us all top coming up, 15 minutes or less -- doordash is announcing
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an ultrafast delivery service in new york city. we will have more on that next. disney's latest animated offering held on to that top spot at the u.s. box office. it took in $12.7 million in its second domestic weekend, beating the latest ghostbusters and solman. it had the top opening weekend of any animated picture during the pandemic last week. this is bloomberg. ♪
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>> aggressive promotions for the latest iphone, ipad and apple watches are not playing out, frustrating consumers who
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believe they were getting the latest apple devices at far lower prices. it offered a huge savings for iphone 12 owners. a partnership met and iphone 12 could trade in that debase -- trade in that device and get a new device and no cost. similar promotions were also offered by verizon and at&t. many customers, including myself, have found the rebates have been inextricably -- in explict way denied by the carrier. in some ways, this year's rebate process has made people feel the promotions are designed to not pay out unless you have the time to haggle with customer service. t-mobile told me the issues have been due to a bug and a company is in the middle of resolving the problem. still, this has made the new apple product buying experience this holiday season less ideal than it should have been. i'm even sure there are me who are unaware there have been
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denials and unaware of how to resolve the problems. if i were you, i would contact your carrier a customer service department to solve your issue. emily: you can subscribe to the weekly power on newsletter at less than 15 minutes -- that's how long doordash says it will take to deliver groceries from now on. for more on that, i'm joined by jackie bob lewis. i was in the middle of a recipe, forgot something and went to doordash and they brought it into me two minutes. how does this build on what they are already offering? >> they have been facing increasing competition from a lot of well-funded startups, especially in new york, that came up with this business model to bring you your food, alcohol,
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anything you might need, in 10 minutes or even 15. this is a new model that has emerged out of this pandemic era, to get your stuff faster and it is showing no sign of slowing down. emily: talk to us about why they are hiring employees instead of using their contractors to deliver this service. jackie: this is a different model than ferrying food around. rapid delivery is predicated on set delivery distances that have much smaller radius is that you would see in food delivery. you need warehouse is with a limited selection of items that you can pack quickly and, in order to do this, you need a reliable workforce with regular schedules managed by humans versus an app with customer
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service or driver service. doordash realizes they have this army of 3 million gig workers that vary around food, but to pull this off, they would have to look into full-time employees to get it done. emily: does that mean bigger changes to their model over time? jackie: i think this is something they are grappling with. you saw today uber's u.k. ruling that said they have two classify their ride-share drivers as employees. while that is happening in europe, it underscores this broader increased regulatory scrutiny as reg later start to catch up to the pace at which these companies have been growing and employing people. for this particular business product, i think no doubt it was the right way to go. but it speaks to the fact they
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want to monetize this as well. while they may not be ready to flip their labor will -- labor model on its head, they are willing to test it out while making some revenue in the process. emily: as they are rolling this out, they settled with the city of san francisco about allegations they misclassified thousands of workers, did not give them the benefits they should have. how does that play into all of this? jackie: it shows that these legal battles are not going to go anywhere. they face a similar one in seattle a few weeks ago and now in new york, they are facing the slate of bills that recently passed to improve worker conditions. pellet wasn't apples to apples with san francisco's lawsuit, it shows lawmakers are trying to find a way to create some
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guardrails around this labor model that has been exploding during the pandemic. going forward, i think doordash is trying to be more mindful of how it it them -- how it employs its short-term labor force. at the same time, it's not going to be something that changes overnight. emily: what does this mean for instacart? i tried to get that ingredient i needed on instacart and couldn't get it for three hours. jackie: it is definitely upping the ante for them. they are operating with two hour delivery windows. in some cities, you can get it as fast as 30 minutes. but 30 minutes doesn't compare to what you can get in 10, 15 -- let's face it i think most people want to get their things quicker, so they are going to have to step it up a bit. whether that is launching their own version of this or
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partnering up with a last mile delivery service. emily: jackie douglas covers doordash, uber and instacart. another legal defeat for a ride hailing that lost its bid to challenge a landmark ruling. uber and its rivals will have to overhaul their business models and assume more responsibility for each trip looked on their app. a u.k.-backed research group has unveiled -- unveiled plans for a hydrogen powered airliner. the plane could fly from london to san francisco at the same speed without producing carbon emission. however, hydrogen is more expensive and challenging to store. it will take time to build the plane and airport infrastructure. coming up, more on bitcoins weekend plunge.
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closing just below 50,000 -- that's next. this is bloomberg. ♪
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emily: welcome back to bloomberg technology. i'm emily chang. there was a crypto flash crash over the weekend. ed ludlow is here with what it all means. ed: this is the joy of cryptocurrencies -- trading 24/7 around-the-clock. i was out and this is what happened -- a drop of almost 22% over the course of that trading time. we recovered somewhat, but it was a dramatic drop and it left people asking questions about
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what is doing it. much lower trading volumes going on and people exercising options as well as covering positions. come to the bloomberg terminal and look at this chart. there's a new narrative around bitcoin if you compare it to ethereum. a big part is institutional investors buying all your long 50% of bitcoin holders are new this year. but we see a cerium experiencing a much less dramatic drop and much weaker recovery. it becomes this double edged sword for bitcoin. they were the first to sell in times of crisis. monday's session, we were in risk on mode. bitcoin is now back above 50,000. we see the same volatility in crypto-related stocks.
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with omicron and the outlook for the federal reserve taper, that volatility has paid -- has played out as well. some of the big names -- you can see since the beginning of november, we've had heavy losses in those stocks. the consensus is that is going to continue. emily: i want to keep at this -- bitcoin losing over a fifth of its value. i want to bring in nat hogan for more analysis. why do you think we saw this flash crash over the weekend? >> we've seen this story before. one thing true about the crypto market and bitcoin market is leverage can build up in the ecosystem. when you get into those times of low liquidity, if the market has a slight selloff, it can cascade
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downward as those levered positions are blown out of the market. importantly, just as quickly as we go down, we bounced back up and are continuing to go from there. a theory of just 10% or so. i take a fairly bullish stance going forward but it does show this is an element to the crypto market, not fully institutional, on these nights and weekends, you can get this low liquidity effect. emily: could this mean a longer flash crash in store? >> for the last for five years i've been in crypto, usually that happens earlier in the year. it's typical, another day in crypto. on top of that, i think there'll
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be a crash before it goes to 100,000. i'm counting on that stop emily: what do you think the chances are we have a crash next year? a bigger one? matt: it depends on how aggressive the fed is. most of the elements behind the crypto market right now are very bullish. but if we see more aggressive wording from the fed, more aggressive tapering, you could see bitcoin selloff. long-term, there is an institutional, relentless bid for a cerium in particular, but bitcoin as well. i think i more bullish than that last speaker. emily: do you believe in the buy the dip philosophy? matt: i think investors are well served by dollar cross -- the
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biggest risk is behavioral. you didn't want to be selling friday at midnight and probably did not want to be buying at its all-time high. i think a consistent come along termed disciplined approach to having a reese's -- have in a reasonable asset allocation to crypto, given the rebound we've seen, it makes me very bullish about where we are going, particularly in ethereum and the other layer one solutions across the market. emily: some of the really bullish folks had big predictions for the end of this year. take a listen to jesse powell back in august. >> the moon is the bare case for crypto. we are going to other dimensions with bitcoin. people need to hold on. we are still early in the cycle. i think we could see $100,000 plus per coin late this year or early next year. emily: are we going to get to
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$100,000 in three weeks? matt: i would be very surprised if we got to $100,000. it is worth mentioning that crypto is the best-performing asset class. still up more than 150% in the last 12 months. a cerium is up 6% or 7% over that same time. i think calling 100,000 dollars by the end of the year is a difficult prediction to make. as we look into 2022, we have these fundamental drivers, the advisors we speak to every day still moving into the market for the first time. i think $100,000 could be a target in 2022, but this year, i'm not so sure. emily: i will add that to your list of predictions. what else would you put on that list? what are your predictions? matt: i think we will see a cambrian explosion of activity
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built on ethereum and other layer one solutions. i think they will be looking at cerium, polygon, a lot of investors with their toe in the water with bitcoin and 2020, hp one, starting to realize there's more to crypto than just bitcoin. if there's one biggest story for next year, it's going to be the everything else. crypto as an fts, crypto as the metaverse. that's what we are hearing from investors. what is there beyond bitcoin? that's what i most bullish about. emily: bitcoin versus a cerium? matt: i'm on the theory him -- on theetherium site. i am reasonably confident it will continue to play that in the future. there's so much positive
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activity taking place in and around the blockchain right now. emily: my job is to pin you down and ask you tough questions. i appreciate you giving straightforward answers. matt hogan, thank you, as always. coming up, what could the delisting of didi have to do with national security? this is bloomberg. ♪
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emily: the ripple effect of chinese writing app, it didi, being delisted still in effect. it could just be the beginning of chinese tech companies being forced to abandon overseas listings as tensions between the two biggest economies continue to mount. joining me is a former tipple matt and u.s. state department focusing on salvation policy. how many more didi's could there be? >> no one knows for topic congressional commission estimated there are 250 chinese companies that have a total of 2.1 trillion shares trading on u.s. exchanges. this tech decoupling shows no signs of stopping. it could be some of the other big adrs listed in the u.s. are next. emily: how much do you think
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this has to do with chinese national security? anja: i think that's the reason the chinese government gives, but i think there are three reasons xi jinping in the communist party are doing this. the first one and most important is they want to maintain absolute political control. they are going into a very hard year for china. the olympics have to go well, the big communist meeting in march and in october, xi jinping is up for an unprecedented third term. they need absolute quiet and that's why you are seeing these sweeping data security laws that caught up didi, tencent, no new approvals for online games, limited gaming -- that's the number one reason. national security is the second reason and i think xi jinping understandably has this new push
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about, prosperity and is worried some of these internet billionaires have earned too much money and that's really affecting the chinese system. that's why you see chinese tech companies giving billions to charity. those are the reasons you are seeing the decoupling. emily: does it all supercharge this race to decoupling and what does it mean for u.s.-china relations after that? are we in the middle of a cold war to use a dramatic term? anja: i'm not sure i would call it a cold war, but it is quite serious. i'm always struck by the difference between how american business people see china, which i think is cautiously optimistic, and what my friends in the biden administration and those focused on national security see. they see a much darker picture. i think there is a real concern about xi jinping moving from
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authoritarianism to totalitarianism. there's a lot of concern about human rights, understandably so, and even though the summit you saw between president biden and president she -- president xi a floor under things, they want to make sure we have guardrails and are talking about the most important issues and that things are going to get better and we will go back to business as usual. i think that's highly unlikely. emily: we saw the u.s. government say they won't send any official representation to the u.s. olympics and also the controversy around the tennis star who accused a communist party official of sexual assault, who has disappeared. the women's tennis association based in the united states has suspended all games in china. where is this going? anja: on the human rights front, i'm quite worried.
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the crackdown continues. it is kind of an amazing story because it was so public and so international, but people disappear in china with regular frequency. we don't hear about it. one of the senior editors of one of the big chinese papers suddenly disappeared a few months ago for some mild criticism of a chinese film. i don't know if he is back yet. this kind of stuff happens a lot in this regime and it doesn't hit the front pages the way it did with the tennis star. emily: the director of the aspen security form. working through some complex issues with us today. thank you for stopping by. coming up, the nft debate -- why cathie wood is calling it the greatest thing to happen to artists. more ahead. this is bloomberg. ♪
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emily: starwood capital chair, barry sims says he's about to put 2% of his net worth into cryptocurrency. speaking at event -- at an event in miami, he says he expects to see inflationary pressures from the u.s. stimulus package exacerbate a housing shortage. >> i think the fed is completely wrong on inflation because they haven't bought all the steel to fix all the bridges and tunnels. that's going to come with the 1.2 trillion dollars. i'm doing development projects down there and i've got to buy steel, i'm going to be competing with the federal government for steel.
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there is going to be pressure on commodity prices from the stimulus package and it's going to crowd out and make it more expensive for private developers to build anything in the country, which will exacerbate the shortage in housing you see today and why it rents are going up. we need $100,000 apartments today and we are seeing a 20% increase in rents. >> you have complained amazon is destroying mom-and-pop retail by using amazon web services to subsidize losses on free shipping. if you believe in competition in a free market, and i think you do, why is that wrong? >> if amazon was producing steel, you are not allowed to dump steel below the cost of supply, yet i got a bike pump rule -- delivered to my house from miami for free in two hours. there is no mom and dad store in
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the world that can compete with that. they are hemorrhaging cast -- hemorrhaging cash and annihilating mom and dad retail in the process. i thing it's unfair they subsidize everything through the cloud service. the government was very late to the game. originally they didn't pay taxes on internet sales. they were subsidize against everything else. now you have a trillion dollar company -- your prime account is going to cost you $500 and you are not going to be able to go he whirls to shop. they are opening the apartment stores. after destroying the apartment stores, they are opening department stores. i come from greenwich, connecticut and main street is half empty. they may be open and paying nothing -- we have no leverage. who is going to replace them? it's not a healthy situation.
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i love landscape of the mainstream streets of america. >> how would you fix it? >> i would break up amazon. i would separate aws from the rest of it, absolutely. >> i heard you say the great hedges your bitcoin position. is that how we should all be thinking? >> yes. this is for me. but if you have 5% of your net worth, in a world where the government just prints money and prints money and prints money and doesn't have any consequences, sometimes that will end. the only thing they can't make more of his bitcoin. it has no real value other than there are 21 million coins. you could see the world saying to the u.s. with our political isolationism that they would say china is going to knock us off the dollar standard and they are
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going to have a lot of countries aligned with them with a bridge and tunnel program and they are going to try really hard to break the dollar standard. if that happens in the dollar devalues coming need one thing that can hold its value and that will go down with the stock market and then it will reverse and it will go to one million a coin. it could do that. it's not u.s. investors. the whole world will look at one thing they can't make more of an that will be bitcoin. there are other coins, but they were there first. it has no function other than a store of value. having a little investment in bitcoin might be a smart hedge in your life because your paper will be worthless. i have 2% of my net worth in cryptocurrency, in a selection of them. emily: also at the event, cathie
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wood and art investor george perez clashed over nft's and art. take a listen. >> nft's, it's the greatest thing to happen to artists. it really is. there is a company -- when i heard this, it was an aha moment for me. this is going to stimulate and cause profound changes in the creator world. but artists, even with physical art, turning it into digital, this is a property rights system. it's a very interesting phenomenon because we are moving into the digital world. >> i understand that and lemme tell you, as an old timer and a lover of art, a passionate lover of art, i hope people don't lose coming to museums and experiencing the beauty of art on a personal basis.
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when i have to buy art by phone, on my apps and now i finally get to come to look at museums and you look at great pieces of art, there is nothing like it. so, yes, i can understand how we will create new energies, but, the beauty of art is always the personal experience of watching the art. >> we have an art gallery called signum art gallery. it is all digital art, and fts, and it is a thing of beauty as well. emily: cathie wood speaking at an event in miami for bloomberg on friday. tom brady is offering a set of nonfungible tokens focusing on the beginning of his career that includes a stopwatch, cleats and jersey used at the national football league combine.
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the collection opens to the public beginning this week. that does it for this edition of bloomberg technology. make sure you tune in tomorrow. we will be speaking exclusively with the vice chair and president of exxon. and we will be joined by the ceo and founder of the realreal. andy cofounder and ceo of crowd strike. i'm emily chang in san francisco. this is bloomberg. ♪
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>> is it creating more severe infections are not? is he going to younger or older? all of these things that as we see, we see cases coming out and
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the cases are getting bigger. we will know in a few weeks. shery: welcome to daybreak asia. haidi: we are counting down to the major market open. investor concerns over omicron start to ease, china policy code as there is a downturn in the real estate market. the evergrande


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