tv Bloomberg Technology Bloomberg May 5, 2022 5:00pm-6:00pm EDT
inflation without plunging the economy into recession. plus, caught in a selloff after surging post-earnings, we talked to lisa hsu about how she is still driving massive growth after lockdowns in china and an ongoing chip crisis. who were shares, down now multiple days in a row despite releasing earnings early to avoid market wipe out. our conversation with their ceo and later in the hour why he is confident about demand from consumers in the road ahead. all of that in a moment but first a look at the market stocks, plunging and bonds, if i'll reversal from yesterday, fed decision to raise rates boosting markets initially but they had one of their sharpest u-turns ever. add to: it's a long list of superlatives, the bank plus index, mega cap, u.s. listed
shares of chinese tech, having their worst days since september of 2020. 10 year yields, the benchmark treasury above 3% for the first time since november of 2018, that's just a snapshot in time. it is a complete u-turn reversal from what we saw wednesday following the fed decision to raise rates by 50 basis points. looking at the nasdaq 100 over the course of two days, bringing it up on the screen, think about the overnight change in psychology. we went to bed wednesday night thinking the fed has got this. 50 basis points in line for the next few meetings. no discussion of a 75 basis point hike. they have it, they can fight inflation without bringing us into recession and we wake up and it's a totally different story. we worry about stagflation and if they are doing enough. but there was also a lot of fighting talk from powell,
talking about the strength of the economy, the tight labor market, corporate america hearing some positive noises. hard to get my head around. indeed -- emily: and many fed officials didn't agree. they thought it would plunge the economy into recession. we have seen stocks sliding multiple days in a row despite a different picture from lift. take a look at his reaction. >> we are focused on what we can control. can we build a great service and ride the reopening in terms of bookings growth, profit growth, household growth, and the answer based on results and what we see going forward is a resounding yes. emily: what do you make of that? ed: the demand is coming, echoing what they were saying,
yet their worst today drop since march, caught up in that contagion. there's no hiding place here. looking at the mega caps and the biggest names in the world of technology, some of the worst performers in the nasdaq 100, i had to look twice. it was the worst day for apple and microsoft since october of 2020. not just sensitive to what we see with higher rates and rising yields but there's also this discussion over what's going on with supply chains globally and you've got a pretty good guest coming up who has a strong theory on that indeed. ed: strong indeed -- emily: strong indeed. well, it was a nightmare on elm street day in terms of the selloff. what's your take on how bad the nightmare is going to get and how long it is going to last? >> i will call it decline relative,
selling it, like we are kneeling some sort of capitulation stage. my conversations with tech investors were so negative today, it's almost bullish. i just continue to point to this is just white knuckle post fed and i believe we will look back at some of the quality tech that's way oversold, if you can hold on through the roller coaster. emily: why is it hitting tech harder? ed: a few things -- >> a few things. it's the leveraged across-the-board. the other thing is these multiple names. even the ones that are not even expensive, like apple, microsoft, in my opinion you are just seeing the street saying i don't believe numbers into the next year. what am i going to pay? i'm uncertain and i'm going to
sell these. the only times i have seen this before, 2008, 2009, going back to the early days of covid. we are starting to get to that panic stage. earnings season, it's a have have not the enterprise, krapp -- cloud, cybersecurity? strong. semi-? talked about, strong. the other side, it's usually week. but i think we are starting to get to what i view as endless horror show opportunities in another -- opportunities. emily: in another jim, you called it a rockstar disaster. uber shares getting held up despite a different outlook. what do you make of that? dan: i mean if you look at lyft, something doesn't connect in terms of that conference call.
one of the top three worst conference calls i have heard in 20 plus years of doing this and part of it was they couldn't explain why they are spending. the driver shortage is there. even uber talked about it not yang where it was six months ago or even nine months ago. spending so far ahead of this was ahead scratcher. when i look at what uber is doing, these stocks trade like starsky and hutch. i think that uber is way oversold. lyft, clearly they feel they need to prove themselves. it's way too aggressive spending . i would be surprised if they ultimately spend it when it is all said and done. emily: i wanted to ask you about the long list of unusual names that have joined elon musk in his deal for twitter. the catarrh in in finance, what
do you make of how this is coming together? dan: in this poker game, he got twitter and was about to undo his burden in terms of leveraging his tesla stock in the equity. look, this is a who's into rooms of who he got, from both coasts, even globally. allison, obviously a huge confidant, not a shock. and recent, sequoia, it just shows that mosque is not just doing it alone. he will have teams strategically even though in theory he could be temporary ceo, over time i think it will be more of a chairman role and that's something that even in an overreaction today, his golden child continues to be tesla. emily: all right, dan, as always, appreciate you joining us with your metaphors.
we are seeing the highest inflation in 40 years. lockdowns in china, a huge production hub for the chip industry, and a major ongoing war. how are you able to post 71% growth and raise your full-year forecast? >> first of all, it's great to be here with you as always. a lot of disturbances around the world but for us it is really about focusing on the long-term strategy, delivering for partners, ensuring that we are getting new products coming out. we have a great strategy. very, very strong product portfolio for this year and we are excited about the growth that we saw in the. it's a really great time to be in the high performance computing market and this is where the performance is.
amd got caught up -- emily: amd got caught up in the environment today. how do you face the uncertainty in the macro? lisa: it is such a different company than we were even just a few years ago. we completed our acquisition under a set of diverse markets and when you added up to our data center strategy and the progress we have made their, i think that what we are really doing is trying to navigate, yes, a set of macro issues and geographic issues we are dealing with but fundamentally people need more high-performance processors and technology and that's what we do. it is very much about having a long-term strategy, a diversified set of markets, making sure that we are focusing on execution every single day to deliver to customers.
emily: the biggest supply -- problem -- some of the biggest problems in the chip industry, outsourcing, when you look ahead to you see being able to have enough supply to support all the growth, all the demand you are seeing? lisa: even pre-pandemic we knew that our strategy was to grow substantially over the next few years. we have been working with partners not just on the wafer side, but on the backend side, backend capacity with the components that you need and yes, we have been able to bring on a significant amount of capacity and it helped us grow so much this year, last year, first quarter and for the rest of the year where we forecast 60% annual growth, bringing on a lot of capacity. it is something that is very
strategic for us, into 2023 and beyond. emily: how much of this demand is coming from big cloud providers, microsoft, and increasing demand from other companies building out their own data centers? lisa: it's been our strategic that over the last few years and we have done extremely well with the hyper scalars who move in a significant way, internal and external workloads. we are also making a lot of progress with enterprise customers who are looking at building out a hybrid environment. we basically doubled in the first quarter and in the overall data center, doubling each cloud enterprise and what you are seeing there is a demand for more computing when you think about digital transformation, business transformation, all the ai out there.
there continues to be very high demand in the data center. emily: there has been speculation on the pc market. pat gelsinger has been very bullish. our u.s. bullish? where is it headed? lisa: they had their best year last year, there had been a lot of need for updated pc's and infrastructure as we were in the middle of the pandemic. looking at this year we are taking a more conservative view of the market. we believe it will probably be down let's call it high single digits, with a market over 300 million units this year. my view on the market is about the segment you are in. the low end with the more consumer facing areas, they have taken a bit of a soft spot in
the first half of the year. i will say, though, thinking about commercial pc's, people are investing a lot in i.t., still. high-end premium and -- and gaming pc's, there's a good demand for those. we do have to watch for that volatility that's in there. emily: i have to ask about your opinion on the leaked supreme court opinion. amd has a good portion of their workforce in texas, where more aggressive antiabortion legislation had already been passed and you have companies like salesforce who had offered to pay for their employees to leave texas if they want to. how are you thinking about all of this as a business leader? >> emily, look, i don't want to get ahead of the actual ruling. i think there are still -- there is still some clarity to be
brought but our priority will always be first and foremost the health and safety of our employees and we are certainly watching the situation carefully and we will make sure that we are focused on our employees. emily: lisa, thank you as always for taking the time to join us. good to see you again. thank you. all right, coming up he helped unionize the first amazon warehouse in the united states. christian smalls joins us next, fresh off his meeting with president biden. that's next. this is bloomberg.
amazon. he along with other union leaders just met at the white house with president biden, vice president harris, and labor secretary marty walsh. he helped the amazon facility in staten island become the first in the country to unionize however monday a nearby amazon facility voted against unionization. he joins us now live from washington. chris, great to have you back here on the show. you tweeted that the president got you into trouble -- that you got the president into trouble. tell us about the meeting and what did he mean christian: by that? christian:a couple of weeks ago, when he said amazon we are coming for you, i think he overstepped a little bit. but it's great to see that he still recognizes that we have to company as far as unionizing. emily: you also spoke with the vice president and the labor
secretary. did they indicate that they are looking to get more actively involved in the effort? christian: absolutely. they spoke to other labor industry leaders like at starbucks, rei, the artistic industries. i want to give recognition to all of them. we definitely think that there is going to be some more support coming from the political realm. they mentioned that they have implemented some things in their administration that they are looking to rollout in the next couple of months and i am excited to be a part of that conversation. emily: i have a portion of your senate testimony, a response to a question from senator lindsey graham. christian: the reason i'm here
is to represent the workers who make these companies go. i think it is in your best interest to realize that it is not a left or right thing. it's not a democrat or republican thing. it's a workers thing, workers issue. we are the ones who are suffering. emily: what is your sense on whether the senators that you were speaking to today understood that in a congress that is often so divided in its bipartisanship. christian: i had to reiterate that. the corporations good to control everything, the market, the laws, lobbying, whether even the government or's -- in some aspect. we don't have a say at the bottom is workers. the only way we have a say is if
we collectively come together. when we collectively say we want a union, that right should be given to us. generating the revenue for the corporations. i think he got the message because he didn't last long. this is something that has to be said and spoken about. emily: now you were the winner at one of the staten island warehouses. amazon is appealing the decision. they said that they believed having a direct relationship with the company's best for the employees. you lost at the warehouse across the street and i'm curious as to where you plan to do this next and that clearly it's not
necessarily a done deal. christian: yeah we are prepared on our side to go to the court hearing and we will take our actions from their. definitely talking to legal representation on our side to get the best advice. at the same time, amazon should recognize the fact that amazon workers at that facility voted in favor of the union, over 500 workers. 500 ballots were the difference. as far as a second election, you know, we definitely overshot it a little bit. we took on a huge task. we had been campaigning for quite a while, over a year. these were new facilities, new workers, new organizers, we didn't have enough time to convince a number -- enough of the coworkers, witches
understandable. for us, we just have to reassess and get back to organizing. emily: will we be seeing you file petitions outside staten island? christian: i can tell you we are going nationwide and we want to continue that plan to get everybody in the country set up. emily: every amazon warehouse in the country has contacted you about unionizing? christian: every amazon facility in the country and then some has contacted the amazon labor union and we will have a conference that will address everybody nationwide. emily: all right, christian smalls, president of the amazon labor union, fresh off his meeting with president biden, chris, thank you. coming up, are we heading for a booming summer or will inflation be spoiling the party? we will speak about those travel
emily: welcome back. volatility in stock is spreading to clip -- crypto. >> another long list of superlatives. for bitcoin, this was the biggest single day drop since january. a violent u-turn we saw bitcoin push toward 40,000 following the fed decision to raise rates. then, we drop off toward $36,000
per token. in this environment, bitcoin is trading in a narrow range. it has struggled to break out. we never got back to the highs that we saw. earnings season continues and there are some after hours movers. lucid reaffirming guidance for the number of vehicles this year. zillow, a big selloff. the worry is that the fed impacts mortgage rates and that could cool off the housing market. block, formally known as square is up after hours. during the session thursday, there were two stocks on the nasdaq in the green. one of them booking holdings up.
earnings, bullish outlook. summer of travel is coming. a few days ago, expedia said the same thing. they are down 6.7% on thursday. recession fears might hit them. emily: as ed said, expedia shares tumbling. rising inflation and a potential recession looms over the summer travel session. joining me now is peter kern of the expedia group. what is your reaction to the chart? >> we weren't expecting it. people are overreacting i think to some of the inflation worries. some of the other travel players and concerns. we haven't seen any of the inflation worries affecting the booking so far going to the
summer season and others. we were a little surprised, we thought it was a good quarter. i think we expect continued good travel season despite inflation concerns. >> there's no question the people want to travel again. at what point does inflation stop the demand? >> i think what we saw through covid on a macro basis was a lot of savings in most households. also in overspend in consumer goods. what we have expected to see and what we are starting to see is a fallback to norms. probably and overspend on services including travel and hospitality. we have been expecting that. that seems to be playing out. obvious the, long-term who knows on inflation. in the near term, inflation worries don't seem to be canceling people's ambition to travel. whether they might rerate down what they are hoping to do maybe
not paris but san diego, we might see some of that. we expect people to travel regardless. if people travel more modestly, we will pick that up. we expected to be strong at least for the foreseeable future. emily: you saw a steep rise in bookings, but you are still not back to 2019 levels. i spoke to the airbnb ceo yesterday. i have to get your reaction to that. he talked about how they are now ahead of pre-pandemic levels even in cities. >> it is already above 2019 at this moment. i don't know if hotels are back, but we are. emily: next time, you going to have to come on 24 hours before him.
howdy was plain some of the differences we are seeing? -- how do you explain the differences we are seeing? >> we saw growth in verbal. as did airbnb in segments. cities have done better in the last quarter. there getting the benefit of that. vrbo doesn't participate in urban markets. the extra lift of cities coming back put them into positive territory but what brian referred to which is true is that not all geographies are back across the globe. hotels are not back across the globe. in north america, we are fully back and more. it's a mix of business and that is the story throughout most of
covid which is depending on where you were strong, you did well. as covid unravels and start to see cities come back, all of the corridors open geographically, business will be back. we're deftly back in more in many markets. emily: you got other news today unveiling the expedia open world e-commerce platform. what is it and how's it going to augment the broader business? >> we talked before about how we are we platforming technology to build our own business faster. we realized that if we built our platform to be externalized essentially and micro services, we can provide the underpinnings for travel commerce for any players. we have a very robust be to be business. we power rewards programs, aarp travel program.
these are big enterprise-level deals. what we are building now is an ability to take our full stack and turn it into micro services so if a partner just wants to use our service capabilities or payment capabilities or any parts of our e-commerce stack or the whole thing or sell cars or activities, we can help the business. we think it's when to dramatically expand the number of partners we can have which expands how much travels we can sell to our customers. emily: peter kern of expedia, always great to have your view of the future. coming up, bitcoin plunging the most since january. what's going on? that's up next. this is bloomberg. ♪
the nasdaq 100 had its worst day since september 2020. a lot of that selling came in the biotech sector. one for that sector is worth less than the cash it holds. you're looking at the ark innovation etf. it is down after its biggest inflow in about a year earlier this week. a lot of the action was in bitcoin. the world's largest cryptocurrency down 8.4% today. if you look over five days, it is down 8.6%. a lot of that pain just came today. if you go back to the stock market, really painful. consumer discretionary, a lot of selling and that sector. a lot in e-commerce amazon, ebay and tesla also selling off in a big way with the tech selloff.
>> it wasn't just bitcoin to be clear. how broad-based was the selloff? >> it was pretty remarkable. the whole cryptocurrency ecosystem tends to move as one. most of the losses came in bitcoin which i thought was interesting. if you compare that to ethereum, that's the second largest cryptocurrency, it was only down 6.4%. only being a relative term. that coin is sort of the underperformer among bitcoin, but if you look at some of the altcoins, those were down as much as 15% at one point at the worst of it. this is all as we talk about the fed, the macro environment, liquidity coming out of the system. what does that mean for cryptocurrencies and so far, it seems that it is not so good. >> let's talk about the companies that have made bitcoin crypto a part of their business. how does this impact them? >> we have to go straight to
microstrategy. what's interesting about the earnings report, bitcoin took a hit on their holdings. what's really interesting was on the earnings call, you heard the cfo of micro strategy say that if bitcoin falls to $21,000 per point, microstrategy face a margin call at that point and probably have to sell some of their bitcoin holdings. it's not close yet, it is still hovering around $36,000 per point. if the trend continues and it has been lower, we could get there conceivably. emily: let's to watch ahead. thank you for that update. coming up, uber shares continuing to slide. the market meltdown and what they were presented sees for drivers and riders on the road ahead. that's next. this is bloomberg. ♪
emily: earlier i spoke with the ceo of uber and his reaction to her shares going down after a release early to avoid comparisons to lyft. >> i think the reaction to lyft was more significant than uber. it definitely affected us. i think we are just incompletely different places. you seat with uber is the benefit of scale, globalization, diversification, and discipline in these markets. we are by far the number one player in the u.s.. we have been for some time. when earners look to come back to the marketplace and start earning in a flex, they're
coming to uber first and they are busy all the time. not only driving people, but also delivering and shopping satoru -- shopping, etc.. in a reopening scenario, a lot of advantage comes to the number one player and the number two player. from a globalization standpoint, everyone knows that the reopening outside of the u.s. has happened much faster. we have been dealing with reopening dynamics bringing drivers back onto the platform. we made a investments last year for some time. we built muscles to do this. we are much more diversified so that we can lean into the west coast which is reopening fast while the east coast has lots of profitability. so that we can lean into reopening's but we are not too dependent on one place. we are a very different global player.
we have delivered a very -- part of our business and as with reopening delivering growth rates while they are healthy, they are not growing quite as fast. we are able to take couriers who used to be drivers, now that covid safety concerns are largely behind us, we can bring them back to drive or we can hire or bring earners onto the platform to deliver things and to drive people. we have a very fundamental business advantage over any other player out there. >> you are saying when drivers come back, they're going to come back to uber first and you don't plan to increase incentives to get them back. lyft is planning to incentivize them coming back. >> i'm not concerned. the message we are saying is that we see the demand coming back and therefore, we want to invest in supply.
>> this is part of the reason why their stock went off a cliff. are you saying you won't have to increase incentives and this won't lead to a subsidy war because that's what we have seen in the past. >> we have already invested in incentives. europe opened up last year. latin america has opened. we have been through this exercise before last year. lyft is when you're behind us in some aspects. we are very confident in terms of demand coming back. we're very confident in terms of supply. we have a structural advantage in that we can bring on couriers that are easier to bring on. we can upsell them into driving because the earnings opportunities now are very significant. as a result of this fundamental structural advantage, we are confident not only an topline growth, but also in margins. we guided lyft their numbers went from 75 million to 50 then
during that same time, we have gone from 86 million to 168 million 240 to 270. we have been heading in opposite directions for some time and i think based on what we heard from them, we are headed up into free cash flow territory. >> you did report a massive loss $5.9 billion tied to your other investments. aurora, didi. are you reassessing your strategy? >> know, those investments were part of mergers and acquisitions, different activities. they think we made the right moves as you can see based on the operating results that we are displaying which are absolutely industry-leading. we're going to take a careful look at those equity stakes. we have plenty of liquidity, we are moving toward free cash flow profitability. we will look to monetize those stakes and return capital to our
shareholders over time. we are caught in the same downdraft that everyone else is caught in right now. >> uber ceo. you can catch that whole interview at bloomberg.com. i want to get back to today's market meltdown. how many companies are going to get caught in the downdraft and how long does it last? >> it has been pretty ugly. we are almost at the end of earnings season. your team has done a great job of reporting the bad numbers. e-commerce has had its first negative quarter year-over-year just as far back as most folks camera member. even the first half of 2020, e-commerce is off. that has a lot of repercussions to other industries like software, ridesharing, advertising. to be frank with the selloffs, we think there is something you're going on. we think investors are
reevaluating whether or not these are technology companies. >> which companies? >> netflix is now being valued like cablevision. other investors are looking at facebook and saying does their future look more like at&t than google? you are seeing multiples rerate faster because investors in our opinion they have likely moved too far in that direction. we have to do our jobs and parse through it and find good deals. >> meantime, you have had a flood of retail investors coming into this market over the last couple of years thanks to companies like robin hood. what happens to them? >> a lot of them might not exist. you saw something similar in the late 90's internet boom. the explosion of e*trade's and ameritrade.
a lot of the businesses had to merge to stay alive. some went private. this twitter deal very well could be the first big transaction we are seeing, but far from the last. we expect a lot of consolidation, shutdowns, the ipo window to remain shut. we don't think over the next 12 months, you are more likely to see shrink in the total number of companies available for investment venue are to see new companies available. >> where do you expect to see consolidation? who do you expect to see shut down? >> the worst the business model, the more likely the consolidation. you have had of a lot of the ridesharing folks on, that space is desperate for continued consolidation. takeaway and doordash have been big consolidators. we think that space is going to continually have to do deals amongst itself until they get to
a small enough number of players to be profitable. >> anything like uber should by lyft? >> have you ever seen two businesses more in need of a merger? with the ridesharing space it's really challenging because they are competing for the same thing ultimately which is they thought , i've been in sanford disco for the last 10 years while these businesses are being built up and they are creating themselves as fast-growing software platforms and they are treating humans like commodities. if we have learned anything, humans are a precious input cost into the function of these businesses. those business models are more dependent on humans then just about any business you have seen come out of silicon valley. that is a really competitive place to be and it's a hard place for investors to sit around and be patient for them to find ways of scaling those business models. >> how long does this drag out?
>> amazon told us that starting on may 15, growth rates ella tip to last year would start to look better and better. the fastest growth you have seen in the last year in the last 50 years. the second half totally different story. one of the worst holiday seasons that the u.s. has experienced in 20 years. the comps relative to last year going to keep improving. investors tend to have existential crises when growth rates are slowing down and management teams are surprised at how poorly their businesses are performing. going to get easier as the year goes on. it is possible that as you see these growth rates start to stabilize, you might see some of these multiples come back to middle ranges. >> that sounds like somewhat about some more lining. -- silver lining. that does it for this edition of
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