tv Bloomberg Technology Bloomberg May 25, 2022 5:00pm-6:00pm EDT
>> from the heart of where innovation, money and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. emily: i'm emily chang in san francisco and this is bloomberg technology. plus, lessons learned from twitter's annual shareholder meeting. investors voicing concerns about
elon musk's takeover and after the meeting wrapped musk voted to change the balance of equity debt in the deal. ed ludlow will join us live from the ground. meta and amazon holding their annual meetings as well, the first one for the amazon ceo. how he addressed growing concerns about worker safety as the company's market cap threatens to dip back below $1 trillion. all of that in a moment, but first let's get a look at the market stocks climbing after a volatile trading day in the nasdaq 100 outperforming. kriti: it is interesting that we see stocks finishing the day in the green. nasdaq 100 relay outperforming here. -- really outperforming here. a lot of it down to the heavyweights, apple and amazon leading the index higher. a lot of that momentum really started gaining after the fed minutes. we start to see traders paring
back expectations, that off some of those growth bids. you did not see much of the change in that. the two year yield just taking up a little higher. i do have to touch on nvidia. they just had their earnings out . they missed analyst asked him it's. -- analyst estimates. the year on a -- the stock on a year-to-date basis down. we were talking about it closer to a $1 trillion market cap valuation, but this is a story broader in the chip space. last year we saw chips surging after the chip shortage, but what we are seeing this year is that momentum has started to wane. nvidia mentioned the key issue was about supply chain issues on those covid china lockdowns, but also about valuations because investors have been shunning
some of these stocks we have in the tech space, particularly in chipmakers. caroline: i do want to get to these annual general meetings all happening today, many of them in tech. twitter, amazon and meta. what were your key takeaways? >> we will start off with twitter. that one closely watched because of the trauma surrounding the elon musk takeover. that is set to happen at a later date. we got news that founder jack dorsey is stepping off the board. a key director also failing his reelection bid. moving on to amazon, shareholders rejecting all of the proposals in place to make t he conditions better for the workers. this company has come under a lot of scrutiny because of those conditions for workers and also the stock split being approved by shareholders at 20 to 1. that is set to take place in
june. emily: thank you for that round up. meantime we are learning new details about the deadly and devastating shooting in uvalde, texas. texas governor greg abbott saying the 18-year-old posted about his plans on facebook in the minutes before the attack. >> as of this time, the only information that was known in advance was posted by the gunman on facebook approximately 30 minutes before reaching the school. the first post was to the point of -- he said, i'm going to shoot my grandmother. the second post was, i shot my grandmother. the third post, may be less than 15 minutes before arriving at the school, was, i'm going to shoot an elementary school.
emily: facebook's spokesperson however clarified and direct replies on twitter that the messages the governor described were private one-to-one text messages discovered after the tragedy occurred. i want to bring in our bloomberg technology executive editor tom giles. there is a big distention between a public post and private message. tom: absolutely, major just tension. what a horrific set of developments. when these things happen, there is always a question about what role social media played in either broadcasting them, glorifying them, was social media involved in any way? could this have been prevented? those questions always arrive. in this instance, what greg abbott said was taken to mean that somehow he was publicizing his intentions, that he had made
this in a public setting. when you say "post on facebook" that makes it sound like he is putting it out there for everyone to hear, suggesting maybe this could have been prevented, may be facebook was in some way involved in this terrible way. quickly facebook says, wait, these were private one to one messages, not the kinds of things that could have been seen by the public. we are trying to get clarification from abbott's office as we speak to determine what he meant by that. was he referring to some public or semi-public part of facebook? was there something out there that we could have seen? none of us have seen anything publicly on facebook. obviously that would be blasted all over social media if someone had used the public newsfeed on facebook to talk about this kind of thing. we don't have any evidence of that. we are seeking care for location from abbott -- clarification
from abbott's office. so far facebook says this is private, one to one. emily: can we confirm these were on a facebook platform, because facebook does not have text messages, there are direct messages. tom: whatsapp, dming, you can use instagram, but how much of that does facebook have access to? if the alleged shooter was a facebook user, facebook would have justification for going into his private messaging, but we don't know which platform on facebook, if it was in fact a facebook platform that he used. emily: it says in the twitter message that they are cooperating with law enforcement in their ongoing investigation. so facebook is now somehow involved in this investigation. what do you make of the way facebook is communicating this,
through direct replies on twitter? may be put out a statement. they could be more clear. tom: in fairness to facebook, meta, twitter is an official platform. it is recognized as a way of getting the statement out there. i would like meta to be more clear about which messaging platform they are talking about here. and remember, in cases like this, law enforcement will want to move very quickly to get any private communications, they use private subpoena, court orders, to get access to these kinds of things that ordinarily pick tech not want to share. in this instance, meta has a great interest in helping law enforcement and the greater public get to the bottom of how its platform may have been used. emily: and encarta but important that we do get to the bottom of it, given the gravity of this
situation. tom giles, thank you so much for sharing what we know now with us. coming up, we will talk about what came out of twitter's general annual meeting and the path ahead for the public and may be soon to be public company. our ed ludlow has been at the meeting, covering it all day. ed? ed: changes on the board, changes to the terms of the deal, and shareholder concern. an end of an era at twitter hq. we will have all of that next. this is bloomberg. ♪
twitter's board. that is one of a few developments from twitter's annual shareholder meeting. his departure was announced earlier this year, but it's still noticeable -- still notable because this is the first time since 2006 that he has no formal role at the company. elon musk's shadow loomed large. the ceo addressed concerns about misinformation and bias more broadly. >> we are constantly improving our product, our policies and our processes in order to earn more trust. we believe twitter is a place for different voices and perspectives to be heard. our rules are enforced objectively on content and our policies remain neutral to political identity and ideology. emily: our own ed ludlow joining us, who has been following the meeting all day. no vote on the elon musk deal,
but just how big was his shadow over this meeting today? ed: shareholders found a way to get the references in there. there was one proposal from arjuna capital on having one board member with a high level of expertise in human and civil rights. the point arjuna made was had twitter had a better track record in human civil rights, they would have a better track record on freedom of expression and we would not be where we are with world's richest man trying to take the company private to fix the issue of freedom of speech, one of the big rationales hind's decisions -- behind his decisions. emily: elon musk finals a new 13d, where he boosts the equity portion of the deal, but reduces the debt portion of the deal. can you explain why this is significant? ed: the equity portion is now at
$33.5 billion. he essentially removed altogether the margin loan component. that is significant because the margin loan component had a loan-to-value ratio of 20%. elon musk had to sell a number of tesla shares to meet the dollar value of collateral. that is gone. he concurrently is adding another 6.25 billion dollars of equity financing, but as part of the filing he is talking to existing shareholders about rolling their public shares into the private entity, something he stated previously he would do. jack dorsey is among those shareholders he is speaking to. significant because it de-risks the entire thing. i'm interested to hear what your next guest has to say on that. it will be interesting to see who he brings in. even though he has added 6.25 billion dollars of equity financing, who else might join this? interesting names are already there. a big question i have is, is
this elon musk just searching for cash or are these strategic elements for the people he is bringing in for a new look private twitter? emily: ed ludlow in san francisco outside twitter headquarters. i want to bring in that guest, a twitter shareholder. there was no vote taken on the most deal today, but if you could have voted, are you for or against? >> i'm for it 100%. i think elon will do a phenomenal job fixing this wonderful asset. emily: have you increased your twitter position since the selloff and are you continuing to boost it ahead of this deal? >> absolutely. the fact that people don't believe that elon is serious about taking this company over just proves how many people don't understand elon after all these years. he's dead serious on completing this deal. it is at a price of over $54.
there is no renegotiation going on. i very much believe he is going to complete the deal. emily: some shareholders are excited, some are skeptical, natosha lam very skeptical about how elon musk will handle free speech, civil rights issues. what do you think about those nuanced and very complicated issues? ross: i think it's silly to think that elon musk's neww job will be the -- new job will be the arbitrator of free speech on twitter. what he's trying to do is put in a management team and a transparent system so that the users of twitter fully understand what is not allowed on the platform. what i think most people are upset about, including myself, with twitter, is the arbitrary way decisions are made.
transparency is something he is pushing hard. i think that will be beneficial for the users of twitter. emily: interestingly we heard the ceo reader rate the company -- reiterate the company's mission to diversity. elon musk announced he will be voting republican. is that good for twitter? ross: [laughter] elon and i are in the same camp. we are both ex-democrats. i'm never going to be a republican because i can't stand them, but i have become an independent voter. what elon is saying is true. i worked hard to get joe biden in as president and am a big believer in the values that the democrats represent, and they have achieved nothing. they achieved none of the agenda that they set out to achieve and they really disappointed big supporters like myself, and especially entrepreneurs, who they attacked, constantly saying we don't pay our fair share when
we do. they push, especially successful entrepreneurs, out of the democratic party. i'm one of them too. emily: speaking about an entrepreneur who is now out at twitter, the era of jack dorsey is officially over. we knew this was coming, no formal role at the company, but we can assume he will have some influence. what do you think it is the significance of jack leaving? ross: i think he will be back. emily: how so? what do you mean? ross: i think he's dealing with this elon stuff. i be surprised if he's not working with elon at all. he seems to be on twitter, jumping on arguments that elon is making, defending his positions. i think jack is focused on square, which as a square shareholder i want him to be.
i think he will play a role in the new twitter. emily: meantime, silverlake's egon durbin did not get reelected to the board. what is your reaction to that? ross: it's hard to understand why certain shareholders are on the board and not on the board. i find that to be significant because silverlake is a major player. i think it has to do with the changing nature of what's going on. there might be some conflict of interest involved as well. maybe they are involved with the new takeover, so they don't want to have a conflict by having someone on the board. it's hard to tell white moves are being made. emily: meta also held its shareholder meeting today. peter thiel no longer on the board there. he's going to work more on the trump agenda. i'm curious of your thoughts on twitter versus facebook. you have a minuscule position in
facebook. also versus step, especially given -- snap, especially given social media stocks. ross: we spent a good day looking at snap and i have friends at snap. i was try to figure out what the hell is going on there. these are three different stories. snap is getting eaten by tiktok. tiktok is like a vacuum of young people's eyeballs. it's just -- snapchat has not been able to compete. meta and facebook and instagram are also suffering from the tiktok thing, and the apple privacy changes, which are really affecting instagram and facebook in their targeting, but also a lot of ads. people are saying you need to move some of your instagram budget to tiktok. that puts pressure on facebook and meta, not to mention there has not really been innovation there in a long time and the
younger generation is not using facebook. with twitter, it serves a completely different demographic than the snapchat, facebook demo. it is people looking for information. twitter is probably the most valuable information platform in the world. if you look at the depth of the global leaders and users, there really is nothing like it. as an investor, i can't even imagine not using twitter. i think twitter has a lot more intrinsic value than the other ones. emily: the president and ceo of gerber kawasaki. always love having your views. coming up, twitter not the only one holding its shareholder meeting today. meta and amazon. we will get an update on how it all went down, next.
emily: amazon also holding its annual shareholder meeting, the first for ceo andy jassy. spencer, what were the big takeaways and andy jassy's responses to some of these resolutions? >> a big one -- there were several regarding worker treatment. jassy had to respond to that and these high injury rates. amazon was hiring a lot of people through the pandemic and jassy was trying to explain a lot of them are new to industrial work environments, therefore injury rates climb, even though amazon made this pledge to make it the best place to work and to target reducing injury rates. he's definitely trying to buy some time by explaining the
unique circumstances around the pandemic. there was also an advisory vote on pay. it was a big deal because you have jassy promoted into this role as ceo, promoted to succeed jeff bezos. some influential advisory firms saying that jassy and two other executives, their pay is not li nked strongly enough to company performance. emily: quickly on that, you have amazon shares dipping nearly below $1 trillion in market cap. how concerned are shareholders about that? spencer: that did come up. jassy addressed it. one of the questions shareholders had was you have so many things going on, what if you are more focused, would that make the company more profitable? jassy's response was we had
amazon web services and when it was in its gestational period, people were critical about that, and we turned it into this huge multibillion-dollar business. i guess he's trying to make the case that you can't afford to not invest in things even when profitability is down. emily: thank you for giving us the round up on andy jassy's first agm. coming up, snap stepping back a bit after that massive -- snapping back a bit after that massive selloff. big concerns remain about the future of digital advertising and the health of the macro environment. we will talk about it next. this is bloomberg. ♪
emily: welcome back to "bloomberg technology." we will get back now to the markets and hone in on social media stocks. >> we will start off with the broader markets, which we did see moving higher today. the nasdaq 100 outperformed. some of your heavier weights, amazon, tesla, and apple pushing that index up higher today. that impetus started to come out after those fed minutes, the idea that fed policymakers were not as aggressive as the market was expecting. you did not see much changes in the 10 year yield, but the two year yield has been more sensitive to fed policy changes. that ticked a touch higher. we get a bit more of a rsik o--
risk on feel today. those social media stocks that plunged yesterday, we saw them get a big bidi today -- bid toda y. we know these stocks behind me, perhaps investors thought they were a little oversold yesterday. on a year to date basis they have been down in the double digits, concerns of a slowdown, what that means for ad revenues. it is not just social media companies suffering this year. that is represented by the orange line on my chart. they are down 37% on a year-to-date basis, but it is also the spac index, your ipo index, and the nasdaq golden dragon index, chinese tech has its own regulation challenges, but clearly investors shunning some speculative or more risky assets and honing in on more relatively safe plays. emily: while we did see that
slight rebound in social media and tech stocks in general, big concerns still looming about the future of digital ads. they lost 43% yesterday. re-gained about 10% of that today. how concerned are you about snap ? >> i share most of the market's concerns. how much of this is macro and how much of this is snap specific? i started thinking this was mostly macro. i was taking the company at face value. but there is a track record here. this company has had a couple surprises along the way, including in the september quarter last year when they said they would not have any impact from apple, than they said they did. -- then they said they did. there is a greater credibility
issue at snap. i expect they are seeing a lot of macro pressures. brand advertisement would be first to get cut in a recession. they have substantial exposure to europe, which one could reasonably assume will see pressure first before the u.s. does. a lot of what they are seeing is due to ad names. a couple times this has happened. maybe it's not terribly surprising that skits taken down more than the other ad names. emily: how much of this could be tiktok eating snap's lunch specifically? mark: you are asking the right question. if in addition to macro, what other factors could there be? it could be tiktok. it could be ad budgets that slipped over to snap in the wake of the apple privacy changes slipping back to facebook. it could be additional apple privacy changes. there is a series of things apple could still do to tighten the screws on the ad ecosystem
that could be having an issue on snap. it could be that this company is more exposed to brand advertising than the market realizes. that is probably the part of internet advertising in a downturn that gets hit first. what gets hit last are the marketing channels because it is more performance marketing based. there are a couple things that could be piling up on snap. it's a surprise to have that guidance change in a month. it is probably macro, but could be a few other factors. emily: there is a question what this means for other social media companies, even though they are in the middle of different narratives. twitter just wrapping their agm today. no vote on elon musk, but concerns, excitement about the deal looming large over that meeting today. what is your take on what direction this is going to go?
we saw a lawn musk raise his -- saw elon musk raise his equity portion of the deal. mark: i assume he's not going to walk away from the deal. i assume he would love to get a lower price. whether he can get it or not, or get those shareholders that he convinced would be a good buyer of their stock, whether they would still be willing to sell it to him at $40 or some lower price. i don't know who has the most leverage in the environment. maybe he does. i assumes he really wants this asset, that he does not want to waste $1 billion. at the end of the day, elon musk wants to own twitter. my guess is this gets negotiated at a lower price, or we will be spending a lot of time in courts, which will be unfortunate for everyone involved.
emily: how insulated do you think twitter and snap are from the problems twitter is facing? mark: i think twitter has relatively material exposure to europe and it's very heavily into print advertising. that is probably the weakest part of the internet advertising ecosystem. that is 75% of twitter's total revenue. if that is what is taking down snap, it would be taking down twitter in droves. there will probably be a lot of dislocation of twitter, but this was a hostile takeover, what do you expect? you disincentivize a lot of the employees, you have turnover, a lot of uncertainty over whether people will keep their jobs. almost certainly it will lead to suboptimal execution. all of that will pile up and probably hurt twitter's fundamentals near-term. this does not help with the issues snap talked about if they are seeing loss of ad budgets.
twitter will see all of that. facebook much less so. google the least of all those. in these major recessions, google's growth rate cratered to only 3% during the great financial crisis. during the covid quarter, it went negative. google is not immune to full-blown advertising recession. emily: let's talk about another big tech company where the gains from the pandemic have been completely erased, amazon. we are seeing amazon's market cap get close to the $1 trillion mark. amazon also holding their annual shareholder meeting today. it is andy jassy's first one at the helm. what were you takeaways from a we heard there, and whether amazon can turn it around? mark: i'm sure amazon can turnaround. i look at amazon as a dislocated high-quality stock. it is the most successfully
diversified tech asset i follow in terms of advertising clout, retail, and a couple other targets they can go after, including logistics and business supplies. groceries i think falls into retail. that is a big area for them. i'm not worried about the long-term outlook for amazon. i think they have good growth initiatives. the norms i picked up today, at least from the headlines, is the focus on cost efficiencies. i think the company -- somebody did something -- i don't recall amazon ever saying we overbuild, but that is what they said on the march earnings call, that they over extrapolated when they were making their distribution center buildup plans at the end of 2021. i don't blame them for doing that. i think the market did that too,
but amazon now has excess capacity both on the labor force and fiscal plan side. how long will it take u.s. an investor to work through that? if we are going into recession, that will make that capacitively -- that capacity utilization buildup time longer. i think they will get through this. i look at the stock, you are a long-term investor, you should be buying, at least taking personal decisions in amazon here today. emily: certainly we will be interested to watch how andy jassy steers the ship. mark mahaney, good to have you. bitcoin at $8,000, couldn't go that low? one investor thinks so. we will hear from him next. this is bloomberg. ♪
>> we are probably going to hit $8,000 until we totally flush out what is going on. i i were, i would be short. emily: could bitcoin fall as low as $8,000? that was scott minerd speaking in davos. at one point he was optimistic enough to predict bitcoin what hit $400,000. -- would hit $400,000. i want to bring in the head of market insights at genesis trading, a cryptocurrency prime broker. what do you think, $8,000?
>> between 8 and 400 is a wide range. predict with wide ranges. i have to say that my opinion is not that of my employer. he was one of the early institutional investors. he did do his homework back in the day. later on in this interview, he did say his predictions of $8,000 was based on technical because there is nothing else. and that is overlooking the growing adoptions and the fixed supply. that no matter how high the bitcoin price or how high the demand, the supply remains fixed. that is a fundamental feature. bitcoin's demand could multiply by 1000 times, the supply will remain fixed. that is a pretty compelling
investment case right there. emily: i want to ask you about some of the wreckage in the wake of this disaster. they have a new plan that has been approved to split the blockchain. what do you make of this as a path forward? noelle: you can imagine crypto twitter today is having a field day with this. i must say anything that gives those that lost a lot of money a chance to get some of that money back should be entertained. that would be a very good develop. that said, a lot of trust needs to be recovered, which is quite ironic that trust is still such a firm component of a system that was designed to not need centralized trust. it shows that we can get rid of
the trust component after all. emily: i wonder what the path forward is for regulators. we know the house committee on financial services will be talking about digital assets. for example, could fed central bank digital dollar so to speak be possible? noelle: certainlyit's -- it's certainly possible and in some parts of the world we are already seeing central bank digital currency. we will see them within five years be quite commonplace. the form this will take is being hotly debated. this has many potential efficiency features, also some risks. what is most interesting, going back to what you mentioned about the terra implosion, this will accelerate regulatory clarity, not just about crypto assets, but stablecoins, their potential use in global trade, their
potential convenience for consumer services. it's a fascinating field. standing in the middle of it, watching what is arguably one of the most profound transformations of how we transact with each other, as entities and individuals, as sovereigns, even, it's an exciting time to be looking at this space. emily: someone who is optimistic is andreessen horowitz. they announced a record $4.5 billion crypto fund. what do you make of the influence andreessen horowitz has on the crypto ecosystem more broadly? they have quite a bit of money at stake. noelle: they have a lot of money and that is their main influence. with a and announced today is a reminder of how much money is still sitting on the sidelines. valuations have been very high. hiring has been very accelerated. i know of many investors who have been sitting at out because
they think the valuations are crazy. i know many entrepreneurs who walked out of an actual pitch meetings -- of initial pitch meetings. that is kind of a crazy time, not because of price, unlike other frothy markets. what happened in the crash the week of may 11 is a jar of cold water on the entire system. the vast amount of money that has been sitting on the sidelines, a lot of it coming from increase in homeless -- from andreasen horowitz, will take time. we have to do due diligence and be careful. we do need to be careful and think things through. the regulators no doubt will be taking a more careful look at some of the stablecoins and other projects because protection is part of their role. now that the froth seems to have
a slightly different tone, i expect us to see different kinds of investment deals. there is a lot of money out there, a lot of belief and the potential of the crypto industry to transform not just finance, but many aspects of our culture. emily: i think about a company like microstrategy, how do you think these massive price fluctuations are going to impact institutional sentiment? noelle: one thing that needs to change is the accounting principles for companies like microstrategy. institutional strategy has taken a hit, but not gone away. we are still talking to them. they are still trading, but a bit more cautious is the tone we are seeing. emily: thank you for sharing your thoughts. coming up, the future of ai and keeping people safe on the road. and promoting fuel efficiency. i will chat with the ceo that is trying to make that happen.
emily: let's talk about the future of ai and helping to make driving safer. a tech company just raised the new funding round at nearly $3 billion valuation and planning to invest in artificial intelligence capabilities, including dashcam's that can identify unsafe driving. i am joined by the motive cofounder and ceo. talk to us about how the technology works, specifically the dashcam. >> it's great to be here. our mission is to unlock the potential of the physical
economy. we serve industries like construction, energy, transportation, agriculture. what we do is we build technology that allows them to improve safety and productivity of their operations. one of our products is the ai dashcam, which is technology that helps our customers understand how their drivers are performing on the road and in real-time improved driving performance by observing the driver and are learning them of unsafe behaviors. in our analysis, we observed almost a 22% reduction in accidents and road fatalities for our customers who deployed this technology. emily: who are your customers? what growth opportunities do you see ahead? shoaib: we serve the physical economy, industries that move things, build stuff, serve
customers in the physical world, industries like construction, agriculture, transportation, logistics. it's a segment of the economy that has been underserved by technology. these industries have not had modern technology to drive the productivity gains that are necessary for them to keep up with what is a continuously expanding demand for their output. we build technology that enables these businesses to thrive. emily: let's talk about what you are going to do with this funding. do you have expansion plans in mind, perhaps beyond the united states? shoaib: we are definitely investing in growth, monitoring the macroenvironment and the health of our customers closely to make sure we are taking the right actions to make sure we can build great products for them, but also react to what is an evolving market condition. importantly, our customers are
facing incredible inflationary pressures. the cost of their inputs is rising. our technology in that sense can be fundamentally deflationary. if we deliver on our promise of delivering safety, productivity, reducing fuel or maintenance costs, we can help these businesses be more efficient and thrive no matter what happens in the macroenvironment. we are very much investing in growth. there is three key areas we are doubling down. number one, ai powered automation. within the source of operating leverage for the fiscal -- for the physical economy will come through productivity gains through innovation. two, we are investing in fintech. we recently lost the motive card, a zero fee corporate card that helps our customers save on fuel, maintenance, tires, but also give them controls to reduce fraud, reduce excess
spend. we will be doubling down there, also serving larger and larger investors. emily: the cofounder and ceo of motive, we will keep watching you. that does it for this edition of "bloomberg technology>" tomorrow the ceo of google cloud will be met t -- be with us. i'm emily chang in san francisco. this is bloomberg. ♪
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