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tv   Bloomberg Technology  Bloomberg  August 24, 2022 11:00pm-12:00am EDT

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>> from the heart of where innovation, money and power collide, and beyond, this is bloomberg technology with emily chang.
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>> i am emily chang in san francisco and this is bloomberg technology. coming up, a concierge start of shaking up city living. we will talk to the wind behind the company about why they see big opportunities and what they think about their early investor, adam neumann starting a different company. plus, peloton on amazon puts it by on the world's largest e-commerce site for the first time ever. and one of the biggest deals of the year comes together, we will go inside the $70 billion microsoft activision deal with bill spencer. first, tesla and apple are performing.
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emily graffeo is with us. welcome to the day. >> finishing the day largely higher are the stocks and the tech heavy nasdaq 100 finishing up about .3%, largely in the green. a little bit of weakness in that final few minutes of the trading day. if you look at the more sensitive areas of the markets, not a lot of movement. bitcoin not moving that much and semiconductors are not doing that much. traders are just waiting to know how hawkish jerome powell will be in that fed speech on friday on jackson hole. we do have a couple of earnings to look at, nvidia falling down about 3% in the post-market. they talked about laszlo -- lackluster demand in computers. a little bit better news coming out of snow. also falling in the post-market, talking about lackluster revenue
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and a final look at the trading day. i am looking at tesla. that stock is falling about 12% today. this was the final day before they executed that three for one stuck they did to finish the trading day. and also, peloton, that was really the big news today, up over 20%. it was the biggest intraday gain since february. they are going to be selling bikes and apparel on amazon. a lot of wall street looking at peloton. their earnings are due tomorrow morning. >> all right. we will be across those results. here talk more about peloton's partnership with amazon is dan. what do you make of this? until now you can only get these bikes directly from peloton and now you can get them on amazon. will it open the floodgates? >> etiquette is a starter. it is a direct to consumer model, it has been an uphill
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battle for peloton, especially coming out of the pandemic. they had to do something. if you're going to bet on someone, i think amazon is the right move. >> obviously, peloton has to work through multiple other issues. they are working on this send the bike, you put it together yourself. does that all make it a little complicated? >> i think it does. that is part of the problem. the typical peloton buyer does not want complexity. they want simplicity. and they have had some significant misses from product perspective on treadmill and some others. strategically now, they are cutting costs. that is part of the issue. cutting costs. especially the competition coming from all sorts of angles. this is really going to be a very bumpy path. i think this is a baby step in
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terms what they need to do. >> how many people will buy a peloton on amazon that did not go to peloton direct? >> i think it is in the single digits. i think it is more about accessories and maybe part of the ecosystem they are trying to build. it comes down to the direct to consumer model. i think the writing was on the wall. i could definitely see some more partnerships down the road but right now, they are on the whiteboard trying to figure out what could ultimately move growth and i think when it comes to amazon, they have their ears open. i think it means a lot strategically for both. >> what you make of the speculation of amazon as a potential buyer? >> i think that is speculation. i would be flabbergasted. strategically, it does not make sense in terms of them going down that route. i think that is why this is more
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of a partnership but i think m&a shatter falls. i think strategically what they will do, amazon is more partnership and it really starts there. -- stops there. >> how much of a difference will that stock split make? >> the retail community will look back at 2020. it is really a different market but no doubt. they are doing it at a time when you're really starting to see demand continue to be firm despite what we are seeing from the storm cloud. production in china, they never had demand issues. they have a supply issue and i think that it starting to get rectified. it really feeds the appetite of retailers. it is a smart move. >> another little twitter
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kerfuffle between elon musk and a customer, replying to a customer, that was critical of this data. the driver assistance feature. musk basically saying i don't want to hear about in so many words. what do you make of this? >> it is not what you want to see. i think there has been positives for twitter and negatives when it comes to musk but the more and more scrutiny to some of the other areas we are seeing with tesla, you don't want to see this go back and forth. they just want the execution and much more of the software model. but musk marches to the beat of a different drummer. it is not going to change. >> thank you, dan. class coming up, we will be speaking with the cofounders of a company that aims to change the future of living.
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one of the earliest backers is adam neumann. he is trying to do the same thing. we will ask about that relationship next, this is bloomberg. ♪
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>> >> venture capital is in the midst of a big debate about funding and second chances. this is after they read the biggest check ever to adam neumann for his new real estate venture, a company portrayed in a recent forbes article as being very close to another company invested in two years ago. it is a residential services company that m's to build
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community by fostering experiences within residential properties. thank you so much for joining us, ladies. as well as bloomberg's own, ed hammond. let's start here. tell us why you founded alfred and the mission of the company today. >> that is an easy one. when we were working long hours and building our careers, one thing we thought about was how we make the places we live in participate and support us. and that was ultimately a way to keep more women in the workforce. that evolved into thinking about housing as a whole. it is about making housing august on the consumer, putting the resident at the center of the value chain and today, housing is the largest asset class in the world. but it is really lacking in
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terms of a experience, technology and the focus on the consumer. we decided to give renters more for their mental. >> the idea of tech enabled property management is getting a lot of attention because adam neumann just got this paycheck. before we go there, why do you think this is such a big opportunity? >> i think that housing is one of the largest opportunities we have. all of us consume housing and no one has ever looked at it as a consumer products. at the same time, i think housing is in crisis. if we look at the asking rent in most markets right now, they are 70% higher than they were for what's being paid. we also have a housing supply problem. we need to build 5 million more apartments to meet demand for housing. given the impact it can have on people's lives and the
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challenges facing it, i think it is right for a lot of attention and investment and a vision for what it can be. >> there is a lot of noise around the space. he had a relationship that previously existed with alfred and you guys. talk to us a little bit about how you got to know him and his family and how their relationship really came to be in the first place. >> and alfred, we have always taken a very collaborative approach for building our business. that started eight years ago when we started working with our initial landlords and partners and among our partners, we don't really count adam but we count great start and invesco and our venture capital partners. i think the key from our perspective has been to build a business by working with the best in the industry and doing
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that bottoms up. that means being part of a broad ecosystem. that is the approach we have taken to the history of how we have built the company. it is very much how we met adam. >> effort has its own unique product. we just talked about this idea of owning the future of living. what is it that alfred does that is unique? how will they disrupt residential real estate? >> this is where most of us are actually living and renters are going to be home dwellers rather than homeowners in the future. most families have not evolved since the invention of the elevator. that is the biggest innovation that has had the opportunity.
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the reason why we believe real estate has been so resistant to this, it takes only 1% of the budget and applies the tour technology. to make a change, you can't just attack one part of the problem, you have to work the entire value chain and you have to align stakeholders in new ways that create value for everyone. what alfred does that is so unique, we are the only tech company that -- we started with home management. we earned the right to provide services in the home. we then acquired a company that allows us to automate and manage. we will acquire a property manager that understands what it takes to drive an asset. what we are going to do when we put those three things together is create a flywheel. we automate the entire experience of sending her these, paying your rent, it doesn't
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hurt. it makes the owner more money. it makes the neighborhood around the building more vibrant. we really think about real estate as not just about the rent check. it is about looking at the building itself as a retail center and a lifestyle. we are changing the value chain and we are giving back. it has taken us eight years of really hard work, we have 150,000 units on our platform and 52 cities across north america and we are really proud of the resilience to build what we believe will be a generation defining company. questions wondering how adams relationship with the company
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changed over the last couple of years. his representatives say he believes the article is inaccurate and that he and his family office still support the company. what is your response to that? what is your assessment of his reporting? >> it is a great question and i think a lot of people are asking probably some of the questions but the thing i think is important is not necessarily what is accurate from a reporting perspective, it is what we are really focused on building and what have we done already to get us to this place? i think this is a huge market and a lot of people see the opportunity here. that is something worth investing in. the thing that we are really focused on is where we want to take this in the future. we have only scratched the surface of what is possible in this market. we have 150 thousand units but that a small compared to the overall market size.
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i think that is where we should focus the conversation and bring the resources, whether they are part of our company or part of other companies in solving what they can be in the future. ? andreasen wrote that they aim to build the future of living and if you look at your website on the homepage, it says welcome to the future of living. i know that can mean a lot of things but how do you feel about that? do you believe there is a conflict of interest here question mark >> we are excited about the attention they are bringing with the logitech they have ever written. there is a difference between those two numbers. we do see the opportunity to continue to expand to our investor side but i don't want
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to comment on other businesses as much as i want to focus the conversation on ours. >> on the question of funding, they have put a very large amount of money into the space. has alfred had a conversation about getting vaccines? they are very interested in the space. >> we have lots of investors. one thing i would note is that the company is on profitability and we are a self sustaining company. this is not an idea. we feel there is something really big year. in terms of talking to other investors we have a ton of appetite. i would say that one thing i hope a positive silverlining that comes out of this is the
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way we think about venture. only 2% of venture dollars have gone to female led companies and that has shrunk year. i really want to put some emphasis here in saying that female led companies are no less . i think there is a huge arbitrage opportunity for female founders. especially in the space. i believe the future of living will require a lot of collaboration across many different companies and that is the new form of disruption. they will require so much change across so many stakeholders and a very complicated value chain. >> i would love to give you a chance to weigh in on this question as well. we know that women are historically underfunded in silicon valley. they have a much harder time raising money. we have upside, a controversial
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male founder getting a very big check. what is with your reaction to that number? >> i think that it is a great point and it is not lost on us. i think the positive view of it is it is time for a lot of investment to go into the space. this is raising the awareness and visibility of housing and the rental residential real estate market as an opportunity. i think this is a terrific company, it really validates that market and put a spotlight on what i think has not been as visible previously. i think that marcella spoke to some of the other elements of it but as we look to the future, we can take that as a benefit for sure. >> both of you have worked very closely in this company and over that time. now looking to start their own
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business in the space, what will it take to be successful in this market as it comes in as a new entry? >> as with any business entering a market, it comes down to understanding the customer. when we started off, we start by focusing on the way we could impact our lives and give back time past the front door of the car. that is how we really build the company by listening to what a resident needs. you have to wonder how you can deliver that. probably not only just for the best but how can you make the operators that work in these buildings, how can we elevate all of the attention in this space just for the benefit of everyone and listening and really thinking from the consumer perspective and the
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customer perspective. i think that is critical for them. >> bigger picture, we are battling inflation. we are potentially going into a recession. how do you assess how many people are going to want to pay more for the kind of services you provide? do you see this as a luxury or a necessity? >> i think the really important thing that we are doing is not about increasing rent prices, it is about how we do things more efficiently, how we use technology to automate prophecies and anticipate needs and deliver services that allow new revenue to come into the building and effectively increasing sizes not just by passing the resident. as we have seen, the mental prices have been so extreme. there has not been a subsequent increase in value proposition. what we believe is people want
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to rent a lifestyle. we can staff these buildings a little differently, training people to hotel standards, moving property management for a focus on maintenance to how do we make a resident possible i fantastic? how do we make people feel a sense of place and home? it is not just about how we jack up the rent prices. >> all right. the cofounders of alfred. thank you both for joining us along with our very own and hamilton. we will be right back. this is bloomberg. ♪
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>> we continue to watch the latest meme stocks. they found a lender to provide financing, bed, bath & beyond is trying to boost liquidity. coming up, how the inflation reduction act could change how we do our taxes. that is next, this is bloomberg. ♪
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>> regulators are taking a close look at how twitter calculates the number of spam and bought a
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account. the sec wrote a letter to twitter ceo asking to disclose a methodology used in calculating the bought situation. twitter's lawyers told the fcc that it already adequately discloses the methodology that it uses. this has become an essential sticking point between the company and elon musk who is trying to walk away from a $44 billion buyout of the platform. bring us up to speed. there was another hearing today, the whistleblower allegations we learned about yesterday. now potentially the fcc is involved? how so? correctly allegations from the whistleblower kind of hit on two important things. one is that he claims that twitter has been lying to shareholders. the company is indeed hiding the number of bots that make up part of its user base or something like that. that could be a security
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violation and a huge thing that the sec has to investigate. twitter and the ftc going to a consent decree back in 2011 that the copy would make all kinds of changes to practices and this whistleblower says the company has not done that. both regulatory agencies have a good reason to at the very least ask twitter what is going on and seek clarification about what this whistleblower claims. >> what happened at the latest hearing? how does it move the ball forward? >> the two sides have been fighting for a while as to who should be bringing the information about bots forward. elon musk and his cap say twitter has not been forthcoming. they are not being willing to put forward employees who do have access to that information or expertise. twitter is already doing the opposite. they are trying to settle that in court. one of the issues is that musk's want access to this whistleblower.
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they think he qualifies as someone who would be an expert on this kind of stuff so they are working with the judge to basically figure out who twitter needs to put forward and make available as part of this trial to answer some of those bought questions. >> we are still learning more about these whistleblower allegations. i am curious what you are hearing from your sources. i am hearing that twitter is looking at the same redacted document that appears in the washington post. there is a lot of information that is not there or they can see. what we learned about this complaint and the intentions of the person making this complaint? >> there are a lot of people who work at twitter now or recently who are not happy with this. they see this as either unfair or certainly not reflective of
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what they truly believed to be happening at the company and the timing is very suspect. a lot of people have claims that seem to echo some of the stuff that elon musk and his lawyers are saying. i think management, my understanding is they have reiterated a lot of the things we have read in the email. that he was basically saying this is false, these allegations don't have any merit to them. but at this point, if you work at twitter, you are annoyed. you're going through this whole process already and then this allegation comes on top of it. it is just snowballing for the company and i start to sense that when i talk to the people who were more recently there. >> it has been going on for a while. many months. kurt, thank you for that update. we appreciate it. turning to earnings. that is expected. the small business use it --
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unit improved 20% year-over-year. they are facing headwinds from government changes to the tax system including part of president biden's inflation reduction act that is setting a government run tax filing system. let's start with the numbers. obviously, they look good. interesting to see the number of small businesses increase coming out of a pandemic. how is this informing your outlook? >> thank you for having me, emily. we are excited about our outlook. when we look at the macro environment, there are two things i would say. number one, small businesses -- i do worry about the economy but at the same time, consumer spending is strong. small business performance is strong that they are trying to manage the rising inflation, the costs going up -- their supply chains costs going up.
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they are working through all of that but they are very resilient. by shifting to that platform, that is why our platform is nor -- more mission-critical than -- now than before. we are no more than a line item on a small business budget. we are the platform being used to run their business. that is reflected in our results but also reflected in the overall company guidance we provided. specifically the segment guidance around small business. we are excited about the future. >> what demand trends are you seeing? you have other software ventures sing lengthening failed cycles. is that something you are finding as well? >> we are not saying that because the small businesses that we serve our either a one-person shop all the way up to about 100 employees and the small businesses use our platforms to be able to manage and grow their customers, manage their cash flow. these are not really enterprise sales so we don't see the sales
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cycle extending a lot. we are seeing more reliant on our platform. especially in this environment to be able to feel their success. >> i want to ask about this inflation reduction act situation. part of this involves money to study the creation of a government run tax filing program that could completely disrupt turbotax. one of the key products. how much does that concern you? >> the irs got about $50 million to do just a study of what it would take for the irs to create a tax platform. the first thing i would say is pretax is available to all americans whether it is us or our competitors. from an availability of free software, it is already available. i think secondly, we are big advocates for the consumer.
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they know the story of their life better than anyone else when it comes to reductions for their taxes. they know the story better than anybody else. we will have to let the consumer decide what is most important in terms of where they want the irs to focus. is it about the refund experience or creating tax software? it is a nonevent because free tax software is already available to all americans. this could yet be another free tax software so that is the way we see it. >> you had been planning ahead -- that said, you have to be planning ahead. do you think this is something that could come to fruition? >> we are not. if you look at the last nine years, we served over 113 million consumers that have filed their taxes for completely free. it really doesn't change anything that we are doing. we have a platform that you can do it yourself and for certain
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customers, it is free. we have a live platform that gives us the ability to deal with this. this is our biggest growth driver. it doesn't really change our strategy at all. i think the governor has gone back and forth for the past 25 years thinking about the study and for us, it doesn't really change anything. >> talk to us about the strategy there and how you see this fitting into the business longer term. >> weird -- we are very excited about mailchimp. we acquired this because it plays a role in helping small businesses grow customer base. it helps them markets and new customers on different channels. it helps them manage their existing customers and one of the things that we see as a huge opportunity is how to marry a platform capability that not only helps a small business grow their customer base but manage their cash flow.
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so bringing those two platforms together allows us to have a one-stop shop to really feel the prosperity of small businesses. mailchimp has incredible capabilities. we just appointed a new leader to work with the team there. she has been leading our payments grew very successfully. now she will be leaving both mailchimp and the payments. we are really excited about the opportunity. >> all right, thank you for joining us. coming up, could bitcoin fall even further question mark that is what some technical analysts are saying. we'll get some takes from the financial services firm next. this is bloomberg. ♪
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>> time for eric gripp to report. -- our crypto report. bitcoin could be headed for another downward slope with a large cryptocurrency down more than 50% this year and digging in a range of 19 to $25,000. let's bring in our chief investment officer for his read on this along with our own crypto contributor. thank you for joining us. stephen, do you think that bitcoin has fallen and how far? below 20? >> thanks for having me. i believe that bitcoin has a little bit further to fall from where it is today.
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we are pretty close to the bottom and from here, i think in the long run we will be doing just fine but inflation as well as what risk assets do and a hawkish fed. >> i think about the letter that dan moorehead wrote to investors. i got in my investment -- in my inbox today. how will this play into where bitcoin goes next? >> any time liquidity is being taken out of the system which is what is happening right now, all risk assets will continue to fall. bitcoin did fall quiet a bit due to some local contagion risk. but bitcoin was the first acid to go. we are ready for the rest of the financial markets to catch up. i agree that we do have a lot further to go as far as rate hikes.
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we think that we will see the fed target rate somewhere between 375 and 400 by the end of the year. >> what does this mean for non-bitcoin crypto assets? what does it mean for ethereum? people fall onto sides here. you have some that are selling into the merge and some that are bitcoin maxis that are really more focused on the benefits that mining provides. how do you feel about this move? >> i don't think it is a rare thing for ethereum in the short run. in the long run, it might actually work out but the ethereum network is actually more secure. that is what really makes bitcoin the most secure network. essentially you have validated that are validating transactions all over the world in a decentralized manner. when you need to prove a stay,
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that falls in the hands of the few. those are the ones that give this to validated. there is an application but in terms of a theory of, the security rules need to be seen how that will work out. we really think that if you're holding a million dollar plus nft and you are relying on the ethereum network and it is changing right now, that may not be a great place to be right now. >> where are you placing your bets? valkyrie has exposure to the largest cryptocurrency by market cap. which ones are you leaning into and leaning out of? >> bitcoin is really the flight to safety right now for a lot of our funds.
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we are looking at some of the more established proof of static protocols. those are great places to be. places like avalanche. these are the ones we are really looking at to move into. we also have active accounts where we can take risk off the table in times of uncertainty like we did at the beginning of this year for most of the year. we are moving out of anything that has too much exposure right now until we see this merge go through in the middle of september and into some i say safer and larger crypto protocols. >> what about salama? you think about magic aiden and the discussions they have had their. it is also very polarizing in terms of an asset. do you think that has any room to benefit? >> it is one of those blockchain's that sacrificed
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security for speed. it is still a work in progress. i don't think it is necessarily a flight to safety. especially if you care about security right now. that is our biggest fear on a theory in. will it turn out to be more like salama and a lot less like bitcoin? we are cautious on solana. >> where does ethereum and the year? >> we think that ethereum very well could get back to a thousand or even lower if it doesn't go well. if the merge does go as expected -- there is metal lot -- there is not a lot of debt out there that it will. we are kind of holding off until september until we make any big bets on a theory in. >> all right. thank you for helping us navigate all the things you're
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working through. appreciate it. coming up, how microsoft hopes to change a toxic workplace culture in the gaming industry. that is next, this is bloomberg.
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>> microsoft's head of gaming says the -- if that happens, spencer will inherit a videogame hit maker with a controversial leader. i spoke with him about a wide-ranging -- in a wide-ranging interview on bloomberg 1.0. here is our conversation. >> i think big deals should be scrutinized. i think that is the role of regulators. i feel good about the progress we have been making, asking good, hard questions about whatever our intent is, what this means if you played out over five years. is this constricting the market? >> you are confident idea will happen?
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>> i have never done a $70 billion deal. i don't know what my competence means. the discussion we have been having seems positive. and we are actively engaged in a conversation, try to be transparent about what our motivations are. activision specifically is facing a lot of challenges here. there have been lawsuits and employee walkouts. there has been accusations of sexual harassment, sexual assault. how much did that concern you? >> we had access to data from the company before we announced the acquisition to see what the actual numbers were in terms of reports. we definitely as a team signed up to say we are on our own journey with xbox. a lot of people will feel very dedicated to building a great workplace environment for them. that is true of any of our studios but it is obviously a conversation you are going to have. you think about the board of microsoft and when they are thinking about the deal and typing into their search engine,
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activision, what are the headlines coming back? >> we learn from this, we will continue to learn. we are committed to that journey. we think it is critical to our business. >> will it stay on? >> i am not in a position to make comments about their leadership team, the regulatory phase or how that will close. when the deal closes, until that point, i am not able to say. >> what was communicated to you about what we didn't know? >> discussions we have had about where they're at, can they make the progress they need to make?
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closing is a long process. are they putting in the work that they need to put in to move along their journey? i believe they are committed to that. when i look at the work they're doing now, there is always more that can be done. >> activision is unionizing. i know microsoft said they will recognize the union. what does that look like? >> i had never run an organization that has had unions in it. this has been compensated fairly in order to do great work. just what that relationship looks like, what it would mean if microsoft was able to close the deal. >> you can watch my full interview with the microsoft game acl bill spencer coming up
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at 9:30 p.m. eastern time right here on bloomberg television. that doesn't for this edition of bloomberg technology. john we will join us to talk about the latest avalanche and the crypto downturn. ♪
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