tv Bloomberg Technology Bloomberg September 16, 2022 5:00pm-6:00pm EDT
emily: i am emily chang in san francisco and this is "bloomberg technology." a bad week for tech stocks that just cap getting worse, the worst five days for the nasdaq since january as investors what the -- wonder what the fed does next. grinder the dating outcome of focusing on the lgbtq plus community, has a new ceo, our conversation. bad news for star wars fans, disney has pulled the film rogue squadron from its release calendar. how this will impact theaters globally. first, a look at the markets and ed ludlow. we made it to friday. market and tech stocks, a bad
week. ed: the nasdaq 100 closing down .1% but the worst week for the nasdaq 100 since january. you saw the big and small, but the mega cap strike does lower. semiconductors gaining .5%. a run up in yields. continued volatility. currency and digital assets will rise on the fed next week. a real tell is this chart in the bloomberg terminal. we talked about the worst week for the nasdaq 100 since january, but it is the ninth occasion of the year with the nasdaq 100 has fallen 4% or more. remember the context of the week . on tuesday when we got the cpi fridge, we had the biggest drop in the nasdaq 100 in more than two years. we had optimism with early preorder data from apple the boost of the index, but there
continues to be volatility. at the end of the week, we have more questions than answers going into the fed meeting wednesday. and then, factor into that fedex and the ripple that news sent into the market at real concerns about global growth. one stock mover i am going to focus on is a big story that may have been lost in the heavy news cycle, uber dropping by the most at one point since june during the friday session, although it pared some losses. exposure from the company after bloomberg's group that a hacker was able to access an employee slack channel, also information about google cloud structure in the market is really paying attention to that in the context of goober. emily: we will be back with you later in the show and talk more about that. i am a hacker -- that is the slack message uber employees received from an unknown source
thursday, trumping the company to shut down internal slack messaging as it investigates a massive cyber breach, according to "the new york times." our next guest is with a company that specializes in finding bugs in software systems. casey, there is a real fire drill happening inside uber now. how did this happen? casey: bug crowd works with hackers all the time, but this is one of the bad ones that we tried to stop. what we know is that there was, either through text messaging or possibly multifactor push message notification, a campaign conducted against people with elevated privileges within uber. the camping was successful. and because of that success, the acker -- the attacker got access
to credentials and got inside the network and they are able to move around and find additional information with that village -- with that privilege. emily: let's talk about the weirdness, one of my sources says there are unseemly pictures all over the internal network. aside from making havoc, what kind of valuable information could they have gotten? casey: it is speculation at this point. as of two hours ago, the basically posted precautions, there was a notice telling internal employees to stop using slack. it looks from the outside in that nothing is necessarily off the table at this point in their -- at this point. uber is having a very busy friday and likely a very busy
weekend just to be able to suss this thing out and then figure out the appropriate response steps. but at this point, they are saying we have things like private user data that has not been accessed, and so on. it is not necessarily an assumption that the hackers got into everything and used all of that, but they had more access than they should. and whenever a thing like that happens, a hack inside the corporate environment, there is a lot of work to be done to figure out what has happened. emily: uber says they have no evidence the incident involved access to sensitive uber data. it doesn't seem like the public uber ridesharing service has been impacted yet, right? casey: yes they seem to be
focused on continuing operations and business as usual, but talking to folks on the inside and around the situation, they are burning the whole thing down and working out what needs to be taken as a response steps and future precautionary steps. emily: all external services operational at this point. there is an interesting time in here in that the perpetrator got into their hacker one system, which helps the company pay bug counties to people who find vulnerabilities in the over system. this is similar to what your company, bug crowd, dies. what do you make of this? casey: it is similar to what we do, for sure. what i make of that, there were more scans and you talked about inappropriate pictures on the corporate slack, and people
interacting with the attacker and so forth. carrying along that line, there were messages that's got sent to everyone in the researcher community, called the white hat hacker or good guys community, that has been an issue with hacker one in the past, saying this is what happened, just so you know. there didn't seem much of a purpose to that other than to make a bunch of noise, but it definitely did. you got a whole bunch of computer security experts getting this matches -- getting this message and they jumped into what happened mode and started taking any steps necessary. from our perspective that bug crowd, there is weird stuff going on and is impacting vulnerability and exposure in the space and we are part of that space and we need to make sure nothing else is wrong.
emily: interestingly, at this very same time, joe sullivan, former chief security officer at cooper, has been on trial for a huge data breach in 2016 that the company allegedly didn't notify the public about when they should have. uber at the time, as i am distended, paid the hacker $100,000 to make the hacker go away, but did not properly disclose it. what do you make of the timing, and also history, of uber not having a great track record here? casey: it is interesting. the case is ongoing. i think it is in session today, pretty much all week to my knowledge and i think joe's side of the story in the internal side of the story through discovery is playing out.
though incident, the other thing that has my spidey senses tingling with the timing of all of this is that whole thing is going on with respect to the breach, you have a bunch of other things happening that are generally encouraging hacktivism activity around bay area tech. at the moment, there is a string of things that are happening that are getting attention. there was testimony earlier in the week with respect to twitter , there is a lot of heightened and passionate subjects boiling up at the same time. and that was the correlation between all those two things -- between all those things commend this happening at uber, trying to figure out what is going on. but yeah, in terms of speaking to how that reflects on uber, it
is too early to say. my main thought right now is my heart going out to the security team that is having to work a very long weekend. that is probably the right place to start. emily: a long, hard weekend for sure a head of them. casey ellis, founder and ceo of bugcrowd. coming up, grinder gets a brand-new ceo. we speak with george aronson next about his ideas for the dating app. this is bloomberg. ♪
emily: the dating app grinder just announced a new ceo, george arison, former ceo of automobile e-commerce marketplace shift. with somebody who identifies with the lgbtq community stepping into this role, george joins us now. stepping into a big role, but you have experienced at a car marketplace and on the board. what did you learn behind the scenes that you think you ring to the table? george: grinder is an amazing company --grindr is an amazing company. margins are challenging in the automobile business, but the
margins on grindr are amazing. more importantly, it is an awesome mission. if you are serving a community that is underserved, they can use this product in a dramatic way to connect. and that mission to me is virtual and will be a credit to it. grindr has been around for a long time, since 2009. people have used it the same way for a long time, but the features allow it to be expanded to be about dating and then other ways, and my role as the ceo is going to be to continue to nurture this incredible product in the community it serves in the best way it can. emily: how can we learn more about how grindr is used globally? there is one impression that it is just a data gap, but it is much more. george: there are many other
things people use it for. travel, and it is organic, grindr facilitates travel, but talking to people about where they can stay come up what they can go to go out to dinner and have fun. in an organic way, people use it for travel. health information is another major feature with grindr. during the pandemic, grindr has been very active helping our user bake understand that there is a problem, and ways you can go get a vaccine. so people use grindr in a ton of different ways. one of the interesting things for me being on the board in the past couple of months, we left one of the very challenging companies to be operating in and be gay in. and we heard so much feedback
from people in other countries pleaded with us to come back. the board decided whether to go back or not and people want to use the product to connect and it is super valuable. on the other side, we know that the state can use the product to find people who are gay. do you allow them to have a product that risks their security? it is a really big issue. the describes are critical grindr -- describes how critical grindr is to so many people. emily: you have gone through one spac process with shift and are trying to get grindr over the finish line now, but how are you thinking about market dynamics and a tough environment? george: a spac is great in that
situation because it is a guaranteed way know about of the market conditions. grindr's partner in this back makes sure there is no need for any capital to come in. emily: the last many most recent spac's haven't done well. george: most spac's have not done well, no question. but there are about two dozen that are doing well, and they share one trait. they are all profitable businesses. grindr falls into that bucket, it is very profitable. we'll feel to good about the transaction from our perspective. the smack is a make it is -- the spac is a mechanism to get it done so it can become a public company. emily: you are one of very few
openly gay ceo's, certainly as it comes to public companies. is there a precedent you want to set a message you want to send? george: yeah, i am very fortunate. people should believe that anything is possible. that is one of my core values as an operator, that the impossible is possible. i was born in the soviet union, came to the u.s. as a teenager to go to prep school, and now, this is the second company i going to take public. incredible things are achievable as long as you work hard. for those people who are part of the lgbtq committee, living in countries well ar -- countries where they are marginalized or can't feel like they can be outcome of that is the direction of the world is heading into every day and we are fortunate to live in a country where we can be ourselves.
emily: how are you taking about monetization and boosting opportunities that grindr has already explored, subscriptions and ads are the moneymakers? george: we make money in different ways. our percentage of users who are paying users is not that i, 6% versus bumble 9% and match at 18%. so, we have a huge opportunity to grow the user base that is paid. what are the ways is by building more adjacent features that people that want to pay for. grindr has been behind in that regard. we just launched boost, which has been a very popular feature. we will do more things like that. and more relevant as.
when we have relevant ads to our community, they are actually very effective and they service the community really well. for example, with health-related outs, so my focus will be to answer the ad quality is good and it will enable the community that uses the product eight a good way. emily: george arison, incoming ceo of grindr, thanks for stopping by. we will keep watching. coming up, fedex guidance brings doom and gloom to the market and especially e-commerce stocks, next. this is bloomberg. ♪
to miss is bloomberg's big take thursday about how a chinese spy tried to steal a secret. and how a burned-out intelligence officer exposed an economic espionage machine. >> when a chinese spy was extradited to the u.s., the fbi got its hands on a remarkable resource -- his iphone. it should she had -- it should shed valuable light on how china steals technology. he was the chinese minister of security when arrested in brussels in 2018. how could the fbi prove it? on his iphone was a form that listed his job as deputy division director at the mss. it might as well have read, profession: spy. a general electric, a colleague distracted a british engineer at
a banquet while she was upstairs in his hotel copying the contents of his lap stock. he said he needs three hours, speeded up in response. the specialist asked -- he asked specialists from chinese aviation companies what intel they needed and then cultivated sources to provide one source was a ge engineer who facilitated his downfall. the engineer turned aa gently at -- turns double agent. the man messaged his wife that there was a thumb stick at home with information should anything happen to him. he now resides in jail, facing up to 60 years in prison. emily: quicktake's alex webb.
check out "the big take" thursday. this company is changing its compensation practices. cash versus equity with the ability to draw equity immediately, this is volatility beats down joseph tech funnies. shopify, the canadian e-commerce firm, saw its own share price fell 75% this year. google cloud is making changes with plans to unfreeze hiring by october. the pause was set in july. this is according to business insider, which cited an internal memo from google cloud's vice president of infrastructure. coming up, the newest iphone hit stores tonight. but with spending down on mobile devices, will people buy? this is bloomberg. ♪
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coming in at about $1000. apple isn't raising prices this year perhaps to capture the pain of inflation, but will customers pay up? ed ludlow is back. ed: this is a global rollout of the iphone 14, the next generation of apple watches. here in new york, tim cook has been in town, on the east side, on fifth avenue, meeting customers of the seems to be excitement there seems to be demand. this three is asking -- the street is asking, will it boost apple sales? let's pull up the chart, we need to contextualize how important the iphone is in terms of overall sales. more than 50%. apple is reserved the biggest upgrades for the most expensive handset. we have been talking about data for preorders that shows there is demand for that most
expensive handset. the other story is evidence that demand for consumer electronics is really slowing down. let's look at the numbers for iphone sales over the last few years. i am going to go to 2021, an incredible year for apple. record iphone sales. the thing is, the early data also shows that the demand for the highest price point handset with the fanciest, most high-spec features, is doing what we saw in 2021 as well. there is a debate about this. a guy that works at bloomberg intelligence here in new york said he might not see it the way some of the street sees it in terms of this wave of upgrades. but some of the street does. emily: ed ludlow, thank you. i want to continue this conversation with the ceo of
creative strategies and bloomberg intelligence's senior analyst who covers apple for us. since we spoke to you last week from the apple event and got your preview, now that you have seen preorder data, how good does it look? >> it doesn't surprise me that we skewed sales toward the higher end of the portfolio. that is always the case with reorders. usual customers that preorder are early adopters with a higher income level. you always see that and i warn people not to judge the rest of the portfolio just by preorders. i think what apple has done this year with the pro line is appealing to a broader audience. dynamic island is refreshing the look and feel of the high-end family, to appeal to a broader
consumer audience. emily: apple didn't raise prices, but we are in a downturn and we are paying more for gas and groceries and everything. are we going to upgrade our devices now? >> they can sell more than 200 million units every year. it doesn't matter what year it is. but for us, iphone 14 does not move the needle. we think is going to be next year's model, with bigger changes. i agree the pro model is good. it has a better camera. remember, people that can afford to buy a $1000 phone, pay the gas prices and things don't bother them as much. emily: kevin lena, what else are you watching? fedex just got its own guidance,
bringing amazon down with it. and there are broader warnings about what is happening in the global economy. kevin lena: from an apple perspective -- carolina: from an apple perspective, the 14 model is going to impact their other selling price. so, we might see a higher selling price compared to last year before we see a difference in volume. at the other part is, as the early adopters die off, the cycle continues to see how the previous model is going to impact overall sales. beyond the iphone, we are all looking at apple watches. for more people entering the ecosystem. and the high-end would be the elder model, at the $800 price point. emily: abarab, what do you read in to this fedex data?
they called out asia and europe. apple is a global company. >> for apple, 43% of sales come from europe and china combined. those are regions that are struggling. europe is going to have bigger issues in the near term with fuel prices and energy prices going up. this is one of the reasons we set, year-over-year, we don't see iphone sales going more than one -- 1% or 2%. honestly, it is not bad at all in a downward market. you're not going to see negative sales compared to last year. all in all, it is a good cycle. next year, we think it is going to be a much bigger refresh for the iphone. as far as the watch, it is a beautiful watch. it is an $800 watch. it is amazing. emily: carolina, does that jive
with your projections? carolina: it does. next year for sure, the upgrade will be higher not just because of the hardware, but a step forward in processing power. especially for markets that seem to be struggling this year from eight financial perspective, china is getting a lot of attention, and the inside, not just the look and feel of the outside, that will matter a law and i tend to agree that generally, while sales of the other products dominate a huge difference for the bottom line from a revenue perspective, it does die in more customers, which longer-term is what apple will benefit from, and more loyal, unified user base. emily: so much to talk about when it comes to apple.
you have a new note out on this story, adobe buying sigma for $20 billion. sigma was a competitive threat to adobe. i wonder if this is an admission of defeat. either way, that is a huge number. is this a smart deal? >> technology-wise, it may be smart. but this is the wrong time to do it. valuations of cratered since november. for a company that was valued at $10 billion last summer coming to buy them for $20 billion, nobody is liking it. i think they lost $35 billion in market cap right now for a company that is going to generate 400 million dollars in revenue next year. they need to think hard and long. they are looking for margin expansion, profit growth. even if growth slows down. and adobe is a widely
diversified company with a very large array of creative products. the competition, it is not a big deal to me, frankly. emily: anurag rana, bloomberg intelligence, along with anurag rana, principal -- carolina milanesi, thank you. fedex has withdrawn its earnings forecast amid worsening business conditions. the package store giant is pointing to weakness in asia and challenge in europe. fedex taking immediate steps to cut costs, including parking aircraft, cutting worker hours in closing more than 90 fedex office locations. ♪ coming up, as we enter a post-etherium urge world, what is next? this is bloomberg. ♪
to build and scale apps, joins us. the merge went according to plan. what are your key takeaways except the funny panda memes? joe: the merge happened a couple of mexico at midnight our time. i stayed up to watch it, as did some of the other communities. this is a monumental effort, part of a multiyear roadmap by hundreds of stakeholders. there is not one, single, centralized decision-maker. the fact it came together as it did come super smoothly, it is incredible. i would liken the merge to swapping out the engine of a plane that is in the air. you had the a theory and block change, and multi-hundred billion dollar ecosystem and to keep it working and swap out one piece of the core and have no
pickups isn't -- no hiccups is incredible. emily: what does this mean for the alchemy ecosystem? joe: camille is a pop gain development platform. we help developers and companies build applications better by providing a developer platform to build on top of. we started the company five years ago in temp grown extremely rapidly. today, we power 150 billion dollars of transaction volume, a big chunk of the top companies in its area meant blockchain in general. and we also work with a lot of the big companies moving into the blockchain today, like adobe, shopify. what the merge means for alchemy? we are a developer platform. our goal is to make developers
also -- always have access to the infrastructure they need to the infrastructure they need. the merge upgraded etherium to basically allow the network to run on proof of steak instead of proof of work. for us, it makes sure our service is 100 percent always ups our developers have access to them. that is what we did. emily: we have been talking about the merge for years and now it has happened. what is the crypto blockchain community zing about now, what is next? joe: the merge is the first step in a long roadmap. the merge was about moving for proof of work to proof of steak which allows users to stake their tokens on the network, the value itself on their network. that is about a 99.9 5% reduction in energy use per year for the blockchain. what is next is going to be
investment into scaling. there is a lot of excitement. ethereum is network is just getting started. it is going to get a lot faster, a lot cheaper, and that is where the focus is going forward. the merge was the first step to unlocking the ability to perform technical upgrades in the future and those are the areas that will be next. emily: it needs to get faster and cheaper in order for killer apps, if you will, to have that killer impact but but eyste -- but i still hear people say killer apps haven't yet been made for crypto. joe: good question, that is something everyone in the space is always working towards. all technologies start out slow, inefficient and expensive. if you look at the internet, into the 1990's when we were
using dial-up, you couldn't even load a picture. fast-forward to today and we have pictures, video, youtube, tiktok. you and me talking on a live string would be unimaginable if you zoom back to 1995. i look at ethereum as part of the wider blockchain ecosystem. you have upgrades like the birds that make the technology better and more developers held more applications and that draws more investment to make the technology even better, and so on. you get better applications and eventually, a killer application emerges. we are seeing a lot of excitement about not just cryptocurrency, but gaining and that is the beginning. -- but gaming. and that is the beginning. emily: i am curious the projects that alchemy is backing right
now and market conditions that are impacting your decisions, with valuations already coming down? joe: the valuations in the market has changed over the last six months. the exciting thing about our ecosystem is that developers have not stopped building. the thing that is important with the blockchain and ethereum ecosystem, as long as developers are building, applications will be built out and that will bring in more users on the technology gets better. we are seeing a tremendous amount of growth, 300% quarter on quarter growth. we are seeing more people coming from traditional technology and other industries into the space to work on new things. it has been very exciting. we also have educational properties aimed at bringing people into the space and teaching them how to develop for free. and we are seeing a lot of growth in that.
across the board, it has been a very positive outlook. emily: there is a lot of negative sentiment out there though. and i wonder how you are filtering that. where do you see problematic parts of the market? nf's are really struggling and you have a lot of doctors who say the stuff is not real -- doubters who say the stuff is not real. joe: that is a very valid question. sometimes people in different areas of the blockchain ecosystem, they say it is scampi or floppy -- scammy or floppy, but we see that in all areas of the internet, the mobile, applications. it is always there. it is important to look at what people are excited about of what people are you -- and what
people are working on. emily: we are out of time, joe. i appreciate your very thoughtful insights. we will have to do this again is the market continues to evolve. alchemy co-founder joe lau, thank you. coming up, the force was weak with disney as it scraps its upcoming star wars film, next. this is bloomberg. ♪
star wars film from its calendar. joining us is bloomberg's chris palmeri. chris: this is a reflection of a lot of things going on in the movies amidst a pandemic. it is hard to get things up and running and the director of this movie, patty jenkins, is working on another from that has no start of production yet. scheduling something of this magnitude is difficult. of course, this is a star wars, so you want to get it right. you broke the news three years ago with then ceo bob iger, there was disappointment when some star wars films were released initially, so there is
a lot of show to get this right but i'm told it is still in development. emily: theaters, they were really counting on this one. chris: yeah. this is a lot of money, a billion-dollar box office. it is a story we keep hearing, theaters are coming back. the reality is, disney is going to do $8.5 billion this year. it is still far from where it was. you had a few big movies, "top gun" was huge, but they were counting on these to drive people to theaters and star wars was certainly one of them. emily: it is in keeping with the story you just wrote called the bad news in hollywood is arriving on most daily. that is the opening line. what other bad news are we hearing?
chris: there is a whole rethinking of the streaming business. for years, everyone was following the netflix model about subscribers and spending a ton of money on movies and tv shows, and the profits will follow. that all got reset this year. netflix has lost subscribers. and everyone now is focusing on how to make money, many are losing billions of dollars. particularly at netflix and warner bros., which just did a merger with discovery, big cutbacks in staffing, the canceling of projects, everyone is dialing back three -- dialing back the budgets for tv series and everything is languishing as everyone watches out this lays out on wall street. emily: on that uplifting note,
what are you watching this weekend? [laughter] chris: back to star wars, the fourth one of the tv series is coming out, and so far it looks pretty good. and house of dragons is terrific. emily: chris palmeri, good to have you. happy friday, everyone that does it this edition of ""bloomberg technology," i'm emily chang in san francisco. this is bloomberg. ♪
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