tv Best of Bloomberg Technology Bloomberg July 7, 2019 5:00pm-6:00pm EDT
♪ caroline: i'm caroline hyde, in for emily chang. this is "the best of bloomberg technology," where we bring all our top interviews from this week in tech. coming up, tesla sets a new record for quarterly vehicle deliveries, easily beating analysts' average estimate. and the company's stock soars. we bring you the details. plus, billionaire
investor mike norbert tells us about his roller coaster ride. after two fairly uneventful presidential debates twitter is out with a new label that flags tweets that break laws. the move might even make president donald trump walk a fine line on the social media site. tesla has set a new record for quarterly vehicle deliveries. on tuesday, tesla handed over 95,000 vehicles to customers in the second quarter beating the average of units. this is due to accelerated shipments to europe and china and u.s. consumers are rushing to buy model three sedans. before the tax credit shrink in half. elon musk told employees that the company was close to setting an all-time record, urging them to go all out in the last few days of june. taylor riggs caught up with an a morningstar analyst on tuesday. >> on the model three side you have to separate the lineup. on the model three side this was a blowout quarter that exceeded
everybody's expectations. i do think you had this up and down quarter where we hit a trough of everybody concerned about demand for the model three. toward the end of the quarter you saw analyst commentary pick up where people were a lot less concerned about that. on the model s and model x front they still have a problem. so 95,200 was the total for deliveries. , aboutan 20% of that 17,000 of those, were model x or s. those are the higher margin, higher priced vehicles in the lineup. that is sort of what remains to be seen here is how much this big jump in deliveries was at the expense of profitability. >> max, give me your take in san francisco. you heard craig say good news, but you wonder about profitability. is this good news for elon musk? or do we face clear headwinds on
the horizon? >> any time you blow estimates out of the water you have to look at it as a win. coming into the end of this quarter, you had sort of two concerns, one with demand and the other piece was logistics. could tesla literally get these cars to people in a timely and cost-effective manner? on the logistics piece they are performing well despite some acknowledged difficulties. on the demand side, as craig says, the real question is what happens in the long run. you obviously have consumers in the u.s. are rushing to buy these model threes and take advantage of the tax incentive. , which is going to shrink. that will shrink. you also have people not buying more expensive cars. we don't know how this will
shake out. tesla is still a relatively new brand. it will be interesting to see what happens if and when they refresh these luxury lines. that could be just the thing that causes people who are model three buyers to want to trade up. taylor: craig, that tax credit, as it shrinks, how much of a headwind was that this quarter -- i should say tailwind. excuse me. going forward, with that tailwind removed, how much do car sales slow? craig: that will be the big question on the conference call for earnings in a few weeks, right, because the tax credit will go from $3750 down. $1875.8 unit what we saw at the end of the 2018, fourth quarter was the previous record deliveries and a lot of that and that being ended up being in hindsight consumers going out to buy the model three and s and x before the tax credit was cut in half. i think people sort of
underappreciated how much of that was demand being pulled ahead into the fourth quarter of last year. that was part of what fueled a big drop-off in the first quarter of this year. that is the big question for this third quarter, can they sustain this momentum with the model three even the smaller with this smaller amount of support from the federal government? taylor: i now want to bring in david, a morningstar analyst joining me from chicago. we have been having a discussion here where it seems to be like we are in the all clear, model threes coming in better than expected. from your fundamental analysis , fold in here for me the demand and profitability mix of the s and x, which are key given their higher-margin cars, getting elon that profitability to where he needs to be. david: right. for all this controversy around the demand problem i don't believe there is a model three demand problem. the s and x are getting old to
consumers. , so to speak. volume is one thing but it is all about profit and the cash flow. we won't know until we get q2 results how much the shift to three and s and x matters. s and x year over down 21%. taylor: past profitability for what does your analysis say in terms of the past profitability for tesla. we heard elon musk talk about this a lot. when we get there? david: they did it for a couple quarters last year. it is not impossible. it is hard to say what is the tipping point because they are still growing internationally. you've got the china factory coming online. european factory. you still have new models coming out, and the trick is how do you balance profitable growth? that is hard for any start up business to do and they are a , pretty big startup, so to
speak. taylor: craig is the chinese , demand where it needs to be? craig: the demand, we don't really know at this point because they are not set up with that factory that is going up near shanghai. once they do that, they will avoid these import tariffs that affect any car built outside of china. - that is built outside of china. we don't really have a true demand in china because they are so priced out of the market. there is a buzz in china of this brand and aura around elon musk that we see around the world. we don't know how much untapped potential there is for china. as david was saying, we also -- that is not something that is going to come for free. it costs money to build up a plant. they are doing a lot of borrowing with local banks. there is a possibility it will not have a huge drag on earnings of the company. that is going to be more of a
2020 story as we see local production start on the model three there. taylor: david as we look forward , of course to the end of 2019 and 2020, what do you see as the biggest left side tail risk downside? is it elon musk's tweets, is it profitability, is it that they need to raise more cash, demand headwind? what do you see as the biggest left side tail risk event? david: probably two things, one is general economic risk which applies to any company in the business cycle. we are late cycle for the auto sales, for example. at the same time, it is a new product. the other point would be a bigger, longer term happening of what happened in late may and early june when sentiment and fear started to get into the name. this is a name that is always traded more on option value. what is it going to look like in 2025 and 2030?
it has always been elon is awesome. he is a brilliant guy, but if all of a sudden, they start to freak out and say look at the debt. it could get paid off, but if all the sudden the street looks at the more downside reasons to fear tesla rather than be optimistic about tesla, the stock will get pounded pretty hard. caroline: coming up half of the , year is already in the bag and we have seen 22 tech companies hit the public market. will the momentum continue? we discuss. this is bloomberg. ♪
newly traded companies. there is a significant shadow hanging over these newly traded companies that have hit the market. -- companies. google and amazon have a significant hold on many tech companies that have hit the market. on monday, we spoke with our guests about this. >> lyft spent $90 million on google ads in a single year. those people went to an apple app store and downloaded the lyft app and google maps was powering it. something else that they had to pay google for. all of this was hosted on amazon servers using amazon web services. lyft has a $300 million contract with them for the next three years to pay for that. on top of that, google owns 5% of lyft and has a board seat. it's obvious that google and amazon are very deep within this economy. when you look into the filings, you see how concretely they are kind of the infrastructure behind how these companies work. >> in some ways, it is a blessing and in some ways it is a curse. you focus on amazon and google,
and from the blessings side of the equation do you see this as , a good element that these companies have so much riding on , whether it be financially but for future revenue streams from these ipos? >> i don't know, caroline. there is good and bad. the benefits of cloud computing is that it allows startup companies, companies that are want to go public eventually or are going public to avoid infrastructure cost. cost you can treat your i.t. needs as variable costs rather than big fixed costs. you don't need to build up a large i.t. department to scale up a business. that is the magic behind amazon web services and microsoft azure and google cloud. in many ways what they are offering is a benefit, but there is no doubt that in order to scale up on the internet you are going to pay one of those three cloud providers. if you are a consumer oriented service and if you need to get consumers to use your service or
your application you will be spending money with google, facebook, those two. that is how you get brand awareness on the internet. i don't know if they are toll keepers, that's probably too strong of a word but they are , clearly the biggest channels out there. hopefully companies that are companiescessful and that they like to look at like uber that are successful long-term that can avoid having to only get traffic through those paid channels. caroline: your piece also shows how many of these ipos, 17 of the recent 22 mention google or amazon in their statement. is this something regulators are looking at? are they worried if they clamp down too hard and push for breakups like elizabeth warren is talking about, that this could impact those that sit downstream? >> on the one hand you could , say, look how powerful these companies are, we surely need to break them up. on the other hand, you could also say they are not interested in disrupting the smaller companies because they are their customers.
want them to keep growing. google wants lyft to keep using its services and paying for them. you can look at it from both direction. as this argument goes forward i , am sure you will see arguments from both say. i just want to say i don't think by breaking up these companies you would disrupt the web in a really deep way. you can still buy google maps from google maps limited and cloud services from google cloud services limited. we will see how this plays out. i am sure this will be a topic of conversation when it comes to antitrust. caroline: before we go to the antitrust equation for the behemoth, let's talk about the fact that you cover lyft and pinterest as well. when you saw this competitive exposure and general exposure in terms of a supply side need from amazon and google, did you see that as much of a risk factor? does that worry you? would you like them to invest in their own independent service? >> i think the answer to that question is no. i did not see it as a risk
factor. i hadn't thought about it that the way you set up the question. if they are going to have a cloud services provider it is going to be one of three names. aws, azure, or google cloud and the chances are it would be aws. that's usually the lead cloud provider. they have almost 50% of the market share. if they did not do that, then the p&l that they would go public with would look a lot different and you would have a lot more capex spending. it probably would be frankly a less attractive business model. you would also raise the question of, why are you trying to verbally integrate and build up that infrastructure and manage those data centers and server stacks and i.t. departments when there are three companies doing a phenomenal job of allowing you to outsource it? i will twist the question back at you. it is a great question. i have not thought about it before. but i do not see that as a competitive -- i don't think that is a dependence risk and
there is the option of switching. we have seen companies -- snapchat went public and migrated from google to amazon. as long as you can migrate, i don't think there is a risk. caroline: what about the the risk from the competitive perspective, from the regulatory viewpoint we are starting to see from capitol hill upon amazon and google? is there a risk of them being so intertwined with the rest of the tech ecosystem? >> possibly. on regulatory risk, it's something that has become a major investor issue across technology. we actually just posted a call earlier today with an antitrust expert to talk about the risk of platforms face, particularly google, but also amazon and facebook. i think the chances of these companies being forced to divest assets is extremely unlikely. i think government regulators would be very low the two unwind to try to unwind that.
i think it would be hard to do that. looking at fines or changes that are modest at the margins. one quick comment. we listened to a weekend of presidential democratic debates. big tech did not come up at all. except for the one time it did was some concerns over whether amazon is paying its fair share of taxes. the issue of google's strong market position or facebook's didn't come up, and that is probably the best political barometer. if it doesn't come up in a presidential debate, it probably does not matter. caroline: select, a potential blu bloomberg scoop of a potential deal with broadcom. analysts are divided over strategy ahead. we will hear from one next. this is bloomberg. ♪
caroline: at&t is considering to sell its regional sports networks as part of a plan to reduce debt. bloomberg learned the networks could fetch up to $4 billion. that sale would include rights to the pittsburgh penguins and houston rockets. another bloomberg scoop, broadcom is in talks to buy the cyber security firm symantec. this would mean a further expansion into further business. we spoke with an analyst on wednesday for the details. >> i think symantec passes the stage, passes the smell test for broadcom. broadcom has 52% operating margin so for them to consider an acquisition, it has to be immensely profitable. there just are not a lot of companies that can reach or have the potential to reach 60% plus
theuld say would be threshold or hurdle rate for them to look at acquisition. the last deal they did is actually performing extremely well. when you look at symantec, it has shades that are similar to ca in terms of the businesses. one already at a 50% operating margin and with a little tweaking could potentially get to 60%. the other that they could just drop into the platform and strip it of cost, mostly marketing and sales cost to drive operating margins. from that angle, it would be an immensely profitable deal and an extension of what they have with ca. caroline: we have been waiting for years to work out what they were going after after the and after the qualcomm deal fell away. what makes symantec more vulnerable to being bought out? >> there has been a lot of drama
at symantec. as we have been following, their ceo had been ousted a few months ago. there is an accounting investigation and they got a few board seats. it really is a vulnerable time for symantec for a takeover. caroline: we were just talking about the t-mobile and sprint deal and the regulatory issues. will there be regulatory issues with this deal? considering in the past they were not able to get through the qualcomm deal. >> before broadcom went after qualcomm they had a singapore headquarters. they have moved totally to the u.s. to try to alleviate that issue. cybersecurity is a national security concern and semantic - symantec works for the u.s. government. the review is definitely something investors will be watching to see how it goes. there could be an eu review. no slamdunk for any large deal
where there is this security element. caroline: putting regulatory concerns to one side, you have spelled out why you think this might be a perfect fit. interestingly, other analysts and investors are questioning the management's strategic direction here. do you think it is the right direction to be going, more focused on cybersecurity? we've seen other players do it, but how does this fit with building outside of the chip space? harsh: i think broadcom is focused singularly on capital returns to shareholders driving free cash flow and profitability. understand this was a company that was at the cusp of a 50% operating margin in a region no other company in the past had been able to approach in the semiconductor land. with this deal, they were able to push the envelope closer to 53% in the last quarter, now running about 52%. so really, for them to be able to expand and build on that they need something outside of hardware, something outside of
semiconductors. typically, software companies have extremely high gross margins, and they tend to spend a lot of money acquiring new clients. the strategy with ca revolved a dig deep and all-you-can-eat strategy. you dig deeper into existing clients and don't worry about getting new clients. there was roughly about $1 billion spent on acquisition of new clients per year. that cost went away. with symantec, it would be easy to go back to clients with a bigger portfolio and drive profitability. that is why we think it is a perfect fit. caroline: interesting. we have seen the shares of symantec closing about 14% higher. what sort of premium do you envisage? because this is a company under some duress to a certain extent. do you think there could be a bidding war? could it go higher? harsh: it is possible that other people could come in. i am not an expert on investment banking aspects of the deal, but
we think certainly a little premium from current prices would still work as well as broadcom's ability to take it and generate returns given the success they have had with software in the past. caroline: interestingly, both these companies have a little bit of history and background. will the board be involved? of symantec has private equity representatives from bain and silver lake. they will have to be involved somehow. they are major shareholders. broadcom was built up through private equity roots. originally they worked with silver lake and other firms so private equity is heavy here but we don't know the structure of the deal and how they will participate. caroline: coming up, twitter announces a rule that might cause problems for president trump himself. with this set a standard for other social media? "bloomberg technology
caroline: welcome back to "the best of bloomberg technology." a new label on twitter will flag tweets from president trump and other politicians. the u.s. president routinely posts comments that might get a lesser-known person suspended for breaking twitter's guidelines. now twitter will hide rule breaking content behind a warning label that will say the tweet has been left up because of legitimate public interest. users will need to click past the label to see the post. >> there wasn't really that moment where everyone said, look at this fake news that is going
viral, and that is the point, this is what facebook and twitter want. they want to have an uneventful debate. they had teams in place that were ready to pounce in case there was that moment, but in so far as as i can tell there did not seem to be. emily: maybe they were doing their job? kurt: i guess that is the idea. emily: let's talk about this tweet flag. you know it doesn't just apply , to politicians. it applies to anyone with 100,000 followers or more. what is your take? david: it is just politicians. which is why it is more -- emily: politicians with 100,000 -- david: who are also verified. it is even more specific to donald trump. if you remember, this two years ago, he tweeted at kim jong-un and said, rocket man, you will not be around much longer, or some kind of threat like that. and a lot of people asked hey, , wouldn't this normally get a user suspended? at the time twitter's response was basically sometimes politicians have tweets that are so newsworthy we do not take them down. well now we will know which of , those tweets may violate the rules but that the company is labeling as newsworthy and
therefore allowed to stay up. emily: david you have been , talking for many months and years now about how difficult it is for these companies to flag content that breaks the rules or crosses a line. do you think this will work? david: well, it is definitely a step in the right direction. you know, we need to acknowledge that some very famous and powerful people are misbehaving, but i also think that twitter has rightly acknowledged up until now that certain people on twitter are of a different nature than others. you know, even that -- i think it is also a lot of judgment calls required. even that tweet you cited about kim jong-un, i think could be debated whether that actually is a violation of the rules. is that a national -- a country threatening another country or an individual threatening an individual? but nonetheless, this is the right kind of step to take, and i'm glad to see it happening. emily: now the president is
always quick to talk about conservative bias on social media, and there was an expectation that he could get angry or tweet about this new rule from twitter but as far as , i can see he still has not mentioned it. naomi, is there any pushback or reaction from washington? it is pretty quiet, but a bit of a bold move for twitter given the repeated accusations by republicans in washington that tech companies like twitter are biased against them. you know they have held multiple , congressional hearings on this topic, and polls show public trust in some of the tech platforms is waning. republicans have not shown any signs they are planning to slow those criticisms down. so this, you know, looks like an issue that just gave them more ammunition to continue making those claims. emily: meantime, one of the biggest flareups on social media recently was the nancy pelosi video where she was slurred to
make her appear drunk, and facebook decided to leave that video up with a flag. mark zuckerberg did say a couple of days ago that there was "an execution mistake" there, that the process by which it was handled was not necessarily perfect, but they stood by the decision. take a listen to what he had to say. mark: it took a while for our systems to flag that and for fact checkers to rate it as false. once the fact checkers saw it and they were able to rate it within an hour, but it took more than a day for our systems to flag it. and during that time, it got more distribution than our policy should've allowed, so that was an execution mistake. i think that what we want to be doing is improving execution, but i do not think we want to go so far toward saying that a private company prevents you from saying something it thinks is factually incorrect to another person. emily: david, i really would love to hear your reaction to this. is it yet another facebook
sorry, not sorry moment? david: you know, i think facebook probably did handle -- their rules are good on that. in the case that -- i don't think the pelosi video should have been removed. i think as he said in that same interview, which i happened to be at, there are so many gray areas that if facebook is being asked to make a universal determination of what is and is not legitimate and false in many instances, it is going to be extremely controversial in itself. given theu wait -- distribution, strikes me as right. i think nancy pelosi's reaction to that whole thing was very extreme and inappropriate, where she acted as if that proved a -- they tolerated russian interference in the presidential election. it really wasn't that. they are trying hard to do the right thing. and it is tough. these are tough decisions. that said, naomi pelosi's
, reaction is certainly an example of just how angry politicians are right now at facebook on both sides of the aisle, or at least they think it is expedient, politically expedient to act as if they are angry. naomi: yes, both republicans and democrats have bones to pick with facebook and other tech companies. and what you are seeing on the house side in particular is house democrats announced they were investigating the technology industry as a whole and looking at antitrust issues that might be going on. and so that could reveal, that committee, the antitrust committee on the judiciary committee, you know, might end up holding multiple hearings with facebook executives, google executives, with twitter executives, and you know, give them an opportunity to continue raising their criticism about misinformation, about russian interference, about discrimination on their platform. emily: we do have a tweet from
-- jordan talking about representative jim jordan talking about twitter's policy, this policy change. last month, they they shadow banned nunez and jordan. why can't twitter respect free speech? kurt: it is a common theme to feel that anybody who voices a conservative viewpoint is therefore the enemy of either twitter or facebook. i mean, the companies have come out, and they have said this is not the intent. we try to uphold these rules. right? these are private businesses and they have rules and community guidelines that people need to follow. they are not held to the same free speech laws that the united states, you know is. , and so, i think that is really a tough distinction for some people to make, and i don't know what specific tweets he is talking about, but this has been a continuous conversation that has dominated now for almost three years since the last election. emily: and david, facebook has
said they are planning to create a content oversight board. zuckerberg has described it as an almost supreme court. could that work? david: i am not certain, but i think it is a step, again, in the right direction. i think what we are seeing at twitter and facebook is that partly because of the election of donald trump and the connection that has to the abuse of social media, so much scrutiny is focused on these platforms that they realized they have to do something, they have to come up with more judicious approaches to content management. and i think an outside review board is a good idea. the execution is going to be excruciatingly difficult. caroline: coming up, bitcoin's turbulence continues. we will hear from a billionaire investor about the slump, next. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg app, bloomberg.com and in the u.s. on sirius xm. this is bloomberg. ♪
caroline: now to a story we continue to watch, bitcoin continuing its roller coaster ride this week so much so that a , battle erupted over bitcoin on twitter. the contestants, bloomberg 's rishaad salamat caught up with both in taipei. >> it has been around for 10 years. 10 years. what are the killer apps in this space? there are none. 75% of distributors are casino games and literally ponzi games. rishaad: what is going on here? he was questioning your finances and you got rather fragrant with him, didn't you? >> i mean he is a hater. , he's a no-coiner. rishaad: a no-coiner. >> a no-coiner. rishaad: a pejorative term? >> someone who doesn't have any bitcoin and watched the price rocket in their face over the past few years. rishaad: a bit harsh, isn't it? >> i think so, but i think it is true. caroline: the went head to head two at a debate on wednesday.
meanwhile taylor riggs got a take on bitcoin volatility with of -- with ats representative from galaxy investment partners. michael: we had a spectacular rally. we were around $4000 for bitcoin say two months ago. we traded up as high as $13,800. and so the last $3000 was a parabolic move where everybody got excited, and they got excited for real reasons. they got excited because of facebook. they got excited because of uber, mastercard, visa, all saying we want to participate in the cryptocurrency world. and so all of a sudden this was from guys like this saying these are all tulips to the biggest companies in the world saying we are going to participate, on top of yale, harvard, stanford participating. and so all of a sudden the question around institutionalization has been answered. and now it is a question of taking, you know the time to , build out the systems. so people are rushing into front
run institutional accounts. and things got a little bit carried away. now we are in acceleration. we went up to $14,000. i think we are at $10,800 right now. and i think you will see the market consolidate between $10,000 and $14,000 for a while before it takes off for the next leg higher. in the next leg higher probably comes with the new institutions, the state of x, the state of wisconsin or the texas teachers union. until those guys start coming in, and then you will see bitcoin go towards the old highs of $20,000 and higher. taylor: when you say parabolic move, our ears perk up. talk to me about when you sold. which was arguably in hindsight a very smart decision. you said you wish you had sold more. what is your next pricing which you would be another seller? michael: you know, listen. by the time i was on tv, the market had fallen 20%, so of course i wish i had sold more.
i did think we had gone parabolic, and there was too much energy in the market, and i think we are going to consolidate. and you know, we are buyers -- i am a buyer below. i trade a portion of my corporate coin position all the time. i don't think i am selling the next time up to $14,000. i think, you know the next time , we get up there, the second time we get up there, i think it is probably closer to $20,000. and so, i don't expect that in the next few weeks, quite frankly. i probably don't expect it towards the middle to the end of the fourth quarter. and i think we will see this kind of a period of consolidation. but what is interesting is, nuriel lost the debate. i was with him in las vegas. i bet him when it was $6000 that a year from then it would be higher. he has lost the debate because all the big institutions -- microsoft is building identity solutions on the blockchain. these are big companies. taylor: right.
so talk to me more about critics like dr. nouriel roubini who came out at that blockchain summit and said he doesn't believe in it because there are massive amounts of price manipulation. how do you respond to that? michael: you know, listen. it is a new technology. there's lots of hype around it. so there has been price manipulation. it is being weeded out. right? you are getting exchanges that are being regulated. you're getting real players in the game. you are getting more and more pipes. you are waiting for people to participate, right? td ameritrade you can buy , bitcoin on your td ameritrade account. that is a big big deal, because , the general population hasn't signed up and got a coinbase wallet yet or circle wallet yet. and so what we are going to see over the next three months, six months, 12 months, 18 months, is more and more ways you can buy this stuff. i would bet you within two years mastercard and visa accept bitcoin with their credit cards.
visa has 50 million merchants worldwide. the fact that they are part of this, you know libra, facebook ra consortiumd lib is a huge statement. , taylor: so talk to me about facebook's entry into the crypto market. does it give bitcoin and other cryptocurrencies legitimacy? michael: yeah, it completely does. it completely legitimizes this whole idea of cryptocurrency. and it doesn't really compete against bitcoin directly. you know facebook is working on , creating a stable, what i will call stable-ish, coin that can be used for payments. currencies need to be relatively stable, because otherwise, why would i spend a currency if i thought it would be worth a whole lot more in three months? so you need lower volatility to be a payment currency. and so bitcoin, i think, is legitimized by being a real hard asset. you know, it has got a fixed supply. it is very difficult to change the rules around bitcoin.
and so it becomes like a digital gold. people don't own enough of it yet. i really see the price going significantly higher over the next couple of years if everyone buys just a little bit of bitcoin. cory: what is -- taylor: what is there -- you say the price would go higher over the next couple of years. do you have a call? michael: like i said, i think if we can get to the old high by the end of this year, every bitcoiner will be happy. but once you take out $20,000, it opens up $40,000 next. and much higher over time. when i think about bitcoin, it has probably got about a $150 billion market cap right now. got an $8.5 trillion market cap. bitcoin has a long way to go before it replaces gold. and it has very similar features. right? gold has a limited supply. you can take all the gold that has ever been mined in the history of the world and fill it in three olympic swimming pools. and so that is kind of a crazy , statistic. we could build a cube of gold in
central park and it would be worth $8.5 trillion. hard to get your mind around. right? we don't use gold for much. jewelry, some, but most of it sits in vaults. bitcoin is a digital gold. taylor: who do you see as the next big companies entering the market? we've talked about facebook, mastercard, paypal. who are some of the other big companies that you see really starting to make an investment? michael: you know i think you , will see in time the investment banks need to move into the space. we are trying at galaxy to carve out our niche before they all show up. but at one point, the foreign-exchange desks are going to trade dollar-yen, and the euro, the great british pound, and libra coin, and bitcoin, and ethereum. and they are going to just be points of the financial infrastructure of the world. and so i do think the investment banks are probably going to end up moving into the space sooner
rather than later. eum.or: you mentioned etherue talk to me about the divergence in price action we have seen with bitcoin having, which is having a really big move year to date. some of the other big currencies like ethereum and ripple, not so much. what is your take on the divergence of the price action? michael: listen bitcoin has , carved out a really interesting lane, which is digital gold. and it doesn't need to change to fulfill its mission. the way it is today is perfect to be digital gold, right, and gold has got a big market cap. ethereum is fighting to be what i will call web 3.0, this decentralized supercomputer that will process tons of transactions. it is a really ambitious project, and it is not finished yet. there is a lot of technical work that needs to be done for it to scale properly, for it to be usable, you know, on a wide range of things in a very fast
caroline: bloomberg has learned samsung has completed a redesign of its galaxy fold to fix embarrassing screen failures. the company will debut its marquee smartphone in time for the crucial holiday season. others reported problems with the screen on test versions. meantime a number of big american companies may shift substantial production out of china. according to nikkei, hp, dell, microsoft and amazon are considering whether to make the move. no one is commenting. last year, amazon hinted it might have to raise prices on products made in china because of tariffs. now users swipe right and left to find their next hook up on
the popular dating up tinder, and it was feared it would make the transactional reputation make it impossible to find success in asia where dating rituals like arranged marriages are still common. but that has changed as tinder reinvents itself to win over asia. last friday, emily chang caught up with bloomberg's olivia covering the story. olivia: tinder is huge in the u.s. it has totally dominated the north american dating market. it is owned by match group, which is another u.s. company which actually owns almost all of the big dating products in the u.s., hinge okcupid, plenty of fish, and tinder. and we saw in the last quarter that while tinder's users and subscribers are still growing here in america, they have actually got almost 5 million subscribers now based here, and they are looking for other areas where they could potentially grow. and looking around the world, there is no bigger opportunity than the asia-pacific region. we heard from the company that there are more than 250 million
single people in the asia-pacific region, most of whom have never actually tried a dating product. so tinder is looking to the asia-pacific as a huge area of potential growth. emily: so how is the product and the marketing of tinder different in asia than it is in the united states? bolivia: -- olivia: in america, we all know it is a hook up app. it is known for casual dating , casual sex among young college on collegend campuses around the country where people can meet to get to know one another. and that really wasn't going to fly in korea. the dating culture largely in korea as i found out researching this story, they would meet through blind dating where friends connect to different people who had not met one another before. so tinder kind of knew the hook up reputation, that kind of casual dating scene wasn't
really going to work in korea. so it decided to attempt to totally reinvent itself into more of a friendship app, so it claims that it is a social discovery network. when you look at the marketing around the country, on the billboards outside university towns, the advertisements all read "new year, new friendships, new you," so it is more around building friendships rather than dating. emily: is this going to fly in china where there is tough regulation on u.s. social media companies, or they are nonexistent, or is tinder focusing on asian regions outside of china? olivia: in the last earnings quarter, we heard from the ceo they are not looking at china right now, but they are looking in different countries across the asia-pacific, so a huge focus in korea. there is another big focus in japan and india where they have local managers on the ground trying to connect and learn the cultural customs. and we heard from mandy ginsburg, the match group ceo, who says they are spending more
money on marketing in india, japan, and korea than anywhere else in the world right now. and they are also looking potentially to expand into taiwan, indonesia, singapore. but china is still on the back burner due to the issues with regulations. emily: what is the outlook for match more broadly, now owning all of these properties, though, of course, you know the original , match app has been criticized for being sort of old and stale? olivia: one of the strategies in these new countries is getting these local managers on the ground to look for potential acquisitions. so in japan, for example, they have acquired the app called peers, which is a model where only the men pay. that is really familiar and well-known in japan, so that is the biggest online dating app, they are. and they are trying to build up tinder as well. match is being strategic in terms of trying to encourage the local managers on the ground to look for potential acquisition
opportunities, because some of these countries have different customs than what match is familiar with. for example in korea, there are a lot of dating apps that do things pretty different to tinder or other match products. for example one app called amanda in order to apply to be , on the product, you actually have to get rated by the users out of 10. and there is another app called small people -- sky people where men can only get onto the app if they hold down a job as a doctor, lawyer, or for a major conglomerate company, or went to a prestigious university. caroline: that was olivia. now amazon will hire more than 2000 workers in the u.k. to develop its latest technology ventures. the employees will include engineers, software developers and data scientists. ,that will raise amazon's british workforce to almost 40,000 people by the end of the year. not for me. that does it for this edition of "the best of bloomberg technology." we bring you all the latest in tech throughout the week.
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paul: i am paul allen. shery: i am shery ahn. sophie: i am sophie kamaruddin. we are counting down to asia's major market open. ♪ paul: the top stories we are covering, deutsche's savings plan, ceo's -- the loss of $3 billion and elimination of 18,000 jobs. the turkish lira slumps as president are to want fires the central banker. he wants policymakers to