tv Bloomberg Technology Bloomberg July 20, 2022 11:00pm-12:00am EDT
emily: i'm emily chang in san francisco and this is bloomberg technology. tesla shares jumped after better-than-expected results showing the carmaker is getting production back on track. tesla making more ev's in june than any other month in the company's history. netflix shares rallied after the streaming giant lost only one million instead of 2 million subscribers. a shift in investor sentiment could buoy markets next week. the influencing marketing firm announced it has a new board member. all of that in a moment but first i want to get to stocks lifted by netflix seemingly
streaming in the right direction. taylor riggs is here to break it all down. this is one losing one million subscribers is not so bad. >> somehow we are managing to turn that around. when you think about technology, the big performer, outperforming the sox index and the russell 2000. it was a day of green on the screen after a broad-based rally yesterday as well. it has actually been one of the best post earnings reactions on a broad-based index of where we are so far in this earnings season going back since 2009. we have come down so hard, you would think netflix coming from $74, we are watching for post-market reaction in the middle of this earnings season. you mentioned some of the individual stock names.
netflix was one we were watching that managed to do pretty well today. we are looking at carnival lower by 8% on the session. selling shims shares -- some shares, pushing them lower by about 8%. macau announced a reopening of their casino july 23. tesla which was a big one, it was much higher earlier but now coming off of those gains a little bit. the numbers actually looked pretty good. emily: we will talk about that more now. taylor riggs, thank you for that update. sticking with tesla, i want to bring in the founder and managing partner, and all former longtime member of the tesla board. i know you are liking what you see, investors seem lukewarm, what are you thinking? >> is great news for tesla and
tesla investors. everybody thought it was going to be a soft quarter. we saw 254,000 units delivered. a 50,000 increase year-over-year, 40% growth. the big surprise was revenue and profitability, they hit 60.3 -- $63.9 billion. the largest car deliveries in history in june. i think they are on track to deliver 340,000 units in q3 and i think they will hit 500,000 in q4. if they do that, that will be closer to 50 or 60% growth. analysts were predicting profitability of a dollar $.81, they hit $2.27. they are on track for record deliveries and profits. tesla has got manufacturing capabilities and supply chain relationships no one else has. someday they may not be the king
of the hill but for the next year or two they are looking awful strong. emily: they have made 564,000 vehicles so far this year, and say they will make a million and a half. can they really make twice as many vehicles as they made in first half as they want to in the second half of the year? >> they have another plant going online and maybe another one in two or three years. tesla now has four plants in california, austin, shanghai and berlin. all four are running. austin and berlin are going to be pumping in big numbers by the tail end of the year. the other key part investors should understand is the biggest component of electric cars is the battery. tesla was the first to bring battery production in-house. they appeared to be the technology leader and are taking the cost curve of entries down faster than -- batteries down
faster than anybody else. they are dropping bigger profits to the bottom line. profitability was way beyond what analysts saw. a lot of people are saying this tesla stock prices crazy, this is an anomaly and not how capital markets work but if you are growing 50% a year, and are more profitable than any other competitor, you are going to have a share price that is the envy of the industry. emily: we just heard from our auto steam that ford is planning to cut 800,000 jobs out of the gas powered side of the business in hard to fund the ev side of the business. jim farley has been very serious about taking on tesla, and also his admiration for tesla. how well-positioned is tesla compared to ford, rivian, and
lucid? >> americans want to know how well gm and ford and lucid and rivian are doing but to be honest, they are behind. they came late to the game. they should have started years ago. keep in mind general motors has been making electric cars for 11 years now and they were only able to make 25,000 last year compared to tesla's 920 5000. they need to kick it into a higher gear. rivian makes a great truck and they are laying people off. they have taken their production numbers down to 35,000. volkswagen saw the writing on the wall. there ceo took battery production in-house and they have got deep pockets, factories on multiple content --
continents. then there are the chinese. most americans have never heard of a chinese auto company but xpeng and others are going to come into the market i am 23 and 2024. they are moving faster than any other auto company except tesla. chinese companies are subsidizing battery and auto costs. they also make pretty good cars. expect a lot more competition. 30 electric vehicle companies have come to the market the last 24 months. we are heading into a recession with more cars and fewer buyers, we will see who ends up on top. keep an eye on tesla, volkswagen and the chinese. emily: you still have that when he one-day lockdown in shanghai, and you have the unpredictability of an ongoing pandemic where the chinese government could once again crackdown and make production difficult. >> there are two big china
issues, one is that covid one. one thing the chinese do is they bring the entire workforce in-house, 8000 people, and sequester them for weeks at a time so they don't get exposed. so i think the covid issue gets solved. the bigger issue is the long-term geopolitical issue, if xi jinping is confirmed as the new chairman, he has said he intends to reunify, or invade, taiwan at some point. if we see something like that happen, china has a huge part of its production of cassidy that tesla has in china. investors need to look at who is selling the most and going fast, the answer to that is tesla. who is getting the smartest at bringing battery costs down and selling software services, the answer to that is tesla. these are not big secrets.
volkswagen and others will catch up. time to buckle up. emily: how big of a problem is the twitter saga? does it seem like twitter will let this go away and investors have not been pleased about the commitments elon musk made, now he is trying to pull out of them. >> tesla and elon are a master of making great cars, i hope they stay focused on that. the more they can stay focused on executing, whoever wins the electric car race will own a 50 year franchise. tesla is sitting pretty with a lot of -- but a lot of serious people are coming after you. i hope tesla is up to the task, i want to see them win. emily: that is the swestly group managing found twitter ise fast trackingr it suit against elon musk.
combinator managing partner and former twitter cfo and coo, twitter one go round one, that means they potentially have the upper hand in round 2, is that good for the company? >> i think it is good for twitter shareholders. especially seeing the selloff in technology stocks over the past couple of months, i think the deal is very richly valued in today's terms. i expect twitter to prevail in order -- court. the agreement is pretty ironclad as i read it and twitter's lawsuit is very clear. if you read it, i think you'll find it pretty compelling that musk had agreed to buy the company even in the case of a market downturn. i think this will go in twitter's direction which is good for shareholders but my own personal view as i said last time i was on your program, i'm
not sure it is good for twitter as a service. twitter being owned by a single person, particularly one whose public statements have indicated a lack of a deep understanding the way the platform works, particularly in areas of trust and abuse, i am not sure that is good for the service. that is my personal view and it has been consistent over time. emily: let's talk a little bit more about why. let's say musk is forced to do the deal and owns twitter. he could turn right around and sell it, that is also a possibility. if he is forced to do the deal, then what happens? >> it is very awkward to force someone to buy something they say they don't want. i don't know how he reacts. one thing elon proven is that he is quite unpredictable and quite extreme sometimes in what he wants to do. your guess is as good as mine.
if he is forced to buy twitter. probably what happens is it will lead to some kind of renegotiation where he becomes a happy buyer again. i don't think you will be able to get out of this. i'm not a lawyer but my read of the documents, that is what i believe, he does not get out of this, maybe there is a compromise or the tar -- or the terms are altered, we will see what he does. i would be surprised if it would be a terrible outcome if he buys and then turns around and looks for another buyer. probably he would take a bath on a transaction like that. my view of twitter is it is too important of a company to be like a little hot potato jumping from one person's hands to another, going public and private, etc.
i hope he is serious enough about making the platform better and helping it to reach its true potential, is everyone so. -- everyone's help. i have my fingers crossed that that happens. emily: part of the reason this is a good deal for shareholders is because the market has plummeted. putting on your y combinator had, and you have been the cfo of the big public companies, how bad is this for silicon valley? how lasting is this downturn and what does it look like as an inflection point a decade from now? >> i think it is important to put it in the right historical context. we went through a remarkable period in 2020 in terms of technology stocks where changes in the covid economy really benefited a lot of tech stocks, and there was a feeling that
everything was moving to the internet immediately. we saw a historic run up in technology stocks with multiples that have never been seen before. so everyone was expecting a correction. perhaps not one that was as rapid as we have seen but everyone was expecting a correction. i think there are a number of companies and recent ipos like doordash or datadog that are just wonderful companies and i think they have been oversold. that is just my personal view. if you zoom out, my expectation is like other things and recessions and times of market turbulence, will be seen as just another one. perhaps one with a slightly downer -- sharp downward slope, but nothing that alters our view that technology is fundamentally changing society and that those technologies are valuable.
portfolio companies like stripe and the public companies that are y combinator companies, gusto, etc., amazing companies that have great businesses that will continue to be disruptive and be amazing assets for investors to own. emily: they have been on the news for an internal reevaluation. the cofounder of y combinator has an essay about default, who do you think survives in this downturn and how is that informing your investment decisions now? >> this may surprise you but almost every private company that has a reputation that people on your program will have probably heard of, i think they all survive. the markets have been so frothy over the past two years that almost every promising
technology company in the mid to late stages is extremely well-capitalized. they have raised hundreds of millions of dollars. there has been downsizing and adjustments but they were done not because the companies were under duress but because they said this was an opportunity for us to right size the business a little bit and life in our runway. i don't expect for mid to late stage private companies for their to be a bloodbath at all. i expect modest belt tightening but almost all these companies will just continue to invest in growth. emily: that is a more optimistic view than we have heard. that is the managing partner at y combinator, also the former cfo and coo of twitter, great to have your thoughts on the show. meantime, speaking of, bytedance has dropped significantly in terms of its valuation. now well below the $300 billion
mark, down at least 25% from last year. the plunge underscoring worsening sentiment around china's tech giants. bytedance has been forced to curtail some of its riskier expansion projects under beijing's intensified scrutiny. apple making the case that it will be a leader in health tech, could this drive the next era of profits for the iphone maker? this is bloomberg. ♪
institutions. though the apple watch dominates the market, the device has not always gotten new health teachers as soon as its competitors. >> this is a nearly 60 page report. i rarely see apple do things like this. typically, when they want to tout initiatives, they make a new website and put out an event or video of some sort. this is more of an academically focused report. it is not for consumers. it shows all the health and fitness teachers we use across the apple watch and the rest of its ecosystem. it dives deep into how they work -- they have sleep studies and heart studies and how all of that works together in concert with different medical institutions and partners they have globally to produce new futures for their products. emily: that is what i thought. i can't remember a time apple has done this previously.
what does it say about their plans for the future? how will health tech increasingly be integrated into all of my apple devices? >> it is fascinating. i think help functionality will spread to all of apple speaker products. don't forget, the airpods, upcoming virtual reality headset and augmented reality glasses, you will probably see health integration in all of those products. your airpods might be able to tell you your heart or body temperature. you might have worked out functionality related to its headset, just like meda has with its oculus headsets. the apple future of health is very strong. this year, they will add a body temperature sensor to the watch. there will be women's health injures -- futures. by 2024, apple wants to release a blood pressure feature for the
apple watch, something samsung and others have had. they are also very invested in r&d projects to bring blood sugar monitoring to the watches well. emily: buying peloton or has apple purposely let that ship sale? >> i think the ship has sailed on that. unless it gets to an absurdly low price and apple finds a way to really integrate it. if apple wanted, it could produce bikes and treadmills at a far cheaper cost than it would take to buy peloton. i also think they would rather integrate their preachers into their existing ecosystem rather than at that -- add that really expensive business. emily: thanks, mark. after losing more than a million customers in the first half of the year, the message from
netflix is clear, it could have been worse. how netflix plans to cut its losses and if it will work. plus. the e-sports company faze clan makes its market debut. the ceo will join us next. this is bloomberg. ♪ as a main street bank, pnc has helped over 7 million kids develop their passion for learning through our grow up great initiative. and now, we're providing billions of dollars for affordable home lending programs... as part of 88 billion to support underserved communities...
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we are talking about losing one million instead of two. we are talking about losing a million and calling it a success but we are set up for next year. emily: welcome back to bloomberg technology, that was the netflix co-ceo reed hastings on the earnings call. i want to get to the netflix relief rally after it over promised on subscriber losses for the second quarter. turns out, overpromising in this case was a good thing. but how good of a thing, how confident are you that netflix can continue to cut its losses? >> i think it's going to be difficult. they have a lot of battles to contend with. when you look at the stock in the reaction, what a difference a quarter or two makes. we are seeing a big shift in the time of the market.
netflix was a company that only traded on subscriber growth. that pretty much was the singular metric people looked at. now you have a decline in subs and a downward guidance to the third quarter subs, and the third quarter outlook. there is clearly a shift in sentiment and a reprioritize ation of what the relevant metrics are, and it is increasingly looking like monetization over the absolute number of subs. emily: the markets took a turn in part because of the subscriber loss, do you think this shift in sentiment will buoy markets through earnings the next six weeks? >> near term, absolutely. i think the sentiment has become so low that you are going to see
some level of relief. obviously, we are not out of the woods as it relates to inflation and what that that will do -- that that will do, but i think what you will see is an increasing appreciation for mean reversion rates. these companies had so much demand during covid and then you had this growth drop off the last couple of quarters where it looked like, is this a structural change where demand is slowing, or is this a mean reversion where we are going to revert back to the original growth curve. i think investors are starting to appreciate that we are coming back to the original growth curve and that these companies can and will grow the way we thought before covid. and in some cases like amazon and microsoft or apple, potentially even better than
they were before covid. as far as netflix is concerned, this is still a company where the advertising is not easy. you are contending with juggernauts like amazon and facebook or google and 20 think about the level of differentiation you have as a service versus them, it is not that much. we put netflix i am the bucket of old media and it likely should be valued as such. emily: if the streaming wars are turning into an ad war, who wins? there is disney plus and hbo also experimenting with advertising, and facebook and google which has been doing this a long time, and snap. >> i think the big guys, amazon, apple, facebook and google will continue to command great share because they are platforms which
provide great stickiness for their customers and great targeting date is with the data they collect. but i think you can become increasingly fragmented as other outlets explore their advertising capabilities and better monetize their businesses. but ultimately, we see the likes of amazon gaining a disproportionate share and netflix having to contend with everybody else. when you think about the data they have, how is it differentiated than what a linear television station has? emily: interesting view there, we will cover all of this. thank you for weighing in. meantime, faze clan is one of the biggest e-sports companies in the world with 11 competitive teams in games like counterstrike and fortnite.
it has officially started trading on nasdaq. it is a gaming lifestyle brand that is now popular with younger audiences and includes big content creators like snoop dogg , who is also on the board. the ceo joins us live now from that nasdaq. good to have you on the big day. everybody thought they go public window has been slammed and sealed shut. why did you decide to rip it open? >> thank you, emily. really appreciate you having me. great day for gaming. for gen z. talking about gen z, the timing is actually precedent because gen z is rising to power not only as a cultural driver like all youth generations, but they are a clip thing -- eclipsing
the culture drivers into changing how we transact and consume. by the end of the decade, they will have $30 trillion of spending power. we are seeing this ascendancy of gen z. we typify that ascendancy as the first gen z native company to go public. so i think the timing feels perfect. emily: shares did drop 25% or so. you still think the timing is right? >> the timing is definitely right. the reality is, this day is about the launch of the first gen z native company going public. we are building value for the long-term. check in with us 12 months, 18 months, 24 months -- we are building value for our community and we will be building for the long-term. emily: you are at the
intersection of some really volatile industries including e-sports and web 3.0, what makes this cocktail so unique and potentially valuable? >> we really do sit at the intersection of technology and culture. that's really what we did starting in 2010. gaming sits at the intersection of technology and culture, i don't think people understood that gaming is culture. gaming culture has become youth culture overall. we have been pioneers at that and our plan is to continue to pioneer. a great example of that is web three, which also happens to be led and driven by culture at the moment. we have been positioning amongst all the blue-chip companies within web3, and we see an opportunity to bring the massive gaming community, we see the
opportunity for us to build that bridge and usher in that massive gaming audience. not only our 500 million plus follower network but they gaming community at large into what will be a colossal part of our future that frankly, will disrupt not only what you have seen so far in things like art, but web3 will impact commerce overall. we are positioned to bring our generation into that. and we see that is an amazing opportunity for us. emily: what don't investors understand about how gen z is going to change things, and how to capitalize on these trends? >> i think what we have seen so far is the way that they consume content, they have moved away from the traditional spaces of content. heavy on youtube, internet, twitch.
that is the beginning of the change not the totality. gen z demands something different from the brands they support. they want to be treated as a community not a customer. at this point, i hesitate to use the word customer because it almost feels pejorative from the gen z lens. the majority of traditional companies don't understand that sea change. they don't understand gen z is rising to power in a different way. by the end of the decade they will have $30 trillion in buying power. another sign is, this election, we are seeing the first gen z candidates for congress. there is a massive see change coming. a lot of companies are not quite prepared the amount of change that is required to treat their customers as their community. and if we speak the gen z
language natively. we have been leaving gen z on the culture side. and we're continuing to lead them on the commercial side as well. emily: lee trink, faze clan ceo, we will continue to watch you all. >> faze up. emily: thank you. tesla earnings calls are still underway. musk set the company has the potential for record-breaking output in the second half. plus, he says the tesla cybertruck is on track to debut next year, 2023. we will continue to listen in and bring you the headlines as we have them. sam bankman-fried 's empire, his crypto spending spree and his intention behind it. this is bloomberg. ♪ >> at the very least, i want to be doing something net
emily: it is time for our crypto reporter as we take a look at one of the most prominent figures in the industry, the fdx ceo and founder sam bankman-fried. over june, the crypto billionaire bought two companies and try to save another with a large loan. he committed about a billion dollars amidst a crypto rout that has wiped 2 trillion dollars in market value out.
let's bring in anna miller for more on today's big take. it is fascinating to see just how ambitious and seemingly successful sbf seems to be. but there are competing views of him within the industry. is he a messiah or is he a sharp? >> you have people calling him the patron saint of crypto, bailing out the industry, swooping in as a white knight to save struggling companies. on the other hand, you have people seeing him as a robber baron consolidating power and control over the industry. emily: sb spoke at ourf bloomberg crypto summit this week. i want to take a quick listen. >> certainly the asset price decline was a strong sign that crypto and frankly a lot of fintech, things were way too
light on use cases and there is a lot of handwaving going on both on use cases and financial modeling that was suspect. emily: tell us a little more about his view on this market downturn. clearly he is more optimistic than the markets would suggest but is he right? >> he puts protecting customers above all else within this industry. he is looking to swoop in and help people out. he believes this is an industry with extremely strong long-term prospects. while he sees opportunity in terms of buying up companies and bailing out others, he thinks that by helping these companies, he can be sure that customers' assets are safe. emily: are you expecting his acquisitions free to continue? >> ftx and ftx u.s. are both
focused on raising funding. they are in talks with people, that is unique because venture capitalists have really cool down on the industry in light of crypto winter. so, it is fascinating to see that he still has competence to raise funds at high valuations. he is eyeing assets at distressed companies and bitcoin miners for acquisitions. emily: meantime, elon musk at one point was considered a crypto savior, coming out and saying tesla sold 75% of its bitcoin purchases to improve its cash position. do you expect something like that to have a continued negative effect on the industry? or can the optimism of sam bankman-fried win out?
>> i think his support for the industry shows that there are people who have confidence in it. he has his eyes outside of the crypto industry. he has talked about, even joked about buying goldman sachs. it was reported he was eyeing a potential takeover of robinhood. he sees finance flooring with crypto. while big names like elon musk might be dampening on their support of the industry, it seems like those within it have the competence to branch out beyond it and are still competent about some of their prospects. emily: i'm sure there are many more twists to come. bloomberg's hannah miller with this week's big take. we will take a look at the future of health tech. we will get hurt inside -- her insight amidst a market downturn
emily: the pandemic has changed how we look at health care and the digital health landscape was booming through covid-19. take a look at the future of health tech with a partner at lux capital. there has been a lot of optimism about the future of health care technology but we have also seen companies like cerebral that have had layoffs, coupled with this downturn. how bright is the future really? >> bottom line, i am still incredibly bullish as are we at lux.
health care is fundamentally recession proof. humans are not going anywhere anytime soon, we will continue to give birth, get sick and die. while the pandemic may have accelerated both, it has opened up a watershed of opportunity for the industry. emily: how is the downturn impacting the industry and valuations? i'm sure companies are struggling under the pressure. >> we are not immune from the macro. health tech is very services oriented and is keenly affected by it. we are seeing there is still a massive influx of funds from venture funds. there was a report documenting that. it is on track to be the third-highest year of venture fundraising in history. there has been a slowdown of dollars deployed toward health care. later stage copies will see it
is not quite the fundraising environment of 2021. emily: apple came out with a 60 page report detailing its role in the health care industry, will apple own this role? >> this is a big question, will it be apple or google or facebook? there is no denying with all of the apple watch is that there is a massive amount of trust in apple, and it will be interesting to see how providers integrate this data. if they can bridge that gap, there could be something very interesting. emily: this is not necessarily a quick question, but with the overturning of roe v. wade, how does that change your view of the industry? >> fundamentally, women's health is population health. the overturning has been a sad moment not just for women but
all of us. it has been a moment where employers step up to the table. major companies funding they care of women to cross state lines to receive the care that we need. one of our companies is already serving nearly half of the fortune 50 companies, and has seen a month over month increase in terms of inbound sales opportunities for companies who want to do more for women and families, who want address the maternal health crisis we face in this country where women are 50% more likely to die in childbirth than our mothers before us. emily: the ceo of maven was just on the show and she talked about maternity deserts, places across the country that don't have adequate care. deena, always great to have you on the show, thank you for
stopping by. we will continue to listen in on that tesla earnings call. elon musk is talking about his decision to sell the majority of their stake in bitcoin. take a listen. >> the reason we sold a bunch of our bitcoin holdings was that we were uncertain as to when the covid lockdowns in china would alleviate. it was important for us to maximize our cash position given the uncertainty of the covid lockdowns. emily: musk also said he is open to increasing the company's bitcoin position in the future and said he is holding onto his doge. that does it for this edition of bloomberg technology. tomorrow we will speak with the at&t ceo, john stankey, he will talk about earnings and the state of the wireless industry. don't forget to tech out our