Musk and Twitter's 'Unresolved Matters

Published Jun 21, 2022, 10:43 PM

Bloomberg's Emily Chang breaks down the Tesla CEO's doubts when it come to his bid for Twitter, and why he thinks a recession is likely. Plus, a look at Apple's first union. 

From the heart of where Innovation, money and power COLLI in Silicon Valley and beyond. This is Bloomberg Technology with Emily Jay I'm Emily Check in San Francisco, and this is Bloomberg Technology. Coming up in the next hour. Elon Musk tells Bloomberg there are still unresolved matters when it comes to his bid for Twitter, and that he believes a recession is likely. We'll bring you our conversation with the Tesla CEO from the Qatar Economic Forum in Doha, plus the first for Apple workers at a retail store in Maryland vote to unionize. We'll talk to the former chair of the National Labor Relations Board about whether the iPhone maker should brace for a wave of union votes at stores around the world, and monetizing meta how the company is shifting priorities and its algorithms in an effort to chase TikTok. We will get to all of that in a moment, but first, U stocks rebounding after last week's route eraised nearly two trillion dollars from the SMP five hundred blueis Katie Gray felt here to walk us through the day and how tech played in it. Katie take it away. Well, Emily, was a big broad rally today. You had both the SMP five hundred and the NAZAC one hundred fishing two and a half percent higher. That was even though you did seal yields continue to climb. If you look at the tenure treasure yield fishing about five basis points higher today, but still volatility taking a breather. You're looking at the vix. They're breaking below thirty at one point, finishing a little bit above thirty, but still seeing some of the volatility exit the market. As we saw stocks rebound today and within that rally, two stocks caught my eye Tesla and Twitter. Of course, like you said, we heard from Elon Musk in conversation with Bloomberg News editor in chief John Michael Swaite. This was an interesting so on the Twitter front, you heard Musk, like you said, Emily, say that there's still a few unresolved matters with the Twitter deal, leaving a few question marks. There still Twitter shares finishing three percent higher. Tesla even more so, even though we heard must say that layoffs have started at Tesla, that the company plans to layoff ten percent of its salaried workforce. Over the next three months. Still you saw a big rally in Tesla shares, finishing over nine percent higher. But if you zoom out away from just today's rally, what's interesting is that we know that tech has had a really tough time this year. If you look at the SMP five hundreds top ten largest tech companies, they're down about thirty percent so far this year. But cracks are starting to show up outside of tech too, And you're looking at the top ten largest non tech companies in the SMP five hundred, that's the white line you can see now down over two percent, Emily. So we'll see if this rally that we saw at least today can sustain itself as other areas of the market begin to come under a little bit of pressure. Here all right, Katie, thanks for that. I want to take a look at the crypto markets now and this weekend's bitcoin drama downs and some up spoilstering hope for some relief from the crypto winter. Bloomberg Shnale Boss here to break it all down socanally. Is it gonna keep up? Well, it's already starting to slow down. We are still seeing a lift in bitcoin, Emily, but remember Sunday brought you a more than fifteen percent lift in bitcoin prices. Now you're looking at about a two percent rise in the last twenty four hours. Earlier today it was about five percent. So that shows you that that the steam is starting to slow down a little bit. But you are still seeing still a rise. So yes, Bitcoin higher, hovering above a twenty thousand. Let's take a look also here at ethereum, because like bitcoin got a massive rise on Sunday, even bigger jump than Bitcoin, but you are seeing that rise start to slow down significantly now only up about two tenths of one percent. Still, you do see ethereum giving some life back to the n f T market as well. You're seeing an n f T indecks rise once again. And look at these volumes up quite a bit when you look at the largest market places, look at open Sea, it's actually up much more than that right now in terms of volumes. Looks rare volumes are also higher in the last twenty four hours. And interesting magic even yes, the volumes are down over the most recent period, but today, just today they announced a funding round that had their valuation announced as surging tenfolds, and so you are seeing the n f T market come to life, just as people gather at NYC n f T. There's a lot of excitement around what the future brings. Despite the SCRIPTO Winter Shinali, thanks for that. We've got the co founder of Magic Eating coming up with us later in the show. You'll be back for that meantime. Elon Musk commented on everything from Twitter to the markets to Tesla in a wide ranging interview with Bloomberg's editor in chief John michel Sweet at the Qatar Economic Forum in Doha. But anyone hoping to hear him commit to his deal to buy Twitter would be disappointed. Take a listen of what do you had to say about that and more? There are still, um a few unresolved matters. You've You've probably read about the question as to whether the number of fake and spam users on the system is less than five percent as Twitter claims, which I think is probably not most people's experience on we're using Twitter. UM So we're still awaiting resolution on that matter. UM. And that that is a very significant matter. UM So we're awaiting resolution on that. Um. And then of course there is the question of will the dead portion of the round come together, and then will the share holders vote in favor? So I think those are the three things that um standard. Uh, you know if that needs to be resolved before the transaction can complete. What about the general state of the economy? Does that weigh on you when you think about this? I mean, just described it. You have a super bad feeling about the economy. Are you still in that position? I just said to you earlier Joe Biden has just come out and said that a recession in America is not inevitable. How do you feel about the economy? Well, I think a recession is inevitable at some point. As to whether there is a reception in the near term, I think that is more likely than not. Certainly isn't. It's not a certainty, but it appears more likelier than that. Can you set the record straight on one thing, which is this issue about the layoffs? I think you said initially that Tesla ten percent of the workforce would be cut, then ten percent of salary would be cut, then salaried would stay fl flat and overall headcamp would go up. What what what is the number? I know there's already I think being a lawsuit about the ten percent? Is ten percent. The goal to reduce the workforce or what is the number that we should think about all that you're planning. Yes, so it TESLA is reducing the salary workforce are roughly ten percent over the next probably three months or so. UM. The UH we expect to grow out our hourly workforce. Act quite clear that we expected to grow our own hourly workforce, but we uh, we grew very fast on the on the salary side, UM, and we grew a little too fast in some areas, and so it requires reduction in the salary workforce. And we're about two thirds hourly and one third salary. So I guess technically attempts at reduction in the salary workforce is only probably a three three and a half a cent reduction in total headcount. TESLA CEO Elon Musk. They're speaking with Bloomberg editor in chief John Michael Weight from the Qatar Economic Forum in Doha. I want to break some of that down with our own at Ludlow. Let's start on Tesla since that's where they ended. What's the significance of what we learned right there? Yeah, I think that the main takeaway and what he goes on to say is that demand is really strong, that they have a really long wait list for their vehicles, and he talked about how they need to build more factories quicker. And the point he was making that piece of tape is that they are reducing ten percent of salary staff. The salary staff is only a third of the workforce, so it kind of nets out at a three to three and a half percent reduction of headcount globally and tests a kind of ballooned right over the last few years, a hundred thousand employees. They're kind of trimming back in some areas, according to Mask and the focusing on priority, which is people that actually build stuff, the cars, the battery packs around the world. Talking about other people that are building stuff. The employees at Twitter probably didn't get an answer one way or another whether or not he's going to go through with the deal. You know, it was it was like recent appearances by Ask. He did not explicitly state that he is committed to the deal as its outlined twenty cents to share. You know, he kind of went through the motions and he gave this caveat that he was trying to do deposition minimization. He didn't want to get into legal trouble because it's appending deal, but still problems with bots. Still need to shareholder vote to make this happen. We keep forgetting that. And the debt real quick reference of debt thirteen billion dollars a debt committed by banks, and he seemed to suggest that that too is not solid. I wonder how much it doesn't help that he thinks a recession is likely at some point and Twitter, along with the rest of the markets, has taken a turn. Yeah, continuation of his thoughts right. He said previously as a super bad feeling about the economy, referencing internal memo, and he said that, you know, a recession is kind of going to happen at some point. The economy is cyclical. That makes sense. But is it going to happen in the near term? He said, more likely than not. Twitter's market cap twenty nine billion dollars. Yes. At the end of this trading session, he did talk about DOJ and we had some interesting commentary there along with his support for cryptocurrencies. So those coins really interesting. He clarified, first of all, he's not suggesting that people go out and invest in cryptocurrencies. That was part of the question that was put to him, he said, I'm not saying that. He said that he went across the factory floors a Tesla SpaceX and he has workers, you know, engineers, all kinds of people in the workforce saying to him, we're invested in doge coin. Can you support it? And he says that's his rationale for supporting it, And of course he's bought dogecoin himself. You can buy test the merchandise and not vehicles, but merchandise using doged coin. So he seems to be suggesting that his support is because he has a wide network of employees that also support cryptocurrency UM and he kind of made the bitcoin side of things with TESSAs Holdings being a very small, inconsequential part of the balance sheet. Interesting, a little bit more meat on the bones there at Bludlow. Thank you for your analysis. That's the sound of Apple workers in Tosa in Maryland, just outside of Baltimore, which just became the first Apple retail store in the country to unionize. Store employees voted overwhelming Lady unionized to thirty three, and this is likely just the beginning, as more stores are expected to organize around the world. In recent months, we've seen more and more workers at tech companies unionized, But with the tightening labor market and the economy turning down, how much influence can they have for more? I'm joined by William Gould the fourth. He is the former chairman of the National Labor Relations Board, a scholar on labor law at Stanford Law School, and author of the book for Labor To Build Upon Wars, Depression and Pandemic. William, thank you so much for joining us. So look, the vote wasn't even close. What does that tell you about the chances that this is going to happen at many more Apple stores? Well, I think it's likely that it will happen at many more stores. We don't know really how many, uh it's likely to be, but clearly something is happening. We've been talking for a long time about the unrelenting decline of organized labor and the absence of organized labor from tech altogether. That's beginning to change a bit. How much we don't know. I think there are a number of factors and issues which have made this possible. But there's no doubt about the fact that something is happening, and it's quite feasible possible that it will happen elsewhere there and another companies. Apple has said in a statement about the possibility of this happening in the past, We're fortunate to have incredible retail team members, and we deeply value everything they bring to Apple. We're pleased to offer very strong compensation and benefits for full time and part time employees, including healthcare, tuition reimbursement, new parental leave, paid family leave, annual stock grants, and many other benefits. You know, how do I think the benefits that Apple, which is to be fair, one of the wealthiest companies in the world, compared to what workers in unions elsewhere receive, you would think they'd be a step above the rest. Oh, there are a step above the unionized sector of the economy, but there's certainly a step above a number of them. I think that probably UH the impetus for this comes from a desire of workers to to shape these employment conditions with the employer, not to have them unilaterally imposed upon them, and UH to to address issues like scheduling, like safety issues. And we've seen in this period of inflation, a decline in real wages. I think all of these issues a confluence of these issues and and the circumstances that have emerged in this period of uncertainty. I talk about wars and de Russian and pandemic in my book, and uh, it's a period of uncertainty where workers are frequently I'm more likely to look to unions and some kind of protective mechanism and some kind of participatory mechanism than they otherwise would now. Amazon, of course, has been facing unionization efforts of its own at warehouses, a vote in Staten Island, for example, to unionize. I recently sat down with Amazon CEO Andy Jassy and asked for his response to these efforts. Take a listen to what he had to say. We happen to think they're better off without a union for a number of reasons, including the fact that you know, it's it's much harder when you have a union to have a direct relationship with your manager and to get things done quickly. Amazon's labor union interestingly filed a charge over those remarks that he made to me. I'm curious what you see is the parallels between Apple and Amazon and what the difference between a wave of tech union unizations, how how that compares to the history of unions in this country. Well, there there have been uh waves of of trade union movement at various points. UH. The Great Depression, World War two are some of the most recent illustrations. UH, when workers are don't know really what's uh what lies ahead. UM, there's this idea that we can just sit down and work things out together. Is fine so long as the worker really has a say in it. And I think that the what the workers are saying through UH. These initiatives in Tech and Amazon Amazons are very formidable effort because there's so many employees that you have to organize in one uh and one swoop. Uh. You know, with the the Staten Island being approximately eight thousand workers, that's a tough thing for for union to do. And they were able to do it effectively in part because they were able to uh. It was a it was an independent ground swell. Though the workers came to the union. Um, the union is not coming to the workers. And that's the way it's been in every period of great union growth. I don't know that this is going to be a great period of union growth. I think we're in early days. So what do you think these tech companies Apple, Amazon at Teter should prepare for How do you see this playing out? Are they just going to have to pay these employees a lot more, give them much better benefits? What does it look like on the other side. I think the big thing is the two. It's not simply a matter of benefits. It's a matter of UH worker involvement, worker participation UM in determining schedule, in UH input into safety issues which have become so important in this pandemic era in a number of contexts, and UH and they're gonna have to in some instances, UH really come through with money for workers who, as I said, see their real wages declining for reasons that are totally beyond their control. And it seems at the present to anybody's control. All right, well, certainly very long chapter yet to be written here, William Gould, former Chair of the National Labored Relations Bards Stifford Law professor, really appreciate having your perspective here today on the show Coming up, changes are coming to metas it shifts its algorithm to bring more creators to the platform, creators you may not have heard of before and expand into the metaverse. Will explain it all next, Mr Bloomberg. Meta has big plans for creators as it looks for ways to continue to expand, especially in the metaverse. Mark Zuckerberg has announced new ways for creators to make money, including through n f t s, reels, and even from paid online events and subscriptions. On top of trying to lore more creators to better compete with TikTok, Meta is also shifting its algorithm. Since the invention of Facebook's news feed, the company has been focused on delivering content that it knows users want to see. However, after more than a decade, it's becoming clear some users need a little more to stay engaged. The success of TikTok has unearthed a new kind of algo magic, giving people content they didn't even know they wanted to see. This is why creators with little followings have been being able to gain massive traction on TikTok, but less so on metas platforms. Now, Mark Zuckerber wants to change all that. For more on all this, I'm joined by Bloomberg's tech editor Sarah Fryar So talk to us about what Meta a k a. Facebook is doing here and if it's gonna work. It's really a big bet to focus on showing people content from people they don't already follow, that they haven't already expressed interest in, in the hopes of helping those people build a following as creators. But it's really risky because it just flies in the face of all of the curation you've done of your feed, who you decide, who you want to follow, who you're friends with, etcetera. Um metas deciding that it thinks it has something to show you that might be better. Uh, and it might or might not work. So it's a big moment of experimentation. They're really betting the company on this because if they can't make money um from this pivot, then you won't be able to really fund the metaverse, and they won't have the creator relationships that they need take into the metaverse eventually. How A creators looking at the differences between a TikTok and a Facebook or on Instagram, Well, creators have their audiences on on Instagram that they where they really have this like back and forth relationship. Um, there's it's easier to connect in some ways on Instagram that it is on TikTok, But TikTok is is really offering people an opportunity for more followings, and is considered the easier place to become famous overnight compared to Instagram, which is already kind of established. And and Facebook is simply not top of mind for young people anymore. And that's another thing that the company really needs to change. So they're leaning on Instagram, and they're also leaning on changes to Facebook itself that are going to help draw in young people and make them more entertainment destinations than simple social networks. UM, that's all trying to compete with TikTok. However, you know this, this is what they really need to do to stay relevant. And if it doesn't work, UM, then they're going to have have um potentially alienated from people who have depended on the platforms working the way they already do. Fascinating a big bet. Indeed, we'll be watching to see how that one plays out. Bloomberg's certifire our tech editor, and also the book about Instagram, No Filter. Thank you, Welcome back to Bloomberg Technology. I'm Emily Chang in San Francisco. Time now for some tech news you might have missed. Uber is bringing back its shared ride service for the first time since the pandemic it's now called Uber x share instead of Uberpool, joining Lift, which reactivated car pool services in some markets. Back in May, Bloomberg's at Bloodlow here with the details and what do we know. Yeah, it's interesting. So if you choose to do Uber x share, you get partnered with the co writer, so it's just you and one other person. And Uber says that uses its algorithms to calculate your co writer based on your route, and who gets dropped off first depends on the route. There might be periods of time where you're riding on your own and someone gets in. You might be riding as a two and someone gets out and you carry on on your own the rest of the way. And they're introducing this and limited markets including l A, New York City, San Francisco. In fact, we have this tweet from somebody that noticed the news in New York City channeling their inner pandemic experience or pre pandemic experience, just with a bit of batter excited for a summer of chaotic encounters in the back of a Nissan Ultimate. We can all relate. I remember uberpool and other shared right services pre pandemic right, and you could have three or four people in the car. You're all in the back like somebody's got a briefcase and umbrella, a dog. Whatever is going on. This is kind of different, but it's going to be interesting to see the psychology of how users act to this after the pandemic. I mean, you look at the share performance right of Uber and Lift since June when things started to recover in the share price after the initial shock of the pandemic, and we're still down significantly. Right. Uber's story has been one where they've diversified the business with Uber eats Lift. You know, we've been debating in the recent weeks and quarters about whether the demand is really there, how much both of these companies will have to do to incentivized riders and drivers, and how that will weigh on the bomb line. Interesting in the case of Uber x share, if you offer that you get an immediate discount on your ride, which could be a way to lure people in. Right, and you see Uber and Left just trading in tandem. Really there, I gotta ask why why did they change the name? I mean, Uber x share doesn't just doesn't have the same ring as uberpool. Yeah, I lact songs to this as well. So what Uber saying their blog post is that after the pandemic shut down shared rides in they did a complete revamp. Right. They did pilots around the world in different markets. They redesigned the feature. And this is the core principle, Right, it's not really a pool of people. It's a co sharing ride that it's you and one other person, and it's limited. I'd also point out that there's there's no mask requirement, at least here in San Francisco, right, And Uber is saying that it's at the comfort level of riders whether they wear a mask. But that's the key point. It's just one and another, not a big pool of riders like uberpool. And I think that's kind of the mainstay of why they've changed the name. Right. I can only imagine the awkward masks now mask conversation. It's okay at ludlow, thank you. Following the recent collapse in token prices, one crypto lender is covering its spaces. Block five has asked for f t X as help to get more cash, with a two million dollar revolving credit facility. To be precise, this to avoid the same fate that other lenders have faced, like Celsius and Babble, which froze withdrawals on their platforms. Here to break it all down, our crypto contributor Shinnali. Boss, you scratch your back, I'll scratch mine, I guess. And there's some deals that come from a position of weakness and some from a position of strength and all that. Remember, as you said, some of the rivals to block By had paused withdrawals, and now you have a block By after also recently acknowledging that I had to liquidated a large client taking some funds from f t X. Remember when you look at why why this happened, you have spf Sam Bankman freed saying that sometimes leadership means acting decisively, and that's what block By did, removing troublesome counterparties before they became a problem and adding cash before it was necessary. Remember Sam Bankman Freeze Alimated Research also had extended credit to Voyage or Digital as well as a safeguard for client assets. In light of this a very volatile crypto market environment. And you know, you look at what people are saying about the whole thing. Is Sam bank been freed? Is f t X the white night here? Uh? You know, Anthony Scaramugi told Bloomberg it makes him the JP Morgan of the crypto industry and to talk about deals also that come from a position of strength. They also announced a deal to acquire an f T x c U S, a deal to acquire m bed, a clearing firm as it looks to expand. Interesting. Okay, so now I stay with us. I want to talk now about how the world of n f T s will evolve amidst this crypto winter. Our next guest Joshan Yin, who is the CEO of the n f T startup Magic Eden, which I know you mentioned earlier in the show and backed by Lightspeed Venture Partners and Sequoia joining us. Now, so look, Josan, this is the start of n f T n y C. I believe last year was a big year for n f T s, but we've seen the market quiet down. What's the impact of the crypto winter been on the n f T market and how do you see that playing out? Yeah, since, first of all, thanks so much for having me, I think, yeah, definitely that has been a broader downtown and macro impact recently, I think from our point of view with Magic Eaton though it's been the last few months has been going from strength to strength. Um So, we are one of the fastest growing marketplaces in the world. We are about market share on Salana we uh and May actually was the largest ever month for us, so it's been about a ten x growth from the last time we raised. So I think from our point of view, we still see pretty significant demand from creators as well as end users to come and interact with and discovery f T s. And you know, the way we think about it is it's a long term time horizon here. We we sort of measure success on a multi year cycle and you know, ups and downs are part and parcel with crypto. So we're here for the long haul and super excited to be announcing this today. How is Magic Eating different from other n f T marketplaces like open Sea. Yeah, great question. This comes up a lot actually, and the reason we started Magic Eating was it was very intentional. Um So for us, like we consider ourselves a very very community centric and and deeply create a focused marketplace. Um what does that mean exactly? It means that this permeates everything that we do. So for example, one of the earliest products that we built was actually a launch pad, which is an end to end create a create a tool, and create a service that helps create as launch n f T Collections UM. Secondly, we actually partner with Collections through the entire journey, so not just at launch, but through the end to end experience where they may want to build a customer embedded marketplace, we're also a partner for that. UM. And then on the community side, I really think that it's important to consider marketplaces is more than just the point of sale, So we actually want to work with communities to to actually be there around the entire discovery journey, whether it's you know, analytics, whether it's research, whether it's actually the point of sale. We want to be there. So I think from our point of view, we're really excited to continue building for the future UM and for us UM that means you know, continuing to expand the team, continuing to grow the line of docks, so we're super excited about that. So you made a very specific decision to be a Salona and f T market place, and I'm really curious, you know, find faster speeds, lower transaction costs, but also real outages. So what's the trade off here and what are some of the things that are going to need to be worked through to make this a viable solution. Yeah, for sure. So it's obviously still very early, and I think the tradeoff here was going with Salana is that it's a it's a newer chain, right, so they're still working through a lot of the growing pains, and as much as we have grown over the last nine months, which has been pretty insane, they are experiencing something similar. But we have obviously huge faith in what they're doing, and the decision to launch there was very intentional because the cost of experimentation is lower when the when when transactions are cheaper, and for us, that means more creatives, more end users who are willing to come and try n f T s for the first time, and you know, hopefully that means that will continue to grow over the long term, and we want to be here as a part of that. I'm wondering about n f T pricing also here, because you've seen things self for extraordinary amounts in the last year, millions and millions of dollars, and some of those same assets are now trading for a lot less. Uh, And so what is a normal price here? What where does the markets start to stabilize, what is the average price of an n f T. It's really hard to say. I wish I could answer that for you, but I think overall we we definitely see strong demand still for n f T s um you know, effectively. I think about n f T s in a really similar way in terms of the market cycle to where fungible tokens where four or five years ago. So it's okay to talk about prices up down sideways. Ultimately, what matters is like, look at the trajectory of the growth. Fungible tokens became became a trillion dollar market, right and n f T s, I think, are a much more applicable technology to many, many things across the spectrum of culture. So regardless of where we see the price end up, I think there's a lot to build. Josh and I have to ask you about Bill Gates's remarks recently about the n f T market. He said it's entirely based on the greater full theory, and then added odd obviously, expensive digital images of monkeys are going to improve the world immensely. With not a small dose of sarcasm, what is Bill Gates getting wrong? I mean, Bill, come and come and try out Magic Aid, and we'd love to have you on the platform. No. I think the couple of things that I would call out is that, yeah, we're very early in the general n FT category and FT ecosystem. Um. Yeah, like profile pictures, you know, they may not seem like something that's very interesting or very exciting to a lot of people, but the reality is that they got very popular, and they're fun, they're social. It's at the intersection of culture um, and they have permeated a lot of society. I think one of the things that we are really excited about is enabling more forms of utility for these n f t s. So part of this raise is actually going to go to what's building out a gaming vertical at Magic Eiden. And you know, gaming is an inherently social activity. It's where communities already gather, and you can imagine the same the same types of behavior where people are buying I didn't and skins already that are not crypto related. People are going to be doing those things with n f t s. And the cool thing about that is that it's a it's actually true ownership that's happening here. So it's early. I mean, we invite Bill to come on and check out Magic Eating, we we'd happily walk him through all the all infrastructure. I wondering also if you can speak a little to the overall fundraising environment here, because you're a rare company that was able to see a tenfold surge invaluation since March. Find you right, So how hard is it out there to actually raise money? What are investors looking for when they're putting their money to work. Yeah, I'd say it's it's absolutely tougher right now than it was probably two three months ago, for sure. But I still think that if you are a really high quality team with clarity of thought, clarity of vision, strong execution, long term focused investors will still, you know, I want to do these deals, and I think Magic Eating is a testament to that, where, you know, despite a deteriorating market over the last couple of months, our numbers have been a strong as ever, and we actually had a lot of appetite and interest inbound from both our existing investors in the previous round and new investors. So there is appetite still to do deals. But I think the implication is you need to there's a longer dating period, shall we say, right, with a lot of teams and investors, and I think that's actually probably healthy for the market. So obviously you're optimistic. Paint the picture five years out. What does the n f T market look like, how much is it worth? What problems is it solving? Yeah, I think the n of team market will be a trillion dollar market. Going back to the point earlier around sort of mimicking the growth of fungible tokens, I do believe that n f T s will permeate many, many different types of assets. And one of the things that we really pumped about is, let's explore the universe of gaming n f T s. Let's explore the universe of music n f T S. I really don't think that it all stops with profile pictures and um, this is a very inherently social experience. It's it permeates a lot of different things around culture, and you know, hopefully this is just the beginning and it spurs a lot of other amazing innovation in the n f T space. So we're just stick to be a part of it, and hopefully we can push the ecosystem forward with a lot of other builders out there Josh and CEO of Magic Eating and our very own Shinelli Bossa thank you both. Coming up the future of work and how to power it. Will speak about all that and more with Coral CEO Christo Quarrels, who's also got a view on the market and lived through her share of downturns. She joins us. Next, this is Bloomberg. In this week's Teconomics, we bring you the story of Coral, a developer of business productivity, graphics and operating system solutions that wants to drive the future of work and compete against the likes of vm Ware and Citrics. Coral CEO Crystal Corals joins me now to talk about this vision and more so, how do you intend to compete with Citrics, vm Ware, which are to be fair giants in the tech space. They definitely are giants. If you look at our largest product, it's Parallels, which, as many people know, enables you to do such things as running Windows on a Mac. But it's more than that. So we have the desktop solution that millions of people enjoy and love and enable them to do a better job. But we also have a server cloud and we just bought a company this week that enables us to be anywhere so you don't have to download anything. But really about a zero trust security way of streaming applications. And so we think about the virtualization space. There are the big giants like Citrics, m VM where who are really serving clients that have five thousand and up consumers. We're here to make it easy for every company, every worker, and every company to work from wherever they want, be at the coffee shop, the sofa, the office in a really secure and easy way. You've been around the block, Christa at you were the CEO of Open Table. You've been through some ups and downs when it comes to the markets. How do you see the shift to remote work playing out? Is this here for good? Are some companies going to regret telling their employees they could work from home forever? I think the genieu is clearly out of the bottle. If you look at pre pandemic work, you know a lot of that came from what it was like to come into a factory. It didn't imagine a world where zoom and collaboration tools and software really enabled people's daily lives. And we believe that when you work better, you live better, and people don't going to give that up. We've seen that in how people are willing to accept a salary decrease for not having to come into the office. And I think the companies that remain abject about their desire to get people in they are going to suffer as it relates to where talent wants to go. That's not to say we don't gather. It's not to say that we don't get people together. But I believe that your personal productivity pod should be where you ever you wanted to be, and you should be able to connect securely and hopefully use some of our products while you do so. So Ellen us calling workers back in the office, do you think he's going to be on the wrong side of history. I mean, could this hurt companies that are forcing employees to come back to the office. I think it's all about understanding, also what your business is. We have the benefit of being what I like to say, we're in the bits business and not the Adams business, meaning we ship software. We don't have a physical product. Obviously, they're delivering a large and complex physical product with a supply chain to boot. And I think there are times in which he's he needs to demonstrate from a cultural standpoint, how those people need to come in. I think if you're building software, which is our case, we can be more flexible and we can lean in and give the knowledge worker not just flexibility but freedom, which is ultimately what they're seeking. You live through the dot com bust, and I'm curious how you think this compares. Do you think a recession is inevitable? And if so, is it a big R or a little R? Yeah, this is my second down turn, and so it's always interesting to see people who have just been operating for the last thirteen years and think it's fully representative. It does feel to me more like the dot com bust, how albeit with much higher interest rates. And so I do think is a big art recession. Anytime inflation is north of five percent, you're going to have a pretty significant challenge out there in the market. I think it's a question of how quickly you do companies respond. I was at an event the other day and somebody said, uh, economics are the new black, and I thought it was amusing, because you know, I come from the private equity landscape, as we're backed by Ker and the unit economics have always been a mainstay of our business, and it will need to be so going forward for many other companies. So how do you think this is going to impact the broader landscape of of all of these tech unicorns that have raised money at high valuations on top of these huge public tech companies that have been enjoying very nice multiples, and you know, will they recover well? I think if you need to raise capital, that capital got significantly more expensive, you know to you know, the flat round is the new upround. And I think the reality is, you know, how are managers employees going to respond in this environment? So when the dollar is up, oil is up, and interest rates are up, it means equity has to be down. And when equity is down, the primary driver of uh tech first workers who work for the equity. They get cranky and it's getting more challenging and by the way, they might be losing a job. And so the whole ecosystem is being thrust into this world where the cost of capital is such that you cannot grow at any price. You've got to grow at a thoughtful, unit economic driven price. So how is this all going to impact the war for talent? On the one hand, you've had the great resignation and workers who are deciding, you know what, I just don't want to do this anymore, and I have all of these options. Now you see the market contracting people don't necessarily have that kind of optionality. There are layoffs and hiring freezes happening across the tech industry. How do those two balance each other out? I think you have to look at which labor market you're in, So I would be very concerned if you are in a market like San Francisco or New York where you're cost of your labor generally is higher than cost of other labor out there in the marketplace. I think what it's done is created a level playing field for twent across not just the United States, but across the globe. And you know, we clearly employ UH developer teams outside of the United States. We think it's a critical advantage for US as an organization. But I think it is a great leveling of talent too. It used to be that you had to be at a certain location to manage and benefit from the ecosystem, and now I think that's gone as our tools and our collaboration software enables people to truly be effective from any place. So it's a great level of her talent. Okay, So if it's a great level of her talent, who wins and who loses? If you're a San Francisco engineer, it could be probably um. But great talent is always always in need. And I think what you see in some of these companies who have raised exceptionally large rounds, they couldn't even hire their you know, according to their hiring plan. Um. But you're also going to see those hiring plans get dramatically scaled back. I think you know, I talk about management by haiku. If you had no bounds, you could do anything, but you might not be as creative as you otherwise would have been. So how do you manage within seventeen syllables and actually still build a great product? And I think that's where a lot of people look at the incredible companies that get born out of our session because they had to be mindful and choosy about where they spent their money. Management by haiku, that is a new one for me. I will remember Corals, Christopher Corals, thank you as always to have you back here on the show. And that doesn't for the edition of Bloomberg Technology We're gonna be back tomorrow with a number of great guests. Slack CEO and co founder Stewart Butterfield will be with us along with Shopify president probably finglestoned to talk about new features the company is launching. We don't forget to check out our new podcast as well. Wherever you get your podcasts, This is Bloomberg.

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