Airbnb CEO on Earnings, MicroStrategy CEO Steps Down (Podcast)

are even higher for the current quarter. I'll talk to CEO Brian Chesky about investors raising the sticks, plus Michael Sailor's next chapter, The micro Strategy co founder is stepping down as CEO to focus on wait for it, more Bitcoin. Sailor joins us later to talk about why he's making moves in a continuing crypto winter, and despite record inflation and pressure on consumers, so far had better than expected results,

bucking a bad news trend for fintech. See EEO Anthony Nodo will share his view on the macro environment and spending plans as competitors like robin Hood sort of massive round of layoffs. We will get to all of that in a moment, But first, Airbnb, as I said, just notched its best second quarter revenue ever. The home sharing giant says it's only going to get better. The travel rebound has given hosts more pricing power, which with average daily rates now tire than pre pandemic. Airbnb chair and

CEO Brian Chesky joins me. Now, so, Brian, I have to ask you about the market reaction here because shares open down. They've paired most of their losses for the day, but they're still down thirty so far this year. What do you think investors are missing? I think there's a lot of insertinty on travel right now, and um, you know, but I think the best thing we can do is continue to tell our story. Our revenue was up fifty

eight percent year of a year. We generated eight million free cash flow in the quarter, nearly nearly three billion dollars in the last year, and I think one of the things we shared with investors is that our bookings actually accelerated from jundist July. So I think one of the things we saw is that there's a lot of demand for our Q three Q four summer travel. And you know, we're just we're focused on things we can control,

so that's what we're doing. Still, there's some disappointment about your forecast still going to grow, but growing the same rate as last quarter. We had Brent phil who covers Airbnb from jeffreys On saying, look, I might be the perfect example of a person I just took a big trip. Now I'm back home. Maybe I'm gonna slowly spending down. Slow might traveled down just because of what's happening in

the macro environment. How concerned are you about that? You know, we're not too concerned right now about the macro environment. One of the things we learned was two years ago. I mean, we experienced something that we think is going to be much worse than this current macro end of my environment when the pandemic hit our business shop in eight weeks. But the thing that was remarkable is what happened next. We recovered really fast round any other travel company.

And that's because are models adaptable. We have nearly every type of space and nearly every type of community. So whatever happens the economy, people I think are still gonna want to live on Airbnb. They're still gonna want to travel. If they want to save money. Everything's a great way to do that. And you know, we're great for crossing boarders, were great urban travel, but we also are great for non urban destination stuff you want to get in a

car and travel nearby. We work from that through that as well. So I think we're a very adaptable model and in a difficult economic time. Whatever remind people were actually born in the recession. During that period of time, during the financial crisis, people turned to Airbnb to become hosts. People wanted to save money and seek the value that they got from Airbnb. So we're actually feeling really positive right now. So dark cause RuSHA He I spoke to

him yesterday, the CEO of Uber. He said he thinks Uber is quote recession resistant. Is that how you describe Airbnb? Are you recession proof? I mean, you know, we were born in the recession. We dealt with a pandemic reloss eighty percent of our business in eight weeks. We just established that we had a record Q two and we're feeling really good about Q three. So I think we are as well positioned as anybody for a recession if

that were to happen. Obviously, we've been talking a lot about the companies doing layoffs, big tech companies like Netflix, Shopify, coin Base. We're just hearing Walmart doing layoffs. I I spoke to Tim Cook just ahead of their earnings call Apple planning to slowdown spending on hiring and growth. Also said Apple plans to be deliberate about its spending. Are you changing your spending or investing or hiring strategy at all given the downturn? What's your approach? Absolutely not. We

are not pulling on the brakes. If anything, I'd be interested in stepping onto the gas. And here's why, because we've been through this movie before. Two years ago, we had to right size our business. We made a lot of difficult choices. We got really focused. That's why we went from a company that had negative free castle and now positive three billion of last year. So we are not changing our Harvard plans, We are not changing any any investment the thesis. We are staying really focused and

we've sustained our discipline. We were disciplined over the last couple of years when we right sized our business, and we're staying discipline, We're staying focused, and actually we're we're focused on right now is next travel season. We're focused on how can we step on the gas to be prepared for the next travel season? All right, So what's gonna happen next travel season? It's clear from your results that Urban and cross border travel are back. What are

the locations the destinations that are going to be most popular. Well, I think it's gonna be. You know, I thought last year was gonna be the travel rebound of the century, and it nearly was, but then, of course we had the pandemic bounced back with delta strain. This was an even bigger year. That's why this was a record cord for US. Remember this is before Asia's recovered. You know, a large percent of travel is Asia Pacific that is not recovered because much of Asia Pacific is cross border

and people aren't freely crossing borders yet. Also urban and cross border more generally is just beginning to recover. Now. Prosper order is double what it was this time last year. But I think that everything is going to continue to recover, obviously, notwithstanding whatever happens the economy. I think it's going to be even even bigger travel season next year. Now, Airbnb closed shop in China at the end of July because

it was just so tough to do business. They're given the zero COVID policy, But you're now focusing on outbound China travel. Do you have any expectation of when restrictions will ease and when that uh will open up. No, I don't, I mean we are. We're not going to try to be in the business of predicting when UM countries are going to reopen, but we're going to be in the business being the most prepared whenever they do,

so we'll be ready whenever boarders reopened. And to be clear, that China outbound business was always the prize, the biggest prize with the Chinese consumer base wanting to travel around the world and stay in homes. That's not really uh, you know, that's not really a robust business right now because people aren't really crossing the border. But when they are,

we're going to be ready. And the way we're preparing is of making sure we have enough homes in all the corridors, whether it's Japan, Korea, Southeast Stags or the other places that Chinese travelers go. We're gonna be prepared to have enough homes. We're gonna market them that this is a great option for them. How much more pricing power do you think hosts can have in this market? I mean, this is the worst inflationary environment that you

know Airbnb has ever seen. Well, I think that, um, we are at we you know, our businesses a somewhat seasonal business. So right now it's peak booking windows. So a lot of people are traveling right now, and so because a lot of people are traveling right now, prices will tend to go up a little bit now. Bookings right now in August or typically for September on September on is really after the peak travel season, and so

that will provide some pricing relief presumably. So I do think there's going to be quite a bit of flex um entering the system as we kind of go off of high season. There also seems to be a trend in companies by being up short term rentals in bulk, and I wonder if that makes you at all concerned about inventory and what do you what do you mean

by that? I just make sure I understand the question. Well, you've got these property companies, these property managers that are buying up short term rentals in bulk, which I wonder if that could be more competition for Airbnb or inventory growth more difficult, you know, I think that like for the most part, I think it's just good to remember the scale that Airbnb operates in. We have four million hosts. We have six million listings around the world, hundreds of

millions of guests. So I think the scale of Airbnb is critical, and I think that ultimately what hosts decide is they usually want to go to platform where they get the most demand, and they always typically want incremental demand. And Airbnb has probably more demand for homes than any other platform in the world. So I think that we're still going to be the place for people to go. This is the category that we created, and it's you know, it's gonna be something that I think you can stay

really strong. Airbnb employees might be driving some of that demand. I know. You know obviously earlier this year and you announced that Airbnb employees could live and work from anywhere, And I'm so curious to learnings from this policy so far. What's been great, what's been more challenging, anything that you think needs to be tweaked. Yeah, it's been a really great experiment so far. I mean, what we announced is

that employees can live and work anywhere. We won't change their pay if they move within the country, and we are going to make it easier for them to travel and work from up to a hundreds seven different countries. What we found is that number one, the reaction was incredibly amazing. We've actually had hundreds of thousands of people visit our jobs paid, so clearly people want this. I think it's going to open up access to tons of the talent all over the world. We begin, we've begun

to gather employees. Our guidance isn't to only be on Zoom. Our guidance is that we would like people to be together at least a week of quarter. So we're trying to do is balance the best of Zoom the best of real world. And we don't think that's necessarily being in the office three days a week. We think that's less frequent, more meaningful engagements. What I've learned is it takes central plan and you don't want a free for all.

Whether or not you bring people back to an office, you allow remote work, you want to have it centrally planned because if one team does an off site, that can stop everything if they're clapping another team. So I think the key is being really organized, really disciplined. But if you do that, you don't need to be an office to see people working, to know they're getting their job done. You just need to be really organized. And more organized you are, the more flexibility you can offer.

Last quick question, I know you're back at your home in San Francisco, but you've been living on Airbnb for for some time now. I know I've seen some pictures of you and your dog Sophie. What what have been your favorite destinations and where are you off to next? Well, like, one of my favorite ones is Sophie and I went to ann Arbor, Michigan, where we stayed in a Frank Lloyd Right home. And who knew that franklid Right homes

are on Airbnb. Well, we have actually the entire collection of them under our design category on Airbnb, so that was amazing. I'm actually going to Europe and a little over a week, so I'll be looking forward to staying in some really great airbnbs as well. And I think I've stayed in like twelve to third different airbnbs obay my last count um since the beginning of the year, so I've gone to like places all over the country

and it's really great. It turns out you can run a really large public company from a laptop and someone else's home. I'm gonna have to track down your your twelve to thirteen reviews on Airbnb. Bryan Tesky, CEO of Airbnb, always good to have you. Thank you for stopping by. Thank you. How Speaker Nancy Pelosi I did her visit to Taiwan pledging the US would not abandon its commitment

to the democratically elected government. China reacted, announcing the series of military exercises and trade sanctions on Taiwan are Bloomberg News political director Jody Schneider joins US now from Washington. So, Jody, what do you make of this trip and the way

that it has played out. Well, it's interesting, Emily, because before the trip, we were hearing a lot of threats from China from President Hu jumping directly from Chinese officials who warned a gray of consequences if Nancy Pelosi made that trip to Taiwan. She's humping. The president himself said that there would be uh that the U s and

Taiwan would get burned if that happened. But now she went, She got there safely, She spent the night, she met with the Taiwan's president and some other government officials, and left. Uh said a lot of things about the US commitment to Taiwan, uh and Uh. Now China is sort of backing off that belligerent tone and saying give us some time, have patience with us while we develop our strategy for determining what we do about Taiwan in terms of that retaliation.

So it really has been a market difference in tone in the past twenty four hours and since Nancy Pelosi left the island. How are we expecting China to retaliate. We spoke to an analyst yesterday who say, we're not going to see it right away, but you're gonna see them hold this against certain companies and this is going to play out over years, not days. Yeah, I think that's probably right. China is famous for its you know, having a long view in terms of geopolitical kinds of things, uh,

and certainly political kinds of events. One thing, I mean, there's two different categories. One is military. And while no one expects uh that China and Ji Jimping are going to try to do something that that could be um, you know, that would be very dramatic to try to unify Taiwan with the mainland. We do expect that things like missile tests and military drills will certainly be part

of this, and they've already announced that. They've said that missile tests could occur at any time to kind of showcase the strength of China's army and China's defense forces.

But they and then also uh, these drills which they've said we'll start soon, So I think we will see some of that, but also economic the thing about some of these military drills, as these could disrupt the Taiwan airspace, and Taiwan today complained about that, saying they wouldn't be able to have commercial flights uh, and you know, operate the same kind of way. Also shipping, shipping could be disrupted, and trying to make some announcements today already about how

they would not send some products to Taiwan. Also, as you note tariffs and it could become economically punitive in some categories of goods. So that could be a real way to try to punish Taiwan. So I think we will see this more over time, and perhaps a variety of strategies being used to try to squeeze Taiwan. Interesting, Okay, lots of complicated dynamics to continue to watch play out

over years. At Jody Schneider E Bloomberg political director. Thank you all right, Come at more companies moving out of San Francisco, including one of the most chrominent venture capital firms in tech. That story next. This is Bloomer Technology, one of Silicon Valley's most prominent venture capital firms, has announced the location of its new headquarters in the Cloud. Andrews and Harrowitz is the latest in a mass exodus

around the Bay Area since the pandemic. But as companies relocate, Silicon Valley still remains the top draw for venture capital dollars. San Francisco attracted fifty two billion in VC funding in the first half of the year, more than one third of the total that according to Pitchbook. Bloom Brigs was at Chapman covers venture capital and start outs for us.

She's with me here now. So it's a pretty big deal that Andrewson Harrowitz is moving its headquarters, if you will, to the cloud, opening these offices in Miami and other parts of the country. Right, it's a major deal. This is a watershed moment, uh for Silicon Valley Andrewson Horowitz.

For people that aren't as familiar with it, it's one of the largest um you know vcs with the most under management, you know, the backed household names including Airbnb, Roadblocks, Lift as well as and Roll and coin based and others. And they employ more than than most other VC firms. So for them saying hey, Silicon you no longer need we no longer need to be in Silicon Valley green lights UM, that practice for founders who are already finding

that working remotely works really well. So is this the start of a trend? Well, I would say that it's a continuation of a trend that actually began before the pandemic UM, and this simply accelerates it. For example, if you look globally, UM, you know how venture capital was distributed. UM, the US got eighty four percent of the total venture

capital back in two thousand four. In two thousand twenty one, the US only got Silicon Valley UM share of that continues to go down UM over time, and this is accelerating that. And the reason why is because as there are so many new places to get funding, it's not just Sandhill Road anymore. So is your expectation that Silicon Valley will still maintain some sort of dominance, but that there will be a lot of mini Silicon Valleys across the United States and really around the world. Right. Um,

I think that's a pretty fair bet. Um. I think that, you know, based on some of the talent here, I don't think it's um, you know likely for you know, uh, you know, a massive exodus of people to suddenly say no, we're gonna rip, We're gonna sell all of our homes, rip our rips, our kids out of schools and all of that. But um, you know, there's there's definitely competition from other hubs with lower costs of living, lower taxes, and um, you know, equally equal access to cash and talent.

And some of them are pretty loud. I'm thinking about Miami. Miami is very loud, la Is and l a is very loud. Um as well as well as a number of other markets that have been increasingly gaining steam, like

including you Salt Lake City, Atlanta. Um. You know, you look at some of these other markets that were overlooked by venture capitalist who didn't want to get on a plane or arrange the travel to go and do a seed deal and do the work with the very early stage companies when they really need that one on one. They weren't willing to do that. So in a way remote work makes venture capital more accessible to a larger

number of founders that maybe were historically overlooked. All right, fascinating, will certainly continue to follow this trendler was that Chapman always get to have you back on the show. By the way, Bloomberg LP, which owns Bloomberg News, has invested in Andres and Harrowitz. Welcome back to Bloomber Technology and Emily Chang in San Francisco. Many fin tech stocks have gotten claubed in the first half of the year, lagging

the SMP five hundred with growth slowed by COVID. Add to that rising interest rates pressuring payment stocks, and fears

over a US for session. It always is a question of which payment stocks are best positioned to whether the downturn or at ludlow back with us and what do you think that are so far kind of case and point where you look at the numbers up twenties eight percent, biggest jump in the stocks in January, four straight day of gains, a really strong top line growth, adjusted net revenues up fifty year on year, eighth consecutive quarter of positive ebit DAR bring up the numbers, mr direction and

let's look at what the street was really paying attention to, which was this strong guidance for the rest of the years, showing growth for the second half this year despite changing market in economic conditions, market volatility really interesting. Moving to view products as well, Deposits for so Far Bank up a hundred quarter on quarter, relatively new product personal loans also up, so they seem to be doing well. They seemed to be consistent, is what CEO Antoo had to

say during the earning school. Let's compare year to date versus robin Hood as an example, had a lot of news out of them this week. They actually will be kind of lead, lagging behind robin Hood. But big jump in the stock today and investors seem to think that so Far as one stock that has some momentum in I'd love them. Thank you. I want to stick with Sofa now and bring in to you know Anthony himself, Anthony, great to have you back with us. So look, strong earnings,

you're bucking the trend here. How do you explain this big uptick in deposit Sure, thank you for having me, Emily. The big uptick and deposits reflects the fact that for the first time this quarter we had our national bank open and having a bank license allows us to actually offer the consumer and interest rate and checking or say things that we determine as opposed to a bank sponsor determining it. And we've taken an approach where we really

want to be the primary relationship with our members. We want them to be with us for all the major funcial decisions they make in their lives, in all the days in between. In order to be that primary relationship, we really need to be the place they do their direct deposit. So we're offering them one percent interest um if they do direct deposit with us, and that's on checking, no minimum balance, no restricting on spending. They could spend when they want. They just have to do direct to

posit with us. And that's allowing us to use those deposits to fund their loans at a much lower cost. And so the two businesses are really synergistic. Higher restrate in checking gives us more deposits at a lower cost, so we can lend more to more people and it drives a great virtual circle. Now, I know you're expecting strong growth in the second half, but you know you've got a recession looming. We've got all these these dire warnings from policymakers, from other CEOs, What are you preparing

for sure? Well, we've we've been preparing for a war since March of two thousand and twenty, when the goal of pandemic hit UM. The President of United States told federal student loan borrowers they didn't have to continue to make payments on those federal student loans as part of the Carre's Act, and that was credibly important for our country. Well, that had a negative impact on our student loan refinancing business. If you're not paying your student loans, there's no motivation

to refinanceing to a lower rate. So that the US went from generating about two point one billion dollars in originations UM two and a half years ago in the Q one to only four in a million this quarter. Well, the reason we've been able to drive record revenue growth this quarter and the prior three quarters is because we're one stop shop for the consumer's financial needs. So we have businesses that can operate and off overcome challenges in

one area to another. As an example, our technology platform business, we're building out the a ws fintech through two companies, Galileo and technicis Gallet saw on acceleration and its revenue growth because of the greater need for people at lower costs and use new technology platforms. So we really benefit

in different environments. And in this environment, we're seeing great trends and personal loans, checking and savings invest strong demand on credit card and also strong demand for technology services. Now you've got the student lawn moraditorium set to end at the end of this month, but it's unclear what the Biden administration is gonna do if it's going to extend that pause, you know, follow through on this idea

of maybe canceling student debt altogether. What are you preparing for their I mean, does the war continue, Yes, it does. Our outlook for the second half of two thousand twenty two assumes the student loan moratorium continues throughout the entire year, and also that the President does provide forgiveness at about ten thousand dollars for individuals. Um. If that actually happens, and it's definitive, we could see a little bit of benefit,

but we're not counting on it. Um. We assume the more torm will continue through the end of the year, but once the government makes it the definitive statement, then people can make real choices. Right now, they're doing nothing and it's actually hurting them. They're not benefiting from refinancing before rates go higher, and they're expected to go higher,

so lose some of the savings. In addition to that, they're not sure how much it is gonna be forgiven, or if it will be forgiven at all, so they're not sure if they should refinance at all. So once we have a decision, we'll be able to pivot off of that and go to market in a in a concerted way. But right now we're anticipating no benefit of the more Tory amending before the end of the year. Meantime, you know, we still have what seems to be a

deteriorating macro environment. Walmart just announced more layoffs today. Robin Hood announced yesterday they're laying off their workforce. Robin Hood as a competitor to so far in some respects. I was on this call with Latin of the CEO, who said, you know, he anticipated market conditions, good market conditions would lack less longer than they've lasted, So that's on me. He used those words, what's your own approach to hiring another costs. I mean, you know, is there any chances

coming for you? Well, we've been built tightening since March of two thousand twenty when that largest business and our most profitable business got cut by sv and so we've been pretty prudent about how we're allocating our capital and what we're investing in. We've delivered eight consecutive quarters and three quarters in a row of record revenue, and we had gap profitability in our bank for the first time

this quarter. And that's because of a prudent relationship between how much we invest, what risk we willing to take, and also dropping into the bottom line. So we endeavor to drop about thirty of incremental revenue to offense and reinvest. That keeps us disciplined and on costs on the cost side of the equation, and not build up with fixed expense that we can't cover within Coromonto revenue. Anthony not CEO of Sophie always going to have here, Anthony, thank

you for joining. Thank you all right, coming up, Michael Sailor stepping down as CEO of micro Strategy. But it doesn't necessarily mean the end of the bitcoin error. We're gonna hear directly from him about that and much more coming up next. This is Bloomberg micro Strategy is changing up its leadership. Michael Sailor, who co founded the company in ninety nine, is giving up his CEO title, saying

he will increase his advocacy efforts for holding bitcoin. Shares of microL Strategy climbed as much as after this announcement. Sailor will continue to service executive chair micro Strategy pro is it in Funk, Well, we'll take on that CEO role on August eight. Joining me to talk about all this and more is Michael Saylor himself. Michael, great to have you with us, So talk to us about what drove this decision to move on from that CEO spot.

Is it the end of the Bitcoin era for micro Strategy? No, No, it's the getting of the bitcoin era. Um. We got into bitcoin about two years ago and it's been a story of great success. The stock is up a hundred and twenty three. We outperform bitcoin. We did three x as well as any other enterprise software company, about three x as well as any other big tech company. So the shareholder returns have have been better than any competitive

stock or any competitive asset. Class, and most importantly, our balance sheet has swelled. We've increased our enterprise value by more than seven hundred and thirty in essence, from six hundred million to five and a half billion dollars over that twenty form on time frame. So now we've got to the to the next point in our development where we've decided we wanted to have a full time, world class CFO, and we also wanted to bring one more person the management team. So Andrew Kang joined us in

May as CFO. Fongly had been the president and CFO of the company, and when Andrew joined, that opened up the door for us to make Fong the president and CEO and for me to move to the role of executive chairman of the company. Now, some people have written in the news that somehow this is related to our quarterly result or this large impairment charge we talk in Q two. It's totally unrelated. The fact is I've been working with Fong on CEO succession for about four years

now and it's always been part of the plan. We finally got to the point where we had Andrew, our new CFO on board and we could actually make the change in Fong to b CEO. So I think that the markets responding to the fact that now instead of two executives Uh Sailor and Fong Lee, we have free executives, and um, it allows me to do what I like to do, which is bitcoin advocacy bitcoin acquisition. I'll continue to provide oversight for bitcoin acquisition as the chair of

the Investments Committee of the board. I'll stay as the Chair of the board, and it means Fong who has been the president and the chief operating executive, he'll just be running the day to day business and Andrew, whose world class CFO, will be here to help us pursue all of our financial strategies. Okay, so just for the record, then, to those who are speculating that you were pushed out of this role, is there any truth to that? No, I'm first of all, it's my idea, Emily, and second

of all, some people say it's their idea. I'm the controlling shareholder of the company. I have the majority of the voting stock and so I've been planning to place Falling as the CEO since we made him chief operating officer. That was like and we made him president in and at that point he was running sales, marketing, technology services, pretty much everything. And he was the CFO and so that was his two years to get comfortable in that role. And uh, and we couldn't elevate him to CEO until

we had another CFO. It's it's you know, it's totally inappropriate to have a CEO and CFO as one person in a publicly traded company. So the catalyst for this is, um, when could I find a CFO and when would when would Falling have had the time to season in the role and both of those things. Uh, they the plan predates my infatuation with bitcoin, Emily, it goes back that far many years. All right, still, micro Strategy lost a billion dollars due to your bitcoin holdings. It's underperforming. You

know the biggest tech companies that are also underperforming. How do you square that? You know, how much is too much for you? Or when will it ever be too much? Okay, Well, first of all, it's a non cash and definite and tangible loss um. The number that matters to our shareholders is that's the number of bitcoin we hold on our balance sheet. And as I've just laid out, over a two year period, are our strategy outperformed in NASDAC by a factor of ten. So we are volatile in the

near term, more volatile than a lot of things. But volatility is the price you pay for performance. We could have chosen a more conventional path in August of and just given five hundred million dollars back to the shareholders and operated an enterprise software company that would have been worth about sixty dollars a share. But there's no way we could have achieved superior shareholder returns if we weren't

willing to take a risk and embrace that volatility. So the result that you can see it is the stock is above three hundred dollars a share. It gyrates. We had more volatility in one hour emily than we had in twelve weeks before. But I embraced the volatility because the alternative would be we're dead money and no one cares about us now. Even Tesla sold seventy of its crypto holdings, And on that day that Tesla announced it, you tweeted, if you sell seventy five a few bitcoin,

you only have twenty of your bitcoin left? Is Elon Musk wrong? Such a sad day for Tesla? It's you know, we all regret having having chosen great assets, all of my investment mistakes in my entire career where I bought a good thing and then I sold it too soon. And uh, there's never going to be more than twenty one million bitcoin. In a hundred years from now, there will be no more than twenty one million bitcoin. So

I think that it's a buy and hold strategy. I think that, uh, you know, Tesla has has many other issues that I am not pervy too, so it's not my ways to criticize them. But I do think that acquiring and folding high quality property forever is a good investment strategy, and Bitcoin, in my opinion, is the highest quality property in the world. Now, a housekeeping question. You filed with the SEC to issue four hundred fifty thousand shares as part of an employee benefit plan. Is that

going to the new CEO to you two other employees. No, Um, there will be a stock option grant to the new CEO. It's sixty thousand shares, um, but the rest goes to the employees, not to me. Um. I haven't had any stock option grants since ten and I work for a dollar a year, so uh, we have made a concerted effort to make sure that nearly all of our employees have either stock options or restricted stock units, and that way they share in in our bitcoin strategy success as

well as our enterprise business intelligence strategy success. And that's been a highly successful motivational program. It's cut our attrition in half and been great from Morrel. So, look, I know bitcoin supporters have been arguing for a decade that uh, you know, decentralized cryptocurrency would dethrone the US dollar. It hasn't happened yet. Will that happen? No, I don't think

it will happen. But what I do think is there's incredible consensus that the entire world wants a digital dollar, like a stable coin like Circle or tether and um, and they want it because their currencies are collapsing and eight billion people would like to have dollars on their Android phone. And I also think there's a consensus that a digital commodity like bitcoin is a really important asset to stand alongside things like gold or oil or land.

And there's incredible demand for that sort of digital property in the world. And so I think bitcoin will. Bitcoin is going to grow as an asset class as it's legitimized and embrace as an asset class. I think it will coexist alongside other assets. And I think that there will always be fiat currencies from strong, well run nation states.

But Emily, it is true that in place like Sri Lanka and Venezuela and Nigeria, their currencies aren't collapsing, and those citizens are going to use the dollars and medium of exchange for the near term. And if you want a long term store of value, and I'm saying looking out four years or longer, you want property, and and bitcoin is is of course that long term digital property you want to hold is a store of value, all right, Michael Sailor. Always good to have you, Michael, Thank you.

Onto the latest and the Twitter Musk saga Twitter suppeded records from equity investors and sought information on investors like Mark Andreason and Ken Griffin and a whole of other venture capital figures you may have seen tweeting about it this over Elon Musk's financing of the four billion dollar buyout.

We should note that Bloomberg LP, which owns Bloomberg News, has invested in Andres and Horowitz and here to break it all down for us is Jeff Feely, our reporter who covers the courts of Delaware and who has been

very busy over the last few weeks. So, look, are these moves pretty common as part of discovery, Jeff, It's standard operating procedure for both sides in these lawsuits to issue a bunch of subpoenas to banks, equity investors, lawyers so they can gather the information they need to build

their cases. So we've actually spoken to some of these friends of Elon Musk who have been subpoena and one of them is David Sacks, who's actually come on our show a couple of times in the last few months to talk about the potential for this deal to happen. Take a listen to what he had to say. When you put bots on Twitter and pretend to be someone you're not, when you pretend, when you basically violate the authenticity requirement, were basically perpetrating and kind of fraught that

is not free speech, that's fake speech. Is perfectly fair game under any kind of free speech policy to take down those kinds of bots, and I fully expect that Ellen will be far more effective at doing that than the current management of Twitter because they've been unable to do that. So you know, obviously we don't know what kind of discussions they've had behind the scenes, if if any at all, But what might the courts be hoping

to get from someone like a David sax Well. This, this issue of the box is really where the rubber is going to meet the road. As my understanding, it's very difficult to get very specific numbers on these things because everybody has to deal with them. That that's not just Twitter, it's a common problem in the tech industry when you're dealing with this kind of stuff. So it's not going to be an easy argument for Mr Musk

to win on. And the Twitter folks, of course say that it's all sort of a pretext ginned up so to to provide a basis for him to walk away. Judge McCormick is going to be the ultimate decider of all of it. Okay, what's next here, Well, we're still in the discovery phase, so we're gonna still have a blizzard of subpoenas. Next we'll start with notice of depositions and they'll be you know, probably hundreds of depositions in

this case, bankers, Mr Musk, the Twitter folks. You know, everybody's gonna have to sit down and say their peace, and then we're gonna go to trial in October and it should be quite a show. A show. Indeed, we will be following this blizzard of subpoenas and I know you will continue to be very busy through October. Jeff Phalely, thank you for waiting and appreciate it. Okay, that does

it for this edition of Bloomberg Technology. Coming up later this week Thursday, we've got Steve Wesley from the Wesley Group. We're gonna be covering Tesla's annual meeting. Of course, he was a former director on Tesla's board. And don't forget to check out our podcast wherever you get your podcasts. I'm Emily check in San Francisco. This is Blueberg. H