Broadcom Purchases VMWare

exclusively by Google Cloud CEO Thomas Curia. I'll get his thoughts on that Broadcom deal, plus how Google and its cloud customers are weathering this market termoil, and how one startup raised a new round with all female investors, seventy

five of them. I'll speak to investor Kara Northman and Solve co founder Heather Fernandez about how more companies can change the gender balance of their cap tables in one fell sweep all of that in a moment, But first I want to get a look at the market where tech stacks stage to come back at Ludlow here with the latest and finally some good news. Yeah, finally we saw kind of this broad equity market rally. Tech at the heart of it, Retail the heart of it will

touch on it just the moment. You see then as that one hundred up two point eight percent, biggest jump for that tech heavy index in a week. It was interesting because I was going through the bloomberg. It's the first back to back gains. We've seen two days of gains. And then as that one hundred in almost four weeks, which kind of shows how things have been recently right, very much in the red. And you see that across

the technology sector, semi conductors up, the mega caps. Also, if there was an area of pressure or some selling across financial markets, it was in old coins. You see Ether on your screen, there's green there because we're going into the next day session, but it's at around one thousand, eight hundred dollars per token, well below the two thousand level that technical and lists are looking for. And come with me into my bloombotuminal. Let's call it right now.

Let's end it right here, because then as that one on a weekly basis is in the green, it's Thursday, let's just call it because then that way we snap seven straight weeks of declines. It looks like we've turned a corner. You can't hang your hat on one week, but my goodness, do we need some positivity? Do we need some green? R up almost four percentage points, and that's that one so far this week. Please Friday, don't

ruin it. I've had enough. A big part of the story when you come back to me in the studio is earnings and Video actually missing estimates, particularly on the forecast, but that stock up five percent. The market sanguine, Macy's incredible lots of confidence, upgrading their profit outlook. People still want to buy fancy stuff. I love fancy stuff. And how do you think all the M and A we're seeing this big tech deal, the number of deals we've seen in general is a signal that maybe maybe we're

turning a corner. Well, it's interesting because I joke about that chart, but there is a feel good fact write a lot of activity, A love M and A. In the tech sector, Twitter up six percentage points on Thursday. Tests are up almost eight percent. And the big story here, of course, is Musque adjusting the financing package for his bid to buy the company, getting rid of the margin loan component and bring in more equity financing. Some bullishness

that this deal might happen. Of course, the other big story is Broadcom vm Ware massive sixty one billion dollar deal. Bloomberg scoop we refers to report that they were in talks. We got official confirmation on Thursday. What does this mean for the company? What does this mean for this health of the technology sector broadly? It's a really interesting timing. Indeed,

Ed Ludlow, thank you. I want to stick with that Broadcom deal for vm Ware now and bringing angel as you know of cf A as well as our very own Leanna Baker, Leona, your team broke the news of this deal. Here we are officially being announced. Talk to us about the nuts and bolts, the new things that

we know now that maybe we didn't know earlier this week. Sure, so we saw the exact price of the deal, although it does key sort of fluctuating because it's fifty percent cash and fifty percent stock, so it'll change day by day. But we did see that it's about sixty one billion, which is a pretty big premium for vm Ware, but maybe not as high as it would have been had it not been for this text sell off. Another interesting angle on the deal is that vm Ware can solicit

other offers. So we're gonna be monitoring whether there's a bidding war and who else could emerge because they have forty days to potentially find a new buyer. Angelo, are you thinking there could be a bidding war here? Are there other suitors out there? I mean, were likely others that might pick up the phone and enquire about it. But to be honest with you, as far as you know, the terms of this deal is concerned the price here. Um. I actually think it's a very compelling author out there

for more vm Ware investors. And you know, at the end of the day, I do think that fell kind of go through, um, you know, via the hands of Broadcom. Leanna, What do we know about how Broadcom intends to run vm ware? Will it stay independent, Which of broadcast services will they emphasize, which might be de emphasized. So I interviewed the Broadcom executive Tom Krause today, who helped engineer the deal, and he mentioned that they're going to rename

the whole software division of Broadcom vm Ware. So I think vm Ware almost is sort of going to run the rest of Broadcom's software. So we'll have to see, but it may take a year for the deal to close, so we won't see anything just yet. But Broadcom does like to keep its franchises intact. I'm sure they'll try to you know, raise margins, but I would expect that

not a lot will change once the deal closes. So Angelo, how optim how competitive do you think a software portfolio within Broadcom under this VM where Umbrella will actually be? You know that I think Yale Hawk has done an absolutely fantastic job here, um kind of transitioning the company around into one that's also definitely sold by driven and I think this really is going to kind of be

that crowned the world for their software business. That really doubles the size of that business, right, so it gets them to nearly half of their revenue base there, um, you know, was the run rate was about a sales so at the end of the day, and you know, I think this definitely kind of um significantly improves the growth profile of that software business, which is extremely important. This was a business that was kind of growing very

low single digit pace. When you kind of look at somebody assets they've acquired a lot of you know, a lot of those acquired assets was really kind of just you know, from a free cash flow potential, um, just

improve the cash flow generation of that company. What vm Ware does here is it really kind of catapults at least the the growth potential within that software business towards one that's more kind of mid single digit range, So definitely more compelling I think long term for that software business.

Within Broadcom Leana, we were looking at a chart of the big tech deals that have been done in the last few months, going all the way back to Microsoft and Activist, and are you expecting more big deals this year?

Are are we moving into an environment you know, given what we're seeing in the markets, given valuations coming down, given potentially companies looking for a safe exit, are are we moving into a time of big time m and A. Well, the tech bankers I talked to would love to say, sure, there's gonna be big deals and deals to get more deals, but you have to understand that Broadcom is a very unique animal. They've been searching for a big elephant acquisition

for years. They hadn't done once since, So that's a company that really likes doing deals. And I wouldn't necessarily say that Broadcom's competitors are suddenly going to follow suit. But it is interesting that the tech sector has been one of the bright spots of the M and A market, which is down year over year. So software companies especially are very resilient. So I'd expect we're going to see probably some more big deals this year, which will keep

me busy well. And Broadcom did want to buy Qualcom a few years back, it didn't happen under the Trump administration. Angelo, are you expecting any regulatory pushback here? I mean, listen, I think as far as this deal is concerned, the stuff we're gonna get looked at. I mean, additionally, if you would have kind of asked me, I'd say this very little little overlap between kind of you know, Broadcom

and vm ware here. But at the end of the day, I mean clearly both companies operating significantly within UM you know, the data center you know group, and as a result, UM there definitely could kind of be UM some concern with how Broadcom operates kind of that VM where business along with its chip side business chip business as well as you know, Listen, I think I just to the day, Um,

there's definitely geopolitical pressures going on out there. Someone w we started thinking about getting the necessary and regulatory approvals across search of certain regions like a China. Um, I'd imagine, you know, a region like that probably will drag their feet similar to what they've done in other deals. So I know Broadcome is looking for a deal to kind of get you know, to get done by the undeficial twenties.

I wouldn't be surprised if that kind of drags further than that, uh, Leanna or what are your Broadcom sources saying about whether Hawk Tan will be doing more deals or is this it for a while? It's a big one, So I would say, as Angelo mentioned, there's a lot of regulatory bodies that have to weigh in on this, So I don't think Tan wants to you know, muddy the waters with more deals. Uh. They're really going to be focused on getting this one through and whatever it takes.

So expect Broadcom not to do much except focus on this and then integrate it. So it could be a while before they do anything that's big. And Angelo, well, Bradley, how do I think this deal will actually impact the potentially change the cloud market? Will it make much of a change? You know, I don't know if it if it changes things, much. I think it just it just

gives the broadcom a lot work power. At the end of the day, I think it gives them the ability to kind of leverage a wheel their power or a lot more than maybe some of their peers or competitors out there want them to. And you know, whether or not, you know, that ends up kind of being a sticking point when they kind of have to kind of get the regular necessary regulatory approvals, I think remains to be seen. But at the end of the day, I mean, you

couldn't have an impact. Yes, so it like we will angelous you know, cfr right, Leanna Baker who helped break this story earlier this weekly on a great job. Thank you. With inflation putting pressure on just about everyone, Apple is raising salaries for workers across the US by ten percent, also in the midst of a type labor market joining

US now. Bloomberg's Mark German, who of course covers Apples, So Apple raising salaries for corporate and retail employees, right, Mark, Yes, So that's right in the face of inflation other pressures globally. Obviously in the face of unionization when it comes to retail employees, Apple is doing a few things. Let's start with retail. One, they're raising the minimum salary for hourly workers.

That's for retail, that's for Apple Care other hourly workers from twenty dollars per hour to twenty two dollars per hour. Now that's ten from last year, that twenty, and it's closer to the company says since in terms of corporate and more generally across Apple, they're raising their overall compensation budget for this year. So that's gonna result in some salary increases based salary increases UH in the US and globally for salaried employees, not hourly employees. And they're also

bringing up raises. Typically those are done around September. The company told employees are going to bring that up to around July now for both corporate some corporate teams as well as the hourly workers. Meantime, you're also reporting that Apple is planning to keep iPhone production flat in part because of all of these macroeconomic headwinds, the pressure on consumers. What exactly do we know? Yeah, there's two ways to really look at this, right, there's the positive and there's

a negative. Let's start with the positive, right. The positive is that the overall smartphone market led by Android is not a very good spot right now. Right, You're seeing those companies do job cuts and hiring slowdowns, and you're seeing people buy Android phones to smaller degrees and they

were in previous years. Right. A lot of that has to do with the inflationary pressure, the war in Ukraine, and other factors globally, right, And so Apple's ability to keep units flat from two in the face of a, you know, a larger slowdown in the smartphone industry, obviously, that's a good thing for Apple that they're not guiding down in terms of their union output. Now, on the negative, Apple has a major iPhone upgrade plan for this year.

That's the iPhone four teen. It'll look mostly similar to the iPhone thirteen, but it's a much bigger update than the iPhone thirteen. What's the iPhone twelve. So Apple is not going to be increasing its units even though they have this bigger handset update than they did last year. Meantime, let's talk about what else Apple has to come this year. WWDC now coming up in a couple of weeks. The

official invitations have gone out. It's gonna be Christmas in they say for developers, What are you expecting to happen at this event? Yeah, so WWDC, this is going to be a pretty significant one. You're gonna see a pretty large update uh to iOS with iOS sixteen. You're gonna see changes and new apps and new designs for some apps across the board. You're gonna see big multitasking improvements for the iPad. You're gonna see some new audio messaging features.

You're gonna see a new lock screen for the iPhone, and you're gonna see major updates to health on the iPhone as well as the Apple Watch. You're gonna see some smart home compatibility improvements for the Apple TV UH and the Home Pod. Like I mentioned, the iPad is gonna get a pretty big update uh, and the Mac is going to get a little bit more flavor from iOS and the iPhone interface as well. So a lot

to look forward to there. I don't believe you're gonna see a full blown unveiling of the Apple Mixed reality headset. That's probably going to come later, but obviously augmented in virtual reality is gonna be on the minds of lots of developers at this year's conference, and of course in the future. When you say later, how much later? Is that something we could see this year? You know, I believe the headset. I believe it's possible we could be doing one of these shows a year from now and

I could have my headset on. Obviously I would look ridiculous, But what I mean to say is I think it will be available by this time next year. Huh, Okay. And what happens come September? You know, obviously w W dcs typically where we see uh, you know, the unveiling of Apple's next generation of software. September is where we see the next generation of hardware. What are we going

to see this September? Yeah, I mean, I think the pattern for this September and the fall launches this year is going to probably be quite similar to what you've seen from Apple, uh in the fall launch periods in previous years. So you could imagine that the iPhone fourteen, in the new version of the Apple Watch will be unveiled in September. I think the Apple Watch actually, interestingly, is going to be one of the bigger new pieces of tex from Apple this year for the first time.

There's gonna be three new models, right, so a lot to look forward to if you're an Apple Watch fan as well. Mark German for us there, Thanks Mark as always. Coming up, Google Cloud CEO Thomas Currian with me next, Mrs Bloomberg. In the midst of a massive market downturn, Google cloud numbers were array of sunshine in Alphabet's latest earnings results. Google's cloud business growing in the quarter, though Google is still a distant third to a WS and

Microsoft's Azure in the cloud infrastructure market. Joining me now to talk more about how Google will continue to scale Thomas curriean CEO of Google Cloud. Thomas, great to have you back with us. So I'm so curious what your outlook is on this market turmoil and what you're seeing in terms of demand. Are you seeing any signs of

a slowdown in spending. We're seeing that the market is entering all it has some volatility in different parts of the world, but technology is seen as helping organizations, you know, address supply change shortages of customers better get online digitally, and so demand for cloud remains very strong for us. What's I take on this Broadcom vm Ware deal and how will it change or potentially reshape the cloud landscape.

Broad Common VMware have both partners of Google, and we're you know, we're thrilled that they are looking at moving forward together. We think a lot of customers use a combination of VMware and Google Cloud together, and we have a strong program with them to help people my great vm O workloads the cloud. So we look forward to continuing of work with both companies. Now, Google Cloud is still growing, as I said, but you know it is third to AWS and Microsoft and there's a lot of

work to do to close that gap. What is the secret weapon going to be how are you going to scale your market share and how long is that going to take to see you get closer to those other competitors. Well, we are seeing very strong demand for our products, whether that is new kinds of infrastructure we're delivering. We are now delivering infrastructure capabilities not just to run I T workloads, but telecommunications network the announcement we had with Belt Canada

for example. Uh, we're seeing a lot of interest in our cybersecurity tools to protect people's networks and applications and data in the cloud. And we're seeing very very strong interests for analytics and data products which are being used. Recently, there was a case study with data about ups optimizing how they were out trucks using our capability for analytics and data. So we remain focused on providing great solutions with customers, bringing the innovation of Google to customers, and

doing so at scale around the world. And if you do that well, will continue to grow and will continue to grow and gain market share as we have been these last three years. You recently did a sustainable ability survey that found that fifty of executives believe there's hypocrisy in their organization on this topic. How so no sustainability what we found from the survey Number one, it's a super important priority for eighty percent of organizations around the world,

yet they have difficulty. Thirty five of organizations struggle with being able to measure their progress because the data about sustainability is not as easily measurable for a variety of reasons. And a number of organizations now need help uh to progress towards their sustainability objectives, and we at Google are helping many organizations do that. Now, how do you make sure that hypocrisy doesn't exist at Google? And this has been a criticism of of all the big cloud companies.

For example, you do work with oil and gas companies, you do sell your services to those companies. Where do you draw the line? We sell our services to all in gas companies, not for exploration production, but to the environmentally clean or the green parts of these companies for work that they're doing. We're also helping all in gas companies de carbonized in a variety of different places, and we help them with things like distribution, et cetera in

their retail stores and other things. But we're not doing work in the exploration production business. The second we do help many many companies in the sustainable energy business, both by providing our technology to them as well as being the largest procurer of renewable energy in the world. We power our data centers and our global network of cloud regions using green energy more and more, and we've been

common neutral for fourteen years now. Even as we provide technology for many organizations around the world to run their I T in a more renewable way, does Google still have that deal with Aramco? For example, we work with the Ramicles system integration division, not with the oil and gas division, and we work with their system integration division to provide our technology to customers in different parts of

the Middle East. We have said that again and again that we don't work with the oil and gas division within ARAMCO or with the system integration of for Ramco. Now, Google did recently strike a deal to buy mandy And for five point four billion dollars. I know the goal is that this will help enhance Google's cloud offerings quickly. How would you characterize the cyber threat landscape right now, especially in the midst of this ongoing war between Russia

and Ukraine. Cyber threat landscape is changing in the kinds of threats, the scope of the threats, the scale of the attacks. And we at Google, along with our technology how people detect threats, protect against them, and analyze if they have been compromised. And we are seeing strong growth

for our product portfolio. Chronicle simplify a lot of US cybersecurity products being adopted by regulated industries like financial institutions, commercial customers, critical infrastructure organizations like telecom, networks and utilities, as well as by government agencies. Thomas Carrian, CEO of Google Cloud, thank you for joining us today. Welcome back

to Boner Technology. Emily Chang in San Francisco. Well venture capital firms like Sequoya and y combinator have been sharing their playbooks on how to weather stormy market conditions, and as startups begin to focus on the fundamentals once again, another key element is ensuring fair representation on their cap tables. My next guests found a way to raise their latest round from all female investors, and they're here to share

their secret. I m joined now by Heather Fernandez, the CEO and co founder of Solve, as well as Karen Northman, managing partner at Upfront Ventures and a founding member of All Rays. Karen had they're great to have both of you back here on the show. So you managed to not just get all women on the cap table in this round, but seventy five different women investors. Heather, how did you do it? Well, let me tell you a bit of this story, Emily. So you know, as you know,

people talk about fundraising is a very easy thing. As every founder knows, it's not. It's stressful. It's arduous. And when I completed my seriously financing and followed last year, I called my good friend here Northman, frankly from my victory lap. In that call, she said to me, for twenty years we've been talking about cap table diversity, how important it is to bring more women and women of

color onto cap tables. Let's use this opportunity to make some space and figure out a way to really drive that in this round for us solve And we made it happen, and you made it happen fairly quickly as I understand it, right, Carol, I mean, just just give us a little more of the how, because you've got a lot of venture capital firms out there who say they can't find enough talented women to add on as partners. Yeah. No, I mean I think what what ended up happening was, Um,

I think, um, a couple of things. Heather and I are fortunate enough to be doing these jobs now for twenty years, were much much younger than we look. Are older than we look, perhaps I should say, and so um we um. We reached into our networks, and our networks are specific people in some specific stages of their careers. So we reached out, um to a number of senior women in tech and actresses, people that we knew were

active angel investors. But then we took it a step further and we said, listen, we really want to use this as an opportunity where there's a lot of demand. Had there had many term sheets. It was it's a company SolV is serving one in five Americans now, which is pretty awesome. UM to say, reach out to a woman in your network who we may not know ideally a woman of color, but a woman who is just as talented as you, who is either an angel investing and we don't know or wants to get into it,

and invite them to join. And it had the snowball effect in a way. It's um. It's a bit like the Freemasons, which is, you know, were groups of men in the olden days, or Paul Revere would yell to another group of men, he wasn't just yelling into the streets of Boston. UM. And that's how the revolution spread. And it's finding these loose connectors, um that brought it

into others. And one quick example there is a woman named Layla Saka whom is a longtime salesforce exact and she brought it into the Black Venture Institute and so she brought in a terrific group of black black angel investors and we had a lot of different examples of that. Revolution is a perfect metaphor and good to hear how you are leading this one. How there if there's a blueprint for other startups, other founders who want to do this,

what are three simple steps. If maybe you don't have a network that goes back twenty years of powerful women, yes, I got you. Number one, designed to do it early. This is something that for me with the eleventh hour, it caused a bit of a scramble and frankly, was really intimidating. So one, decide early, align that with your board as well as your internal team. Number two, I'm

gonna say tap your network. We have a twenty year long relationship, but every founder has investors, you have professors, you have people in your world who are connected to others, and it was really managing that network that enabled us to do us so quickly. Third, find a back end partner. We were used a family office. You can use Angelist or Carter. And number four this is the final one

set guidelines in our world. Because we were trying to bring and new investors into growth investing, we reduced the minimum down to zero, but we decided we would do it over a constrained timetable and that ended up enabling us to meet our goals and do it very quickly. Okay, Now I want to talk a little bit about the market environment, Kara, because obviously there's public market turmoil. Startups are having trouble raising new rounds right now. We're seeing

hiring freezes and even layoffs. You know, in times of turmoil, often women take a step back. Investors invest in what they know and they understand, rather than taking that risk. Are you concerned that could happen now? Well? Yeah, so I am concerned that can happen. And I think, you know, the message to put out there is that, um uh, now is the best time to take risk in a

way that is good for you as an individual. But we're so emotional about risk, and actually, um the great thing about venture uh is that you know, we're we're building the long term trends and the problems we need to solve are bigger than ever. And so I think it's really important though that each individual really understand their

risk profile. And if you were going to allocate to venture capital, I always say, allocate a certain amount of money, whether it's five thousand, ten thousand, a hundred thousand, whatever the right amount is for you, and then divide it up into five or ten investments UM, and then be thoughtful about where you're gonna, you know, place those investments, knowing that no one of them may you know, generate

a return. UM prices are down. Founders who start businesses now are deeply convicted and not just doing it because they watch some HBO special And so there's never been bigger problems to solve, and now is you know, I think a huge part of what came out of the SOLVESTPV and cannily we did. I had done something just like this for Angel City, which is the soccer team I had started, which was my first blue print, which is why I had the conviction to bring it to Heather.

Is that now the best time to take the right kind of risk with people you trust in things that seem very obvious in your high conviction around um. You just have to do it in the right way for your balance sheet. Thank you for bringing up Angel City because that was my next question. And I see the soccer ball behind you. US Soccer. US Soccer just reached a landmark deal to split pay equally among the women's and men's teams. What was the real secret to getting

that done? And do you think can really be translated to other sports when the skeptics are saying, well, in soccer, the women do make the money. Yeah. I mean, there's a terrific article that came out today on this topic, so Joe google it. It's not on Bloomberg. So I'm not going to mention. But um uh, that lawsuit that you in that case is what got me. I started as an activist. Um and working with a woman named Becau who led the charge and having extraordinary leadership like

Heather and Solved. Taking the time to actually build a syndicate someone like Beccau, who has been fighting this battle as the head of the Players Union for many many years behind the scenes is critical. And so for the first time, the next woman's World chap is going to is negotiating their own broadcast deal and their own sponsorship deal. It's gonna be a half a billion dollars on its way to a billion dollars. We've never had that, and so it's all of this stuff builds on each other.

Um And I mean, I guess the one thing I'd say to tie this back to solve also is that you know, my just interest in supporting the pay equity fight, which is how Nataliepportman and I first came together as activists supporting a union not as not as capitalists, led to this capitalist moment with Angel City, which led to Solve. And so I think the most important thing is building not just building wealth for women, but building those relationships and even amongst me and Heather and some of the

our twenty year relationships. This was the first transaction we all did together, and since then we've done many more, and we're pulling each other into each other's deals and the like. And so I think it is about find joy and play and energy amongst your female and diverse relationships and then just lean into that energy and hold each other accountable and make it a possible side hustle and you know, good things will happen. We'll build our

own Freemason's network. UM. Heather, uh, solid is anything but side hustle for you. And I'm so curious how these you know, recent downturn and market conditions is impacting you and your strategy. We saw you know, doubling of of exits last year fifty seven billion dollars and exit value UM for public listings. But right now folks are saying the I P O window is closed for you know, a fast growing venture back startup like yours. You know, how are you navigating this time? Yeah? I mean, Emily,

what we do has never been more relevant. And so when I think about our value prop for consumers, help me figure out where I should go, when can I be seen and how much does it cost? In an economic downturn, we are extraordinarily relevant on the provider side of what we do help providers, innovative providers deliver a more consumer first experience on the heels of COVID, where consumers have experienced more digital first healthcare, same day healthcare

than they ever had previously. So realistically, I am focused on the fundamentals and delivering real value both to consumers and providers in terms of our growth. And as you do that, good things will happen. And we aren't on a short term time horizon in order to get to UH like what Cure Nortman said the HBO exit. We're here to build stinable company that delivers real value in R o I and this is a great environment for

us to be able to do that. How the Fernandez CEO and co founder Assault and Karen and Upfront venture is so great to have you back here on the show. Thanks for sharing some of your secret sauce with us. Time now for our crypto report, and it's to see a read in the world as alt coins lead the route or at Ludlow back here with the latest. What's happening with all coins so heavy setting, you know, declines

in between eleven p sevent a lot of volatility. We're talking about Avalanche, Polka Dot Salana, and there's a lot of movement away from anything that it's associated or has any residents of being assoted with terror. And what's happened in the last couple of weeks back that up a lot of it, you know, because we've seen, you know, some big changes with terror. They're trying to save it,

trying to save it. So the Terror blockchain and you have Terror USD or us T, and the whole point of the platform is that allows traders to be nimble, to stay within it. It's supposed to be pegged to the dollar in that chart that you see on your screen. Is that it's just seen a complete collapse. Terror us

D and also its sister Crypto tooken Lunar. The other big point of it was that it was supposed to give you a yield, a set interest rate where you'd have a really tasty return for keeping your assets within the blockchain, and is that's collapsed. What we've seen across old coins but also Ethereum and to a certain extent, Bitcoin is just bearishness across the market. You know, some evidence being the demand for the ethereum block has just dropped off, and it shows there's a lot of nervousness

out there. Why is bitcoin by even differently? Right now? All right, Bitcoin has been hovering around twenty nine thousand, thousand dollars token for some days, some weeks. There's two theories, right, One is that it's like the haven asset within the world of crypto that if you're going to move into something, and you want to stay within the world of cryptocurrencies, you move into Bitcoin. The other problem that we have

you and I discussed this all the time. It has a very high correlation to stocks, and in periods where stocks are selling off, the correlation increases. Now stocks have stopped selling off, so Bitcoin's kind of stood static and treading water at twenty dollars are token. So one are the crypto balls waiting for I haven't really heard a lot of people saying by now by now by now Yeah, Well, we've asked this question before. What is bitcoin? Is it

an inflation hedge. We're a bit more sanguine on inflation at the moments. There's been no big move into a bitcoin for that reason. If you look at Inferium, for example, there's a lot of technical analysis that it's stuck at this kind of token level. It can't go higher. It really needs to push beyond two thousand dollars per token, as we see on our screen there. That's the severity of the kind of plunge we saw Thursday session going through.

And look, we we kind of paired some of the losses that we saw, but there's a lack of direction, and they have tried to restart the terror block. They've tried to get some life back into this USD pegged crypto currency. Not a lot of evidence that it's going very well well, and one of our guests last week said she expects crypto winter to last at least twelve months, maybe eighteen, and it's not going to get back to sixty for a while. Yeah, And we had folks from

Davos telling our co anchors we called it. We told you bitcoin would fall from sixty to thirty, It happened, and it will go back up in a shorter time frame. I think it's a little bit of like, right, where are we going? So what are you gonna be watching tomorrow and through the weekend, because obviously crypto will continue trading. Yes, So this is the problem you and I have. We go home on a Friday, thank goodness, and we come back on a Monday and it's seven. What's different is

the psychology of the Asian session Sunday night. You have a lot of people that have had the weekend to digest it. They get back to their desks in Hong Kong, in Singapore, and sometimes when you and I wake up on a Monday, they've traded for because of the words that have been spoken over the weekend. Remember Krypto seven is so the media outlets to cover it. So I guess whatever the big thinking is of the weekend, well, lucky for us, we get a weekend. Thank you, Ed Ludlow.

Thanks Okay, Coming up, have the tech bubble first. Many are calling the current tech route long overdue a poor holdings. Portfolio manager Robert kentwell with us next for his thoughts on the market moves now. As our Bloomber Technology Senior executive editor Bradstone put it in this week's Big Take, years of wildly inflated valuations, crypto flavored pyramid schemes and all manner of naked opportunism have led us to the tech bust. Of he has such a way with words that, Brad.

So far this year, the tech heavy SMP five has lost just under one five of its value, among the worst hit Amazon, Tesla, Meta, and Zoom. But that's just the start. So has the tech bubble burst? Let's bring in Robert Kentwell, portfolio manager at Upholdings. Robert, what do you think has a bubble burst? Well, some air has has definitely come out of the balloon, but believe it or not, it has fall are from burst companies. There's too much cash on balance sheets, there's too much trypowder

and venture capital. A lot of technology companies have hardly tapped debt markets, and so until you really see companies extended with short runways, frankly, there's there's there's still a little bit of ways to go. But what what's been interesting with with this kind of wholesale sell off is that we've been kind of putting companies into one of three buckets. You either have businesses that have been big

growers for ten years that are hitting a wall. These are streamers like Netflix and Spotify that have to call their business models into question. You have this middle group of businesses like Meta and Amazon with a lot of e commerce exposure, and it's very clear that just as the market goes up and down, those businesses are going to be affected. So we'll call them in the yellow category of well, we'll see what e commerce does and

then those businesses will do just fine. And then there's the green category of business models that are proving to be unbelievably resilient. You had Thomas uh you know, from the Google Cloud team on here earlier. He couldn't stop smiling, and that's because cloud computing is just doing so well in spite of how challenging of an environment that we're

in right now. And so that's definitely the one area where we're probably spending the most time as investors because prices have come down on a lot of stocks like Snowflake and Data Dog in aws that all have exposure to that end cloud computing segment. Interesting. Of course, as you mentioned, Google Cloud was that one bright spot in Alphabet results just a few weeks ago. Now, let's talk about your strategy, because your E T F Kings is, you know, down with the rest of the market thirty

year to date. How are you evolving your own strategy. I know some of your top stocks are Meta, Amazon and Alphabet yep Um and as I as I've been mentioning, we're you know, moving more into some of these cloud computing businesses like service now um. So our our our strategy is it looks sometimes like a technology and desks, but we're very pure investors. Where we start at the industry where we find really big industries with a small

number of competitors. We find who the market leaders are that are dating market share or have a dominant position. We make sure that management is being responsible with how they're allocating that capital, and then ultimately got to make sure that you're paying a fair price for it. And being down, you know, thirty four percent year to day when Amazon is down thirty four percent year to date is painful and it means that we paid too much

for some of the companies that we own. For the most part, we're holding onto the businesses that we own, as I mentioned Spotify as an example of a stock that we dropped because we just don't believe in the expansion into podcasts, even managements pulling back investment there. But we're continuing to move money into these cloud computing businesses.

And that's the beauty of being one of these early actively managed ets is we can move between stocks without creating tax problems for investors, and everything we do is transparent, so folks can follow along with us while we do it as we do now, it's not really spooked a lot of investors. I mean, the market was like shaking in its boots. How booked were you by Snap? You know, not necessarily Snap in particular, but the signal it's sent

about the macro environment and the digital ads business. It was pretty interesting to watch the market process the Snap information thirty days. It was only a month since Snap was just out publicly reporting that they announced that they were going to miss the low end of their guided

So that's scared a lot of people. Google and Meta had a really bad day, But on that same day you heard Service Now they had there There's a lot of investor days happening right now they up their five year revenue target by a billion dollars, and so investors are getting a lot of mixed signals. Visa reported that while they're seeing variability across different markets, for the most part,

they don't think we're in a recession. So you're getting a lot of different data points that are out there, and I'd say, clearly with what the markets in the past couple of days, people view this more as an idiosyncratic issue with snap because they've had while they've been growing users, they've had a declining share of usage relative to the rise of TikTok and reels on Instagram, and that's been a hard thing for Snapchat to have to navigate.

So so far we've seen the Snapchat news be um potentially isolating, but we're really not going to know for another six to eight weeks when earning season lights up again. Now we saw this big broad com VM where deal get announced today, tech stocks bouncing back. Where where are

you pleasing your bets for next week? I mean, you know, there's so much concern that we're you know, you know, heading into a recession, that this is going to be some long drawn out period of pain, and then other signs that maybe it's it's it's it's just a blip. It's noisy, it's very noisy. Um, you know, we're I think you're right that this is just the beginning of a wave of acquisitions. You had a chart up earlier with five different acquisitions that we've already seen this year,

all in the multi billion dollar phase. I think it is extremely reasonable to assume that the second half of this year will have an even faster pace of act positions. There's simply too much dry powder out there. There's too much cash sitting on corporate balance sheets, and there's too

many valuations that are really attractive. So if you're if you're Google and you're sitting there and wondering how to you know, turn Google images into Pinterest, Uh, you're like, wow, this could take a few years, or we could try and go and buy the company for billion dollars. That's just something that wasn't in the cards a couple of

years ago when prices were too high. And so when you have some of these larger businesses whose growth rates are slowing, with some of these smaller businesses that still have penetrating growth rates. By the way Snapchat might be up for sale fifteen billion dollars for one of the world's very few social networks that works internationally. Uh, it's gonna get be a really interesting conversation, I think for a lot of these assets that are that are pretty unique. Um,

and we'll see how it goes. You just gave our print reporters, uh, some homework there to chase some deals. Robert Cantwell of Upholdings as always great to have you. That does it for this edition of Bloomwork Technology. Emily Chang in San Francisco, Solar Winds CEO, will be joining us to talk cyber tomorrow