Disney Earnings and Google's New AR Glasses

numbers and where the streaming business goes from here. Plus how low can crypto go? The massive sell off that started with tech is spilling over to cryptocurrencies at Bitcoin and Ether have both fallen more than fifty since record highs last year. And Google gives us a sneak peak a our glasses. What can they do and when can you get your hands on them? And how do they not repeat the failures of Google Glass A top Google

exact call join us. We'll get to all of that in a moment, but first let's get a look at the market. Stocks sliding on signs inflation isn't going away anytime soon. And then as dat closing down. Three bloombergs Emily Grafhao here with the latest Emily walk us through the day. Hi, Emily, what was another volatile day for the US equity market. The SMP five hundred ended down over one point six percent, but the pain was really concentrated in those tech stocks. We saw the Nasdaq one

fall over three percent. Big tech giants like Tesla and Apple were really falling along with the index. And this of course came after we had some CPI data that showed investors inflation is higher than expected and probably going to prompt the Federal Reserve to continue on that aggressive monetary tightening path that doesn't really bode well for high growth stocks. Field on, the u S tenure was lower for the third day, but didn't seem to provide any

support for u S stocks. Also, the dollar finishing the day in New York largely flat but still approaching its largest a highest level since May. We talked about a little bit of pain in tech stocks, but the pain is even worse when you look at the crypto markets. Bitcoin falling below that key thirty thou dollar level, and this of course was near an eleven month low, and we're also seeing ethereum down about forty percent year to date.

The risk goff mood and market has kind of been weighing on cryptos pretty much all year, but the pain right now is really being felt because of the plunge in Terra. It's an algorithmic stable coin, but it lost its dollar peg earlier this week. It plunged about eight percent today, paired back some of those losses just a little bit, but really worrying those crypto investors. We also saw Luna, which is a crypto token that's linked UM

and helps maintain the Terra peg, also fall. There was an exchange traded product from twenty one shares that tracks Terra. It fell over nine today. I heard from Bloomberg Intelligences of Eric Baltuna is that is one of the worst single day exchange traded product declines in ETP history ever, so a lot of losses there. Let's get to Disney though. They reported earnings, missed on revenue, also missed on EPs, but they did beat on Disney Plus subscribers and reporting

more Disney Plus subscribers than expected. Quite a change from UM, its streaming competitor, Netflix, which of course the stock plunged after they reported earnings. Disney actually down a little bit in the postmarket zoom out here to date, Disney is down over thirty so we'll see how analysts are taking this earning support that was largely positive. Alright, Bloomer's Emily Grafe O, thank you. I want to stick with Disney. Now. Talk more about those results with Ross Gerber, president CEO

of Gerbert Kawasaki, a long time Disney shareholders. So look, Ross hul in ESPN plus subscribers a little light, but you have to look at that massive subscriber increase and feel some sense of relief, even surprise. I don't know, is this what you were expecting. Well, we didn't really have much expectation as far as subscriber because it's so hard to predict what, you know, consumers do based off

what contents being released on each streamer. But what we now see it, you know, at the end of this earnings period, is that Netflix did lose a certain amount of subscribers to the competitors, one being Disney Plus and and the other being you know, Peacock or and Paramount Plus. So um. You know, certainly we don't know if that's a permanent change in behavior, because we think streamers go back and forth between what you know shows are you know,

popular at the time. So Disney had very good results for their um, their streaming businesses, and and much better than we expected because obviously we thought they had a tough comparison to the COVID era. And you know, quite frankly, all of their businesses are starting to improve now and we're starting to see revenue dramatically increase in parks and resorts, and and actually a wonderful weekend at the theaters this weekend.

So you know, with the valuations so cheap now in the stock market, stocks like Disney are quite compelling for long term investors. I thought what CEO Bob J. Peck had to say about Disney Plus subscribers who are grown ups but don't have children was really interesting. Take a quick listen to what he had to say. It's certainly popular with families, but as a reminder, almost half of Disney Plus subscribers are adults without kids, and he said he's going to try to cater more to that audience.

What do you make of that strategy, Well, I think his point is really trying to broaden the market because obviously Disney Plus is just a no brainer if you have kids, So you know, what would be your impetus

to getting what is perceived as a kid's channel. But see, when you're talking about adults, you're talking about gen xers like us who have grown up with Star Wars, and so what he's really saying is that there's an enormous audience base of people who don't have kids, who are really into the I P like, you know, Star Wars and Marvel movies and you know, you think, oh, these are kids movies, but they're actually not. You know, they're

adult movies and it's adult content. And I think that's why they've been successful, is that there is stuff for different age groups on Disney Plus. How do you think Disney Plus holds up if Netflix releases a lower priced ad supported tier. I don't really see it as an issue. Like, so look at it this way. So you have basically three main streamers now with with Hulu, Disney Plus, Netflix, and what will be HBO Discover or whatever that is.

Those will be the three main players. And then you have Amazon and Apple are the players that don't charge for streaming services and they try to sell other products. And so when you look at the you know, environment that's out there today, I think Disney's extremely well positioned

in the multiple content offerings. So with ESPN plus their agreement with UFC and and really their numbers would have been completely blowout numbers if it weren't for the billion dollars they had to pay producers and other people to to put stuff on the streamers instead of in the theaters over the last year or two. So Disney took a big hit, you know, investing in the streamers, but that's gonna pay off big time for them long term. Meantime,

he's talking about rolling out into fifty three new markets. Obviously, we've talked a lot about Netflix's global appeal, a lot of you know, new content coming in from for example, South Korea and the success of Squid Game. Do you think Disney can repeat that? No, and I don't think it would benefit them to. You know, Disney has a different approach to content. So if I make a Pixar movie that will play in all countries in the world,

you just change the language. But the content works globally, where Netflix doesn't make kids content really and so it doesn't work globally. So I've recently watched a lot of the Asian based shows that they've been making Korean dramas, Japanese crime movies. You know, I watched some of these stuff on Netflix and Netflix has a far deeper approach to the local cultures and artistic sensibilities than I think the approach Disney has. So I think that Netflix ultimately

is going to be much more successful internationally. And I think what Disney is really focused on is you have hot start in India where they they're a main player in India, and it's a massive market, and I think they're very focused on that market. And it makes a lot of sense for them to focus on bigger markets where they can put money into content and not have

to spread it between so many regions. Um, So, parks, let's go want to talk about parks because you know trade Peck saying domestic parks are firing on all cylinders, but they might have to take a big hit to operating income three a fifty million dollars potentially because of the closures of its parks in Hong Kong and Shanghai do the pandemic and as we know, Shanghai is on a very restrictive lockdown to this day. How concerned are

you about that? I mean, for me, this is probably the biggest concern I have as an investor right now. You know, I'm I'm not that worried about the FED actually because I you know, it's easy for them to stop causing pain. But like China has, we have a lot of business that we do in China, whether it's Apple, Tesla or Disney and many others, And and this approach in Shanghai has been hugely detrimental to the economy in China, to the people in China, and it may or may

not work. I'm less believing that it's gonna work. So so this is a big issue for for Disney on the short term and and and maybe even on the medium and long term in in a country like China. So I don't expect it to be easy for Disney to do business us in China for the foreseeable future because of their goal of having no COVID and and the fact that theme parks are sort of the exact opposite of what you know, the Chinese government wants people

doing right now. But I do think that that's more a short term issue than a long term one, but one that one weigh on Disney well. I wonder if you think doing business in Florida being more difficult is a short or long term issue you have. You've been pretty clear that you're not a huge fan of Bob Speck. You don't think he handled this situation in Florida very well. Disney is now losing these special privileges that they've enjoyed in Florida for decades as a result of this, you know,

very controversial don't say gay bill. And you know it's clear that lawmakers in Florida are you know, taking this out on Disney. What's your take on shape back now now that you see these numbers, are you having a change of heart at all? Or are you still not a fan? Well? I mean he just fired the PR guy, right uh uh for for what's going on in Florida. Um, you know, there's a lot of things I don't think he's handling the way I wish. The Florida situation is

really tough one. But I think that Disney wins in the end because in the end, whether you're on the right wing or the left wing, your kids want to Disneyland and and there's a lot of people type stuff onto Twitter or Facebook, but then they go to Disneyland, So you know, I don't think that that's such an issue. And and really the politicians in Florida are sounding and the people of Florida with higher costs, higher debts and

taxes because Disney's actually relationship benefits Florida. So what I think is this will smooth out over time. And I think these political wars over the right and the left are more played out in the media than in people's actual behavior. All Right, we're continuing to get headlines from the Call Disney saying they still expect Disney Plus to grow even more in the second half of the year, though maybe not as much as we've seen it grow in the first half of the year. So that of

course the number to watch, that big subscriber number. Ross Gerber, co founder of Gerbert Kawasaki, always love having you on the show. Ross, Thank you for stopping by. There are a lot of things that are going on, um, a lot of different disturbances around the world, but you know, for us, it's really about focusing on our long term strategy. So as mortgage rates have gone up and and they're

gonna they still have further to go. Clearly, homebuyers are gonna have to trade down to slightly lower price points. But most of the data that I've seen around housing still predicts strong housing appreciation. I think people are overreacting to, uh, some of the inflation worries some of the other travel players.

We've been studying inflation pretty carefully now for the past four or six quarters, because I think it happened, actually, or the growth of inflation I should say, you know, occurred maybe a bit more sharply than some had anticipated, and it certainly it continues to be a real concern some top tech execs. There. We've had right here on

Bloomberg Technology reacting to concerns about rising inflation. Wednesday's report painting a troubling bigger picture for tech, especially as the FED tries to combat rising prices, all of this adding to the decline we've seen in tech docs in particular. For more on this, I'm joined by Steve Sarah's no founder and partner at Active in Capital. Steve, thank you so much for joining us. So what do you think the impact more broadly of inflation has been so far

on tech. Well, when we went and looked back at the seventies during the stack placing period, the best performance sector was actually consumer products and the worst performing with information technology, you know, And I think that's a testament to how mission critical a lot of the you know,

software computers were back then for businesses. It's much more mission critical today, and so we expect actually tech to perform a lot better where it's gonna where it's gonna show up in the form of pain or equity prices declining, or those um software programs that businesses use on an ancillary basis for things that are just not court of the business. So we do affect and we do expect

inflation to affect technology pretty dramatically. And in gross stocks we've already seen it as they're down six pretty much across the board, and we're seeing in the private markets as well. So by dramatically, what do you expect the impacts of that will be, you know, massive down rounds, inability to fundraise, more layoffs. Yeah, okay, so you hit on all the key factors. We saw this before the

dot com bust. There's a very strong anchoring bias in the private markets for the last twelve years, and even through the Great Financial Crisis, gross stocks really um never went down, and so it's gonna take time for prices to adjust. We're seeing the early cracks, um, some of which come in the form of last competition. We're also seeing converts, and what converts do is maintain an equity

price but allow a company to extend its runway. What follows converts is always down rounds UM the other thing that's coming, and we saw this today with carbon or lay offs. You know, we think in technology the layoffs are actually gonna be shocking. They're going to be shocking, Emily, and we've seen Meta and Facebook freeze hiring, the same with Uber and it's this will be in the millions of people in the next twelve of the twenty four months.

This is just the beginning. So you're comparing it to the dot com bust, I mean, just how close the comparison is there? I mean, do you think this could take twelve years to play out? So unclear how long it will take. Our current view is that over the next twelve months it's going to be very rocky. Back half the next year, things should firm up in the tech sector. The dot com bus, you know, like that

was unique to that time period. Our time period UM more liquidity company business models are a little bit stronger. There's a better understanding of, you know, how to get to couch on profitability UM at the management team level, at the board level, and those discussions are happening right now. So I suspect that the downturn will be a little bit more violent, but the recovery recovery will be faster and the next kind of twelve to twenty four months,

you're gonna see some really interesting opportunities. But we've got to flush through these down rounds, and companies with six or twelve months of capital left are really going to struggle or raise raise money in this environment. So who makes it out of the gauntlet who doesn't? So those with fortified balance sheets, those companies that got ahead of

fortifying the balance sheet by trimming staff when necessary. It's always unfortunate to do lay offs, but it's it's part of what needs to happen during a downturn UM, and we're going to see the most pain is on the larger businesses unicorns. The smaller companies that can adapt UM and extend runway three or more years should be okay. Those that have less than two years are are going to struggle. UM. You know, more broadly, what's gonna work commerce,

commerce infrastructure, anything to do with e commerce, fintech. Although we're seeing competition increase, it's been a blood back both in the private and the public markets, and then transportation, lotistics and security. Wow, they're giving it to us straight. Steve Sarasino, Activate Capital Founder, We'll be watching well. It was built as the biggest change to Airbnb in a decade. We have the biggest updates to our product in ten years. We've been thinking about this for a very long period

of time. I can't say a lot, but I'll just give a couple of clues. Number one, there will be a whole new way to search on Airbnb, and this new way to search is going to be a new way to find really interesting homes. And then the second thing is we're gonna have a big step change to our service level and the kind of customer service we offer.

Airbb has now revealed its big update, which includes a new way to search for homes, split your trips between a couple of homes, and perhaps the biggest upgrade, more protections while traveling. They are calling it air Cover, which includes a number of guarantees on your booking check in and what they're calling a get what You book to promise. We will talk about all that and more with Airbnb c O and co founder Brian Chesky tomorrow on the show, and coming up, we need a Name. We We Live,

We Dream, We Work? What didn't work at We Work? And what lessons can tech companies learn from it As we navigate market turmoil and employers try to get workers back to the office. We're going to talk about all that and more with a former We Work exec Next, this is Bloomberg from Wall Street to Silicon Valley. Companies are competing fiercely for talent and to avoid losing more employees are tweaking in person requirements, even going fully remote.

I want to talk about all this and more with Melissa Diameler, chief learning officer at the online teaching platform You to Me and former We Work executive, as she is out with a new book called Reculturing. Design your company culture to connect with strategy and purpose for lasting success. Melissa, the pandemic has totally reshaped the workplace, for better or for worse. How should companies re culture in this environment? Yeah? So, I The biggest question I always get right now is

how do we bring our culture back? And that is the wrong question because it assumes that culture is the office. And while I think a lot of us enjoyed the ping pong tables and enjoyed the donuts and the free food, that is not what culture is. Culture is how work happens between people. And so I think the focus needs to be more on the values and the behaviors and and how we're showing up with each other through different ways of communicating, versus how we can get back people

into an office. So let's talk about what companies are doing wrong. I mean you've companies, you know, changing their work from home policies, trying to you know, create these new perks for when people are in the office. Yeah, I mean I think that you know, it comes down to, uh, going a little deeper than just defining your values. I think companies stop when they have a list of values on the wall or they threw them up on a website.

I think the companies that are thinking through this and we're doing this at you to me, are really trying to codify what culture is. What would it what would a value for instance of teamwork, how would that show up? You know? Is that collaborating with each other effectively. Is that constructive debate? And how do we do that in a way that is in this hybrid environment? What are what are opportunities for us to come back together in an office If it's more of a brainstorm and opportunity

versus you know, when can we do it remotely? So I think it's less about how we can get people back into the office or you know, how do we how do we make sure that that we're continuing to UM figure out ways to provide food. It's more about how to connect so quickly. What are some parallels you can draw from your experience that we work and what we're seeing right now in tech market term oil companies getting punished, you know, whether you're growing or not. Mm hmm.

I you know, I think of organizations again as as a total system, and I think it we work and a lot of companies get this wrong. I think we think of culture as this is separate hr initiative versus continuing to look at how to reconnect it to your purpose, to your strategy and closing those gaps. So if you're if your mission is to um, you know, to to make a life not a living and then you invest in wave pools. There's a gap there, No, Yeah, all right, Well you can check out your new book out now.

Melissa Diamelar, chief Learning Officer at You to Me, thanks so much for joining us. Welcome back to Bloomer Technology Imamily check in San Francisco. We've got some breaking news now headlines involving Twitter, Dal Jones reporting that federal regulators are investigating Elon Musk's disclosure of his sizeable steak in Twitter. The report saying that the SEC is probing his late submission of a public form that investors must file when they buy more than five percent of a company shares.

As we know, he started amassing Twitter shares back in January, but didn't reveal his steak until April. We're gonna have more on that story as we get more details. Meantime, Google just unveils a series of upgrades to its search and map services, revealing more about the company's augmented reality ambitions, and a slew of new products, like the six A phone and a Google Pixel watch to rival Apple Watch,

and even a pair of new A R glasses. Rick aster Loo, alphabet Senior Vice president of Devices and Services, joins us. Now for more on all this Rick loss to get through here, let's talk about the phone first, the six and six A talk to us about the strategy here and the need for high and lower end devices. You bet well, thanks so much for having the Emily uh.

First off, I just mentioned you know, our vision for computing is a vision that we call ambient computing, where computer should be able to help you with whatever you need seamlessly and kind of be all around you. The center of that universe is really phones today, and that's why we are investing so much in this area. Google Tensor is our technology substrate for these phones. Um it's a system on a chip the powers all of them.

And today we introduced Pixel six A, which is a four dollar version of the Pixel phone that includes our premium tensor s ocuh and could do all sorts of great things for users around speech recognition and photography. So so that's pretty key. You know, later in the year we'll on the Phone Arena will be also launching our pre our next version of our premium lineup of phones, called Pixel seven. So we talked a little bit about about that too. So let's talk about the Google Pitch

Pixel Watch. How do you think it stacks up to Apple Watch? And how many of these do you think you can sell? Well? I mean, first of all, we think it's going to be a terrific offering. I've got it right here. It's a beautiful device, round uh circular design with stainless steel and beautiful features. Um some of the key things you know. For anyone that uses a Pixel phone or Pixel family of devices, this is going to be the watch for them. It deeply integrates with

Google's ecosystem products. You can get turned by turn directions without having your phone. You could use Google Wallet to pay for anything. Google Home app will beyond there you can do your smart home controls. And of course the best part is it deeply integrates with Fitbit. I've been a Fitbit user for ten years, so everything I do on here seamlessly sinks of my Fitbit account. I can get heart rate tracking, sleep tracking, all the latest features

for health and wellness. So it's it's really exciting. I think people are gonna love this product. Any chance you've got a pair of those new A R glasses in your pocket too, I don't have them with me. There. It's a prototype where of course been involved in the a R space for a very long time, um, and we're really excited about the advances we've made. We see this area of being just a key part of the

AMMY and computing vision. You can see how wonderful it would be to have something on your face that enables you to do real time communication, to do translation, to be able to live caption the world around you, all of this powered by powerful technology with our A our systems and with Tensor and so, you know, we were excited to show a little bit about the future here.

Obviously it's a bit of a ways off. This is a prototype, but we are very much continuing to invest in the air space and we see it as a key part of where we're headed with ambient computing in the future. So tell us more about how the glasses work. Is this like Google Translate on a pair of glasses or is it something more? Well, you know it's gonna end up being a lot more, but it's very early days.

I mean, what we showed was a prototype and we don't have like a ton of product details to share today. We were just showing a little bit about you know, how one facet of how it might work with powerful speech recognition and translation. We do have a lot of air capabilities on smartphones today. You can see that throughout everything we do with lens and Google Maps and things like that. So you'll see a lot of continued investment

in the a R space. We believe strongly in offering users help in the real world and that's what we're very focused on with our A our efforts. So we're are you on the glasses in the research stage right now? Do you have a limited number of users testing it? I mean, how far along are you with this prototype? Oh?

I mean, you know, we have we have a number of engineers and developers continuing to build product in this space for internal use and uh, you know, we're still in the research phase, so it will be quite a ways off, but we're very excited about where it is headed. And is it based on AI image processing. I mean there must be a lot going on on the back end there to make all this work. Um, well, yeah, I mean a R is one of the more sophisticated

computing capabilities that's that's required to offer useful information of people. Um. We have in of course, a gray prowess in our computing capabilities in the data center what's been new is that we're adding a lot of intelligence to end points, and you can see an indication of that with Google Tensor. Um we're able to leverage both of these capabilities together to be able to really offer this sort of powerful

experience in the future. So the big question is when when will these be available for consumers or how many years out? Are we talking more to come, But it's not, it's not imminent. We're definitely in the prototyping stage. So we'll we'll make sure to tell you Emily when they're about to be out. And okay, last question on the glasses, but look, Google Glass wasn't necessarily the consumer success you hoped it would be, you know, became the butt of a few jokes. How do you avoid that same fate

with another set of glasses? I mean, we learned so much from the introduction of Google Glass. Um. We we clearly learned how hard it is to develop this kind of technology and learned a lot about what users care about and what's important um So, so I think that that informs us, uh and gives us just a great background to understand what we need to do in this space. So we're very glad that we had that initial effort. Um, it's really helped us think through where we need to

be for the future. So we're very we're excited about it. We're using all the learning from our prior entry into this space and uh and I think you'll see a lot of the benefit of that in the future. So you said you also planned to release a tablet next year as a companion to Pixel and you know, I believe back in twe you said no more tablets. So

so why the change of heart? Well, you know, I think, um, we the Andrew team has really invested a lot in larger screen devices, larger form factors, and I think in the last couple of years in the pandemic, it became really clear how important having these large screen devices is for the home for various use cases. And so between all of those, um collective things, at once, we decided that it was really important for us to develop one. And it really does provide a new, facet new experience

for Pixel users. So we thought it was important to have it as part of the Pixel portfolio. So just how many facets will there be? Is this a foldable tablet we're talking about? Oh? Um, you know, we just talked. We just showed a little bit of a prototype of what we're building right now today, which is a standard tablet, and there'll be a lot more details shared next year when it comes to market. Okay, so bigger picture, how

do you measure the success of Google's hardware division? I mean, comparatively, when you look at other companies and you compare the numbers, Google is not quite there, but obviously it's still growing and it's still a place that you're investing. What's the bar for you? Well, I mean, you know, clearly we want this to be a very large business for the company,

and it has been growing quite significantly. For for instance, um we talked about it our earnings that Pixel six has sold more in its first six months than Pixel four and Pixel five combined. UM. So, so without a doubt, you know, we're investing a lot in this area, and we also are growing a lot, and our intention is to continue to grow the business. We're no doubt a challenger in this space, where a new entrant relative to

other people who've been in it. So we're starting from a very small base, but we do expect to continue to grow and we're investing in the future for that, and that's why you see, you know, us make investments like the pixel uh sponsorship for the NBA Playoffs which have been just terrific to see, and trivia games to wash. So yeah, this is gonna be a space we definitely

invest in and grow in the future. So in the future, how big a piece of the pie do you think or do you see hardware being in the overall Google hole, Well, we'll see, you know, hopefully it will become a meaningful part. Obviously, we're quite a quite a large and successful business as it stands, and we hope to be a contributing part of that. All right, Rick Ostelo Alphabet, Senior vice president of Devices and Services, Thanks for giving us a little

peek into the future. Appreciate you stepping by. Thanks. Coin based shares coming up falling to new loads in this ongoing bear market. We're gonna talk about all that and more with Fourager Digital, another crypto exchange next. This is Bloomberg time now for our crypto report, and I want to get another look at coin base shares falling to new lows. Even the word bankruptcy the big B word being floated. Our crypto contributor Snelli BOSSI here with more Shanelle.

Thank you so much, Emily. When we talk about what happened with coin based today, you do have shares and bonds of coin Based plunging to new lows after results disappointed Wall Street, really Goldman Sacks coming in and saying here that coin bas is unlikely to return to recent

levels of profitability in the near term. In a quarterly report, they added a disclosure that if the company filed for bankruptcy, the court might treat the customer assets as a line for repayment, meaning the customer assets are what are going to be at play here. But you also, I want to be very clear about this, having Brian Armstrong really the CEO, saying that this is about a disclosure about how they hold the crypto assets and not really a

statement about the chance of bankruptcy at coin base. While that's not a risk in the near term, here he is saying that your funds here are safe at coin Base. Still, you do have a huge drop off in the shares and a lot of questions about the exchange business moving forward. To answer some of those questions, Emily, I want to bring in Steve Erlick. Now he's the CEO of Chris Strip crypto asset trading platform Voyage or digital see if you're a long time member of the trading community, both

from stocks and now to cryptocurrencies. When you look at the exchange model moving forward, a lot of concerns here about profitability. How do you make this work in a down market? Well, look, I think that you know, the exchange model is something that has been become very profitable across traditional exchanges. So we're in the early stages of adoption of crypto, especially in the US. We are working

through you know, thoughtful regulation. So my belief is the exchange model will become you know, extremely profitable over time. But we're gonna have bumps in the road until we get there, and today it's one of those bumps in the road. But you know, I'm really you know, bullish on the exchange model and the industry in general. You know, I want to talk more about coin base for a second here, because the idea that there's a claim on assets here at the end of the day if there

were to be bankruptcy. A lot of firms have not gone public yet, so they don't have similar discos disclosures. What kind of a risk does that really entail and what does that make the customer really aware of at the end of the day if they go to zero. It's really interesting because the SEC came down and said, I think in the prior quarters they didn't disclose the

level of customer assets that they were holding. But the SEC changed disclosures and said, hey, if you're holding customer assets, you now have to put it on your asset and liabilit anty side of your balance sheet. So now that disclosure is there and we see how much assets they really do have. But to your point, a public company like coin based, like Voyager, we've been disclosing that since

day one, and we've been public three years now. I think that's actually a good thing for consumers because now they see that our assets do cover all the liabilities where nowhere near any any bankruptcy situation in either case, and you now have more clarity than if you were, you know, investing in a private company and holding your assets with a private company with no required disclosures. So what about the model itself in terms of making money.

There's a lot of questions around there around whether fees really start to go to zero, kind of like you saw in the stock market as spreads started to come in. Look, I think that you know, there's there's a place in this business for commissions. Consumers are getting a great price, great you know, action on all their trades. But I do think that you know, there's no national best bid and offer. This is where the market actually changes and

is different for crypto versus the traditional markets. The traditional markets have reaganam Mass a national best better offer, so you have price protection on every trade. In the crypto market, you don't, And that's why I think we're looking for thoughtful regulation. But as long as there's exchanges around the globe holding and trading all these cryptos, there's opportunities for commissions and for spreads for every everybody in the industry. Now,

I want to talk more about price protection. As you say, let's talk about it as it pertains to us T now trading out about seventy cents on the dollar. You made a decision not to list u s T, but you did list LUNA. Why is that. Yeah, So when we looked at the underlying of us T, we saw it truly wasn't a stable coin in the same instance as USDC. Now USDC, the US dollars stable coined by Circle and coin base is backed by US dollars and US treasuries, so and it has an attestation from a

prominent accounting firm in Grant Thornton. We felt very the mo and we still do that there always will be a dollar for dollar there. When we looked at UST, we didn't see the same assets behind it, and so we're uncomfortable in bringing that to our customers. But we did list Luna only from an aspect of price action that consumers can actually participate in and trade Luna, but not take it off the platform. Because one of the main reasons to take it off the platform was to

stake it for US T and earn those rewards. We didn't feel comfortable always thinking about the customer first and how they were going to look at the trade and the asset. We chose not to list UST and to list Luna. How do you think more exchanges are going to be more discerning moving forward about the types of assets that they do list, especially when it comes to defy. I definitely think that, you know, exchanges, everybody's going to take a different look about how they list their coins.

We go through a really detailed process, and I think everybody's starting and going to expand their processes for that, processes for that as well. I do think we sort of we sort of flight out of defy. Today. We saw a lot of consumers bringing their assets back to a centralized place like US so they can actually be comfortable in holding the assets because in the defied world, you're putting your assets into some contract and going to

get some reward on it. But now we see that those rewards may not be as good as they look, and to trust another party to do a lot of the work in diligence for you. We serve massive inflows today and massive trading volume today. So what then is the ultimate ramification for defy into this year? Given that it's not just us T that is falling, you see Bitcoin falling as well, below that thirty thousand mark that everyone was watching. Look, I think that this is an

opportunity for a reset opportunity. I think, you know, UST did have an impact on the entire market today because us T was backed by bitcoin and there was a lot of selling of bitcoin related to the u s T. So I think you're seeing a reset time. I think we're close to the bottom here if we're not there already, and we'll see that rebound. But it's truly an opportunity for people to learn more. And that's the key thing here, individuals, consumers,

brokers like us. We need to educate people more, educate consumers why these cryptocurrencies matter, and therefore then they could make an educated decision on which wants to own. Steve, thank you so much. That is Stephen Rlex, CEO of Voyager Digital, Emily back to you, Shanali, thank you well. Nike is escalating its legal battle with the sneaker marketplace stock x, saying it purchased four pairs of counterfeit shoes

on the platform despite them advertising authentic footwear. This after Nike sued stock x back in February, accusing it of free riding on Nike's trademarks with a service called vault n f t S. Stock X argues it's n f t s aren't digital sneakers, but simply listings for physical sneakers that are stored in its fault and can be traded by users. We believe that we and you know, sort of move up and cascade up our net price

over time. Given the tremendous value that we started with and the increased price value relationship all of all the new content. But we're pretty bullish above that. Disney to go about check there on the company's earnings call, speaking about pricing power and future pricing power for Disney Plus, Disney saw big growth in subscribers, beating estimates the service finishing the quarter with a hundred thirty seven point seven million subscribers globally, up thirty three from a year ago.

Disney not the only one reporting results today. Ev makeer Rivian also out with its earnings and our Ed Ludlow has been listening in on the call, so shares up modestly. At what are the headline takeaways. It's still really hot out there for Rivian, but it was as good as it could be. There's still planning to build twenty five evs this year. Split across the consumer product in the van for Amazon, semi conductors are still hard. Cell supply

is still hard. But I think you good use for investors is they got a lot of trucks built, sitting in a parking lot somewhere waiting to be delivered, and they're finding out the hard way. It's not easy being a real company. What about the supply chain crisis and especially what's going on with China. Are they feeling the brunt of that. I think they're disappointed. They've built five thousand vehicles since production started around the quarter, but at

times they had to pause the line. Literally, you've seen the video, right, I've been inside the factory. All these great robotic arms just stopped because they don't have enough parts. Semi conductors is a big issue still, but they say that they're speaking to their suppliers. We've seen the worst of it. We've hit the bottom, and we're going to

get better from here. He also disputed some reports from the Wall Street Journal about battery cell supplies and actually, if you look over a five year horizon, battery seal supplier is fine. It's longer term when we all start building e vs. The whole world's clamoring for an electric car. That's where it becomes a content. Did they have anything to say about Amazon, Yeah, a lot to say about Amazon.

Progress on Amazon. You know, the two figure for this year includes ten thousand bands for and what's interesting is they're building in two sizes for one of a better description big and small. The big is really underway, the smallest in development, and they're on track and they're starting to roll out more and more pilots of amazon Is cities around the country. Adam Jonas from Morgan Stanley really willed them. What did he get anywhere? He kind of

got somewhere. His point was that you look at the equity story. Rivian has fallen from a hundred and seventy two dollars a share following its I PO to around twenty dollars a share. Investors have lost patients for a company that burnt companies that just burned through cash. You wanted to know, how are you going to do better? How are you going to limit your costs? How are

you going to spread out spending smartly? They give very detailed but very safe answers, and you can see the stock reactions kind of modest and after us, but it's up and given the tough time, that's positive. Exactly well, certainly it matters with inflation and rates going up and labor and supply chain stiles and just about everything. Okay, I thank you for that update, appreciate it. And that does it for the sedition Bloomberg Technology. We're back tomorrow.

We've got a pack show. Airbnb CEO Brian Chesky will be back. We'll talk about the companies at new redesign, changes to shirt search. We've also got Arms CEO Renee Has and the CEO of son Nos, Patrick Spence. Big show tomorrow. Don't forget to check out our podcast Daily. You can find it anywhere you get your podcasts. I'm Emily checking in San Francisco. This is Bloomberg