Netflix vs Disney and Education in the Metaverse

TikTok CEO and top former Disney executive Kevin Meyer. Plus Learning in the Metaverse Are at Tech series continues with a candid conversation about the future of virtual learning and whether it could tip the balance in favor of screen time and lawyers for Tharanos founder Elizabeth Holmes failed in along on attempt to get her fraud conviction thrown out. We're gonna hear from our own General roles in Black, who was in the courtroom for this decision. We will

get to all of that in a moment. Stocks ending another week down on the back of a job's report that showed people are going back to work, but that means the FED will likely stay on a talkish course. Bloom Brig Shanali Bossik here to break it all down. Pay Shanali happy Friday. Happy Friday, Emily. If we take a look not so happy of a Friday for the stock market. You have the SMP down more than one percent, as you say, on the back of that expectation of

a hawkish fed. But remember did try to scrape higher into the day, ending the day lower than you do. Have the NAZAC one hundred ending more than one point four percent lower on the day, so the steeper decline than you're seeing in the SMP five hundred. Both of these indicries are down on the week pretty significantly. And

then you have the two year yield. Interestingly, you had that really rise very significantly into the week, getting well above that three fifty level, really pairing some of those rises that you saw on the two year yield. And remember those yields have a big impact on what you're going to expect on how you value a lot of these high growth companies moving forward. And bitcoin Bitcoin is back below twenty thousand your now at nine nine fifty nine.

We are watching that very closely. It hasn't broken too far below these levels here, But again bitcoin trades into the weekend. If we flip up the board here, let's look at another asset lately, very correlated to bitcoin. That is that NAZAC one hundred. As I've been talking to you about the five day move here when I said significant, what I meant was a four percent drop this week.

That's not the biggest drop that we've seen. But again, moving into September, which is a traditionally hard month for stocks, it'll be interesting to see how this trades into next week. We did see traders try to get back some of those gains, but again ending the day and the week much lower. But a couple of individual movers for you quickly here, Emily, I want to take a look here at Starbucks because remember they had that new CEO announcement.

On the back of that, the stock has declined two point eight percent on the day to point nine percent. That is, of course deeper than we saw in the SMP. Lulu Lemon was your biggest s gainer here and that now as that one d that was down on the day six point seven percent higher on the back of encouraging earnings. People are buying leggings Broadcom. We have also one point seven percent higher on the day, shaking off

a lot of those fears for those chip companies. Emily, all right, we're gonna dig into chips a little later in the show, Shinali Bostek, thank you for that update. Meantime, turning to streaming, Netflix is set to launch its AD supported service later this year, a significant premium add a significant premium compared to other streaming platforms. As far as we know, the streaming giant intending to roll out this plan ahead of its rival, Disney Plus, which will launch

its own AD supported plan on December eight. Netflix hasn't announced the rate for its AD supported plan. Yeah, we're gonna break all of this down with Kevin Meyer, founder and co CEO of Candle Media, a former top longtime Disney executive of course as well. Kevin, it's so great to have you back here on the show. So curious what you think of this raft of streaming news we've gotten over the last several weeks, and especially this these ADS supported tiers. How much do you think these will

really drive new subscribers to Netflix and Disney Plus. We're great to be here, Emily, Always enjoy being on your show. Um, Look, I think there's a lot of promise in these as supported tiers. I do think that there are very substantial tail ones in the marketplace, and marketers are looking to

place their brand marketing dollars and high quality video environments. Uh, linear television has been the traditional place where they spend that money, and of course that has becoming that's becoming challenged from just an audience perspective as audiences moved from linear television and pay TV over to streaming. That's what

streaming is where the audiences are. When I launched Disney Plus, you know, several years ago, we had marketers trying to bang down our doors to have advertising on Disney Plus.

So I know there'll be an explosion of demand. I also know, having been involved with running Hulu for many years, that the ad supported version of Hulu was five dollars less expensive for consumers but brought in and roughly eight and a half dollars worth of monthly revenue just from the ad loads and the ad sales that they add. So I'm feeling pretty bullish about it. I do think that consumers do tend to like to pay less, even

if to put up with a small ad load. I think that both Netflix and Disney will be quite successful. If you don't know how Netflix will yet price their their their service with ads. Disney surprised me a little bit with keeping the same price as it is today add free for ads and moving the ad free price up three dollars or thirty eight percent. I think that's

a pretty aggressive price move. It will be very interesting to see how much price sensitivity is in the Disney plus subscriber ranks and see how that how that evolves. And look, you've always said Netflix and Disney can both and will both coexist. But over the longer term, given the challenges that we we've known them to face, especially over the last six months, does Netflix or Disney have

the edge? They're very different services. Um Disney is configured with the core brands of the Wall Disney Company, including Inport, Disney, It's Help and Pixar, Marvels, Star Wars, National Geographic, and it's meant is designed to superserve those fans, the fans

of those brands. Now they have expanded under Bob Shapeck, They've expanded the programming somewhat to have a little bit more general entertainment adult programming, but still the essence of Disney Plus is for fans of those brands, not only families, because of course, if you have kids, you're more likely to be a fan of one of those brands, but also for adults and single people and couples, many of whom were fans of those brands as well. So that's

the focus of Disney Plus. And if you are a fan of one of those brands, you kind of have to have Disney Plus to satisfy, uh, spatisfy that affinity that you have. You can't get that programming elsewhere. So I think if you're you know, and the Netflix, of course is much broader based too, serves uh the entire population. It's very much a general entertainment brand and service, so I think that has the broader footprint, and I think that Disney Plus is typically going to be an add

on to Netflix. I think both are doing great. I think both will be you know, quote unquote winners in the global battle for um for having a successful rollout, and they already they already are, So I think both are going to go exist. And I don't know that either open care one is bigger than the other. They just want to service their consumers as best they can. Streaming of course, has surpassed cable for the first time. You know, with HBO's House of Dragons has been a

huge hit so far. Who else wins and who else loses in this new future, Well, it's hard to say. I mean, those are the best programming. I guess it's an obvious thing to say that people subscribe to these services to watch the programs that they love. I think, you know, Netflix has already been established itself as a

big winner. I know there's turbulence in the stock price, and they've hit some They've stalled out a little bit on growth of subscribers, but I think the add three tier at a lower price will actually help them there. I think they should see some additional growth restarting with with that offering. Um. Look, I think Disney Plus and

Netflix are in arguably winners. I think that HBO Max with the programming that it has in its vault, and the and the ongoing production of HDO and discovery programming and even seeing enders, I expect to probably be in that in that service. I think that's going to be a global winner. I think I've been a little bit positively surprised by Paramount Plus. To tell you, the truth, I didn't have a lot of pok for it to be as successful as it has been. So I think

that's that's they're they're they're making a big play. Then get the Apple and you have Amazon. They have a lot of money, a lot of cash, and they have other strategic reasons to be in the streaming space other than the direct economics of those streaming uh, the streaming

services themselves. So I think they're pretty well committed. So I think you have a handfull, you know, four or five global winners, And of course the niches will continue to to to exist and then be profitable but smaller and those will be um, those will you know, won't be competing with the big guys, but the big guys I think there will be several of them. Ultimately. I'm seeing ads for Amazon's Lord of the Rings everywhere I go,

everywhere I click. Um. The reviews on Rotten Tomatoes, at least if you look at the audience reviews not so positive. So are kind of rotten on Rotten Tomatoes critics have been more positive. What are you making this look? I haven't had a chance yet to watch it. I have seen the same same reviews that you've seen I would pay a lot more attention to the customer reviews than to the critic reviews. That's where the rubber reviews the road actually. But look, there's a lot of pent up

excitement for this, for this title, I expected to do well. Um, it doesn't have to be critically reviewed to be successful or and rotten tomatoes only go so far by the way. I just I expected to be to work. I expected to to you know, to help Amazon continue to gather and keep Prime subscribers. And remember, people subscribe to Prime not just for video, but primarily for delivery of their of their goods and to and to conclude e commerce transactions on on on that platform. So I do think

that it's not a must win. It doesn't have to be one of the top shows of the year for it to be to prove successful and to leverage more e commerce activity on Amazon, this is the old purpose of it, I think. So, look, you know, you've also talked about consolidation, but uh, you know, it seems like you're pretty optimistic about a lot of these services. If consolidation happens, who who gets consolidated? It's always hard to call that, Emily. Um, you know, if I knew that,

I don't have a crystal ball there. But these are big brands, I guess the ones that are, you know, somewhat smaller could be consolidated. No one's consolidating Apple. No one's consolidating Amazon. That's obvious. And then you look at the media companies and which one of those might be consolidated. There's always rumors about you know, UM Peacock and HBO Max coming to the other possibly, or the parent companies

merging Paramount and Paramount Global. The parent company is often discussed as being in play, and Stars is out there too, by the way, which is being separated from lions Gate. That that will be brought with someone ultimately, I think so hard to say. Obviously, the bigger guys, if there is consolidation, the bigger guys swallow the smaller guys. That's the way the physics of it, and that that will

take place here too. So you might look at you might look at some of the digital giants to to buy some of the smaller media companies, or you might look for a merger between media companies. But I don't I think that that will happen ultimately, and not not in the two distant future. Now, Dan Lobe a few weeks ago urging Disney to spin off ESPN was otherwise positive of Bob Chpeck. Of course, you worked at Disney for so many years and oversaw ESPN. Was this ever

discussed and in your view is this ever going to happen? Well, it's it's a very interesting question. From time to time we discussed, you know, what what should be the deployment of all of the assets of the Walt Disney Company. We had are very very um, a very high quality boarder, and of course one of the one of the things that board always asks of management is to review the asset portfolio that you have and understand whether or not there should be some additions to the assets or some

subtractions should you sell something. So it is discussed, you know, at various times over the years that I was there, was there for a very long time, so I had to discussed several times. Bob is a very smart guy. I respect him all. I think he's a great uh. He's doing a very well good job as CEO. He'll

make the right call. My own observation would be that ESPN was a very strategic asset for the Walt Disney Company when they are when PayTV was growing, and when ESPN was such an important part of the bundle of channels that Disney had, including ABC and the Disney Channel and X and all the different all the different channels and Nation National, Geographic, all the channels that they have.

As the pay TV universe continues, it's precipitous decline. I think that the channel business and also the audiences for among the you know, for the programming on linear channels, is decreasing quite substantially. The channel business, not only for Disney but for all these media companies, is declining in

strategic importance. So therefore the importance of ESPN to be a bulwark in that channel distribution modality is becoming less also, So I think that the the reason the strategic comparative of having a sports service like ESPN is less than it used to be. So I think there's more degrees of freedom, operating flexibility, if you will, for the for Bob and the management team there to make the right decision.

So I wouldn't be shocked to see it um spun off from Disney, but I wouldn't be shocked to see a state or two. Yeah, okay, okay, Well, next week kicks off NFL season, and you know, there's been a lot of talk about whether these streaming services need sports to take them to the next level. Is that going to drive the next chapter, the next era of subscriber growth.

Maybe it's not just sports, maybe it's also news. What do you think on the tournament of a big sports streaming service outside the US called the Zone D A c N and we stream the big most important soccer leagues in Italy and Spain and in Germany, and we have and across the tontinent of Europe, and in Japan we also have a big, big presence, and in the US with boxing. I think that the ultimate, the ultimate way that sports will be delivered to consumers will be

over the top. It will be delivered via the internet, on apps, on televisions, and on mobile devices, just like entertainment programming is. I don't think that entertainment services need to have sports, nor do I think that sport needs of entertainment. I think consumers are tired of paying a lot for sports when they're just interested in entertainment. That's

what's bringing the pay TV bundle down. And I think that people just just want to watch for I want to pay for entertainment necessarily, so I think the disaggregation of different programming types into and making leving consumers make a choice of what they want to pay for. I think that is the promise of the Internet. That's why streaming services have have done so well. And I think you'll see that here sports services will be paid for

separately and package separately entertainment in the future. I think would love an update on what you're doing at Candle Media. Of course you bought Hello Sunshine. I want to know how that's going and where your priorities are in this new kind of constantly evolving world. Well, Candle Meet is going great. They have a fantastic partner in Blackstone Private Equity Group. They've been unbelievable supporters of the Candle We have bought about nine or ten companies already. The biggest

ones were Hello Sunshine and the company called Moonbug. Pella Sunshine is doing great, Reese is Restura, this spoon is still highly involved with a great management team. There. We're doing We're doing very well uh at Hello Sunshine, but also a Moonbug where if you're a parent with small kids, you would under you would know of our great intellectual property and characters and Mukoka Millon the most popular streaming the second most popular show on Netflix last year in

the second biggest YouTube channel in the world. Slippy Little Baby Bomb a whole bunch of different ip that we haven't move like. That's doing very well. We have bought a company called Exile, which does programming in Latin America under the stewardship of Isaac Lee, who was the former head of content for both Televisa and Univision. He's a great Latin American programmer. And that's a multi platform business that we acquired. Also Required Attention, which does social media

storytelling on TikTok and Instagram and elsewhere. That will help all of our companies do. All of our brands do much better in the marketplace when they need to have a social media footprint. So we love the fly wheel that we've created in traditional television content, social media storytelling and then related commerce opportunities. And we we're doing We're We're very polish on our future. I've got a three year old Kevin Coco melon is huge in our house.

I don't know whether to say thank you or no thank you for that, but you watch Kevin Meyer, candle founder and co CEO. Always good to have you, Kevin, have a great weekend. Thank you for stopping by. Twitter is asking a judge to order Elon Musk to turn over all of his text messages from the first six months. The company is saying the billionaire isn't cooperating and exchanging evidence ahead of the trial in this fight over that forty four billion dollar deal bloom Brooks. Jeff Phely joins

us from Delaware More Late Friday News. Jeff, is it usual to be asking for six months of test text messages? I mean, should we have expected this given Elon Musk is witness number one? Yeah, I don't think it's an unusual request. I've seen it in other cases, and I suspect Mr Musk has a lot of business by text, so you know, so it's easily actually going to hand them over. What's the likelihood Twitter is going to get these?

I think the judge will ask him to hand over, you know, maybe not all of them, but some of them, if you know, have to go through and have somebody look at them to see if they're relevant to the case. Maybe, but he's not going to be able to keep texts completely out. How does one do this? I mean, I mean there are hundreds thousands of texts, and there could be a lot of different kinds of information in those times, those things that might be interesting. True, But he also

has he liked many folks. He also has multiple phones and wipes his phone periodically, so you know, it gets kind of touchy, you know, trying to figure it out. I suspect that since he filed the notice that he was gonna walk away from the deal though, that he's been saving his texts because judges don't like here, and that that that kind of material has been deleted. Okay, okay. Now, Twitter says he hasn't been cooperating in the discovery process.

What does that mean? Well, and the discovery is the pre trial information exchange that folks do so you can you know, get the material to put your case together. Twitter claims that he has not been cooperating in good faith, acting in good faith, dragging his feet. In other words, that the most people say, oh no, it's not us, has been dragging our feet. Twitter has been dragging their feet and trying to hide witnesses about this whole box

issue again. These kind of fights are very common in the run up to these you know merger cases, all right, and we are still, of course waiting to see if this indeed will stay in October or if it gets pushed back to November December, as Muski is asking for Jeff Feey in Delaware, thank you chip Stocks and focus. After the US government imposed new license requirements on semiconductor exports to China. Bloomberg's Ian King, of course, covers all

things chips Ian. What does this mean? Yeah, I mean this is a big deal first of all, for in video obviously, for hundred million dollars in a quarter for in video that's and the ads up over a year. On the flip side of that, for China, this is a key piece of technology. These are key AI accelerators that really helped train these systems. So if you're in a hyper scale you really need this if you want to stay up with what Google, what a ws are doing.

And that's really you know, could be a major blow to some of these Chinese customers, you know, chip companies reporting it's been a lot of doom and gloom, but Broadcom seems to be more positive. Why is that? Yeah, No, I mean, they spent an hour on the phone ys today with analyst saying are you shut you know, answering the same question, which was are you sure? Are you sure?

And you know, it's really a division between the PC related companies where we've seen, you know, laptop demand has just gone away after the pandemic, and you know, lots of companies like Intel like you know, a lot weaker outlook on the flip side. Don't comment saying, look, infrastructure, these giant data centers people are still building. Companies are still investing in their infrastructure and that's why our numbers are good. Broadcom is, of course a big Apple supplier.

What is what they had to say indicate about iPhone de man, especially with the big Apple event coming up next week. Yeah, no, you're you're absolutely right. That got kind of lost in the in the general mix yesterday. And what world Com said was like, you know, the shipments for our large North American customer that everybody knows who it is, It's, it's it's Apple are going to be kind of what they were last at this point

last time, and demand this solid. So the indications at least from that on a unit basis is that Apple is expecting the next version of the iPhone to be sort of as good as the previous one was, which I think, given you know the environment and consumer spending, will be seen as a positive side all right, And of course Bloomberg Technology will be coming to you live from the Apple event Wednesday of next week, will be across all of those new iPhones were expecting them to unveil.

Bloomberg's and King Ian thank you so much for that update. Welcome back to Bloomberg Technology. I'm Emily Chang in San Francisco for the last installment of our a Tech series. This week, we want to take a look at education in the metaverse. With today's technology already prompting so many safety concerns, how do we make sure the metaverse can be a safe place for all students. Let's bring in

Kathy hirsh Passek for more on this. She's a professor of psychology at Temple University and a senior fellow at the Brookie Institution. Dr harsh Passing, thank you so much for joining us. What does the metaverurs look like in the classroom, or should I say what does the classroom look like in the metamurs? Well, we're not really sure yet, is the curi answer to that. We're on the cusp of so much that's so exciting that it feels kind of like the dot com revolution, and I think many

of us are trying to figure it out. But I want to take you on a journey right now what it would be like. It's instead of reading paragraphs about ancient Greece, you actually got to visit it, and you actually got to figure out how we know so much about ancient Greece given that we're living thousands of years later. So what if students could be active and engaged as they were learning, as opposed to pass it when they're reading or listening. You know, it's I feel like technology

is just coming into classrooms. Were us getting kids to start learning how to code? How are we going to get educators and schools on board and equipped with this new technology even when it is available. Well, I think it's going to take a little while, to be quite honest with you. The affordability is a big piece, as you mentioned, um the second big pieces right now. The glasses are kind of clunky, but researchers are working on that technology. Folks are working on it, so quite soon.

I think it's gonna be like wearing a pair of glasses like this, and we're going to be able to enter into new spaces and alternate realities. One key piece I want to add here, though, is that this is not meant to be a substitute for the kind of reality that we live in or for the social interactions we have in that reality. It's not a solo game. This is meant to be a space in which we can work with others and have teachers who guide us

into these worlds and back again. A lot of parents, including myself, concerned about screen time, concerned about tech addiction. Why wouldn't this make all of that worse. Well, look, tech has its good sides and its bad sides. It takes us to places that we could never go otherwise. On the other hand, if we sit around by ourselves just investigating tech, we kind of that the solo doesn't work so well for human beings because we have a

socially integrated brain and that's how we learn. So I think what we need to move to a more collective kinds of environments that prompt prompt social interaction rather than taking over for it. They can't be substitutes, and that's going to be true as we go along the same as nutrition, How are we going to stop our kids from meeting dessert? Well, we have to set limits and say, you know, you've got to eat the roccoli. Now, what about concerns about privacy and protecting our our children in

these new worlds? Given that much of this technology is going to be deployed by big tech company, some of which don't have the best records on privacy. Boy, isn't that isn't that true? I think at the beginning, um, you know, will be wonderful for a lot of this were through the gating of the education systems so that teachers would work together to prin pick wonderful experiences that our kids could learn from and enjoy and that they

could be guides in. Um. What I don't think we want to create is something that's a total free for all, because I worry, like you do, that many of these new technologies can get out of hand. So let's move slowly this time, and let's try to think it out before we just thrust it in the marketplace. I spoke with the Attorney General of New Mexico yesterday. Hector Balderis who's sounded the alarm about kids privacy when it comes

to technology in the current world. He's actually sued Google about how they used student data even even before the pandemic ever happened. Because you know, a lot of the technology that schools are using it's free software, free technology, because a lot of these schools are under research sourced. He's very concerned about regulation and whether or not lawmakers can figure out how to regulate current technologies. Take a

listen to what he had to say. Technology is a great equalizer in terms of education outcomes, but we are not regulating these companies, and we are not regulating safety and these safeguards within these technology products. What do you think about Dr Hirst that Doctor Hirst passet given that you know, obviously we want everyone to have the benefit of these technologies, but they also need to be fairly and appropriately regulated. But regulation is up to lawmakers who

don't necessarily understand the technology that they're trying to regulate. Well, I think we're going to have to help train them, and I think it's really important. I couldn't agree more with what I just heard. I think it has to be some regulation to make this safe for parents and for children, and I think we have to deal with that upfront. In the same way we have to make

sure that there's quality, quality experiences in the metaverse. Again, as is suggested to, we have to have some gate keeping and a free for all that just says anything goes is dangerous for children, and as a parent, I would be scared too, ill with you. Then there's the equity piece, and you know, so much of technic classrooms, right like, so much of technic classrooms is not equitable. Some students have access to these things, some students don't.

If you don't have access, there can be these huge learning gaps. I mean when it comes to something like the metaverse and technology that's you know, so advanced. Are you concerned this could could lead to even more, even bigger sort of class divides and education. Well, as you suggested in our paper, this is something we definitely have to have to look at. But we're on the cusp of something and the classrooms aren't really ready nor the

schools yet for taking on the metaverse. So I think we had some league time here to really think about how we want to introduce it. What should the school classroom look like? How should we retrain in teaching, teaching professional development, How do the teachers get on board so they help us in the training, how do we grow scientists? And so what we're presenting on the metaverse really is

of high quality for children. Now in the interim, it may be something like an imax, and it may be the communities will adopt a certain place where schools can take their kids on field trips and visit areas they could have never visited otherwise. So I think there's tremendous potential. And well, I appreciate that, Um, your concentration today is more on the risks and the safety and the oh nose.

I think we have to put together the oh nos and the oh my gosh is and see if we can create an optimal product that will be safe for children and will bring everyone in at a cost that will be reasonable. So let's leave then on the oh my gosh as. What are you most excited about and where do you think we will realistically be Let's say five years from now. I think five years from now we will have more affordable products that allow us to

visit the maniverse. I don't think classrooms will be quite ready yet, but I do think we could set up community centers that people could take field trips in, and I think the oh my gosh for me instead, a lot of things that were otherwise kind of boring to learn for kids might then be excited. And if we can bring more joy and more experience and more energy into classrooms and into learning experiences, children will not only learn what we're teaching them, but they will learn how

to learn. And since the world is changing so so very quickly, that's the skill that everyone needs. Well, that is something certainly worth continuing to innovate for. Kathy Hurts Passek, Professor of psychology at Temple University and uh Senior Fellow at the Brookings Institution. Thank you, what a fascinating conversation. Appreciate you stopping by A hedge fund that told most of its crypto holdings last month, says today's jobs report

could have been dire for the price of bitcoin. Alpha Trey CEO Max Goackam, saying bitcoin could have dropped below fifteen thousand dollars or to fifteen thousand dollars if the report was a major eat. You know it's Bitcoin has been increasingly tied to macro sentiment joining us to discuss Juthaa Choe, head of OTC trading for crack in. UH, what's your take on this? I mean, I think there's no question that bitcoin has been tied to the macro

markets um, and I think that's for a few reasons. So, you know, in one area, bitcoin is kind of like a growth text stock, you know, a three hundred four hundred billion dollar market cap. It's not really a macro asset. It does trade like a growth stock. You can think about it kind of like an equity investment UM, but that's a small component. I think another piece is that it becomes a self fulfilling prophecy um, similar to signals

like technical nowlysis. Sometimes if everybody's looking at them and kind of trading on them and believing them, you can start to see that price action UM. And then I think the last pieces that uh, in a lot of ways, I think investors in the crypto space are latching onto the macro narrative a little bit because without that, there wouldn't really be many catalysts or many events for bitcoin. You know, we're in a bear market. Volatility has come down.

We've been sitting around twenty thousand for a while. And so if not for some of these macro events like Jackson Hole and some of the jobs numbers, UM, August would look a lot quieter, and so crypto investors are following them. Um, I think for a number of those reasons. Well, speaking of events, we've got the merge coming up in mid September. You know, what are you expecting uh to happen around the merge? What kind of volume will there be?

Will there be a sort of sell the news event? Well, we're definitely seeing a wide range of speculative bets and positioning and hedging that are being put on, particularly in the derivativist market and the options market ethereum. Open interests is reaching high as we're seeing a lot of volume through our OTC death on ethereum, and so I think

investors are gearing up for something to happen. UM. I think if you look at the volatility surface of the term structure, UH, the September sixteenth term, which is the one that's kind of pricing in at least a couple of the merge events, UH, it's about ten points of the September ninth term, And so I think investors are gearing up for some sort of price action in some sort of move for sure. What about cracking house cracking handling the merge. Are you gonna halt trading of ether

for example, we won't halt trading. Nope, So customers can still trade ether. It will be available. They can trade at otc um. All the trading services will be available. There might be temporary suspension on withdrawals and deposits, so just at the plock chain level, but trading will still be available. Congress has been questioning Cracking about your handling of fraud. What is it important that regulators know about

your security standards? Well, you know, Cracking abides by all the necessary KYC and transaction monitoring, and this obviously in my area of expertise, but we've been doing this for many years. Cracking itself has been around for more than a decade, and you can't be around for more than a decade in the crypto space unless you're abiding by all the local regulations and so UM I think some of the inquiries might be related to just some of the fallout on related to cracking really from three a

C And Tornado and things of that nature. UM, But from our point of view. This is just kind of standard KYC transaction monitoring that we normally do meantime Crypto dot com. The story getting a lot of attention is suing a woman after accidentally sending her seven million dollars she was supposed to get a hundred and and and reportedly she went on a little bit of a spending spree. I'm so curious what your reaction is to this story and how crack can handles these kinds of scenarios and

awards these kinds of errors. Well, you know, I think this is one of those things with that when you look at bitcoin and what makes it so powerful is that this transaction settlement finality that you know, without any intermediary you can send money seven and three, six five, and it's a gross settlement network that clears instantly, like better than wire transfers. But obviously there's this downside that

you have to be really careful. I'm cracking. You can again imagine being a for many many years, has a lot of protections, policies, procedures, safeguards UM. Anytime funds are are sent out, we have hosts of customer service representatives that US is send it to UM and we do a proof of reserves audit so that customers can also feel comfortable that all of the funds that they have on deposit are are not being sent out, either for

affarious reasons or for errors. So all of these things have really been built over time because all of the powerful elements you get from being able to send money, you know, bitcoin as a method of payment on a blockchain, come with some downsides too, and so we have to protect against those for sure. So speaking out of downsides, where do you think the bottom is, Well, you know, I do think it depends on the macro environment. I

mean within crypto. I think with volatility coming down, you can kind of see that investors have gotten a little bit comfortable around this level, which can be both a good and a bad thing. A lot of the panic and the leverage has been wiped out of the system, so they're not as much of that um inherent kind of riskiness that's still in a lot of the positions

that are out there. But I think everybody is waiting to see what happens with the macro markets, and once there's a little bit of resilience shown in the NAZAC and the SMP, then I think we'll see that altern into crypto markets as well. All right, thanks for that crack and head of OTC Trading Juicoo, appreciate you stopping by. All right, let's get back to the Sara Noes trial.

A lot has happened since Elizabeth Holmes guilty verdict. For one, she just tried to get her own fraud conviction thrown out, but the judge upheld that verdict. Let's break it all down with our court reporter Joel Rosenblatt, who was in the courtroom every day and was there for this latest decision.

So what happened? So yesterday's hearing was a rather routine hearing in which Elizabeth Holmes her lawyers argued that the verdict should be set aside or thrown out for insufficient evidence, so that the government really just didn't a mass or martial the evidence required to convict her on on the various counts that she was convicted of. Um. That was quickly dismissed. H and kind of surprisingly for this judge who likes to weigh and consider everything, he wasn't having it. Really,

So what's next? I mean, does she have any other options? She does, and so well there's a So we're entering the endgame of her legal odyssey. But there's gonna be a flurry of activity now. So we have left her sentencing next month. Uh and assuming that goes well for the prosecution, um, she will show up for prison six days after that. However, yesterday at this hearing, she in true kind of Holmes fashion, through something of a curveball,

hinted at a curveball. And this is a different kind of motion in which she's arguing for a new trial. So her attorneys have found something since since the conviction that they've decided that they've they're going to argue warrants a whole new trial. So not not an acquittal as they argued for yesterday and looks like they failed, but for a whole new trial. Just three more months for trial, Rosen Black in the courtroom is what that means? Really though? How likely is it that she's going to get a

new trial? All of this is unlikely. Yesterday's the chances of yesterday's acquittal. The acquittal she asked for very low probability, I mean extremely low. All white color criminal defendants or convicts usually ask for this, but don't get it. This new this new question of of of a new trial based on this new evidence. Again low probability, but it's just kind of so fitting with how this thing is unfolded, and it's just gonna be interesting to see what it

is that she's comes up with. So, in all likely she's going to jail, In all likely that she's going to prison, I'm just like, it's just kind of unbelievable after all this time. So I'm being careful. How much time is she likely to serve when all is said and done? So this is the question I always get because people always want to know. And look, there has been a case made that her entire defense was built around not winning and acquittal, but minimizing her her time served.

If she gets seven years, seven years, that would be a win for her. At this point, that would be a win. She's facing uh, well, legally twenty years, she's likely to get eight to ten years, Okay, and at what point? How much longer is this drag on? For her sentencing is scheduled for October, if you know, barring these barring a kind of twist that we've discussed, um, she would be asked to show up for prison six

nine day after that sentencing. Uh, and she will appeal, but it's unlikely that she would have to be she would have to go to prison while she appeals her conviction. And what's happening with Sonny Balwani? So Sonny meanwhile, yeah, everybody kind of has furgotten about Sonny um. But he was convicted in May on twelve counts and so in other words, all the counts, including the the accounts of patient fraud. M His sentencing is scheduled for November. Will

he serve as much time as her? Will he serve four time than her? What decides? That? Very interesting? That's this kind of this endgame, this phase of sentencing, right, both sides will make the case that these are in fact good people who maybe win austray all these kinds of arguments from family members and friends, and the judge will decide, and he will compare their respective roles in this fraud and decide who should get what. They were

both convicted of conspiracy. It was a conspiracy, uh, the crime of co conspirators. So I I'm thinking they're going to get the same sentence. I think they're both going to be serving eight to ten years, all right, Joel Rolls and Black who, of course, has lived and breathed both of these cases. Thank you Joel for that update. Appreciate it all right. This weekend, NASA we'll try again

Saturday to launch it's Artemis one moon rocket. The Space Agency tried earlier this week, but the launch was scrowed because of a problem with one of the rocket's engines and other technical issues. It is the first major flight in NASA's ambitious plan to go back to the Moon. This mission is carrying test dummies instead of astronauts. You can watch the launch Saturday on Bloomberg Television. Coverage starts two pm Eastern. And that does it for this edition

of Bloomberg Technology. I'm Emily changing in San Francisco. Tuesday, we're going to start a series on sports technology. That'll be a fun one. Drafting CEO Jason Robbins will help us kick that off. Have a great weekend everyone. This is Bloomberg the Big Who Day. Were up Everything