Tech Selloff and Big Box Bash

not just tech stocks. Cryptocurrencies are in the gutter this year too, and the meltdown shows no signs of easing. Then again, some coins are holding up better than others. Will have all the details and Elon Musk is at it again. Twitter's board says it's committed to the billionaires original takeover deal despite elons Bok concerns. The Tesla ceo also using the social media platform to vent frustrations on the ev maker getting yanked from a key e s

G index. All of that later this out we'll get to at a moment, But first let's get a look at market's pain for stocks. The SMP five hundred suffering its deepest one day drop in almost two years, Bloomberg's data here with the latest Riddika consumer retail tech all in the red, all in the red, indeed ed and this today has been nothing short of brutal. When you have the SMP five closing down some four the now ZACK one hundred being weighed down even more, down some

five percent. You have those heavy weights like Apple and Amazon also down today over five percent in today's session, and really big tech not even being helped out by the fact that we did have lower yields today on that tenure it was down some eleven basis points for that really not helping the market out today as we saw that flight into safety and treasury is really getting

a bid. And of course, one we talk about that risk off sentiment, we've got to talk about bitcoin ed below that thirty thousand dollar threshold there of course, if you actually think a bitcoin in the may alone down more than that collapse and stable coin last week not recovering those losses, but for today at least, that pressure, that's selling pressure really accelerated after those target earnings, so amiss on those analysts expectations and that profit outlook being

cut to six percent from eight percent. Now, this is not about sales. This is not about revenues. It was about higher freight costs, it was about higher inventory levels. All of that really weighing on the stock. And it was a similar story that we saw with Walmart. Walmart stock now down over the past two days and Target

of course having its worst day since the nine seven. Now, let us flip up the board because when we talk about margins, when we talk about those coming under pressure, let's look at those Cisco earnings that we just got after the market closed, and you see that stock absolutely plunging down from their percent here. They got hit with those China COVID lockdowns, the supply chain issues really coming

to the forefront. They also got hit by the Russia Ukraine war and of course inflation playing a key part. Will that way on customer demand or will set back to Cisco after those earning fat stock after hours punging some head. Yes, Cisco a real bell weather of corporate spending. Our thanks to Bloomberg's Ridika goot To and let's stick with markets. I want to bring in mel like a Messino. She's the CEO of WE Family Offices, which has more

than fourteen billion dollars in assets, under management. Mel You've seen a lot of markets. What do you make of a daylight today? Well, I think we're going through a paradigm shift. You know, we're going through a regime change, and I think the markets are getting used to the fact that the very drivers that droves this fantastic investment environment for the last ten years, it's not going to

be there anymore. We're not going to have low inflation, we're not going to have low interest rates, we're not going to have globalization, We're not going to have frankly,

very benign geopolitical markets. So so I think that a lot of the things that lead to wonderful markets over the last ten years are going to change, and so I think the market is trying to figure out what's the new paradigm gonna look like, what's it going to be in the next ten We'll look here a chart on the Bloomberg terminal evaluations on the NASTAC one hundred, we're getting nearer to ten year average on that price projected profit right, and we're getting nearer too pre pandemic levels.

Do you sense opportunity in a daylight today? Absolutely? Absolutely, because I think a lot of the things that are worrying the corporates, a lot of the supply chain issues, lower profit margins, inflation cre How are you going to solve it? You're gonna solve it through technology. So I think that the name of the game is going to be productivity, and what's going to drive productivity. It's going to be technology. So I think there's a tremendous opportunity

that's happening right now. Now. You're the former CEO of JPMorgan Private Bank, You've been in the market's a long time, and there's a lot of take on board inflation, the outlook for higher rates, supply chain issues, China. Can go on and on if you'd like me to. What's driving the psychology of this market. I think it's inflation. I think it's it's really the fact that for those of us who remember, and I do remember, once inflation starts,

it's really hard to get it under control. And we really have been blessed with this unbelievable investment climate over the next ten years, over the last ten years, and I think people are trying to figure out how we're going to be able to bring down inflation. What is it going to look like over the next ten years? What is it gonna take? And again, I'm not a trader. I'm more of a long term investor, so I really

look at the next ten years. A few things caught my eye when you and I were talking the markets throughout the day. You see opportunities in particular sectors and subsectors talking about artificial intelligence, cybersecurity, some perhaps those long, longer duration software stocks. Where do you see that opportunity specifically? Well, would the opportunity around all of the sudden you think about all of the areas their productivity is really going

to change the new paradigm. Uh, it's it's really going to be. For example, let's take the health care sector and take a look at the demographics on the United States technology. I think it's going to make a huge difference in the healthcare and I think you have to play it across the equity spectrum. You have to play an adventure, you have to pay play it in girls, you have to play it in the private markets on the public markets, So you have to play it across

the board. Same thing with cybersecurity, same thing with artificial intelligence or the cloud. Right, I just want to come back to Cisco with downt and after hours, Cisco is active saying it's impossible to catch up on supply given the current situation. You think about their exposures, what we see in the semiconductor space, their exposure to China. But you against the opportunity in semiconductors taught me about that well.

We do see a lot of opportunity in semiconductors, where it's going to take time because I think new factories are going to have to be built. There's going to be tremendous demand. But we're going through this adjustment, and I think that's where the issue is is that we're going through this adjustment. It's taking down a lot of great companies that will I think emerge stronger as a result of this. They will emerge differently as a result of this, and there will be I think tremendous opportunity

in that space, including with companies like Ziska. We've seen this under performance of the NAZAC one hundred relative to the broader market, right, the sensitivity of tech to higher rates, the psychology around that going forward, what is the key data that we're looking at. Do we track inflation or do we assess the markets faith that the FED can handle inflation without causing a soft hard landing or indeed

delivering a soft landing. Well, the economy is really moving, UH is pretty hot right now, and it's going to take a bit to cool it down. So I think that and the consumer is still spending even and though you're seeing the Walmart and and and Target results, but I think that the economy is probably strong enough not to have a recession this year. But I think we might get a recession next year, but I don't think it will be long, right, male, final question, you also

see opportunity in private markets towards me about that. We see lots more opportunity actually in private markets than in public markets. And I think there's a tremendous amount of money to be put to work. And I think that exactly what's happening in the public markets will bring down valuations and we'll create fantastic opportunities in the private markets across the whole spectrum, the whole spectrum. Indeed, mel like

a Messino CEO of We Family Offices. Thank you, as Elon Musk continues to tweet and tweet and tweet his concerns about twee this problems sources say his deal to buy the platform is still very much going forward. For more and where things stand, I'm joined by Bloomberg's Deals reporter Michelle Davis, along with Bloomberg Technology executive editor Tom Giles. And Tom, I'm going to start with you, just bring us up to speed. Where do we stand with this?

What a Twitter saying and all of this? Yeah, well Twitter, Twitter thinks the deal's going forward. Um as our colleague Michelle, who were about to talk to broke the news yesterday, Twitter's board came out and said, we're going to enforce this merger agreement. We've got an agreement in place where Elon Musk is going to pay fifty twenty for our company, right,

and we expect that deal to go through. So all this talk, all this background noise about bots and the deals on hold, which ain't a thing, by the way, not a thing. Twitter is like, the deal goes forward, all right, So Michelle, I want to get the inside scoop from you. But first we had Natasha Lamb from our junior capital on the show on Tuesday. Listen is

what she had to say about this whole situation. I think Twitter has had so many challenges over the years, which is why you've seen you know, CEOs come and go move around, why you're seeing what's happening with Elon Musk right now. Um, you know, Unfortunately, right now I feel like I feel like Elon Musk is like a cat playing with a bottle of string, a cat with a ball of string. But what you're hearing, Michelle is in the background, the bankers, the advisors, business as usual. Yeah.

Everyone that I've been talking to, um, you know, seems to have the impression that things the Steel will proceed as planned. One big sign of that is that the proxy filing hit yesterday morning. That's you know, this big, more than page long documents that explains how the deal came together. Um. It's something that was put together in coordination between the Musk camp and the Twitter camp, and it's something that Musk would have had to personally sign

off on before would been filed. And this is a proxy that you know outline the deal terms twenties. So that's the clearest indication that you know, both sides do see this deal going forward, despite the you know tweets that we're seeing on Twitter. Michelle, I've got a question, so all this chatter, all this noise in the background about Boughts and whether or not he had all the information he needed before he agreed to this deal. What happens if he decides I don't want to pay fifty

What are the means that he has at his disposal. So, you know a lot of people have talked about the fact that the deal has a breakup fee and that you know, people say that he could just pay this

billion dollar break up and walk away. That's not true. Um, this deal actually includes as it's seller friendly, So it includes this legal provision called specific performance, which basically means I must decides he wants to walk away, Twitter can take him to court and get a court order that says you have to complete the steale, you have to come up with the finance, and you have to pay for Twitter. Um. Other options that he could take is he could try to show that there was something called

a material adverse event. Um, it's a mac cause and he could say, you know, there was like some change to the business that materially, for a sustained period of time, is going to change Twitter's outlook. Um, But the burden of proof is on him. He would have to show this so him saying, uh, you know, Twitter, I'm not going through this deal until you prove to me that box make up fewer than five percent of accounts. That's

not Twitter doesn't have to prove anything. Um. The other thing is he waived his right to do diligence when he was going about this deal and presented that as something that, uh, you know, was a vote in favor of the deal. He said, you know, I'm someone who's gonna be able to do this quickly. I won't even do diligence and so kind of doesn't have a like

to stand on. And then finally, Twitter has made public disclosures about the fact that you know, it estimates that the box make up fewer the five percent of accounts, but it's also in securities filing said, including in its most recent ten K said the number could be higher than that. So it for the people I talked to you say that it would be a judge would be hard press to agree with Musk on this. Um. What could happen is, you know, he could walk he could

try to walk away. Twitter could take him to court. Um. And then in order to avoid some you know, lengthy protracted court battle. Um, there could be a scenario where the two come to some settlement. But at this point, um, from my understanding, you know, Twitter does not have any reason to renegotiate a deal. The contract is in their favor, um, and so it seems like the deal has to go ahead unless unless must can prove that there's some you know,

material adverse effect to the business. Meantime, Tom wierrating on the share price right, you know, we saw the sell off in Twitter stock accelerate with the broader market, but basically the skepticisn't from the market that sent materializes. Meantime, Elomuski is tweeting a lot about his political affiliations, and we wonder, is this him getting ahead of scrutiny of a deal. Is this him trying to get allies in DC? What's your ead? Sure, there's a couple of things going on.

He talked about his disillusionment with the Democrats, how in the next election he's voting Republican and this is apparently the first time he's done and I haven't seen his voting records, but that's what he's saying. So what's interesting about that? You have a couple of dynamics going on This is a guy whose market is moving, is shifting. He started in California's company started in California. He's moved to Texas. He's shifting towards wanting to sell trucks. He's

got a different constituency. The market for electronic vehicles in California anyway is saturated. He needs to embrace a whole new constituency people who drive trucks, different constituency than the Californians were buying e vs. Right, So that's one side

of the equation. The other side of the equation is, as you pointed out, there's a lot of scrutiny around this deal, and there's a lot of scrutiny around UH, around Tesla and his in his management of Tesla, whether it's Nitza, whether it's the SEC looking at things he's tweeted about sales of Tesla stock, and reportedly the SEC is looking into the timing of his disclosure around the

Twitter state. So the government is already scrutinizing a lot about Elon Musk and what he says in potential manipulation of securities, and so this could be him just getting ahead of it and saying, look, I told you so well. We knew this was already happening. We didn't need Ellen to tell us sec NITSA. These agencies have already been doing it for months. Michelle, very quickly, five seconds. What's the probability of this deal happening? I couldn't tell you.

Tom at twenty, I don't think it happens. I think there's some kind of negotiation, just like Michelle was talking about. They go to court, he negotiates the price down. All right, wait and see Bloomberg's Michelle Davis and Tom Giles, executive editor for Bloomberg Technology. Thanks to you both coming up. We dig deep in today's market sell off as investors assess the impact of higher prices on earnings and economic growth. This is Bloomberg. Let's get straight back to the sell

off in financial markets. All corners of the equities market sold off Wednesday, with tech among the worst performing sectors. Joining us to digest the drop is Bloomberg Senior editor for Markets and opinion columnist John Authors. John on Wednesday, like this, when you see the red across the Bloomberg terminal, where do you look for answers? Well, first of all, this is one of those is which has gone back to the kind of synchronization we saw in No. Seven

and oh eight. So if you look at how bond yields have moved on how the oil price have moved today, both rose until about eight nine o'clock in the morning, tested new levels, decided they weren't going there, and slid the rest of the day. And basically stocks have fallen in line with the oil price and with bondyields all day. It's a very coherent bet actually against inflation, the bet

that the miss ties back into target. Although it has a huge impact on the whole of the tech sector, it ties into this belief that inflation might be bitten off by companies having to write, having to swallow sallow with bad margins, tighten margins. These are big declines, and you wrote this fantastic column on Tuesday about the dangers of by sing the dip. You basically talk about how fund managers, investors their sanguin about stagflation or persistent inflation.

Any you look at the outlook for rates, but all of these players, they're underweight tech and texts most sensitive to rates. Walk me through that one. Um, it's certainly true that in the environment of the last few years, tech has been very sensitive to rates at the moment when it's more of a straightforward play of am I comfortable being in stocks or bonds? Do I think there's

going to be inflation? Uh? And stagflation or recession? At this point, I think you need to get back to the Willie Sutton dictum who was, you know, when he was asked why he robbed banks, he said, because that's where the money is. If you want to take profits at the moment, if you want to get out of the equity market, then the most liquid stocks in which people are probably sitting on profits still are the big tech fang stocks. So it's the main reason they're down. Yeah,

come with me, it's might be mactaminal. Take a look at this chart. We've talked about the pain in certain pockets of this market, arc Innovation ETF being one seen big declines. At the same time we've seen five straight weeks of flows. Okay, a little drop off in that. Still, what is the psychology here? What is driving that? I fear it's a lottery ticket vibe of you might as well shoot for the moon. You might you don't have

much money anyway. The only way it's really going to make a difference, few as if you buy something that's really going to to rip higher. ARC has had a lot of publicity and also people like to invest in something that's a little exciting, which obviously the ARC stocks are, whereas the likes of Targets and Walnut aren't. So. But I think that's a disconnect between the retail markets and the broader institutions who are mostly behind what's been going

on today. John. When I was a kid, I was obsessed with dinosaurs, and as you know, I'm a Londoner. I used to go to the Natural History Museum. Look at the skeletons going across the Bloomberg terminal. I go under your bio and I see the word brontosaurus. What are you talking about? Forward to me about a brontosaurus moment? Okay, Well, I was also a fan of Dippy the Diplodocus in the in the main hall at the Metro History Museum

in London. As love the Brontosaurus. It's a reference to Yes, another British guy, Jeremy Grantham who in oh seven, as as the housing market had already turned and subprime mortgage dealers were beginning to go bankrupt was I asked him why is the stock market still holding up so much? And he said that the stock market is basically like a brontosaurus. A brontosaurus, if you bit its tail, it's nervous system. Its brain was so limited that it would take a long time to know that its tail had

been bitten, to feel the pain. And in the same way, he said that the up markets take some extremely long time to cotton onto what is happening elsewhere in the economy, elsewhere in the markets. You know, I've always wanted to do that, talk about dinosaurs in financial markets. You've made my day. Look Bloomberger Billium columnists John Orthord, Welcome to Bloomberg Technology. I'm Ed Ludlow in San Francisco. Shares of retailers plunged on Wednesday, leading the sell off on Wall

Street after US retail giants cut their growth outlooks. Bloomberg's Ridoutta joined to the latest Which names are we watching? Well? Yesterday it was Walmart. Today it was Target actually having its worst day since seven It was a miss on those earnings and actually cutting their profit outlook to six percent from eight percent. This was not about sales. It was about those higher freight costs, higher fuel costs, and also those inventory levels rising actually up some fort from

a year ago. That was a similar story that we saw from Walmart yesterday, which is also down in the session today. But this is not just your traditional retailers that are being hit today. That has extended over to some of your e commerce stocks. I'm looking at Etsy, I'm looking at Wayfam, looking at eBay. All of those were down today. They suffer some a lot of the same problems, supply chain issues, inflation. Those stocks actually on a year today basis getting hit even harder than the

likes of Walmart than the likes of Target. But you've got to remember when we talk about these e comma stocks, these were actually your pandemic darlings. But that of course started to falter and we got that reopening, that stay stay at home began to suffer as people got back out there and started shopping back in their brick and mortarn. If you actually look at the selective e Commerce index, it's actually given up about half of the peak of

the pandemic gains. And of course, when we talk about shoppers changing, it's not just how they shot but also what they have been shopping on and we see that really by consumer discretionary really getting hit. Those stocks down in the past month in a big way. A key part of that, of course, is inflation. Yes, wages are rising, but they are not keeping a pace. So we're seeing a lot of that optional spending really dwindling, particularly as food and fuel prices have been rising in a big way.

And that is the key theme that we have seen in some of these retail earnings. Said alright, Ridica is so smart on that retail beat. Thank you very much. Let's stick with the market sell off. Lots of big name tech companies who stocks sword as Risk has said, in the pandemic era of feeling the burn of higher interest rates, the continued crisis of a war in Ukraine, domestic inflation, and a pandemic now well into its third year.

Let's talk about how all this market chaos is affecting not just public markets but later staged startups and companies. With Light Speed Venture partner Alex Taosig, Alex on a day like this read everywhere, anxiety everywhere. What's your take on it? Oh? Thanks for having me for us all that. I appreciate it. Um definitely a tough day for public

market investors. UM. You know, as a venture capital firm, UM with over twenty years of investing history in the private markets, you know, we we have a little bit of a different perspective. Our companies generally don't have the pleasure of being marked every single day. They can take

a little bit of a longer term view. So essentially, a lot of these companies raise money one at you know, capital is fairly cheap historically and at fairly high prices, and you know, our perspective is a lot of those companies are going to come back into the market in the next couple of years and not face the same kind of cheap capital environment. And so we're sort of expecting that what the public companies are seeing right now is going to trickle back down into the privates over time.

But there's a lot private companies can do in the intervening period to make their businesses a lot more attractive so that when they do have to access the financial markets, they'll look a lot better. You have the experience, of course, of looking to your portfolio some of those companies in the past have gone public. Of course, what means my Bloombog Terminalis. Take a look at this chart. You want to make a key point, which is that perhaps we've

seen this before. Right, what we're seeing on our screen is that there is a single metric that shows the magnitude of the current downturn that we're seeing, and that's a retreat in revenue multiples for a specific corner of the technology market. Left hand of your screen, the blue line Amazon back in through two thousand, two thousand one, right hand side Shopify. Why are you looking at this data?

We are always looking at the public market multiples that apply to revenue as essentially we invest in growth assets that aren't usually profitable, and so the rate of growth of the business is very important in the expectation of

future growth is very important. And I think in the in the in the days where you have ascendencies of new platforms, there's a lot of enthusiasm around the new thing, and um, you know, that can often create speculative asset bubbles, which is sort of something that's common throughout financial markets.

And you know, some of what's happened in the the last few years, uh in addition to being you know, pushed on by the pandemic, we feel like are parallel to what happened in the dot com bubble with certain names that really benefited from the shift to e commerce. But the other thing to just consider here is that Amazon still around and it's and it's very very valuable company. Uh, and it saw its way through and share price collapse post the dot com bubble, and uh, not to say

Shopify is going to continue to go down. Maybe it will, maybe it won't, But we also believe that's a very durable business. So the chart, right, it sort of tells a few different stories. At the same time, we personally take a view of optimism and that you know, these speculative bubbles come and go, but some of these businesses are building real value for the long term. Right you're looking on our screen some of the pain in technology shares over the last seven days or so, the likes

of Apple, some of those mega caps like Microsoft. I am fascinated with the private markets. We broke a story on Tuesday that SpaceX is raising more money at evaluation of a d twenty five billion dollars. It was valued around a hundred billion dollars in October. When you hear about that, how do you assess valuations right now, and what do valuations look like in the coming months, especially with the backdrop of a FED that looks determined to

to raise rates. We this is a conversation we have a lot in internally and with some of our peers at other firms. You know, there is a big valuation reset that's essentially happening right now. Um not as in the public because again these are not publicly traded securities, but the private markets always look to the public markets

for some sort of guidance on valuation. And so you know, essentially for a lot of businesses, your multiple has been cut in half, maybe cut by three x over the last six months, and so those businesses are essentially going to have to get back to par before they go

out and raise again in this environment. And so we're really stressing the importance of cash flow and becoming default alive in this environment, which essentially means that you can ratchet up and down on your sales and marketing spend and maintain a relatively modest burn while the volatility continues to play out, and we certainly expect the valatility to

probably increase before it decreases again very quickly. Alets what I'm saying on my screen is the share performance of names like Airbnb, Snap, Uber, Uber over the last couple of years. But these are names that were created in periods of stress. I am thinking back to two thousand and eight, two thousand nine in the financial crisis very quickly. What would your advice be to a founder right now with the markets as they are, absolutely the first The

first thing is to stay optimistic. So while it might be a little bit difficult to do if you're looking at your own personal stock portfolio, the reality is that a downturn in a capital constrained environment often produces some of the best companies. Companies can really focus in on what they're great at and ignore things that are extraneous. Talent tends to stick around longer, and people are kind of not choosing between as many different jobs, so you

can keep them engaged for longer. You can really have the time to hone that business model because you have to to survive. So we we invest in all cycles consistently. We've been doing it for over twenty years, and I do think that there's also some advantages that companies can have during a downturn, but that's presuming that you can get control of your business and do it decisively. Right lights be a benchure partner, Alex TUSI giving us the

private markets take on volatility, Thank you very much. Coming up a Bloomberg scoop gave Plotkin is telling investors he plans to wind down his Melvin Capital Management after billions of dollars of losses. Details ahead. This is Bloomberg time for our crypto report, and it's been a brutal market sell off in digital currencies. Bloomberg's Shinnali back Bassack with us. But before we get into digital assets, I have to

ask you about Melvin Capital Management's plan to wind down. Yeah, truly ed. Remember this is an amazing scoop by Bloomer's Hamma Parmer. Gay plot Can really the poster child's here of that game stop short Squeeze. Even after recouping some the losses that he had in early, is now down again for the year and telling investors that he is returning money and winding down funds. Remember this is right after he initially tried to reboot the fund in a

different fashion. Scrap those plans. And now remember, I've got to say Wall Street for a while now has been expecting some casualties in the hedge fund industry, and it starts here with Melvin Capital. Alright, Snalie, keep give me a quick update on the markets in the world of

cryptocurrencies as well. Yeah. Absolutely, Something interesting here, ed is that even though you saw that brutal cell off today in the market more largely, especially in the NAZAC one five percent sell off, you're actually seeing Bitcoin even though it's trading below that level, only falling about three percent over over twenty four hour period, so not selling off steeply as the market you are seeing. It also holds steady as opposed to other coins, all coins in this downturn.

So when you look at Bitcoin to what extent is it the relative safe haven compared to the other crypto assets. Alright, thanks, say stay with us. Let's bringing our next guests. Honey rush One, who's the co founder and CEO of twenty one Shares, a crypto exchange traded products issue that's been making ways in Europe for the past four years and it's now marking its US entrance with the launch of

two new funds. Simple question to start with, Honey, why is the US okay with e t P s the nor e t S, So thank you for having me. I'm really excited to talk about our launch into the US market. We're launching private funds today, so we're not yet launching e t f s for e tps. We are working on an e t F in America and that's public as well, but nothing has been announced yet on that word still work king very very closely with

the regulators on all of that. Why is it that this is the time to launch new products in a down market, especially when there's a lot of questions about how comfortable institutions will get with these types of products in such a downturn. So there are a couple of reasons.

When we first launched in the world's first physically backed et P, which was the first crypto et F on the Swiss Stock Exchange, it was a bear market, and uh, I remember that the initial seat capital of five million went down to three and a half two days later. It turns out the building during bear markets, if you're focused on the long term, UH ends up being a

pretty good bet. UH. The other way of looking at this is um nothing fundamental has changed with any of the underlying technologies, and we're seeing this across the board, both across every crypto asset as well as more in

stitutional investor interests. One of the things that should be very very comforting is that despite the market sell off and what happened with the terror ecosystem last week, we only saw a couple of days of outflows UH, and we've seen consistent inflows today, yesterday, the day before and

Friday as well. While you're on it, how does what happened last week, I guess more than a week ago now, the terror breakdown really draw into question the broader crypto ecosystem and the place of other coins stable coins in the ecosystem. So we had UM the world's largest Luna Terra e t f UM, which was listed on a European exchanges including Switzerland. So we've been following this very very closely UM on the product itself. Considering that Luna

is now operating intermittently, we've obviously suspended quoting the products. However, there seems to be a potential rescue plan and will keep that up and running while we monitor that. I think it's important to just take a step back and really look at Terra as what it was, which was a grand experiment that was supported by some of the world's largest and most notable investors, both in the crypto space and in the traditional financial space, to try and

build an algorithmic stable point. Had they succeeded, which obviously they did not, it would have had huge positive ripple effects, and so it was a worthy experiment to run that built a vibrant ecosystem with a lot of risks, and our research has shown that the risk for there as well as the opportunity. Honey, we see on our screens. You're in Florence, Italy. Lovely, that's a wonderful place in

the hot land of the European Union. Towards me about the regulatory landscape, the difference between doing business in Europe versus the US, your experience of launching these products in each market, it's different um geography by geography, what regulators are looking for and what populations are looking for can be different. We just launched Australia's first Bitcoin and Ethereum e t S and that was due to answering very very different questions than we have in Europe, both in

the EU and in Switzerland where we are active. Uh Switzerland jumped ahead of the pack by trying to create a crypto nation. And so we've been very very supported from the beginning out of our Zurich base, But as the asset classes has become too big to ignore, other regulators around the continent and and actually around the world have started to pay attention and have had incredibly engaging conversations with us. You know, I think it's really interesting that you had been working on e t p s

outside of bitcoin. There are so many uh calls for e t s when it comes to bitcoin itself. But when you look at what happened with Luna and the need to halt the product, what is it taught you about products that are tied to other types of assets here in the cryptic universe that have a lot more risk potentially. So one of the beautiful things about crypto is that everything is open source, including the smart contracts, including the risks that that are applied to whatever ecosystem

you might be investing in. And like I said, our research very adequately on Luna displayed both the risks and the potential rewards. It's um, it's going to be different investing the alts versus Bitcoin and ethereum. And again this was a grand and I I believe very noteworthy experiment to run right thanks to Honey Rush One they're co

founder and CEO. Twenty one shares and of course my good mate Shinali Bassak over in New York coming up an e s G exit for Tesla, WHI ev maker loss its spot in the SMP s G index and what the world's richest man has to say about it? That's next. We're also looking at shares of Cisco in after hours down twelve point seven percent. The company talking about struggles with the supply chain China, the war in Ukraina ultimately cutting its sales forecast for stock. Will keep

an eye on as the markets go by. This is Bloomberg this week's Technomics. Shares of Tesla's dropping on Wednesday, and the ev maker also lost its spot on the E s G version of the SMP FI Index. The industries provided a citing working conditions and crashes for Tesla's score on Environmental Social and Governance Standard. Elon Musk reacting to the news, tweeting quote ex On is rated top ten best in world for Environmental Social and Governments e s G by SMP, while Tesla didn't make the list

E s G is a scam. It has been weaponized by phony social justice warriors. All in on must words not mine, joining us to discuss all of this. Bloomberg's Danna Whole, who leads coverage not just of everything Tesla, but everything Elon Musk as well in all that noise, tell us what the news was there? Well, I think it's pretty clear that Elon musk knew that this was coming. He has been raising concerns about E s G reading systems for several weeks now, and he does have a point.

I mean, what are the metrics and why are they always changing? And for passive investors, E s G ranks rankings are very important. But he would argue, you know, we make electric cars, how can we be ranked less than an oil company? Right? And we have to remind ourselves. Of course, the mission statement of Tesla is to advance the transitions to sustainable energy. I mean, what is Tesla's impact on the world? Bring us back to basics. We assume everyone knows what the company does and how it's

trying to help, But what does Tesla do? So Tesla makes elector cars, they also make energy products, solar roof batteries. They have big utility contracts, but they have been dinged quite a bit reputationally by workforce issues. But at the Fremont plant they have been sued by the State of

California for blatant racism against black workers. The e o C is investigating them, um, and so, I mean there are some problems there, and the board of directors has been dinged quite a bit for overlapping duties and um. You know, they've been under pressure to diversify their board, which they have done. I'm just looking at Tesla's stock year today on the Bloomberg down more than caught up in Wednesday's sell off, as all stocks were. What's the

story for Tesla right now? Because we're so focused on Elon Masque's tweet by tweet analysis of what's happening with the Twitter deal, I feel like we're not really talking about Tesla. Well, I think what's really happening at Tesla is production in China. I mean, the production in China really took a hit when the factory in Shanghai was

shut down for almost a month because of COVID. Now they're bringing that back online, but you know, they're still supply chain issues and it's going to be a hard quarter for them. There's all this macro stuff. They still hold bitcoin. Bitcoin has seen a rough ride of late um and there's not really any new product launches on the horizon. So Musk said that there's going to be an AI day in August. So what are we going to see there? Like the new Tesla bat More talk

about Jojo like more promises about self driving. But I mean, this is like a weird year for them. They don't have a new product that they're bringing to market. So if our audience out there, Donna writes a fantastic if I say so myself column for hyper Drive where you basically take a step back talk about what's going on the world of evs and Tesla. And Wednesday's column is

about insurance. Yeah, what's Tesla doing in the world of insurance. Well, this is a big passion project of the CFO Za Kercorn, and you know, Tesla very shrewdly, I think, is trying to find new revenue streams. They always say that they are a software company, not just a car company, and they really want to have like a captive audience with their customers. Um, you know, you buy a car, then you get the solar roof, then you get the power wall.

Well you might as well. I Tesla insurance too. And because Tesla has so much data on your vehicle and how you drive it, they can really kind of monetize that but also offer you a premium based on your driving skills. Um. You know, other insurance companies have tried to do this, but Tesla customers, particularly who live in Texas, have said that they really like it and that their premiums are cheaper. Very quickly, we've just got a few seconds.

What's the next thing to look for in the Tesla calendar? But you on the spot a little bit. In the Tesla calendar. We will have a second quarter delivery figures in early July. We will have an annual meeting August four. All right, thanks to Bloomberg's down the whole Elon Musk, reporter in chief. That does it for this edition of

Bloomberg Technology. We're back tomorrow, where we'll continue to follow the S and P five biggest drop in almost two years, and the broader implications, including for tech, and don't forget to tune in to Bloomberg Studio one point oh at nine pm New York Time, Emily Chang speaks exclusively with Roadblock CEO and co founder David Bazuki about the online gaming platforms explosive growth, and cultivating a civil digital community

while exploring the revenue opportunities. That's tonight, and this is Bloomberg.