Tech Stocks Take a Beating and Tesla Recalls Cars

for more. Let's stick with these markets and the tech sector, bringing clear Bridge senior research analysts Hillary Fresh and Hillary you know you've learned that one session and market does not make but the FED giving us a clear kind of travel direction today right when we think about the technology sector, how are you thinking right now when it ums particularly to software and there's high multiple tech names.

Thanks very much that it's good to be here. U. First of all, there has I agree with Richard, there's been a lot of speculation in this market, especially with certain components of the Tech index. However, um I have a slightly different view. Um when we look at how we got here, um Q four orians in fact weren't

so bad. They weren't as bad as investors feared. UM companies actually were able to constructively take down guidance for the four year and on top of that, most companies have actually taken a much more significant step toward profitability and improving profitability, and I think that's a big part of the reason why the average stock has rallied. The

IDV software next was up as of yesterday. That's almost double the SMP appreciation, and there are components of that that were up thirty not all of them speculative, but I agree how interest rates are very tough for tech um. Plus, we're entering the seasonally difficult part of the year, so it's likely we give up some of these games, and I think that would be constructive. You know, we're in the debts of earning season, and you know, all we can do on a case by case basis and look

at those that be expectations and those that miss. But as you look across software sas enterprise in particular, how are you discerning those that are are struggling in this environment and those that are outdoing expectations. Sure well, at clear Bridge we have a quality bias, and we tried to invest in quality companies, quality management teams that are extremely well positioned across their sector UM. HubSpot is an

example of that. HubSpot reported after the clothes that actually beat revenues by five it beat EPs by thirty percent. The street was concerned because they announced a sudden percent headcount cut about a week ago, and actually they guided inline revenues going forward and they guided EPs fift above

the streets. So I would say that's an example of a quality name which we like a lot um and we try to pick leading companies in their category a comes that have UM like HubSpot, that are expanding a product portfolio, moving up and down market, doing things to really determine their destiny beyond the markets hit away. We just showed a fantastic chart. In fact, I think we'll bring it up again because it was that good showing the NAS that one hundred a pretty historic relative highs

the SMP five hundred. Right we're talking about elevated levels that go back to near its dot com peak. My question to you, based on that chart is where do we sit right now with tech valuations? We had a brutal sell off in two we're trying to pass valuations as part of the equation around higher rates as well. That's such a good question, ed. Not all tech has created equal. However, software and enterprise tech in particular has

actually been adjusting from evaluation perspective for two years. Two years as of April. Currently, for software in particular, evaluations stand within their pre pandemic five and tenure averages, and for growth equities there below the tenure average, in part because many of the growth contingents of of the sector weren't as profitable, but they're becoming more profitable. So I

think we've done a lot of constructive work. Um. Again, the markets certainly can give back a lot of what we've gotten, but I would view those that give back as an interesting opportunity because I think at the end of the day, digital transformation and many of the things these companies are doing for digital economy remain incredibly important. I don't think that's going away by any means. Hillary, how many of your conversations at clear Bridge and with

your clients are about artificial intelligence right now? Many that tell me, sure, well, well, it's interesting, um, where we're large holders of Microsoft and Avid fans, Um, what's interesting about this. Even though the world is incredibly focused on search and the impact of chat GBT on search, I think the impact to Microsoft in particular goes well the

on search. I think this could be a huge boon to their cloud business, their productivity application business, their development platform business, all of that accruise eventually to their cloud business.

So I think this could be a leap frogging for Microsoft in the marketplace, who has never actually been seen and never gotten the credit for their technology prowess and never been seen as a leader in important next generation technologies, whereas AI is probably the most important next generation technology of this decade. Hillary Fresh of clear Bridge, thank you

so much for your time. See we take it from those market fundamentals to AI completely conversation, different conversation happening on Wall Street and globally for investors, and honestly, it is getting us excited, So thank you for your time. Night. Shares of Shopify plunging today after earning sixteen cent dropped biggest in a year, revenue forecast for the current fiscal

quarter below expectations. What's really interesting, though, at least five analysts raised their price targets on the stock despite that drop and that miss you can see on a two day basis kind of the picture they're telling the story, joining us now to discuss Shopify as president Harley Finkelstein and Hardy. There's no getting away from that, right, that's a pretty severe market reaction, at least the investors in the context of the stock. But analysts raising price targets.

What is it that you think they got wrong in their reaction the investors? I mean, well, first, before we started get into the reaction, let's talk about the quarter, because obviously this all came out of out of our earnings released yesterday, out of out of the print. I think in a year, in particularly Q four was a quarter where performance mattered more than anything else, to the street, to investors, to the world. More rather than you know, potential,

Shopify delivered. I think we demonstrated that while commerce is moving fast, Shopify is moving much faster. On the top line, we beat gm B was up on a conte currency basis. In Q four, revenue was was up um it was sixty one million dollars for the quarter. As excuse me, revenue was up to one point seven billion dollars for the quarter. That's up twenty eight percent on a constant currency basis. So on the top line we did really well. On the bottom line, we also had we were profitable.

We we showed a o I of but sixty one million dollars, and more importantly, we demonstrated operating expense growth actually decelerated from Q three to Q four. So when I think about the last two quarters Q three, in Q four, I think shop it has proven that we can we can drive improvements in our cost structure and at the same time grow revenue while still invest in critical areas. And then you know, we we mentioned brands like Supreme, Black and Deck or Glossier, Mattel all coming

out to Shopify. So in terms of the Q four we're very proud of how we showed up there. Now, in terms of the expectation, obviously people didn't necessarily like the guidance. We were trying to be prudent and and and frankly, this morning we woke up and we saw inflation numbers came out completely different than everyone thought. We can of macro trends. We can do is make sure that we're building a durable company, that our products are

beloved by the millions of merchancy that used it. We're now ten of all e commerce in the US, were higher in other countries, but that we're building a company that is operationally disciplined and notwithstanding obviously the you know today's today's stock price change, we think we are we're absolutely executing. My colleague Jeffrey Morgan wrote, Shopify like a film that draws critics or a film that nobody loves, is getting bad reviews from investors, but then praise from others.

You know, that's kind of the summary here. Despite the reaction, you talked about the top line, and you talked a little bit about the bottom line. I know that Toby was asked about this on the call. There was a want from the street to learn a little bit more about the roadmap for profit profit throughout this calendar year. Can you talk about what Shopify is doing to to

meet its profitability targets. You know, we're not a company that was raised on the venture capital If you think about the seven year period post I p O, we were profitable, profitable five at A seven at A seven years. So we're a company that actually has been profitable for a very long time, and we we understand the path back In fact, we you know, we were cashlow positive Q three, cashlow pause by a Q four and we had a y then. But we're also a company that

takes its medicine. If you think about the layoffs that have been happening in tech the last couple of weeks, Shopify did head count reduction back in July of last year. So we're not a company that that has been bloated like a lot of other companies have. But we're also making sure the products that we're putting out there are are products that have that are port into our merchants. One metric that missed almost entirely is our attach rate, which is now at two point eight five two point

eight five percent. The attach rate, which is effectively revenue divided by g m V, is a proxy for the usage of of of our products buy our merchants. So remember we have small business that come to Shopify. We also have a lot of larger merchants are coming to Shopify as well. I mentioned Black and Decker and Mittel and Supreme on the call yesterday, So we have all these different growth vectors. Not to mention, once they come into Shopify, we're not just helping them with a commerce

we help them with physical retail. We're giving them capital. We gave about four hundred million dollars of cash advances in the quarter. That's about We've done about four point eight billion dollars of cash advances total since the capital program came to be. We're doing these like audiences to help with things right return and ad spin and helping them reduce the cost of customer acquisition. Shop play is

very much becoming the retail operating system. And this isn't something that we're hoping investors, you know, trust us and you'll see in the future. We're doing that right now. And and and the performance I think was indicated by by the print yesterday. Hey Holliday, we just have about fifteen seconds. But what's your assessment of the health of your user based your customers and also others intimes of

the consumer read through? Well, this is where I get excited because if you look actually at the US business registrations, the last two years have been the highest business registrations of the last ten years. That's on the merchant side. On the consumer side, the consumer is strong. You know, we had two hundred billion dollars of g m V two. That's three Times two thousand nineteen, and if you on Wednesday, when when US retail sales came out, it's served. I

think it was up three percent. In January it was anticipated to be at one point eight percent. So the the consumer in the world is strong, merchants are strong, and Shopify is absolutely entrepreneurship company in the retail operating system for the future of business. And we're happy and proud of of what we're doing. We'll keep we'll keep doing us Harley Finklestein, Shopify President, We're grateful for your time.

Thank you, Thank you very much. Now turning to another name that we're watching, and that's YouTube CEO Susan Jiki, stepping down from the role after nine years running Google's video streaming division, handing the reins to top Lieutenant Neil Mohan, joining us with Mooys, Bloomberg's Mark Berg and also the author of Course of Light comments subscribed inside YouTube's chaotic rise to world domination. Mark This is a big moment for YouTube. It's the big moment that some people have

been expecting for a while. I'd say that the pickup succession is surprised. No one who's been tracking YouTube and Google Neil Mohan has been at YouTube in the role of Chief Product Officer since his role has expanded in those eight years. Actually worked with with Susan Wijiski before that on Google Adds. So he's a known entity certainly for advertisers and a little bit more so for for

YouTube creators. Is Susan leaving YouTube at a time where they pressured and challenged or is she leaving them in sort of robust rude health. Uh, let's say both. I mean, you know, I think part of Susan's Likegacy, certainly on the business side, has been taking this asseteen when she joined YouTube, was this huge commercial success or sorry, are the huge like pop culture success right, but had never really proven itself to be profitable. Uh. They've gone through

like a series of crises around the business side. But in the past five years that ad business, at least from what they disclosed, has more than tripled. Uh. And you know there's moving into TV streaming. Um, They've they've struggled a little bit on competing with Spotify, but they're big threats now are TikTok, which is clearly a much bigger existential threat. Uh. And then just the larger threast that Google has on the regulatory side, like that's very

unclear about YouTube shoote. So some saw this coming. This is what Susan herself had to say in a blog post that was published on Thursday morning about why the time is right for me. I feel able to do this because we have an incredible leadership team clearly referenced as well to Neil who's going to take the reins. What do we know about him him as a leader is as an operator, he's incredibly googly. I mean, I mean that the sense of he's been there since two

thousand eight. You know, people talk to me about this. This this actually does have some value in the sense of Google's a very political place and in order to get things done, you know, YouTube is a division that has to fight for resources with other with Google Cloud, with Pixel right, uh, and certainly having someone who has been so experienced with the company is an asset. He's not a media executive, right, he never worked in media before.

Um Like on programming, they had Robert Kinsel, who was their Hollywood chief who left earlier this year, and I think that was his replacement was another person who worked on Google Ads, and I think It's a clear indication here. You know, YouTube has dropped their strategy to compete with Netflix and Amazon Prime. They're like all in on becoming just the pre premier sort of ad ad base destination and competing with TikTok. Before we let you go, what do we What do you kind of reflect on in

your book about Susan? What did you learn about her as you went about writing. Yeah, Susan's a bit of a cipher like unlike some say Sheryl Sandberg. She has not built a public profile. Most people out on the street don't know who she is. I think that's been advantageous to to YouTube, and in some ways they've been able to sort of avoid some of the scrutiny that

Facebook has. I think what will be really interesting going forward is she is described by people who worked at Google as one of the very few humings of the planet that has a relationship with the Google founders, who are as we know, have left the company but are still the majority shareholders. And now as Google is having this big existential moment around ai UM, she's an important person there and and you know she's clearly still consulting, but her absence will I think will be felt all right.

Bloom Dugs montug of Coolest Bloomberg Reporter, but also author of that book that you can check out. I'm sure you can get it anywhere. It's been out since September, and I myself will be reading it like comments Subscribe inside YouTube's chaotic rise to world domination. Now something else we're keeping our eye on very closely. Changes coming to an app near you. Both Meta and Spotify launching new features metas Instagram rolling out broadcast channels, which let users

send text or photo updates directly to followers. The ideas to offer another way to share posts without having to put them on a potentially cluttered main Instagram feed. Meanwhile, Spotify will launch a TikTok esque vertically scrolling feed next month. At their stream on event in Los Angeles, Spotify executives will announce the latest features and upgrades coming to the audio platform. The move toward a TikTok like feed comes as the company seeks to attract more of those gen

Z listeners. Now coming up will bring you the latest news in the land of VC back startups from Hydrogen and Finte to ed Tech, and we're keeping it global as we had to break. I'm watching shares of door Dash, a pretty strong forecast for earnings, kind of beating expectations. Cross cunning efforts at that company really seemed to be taking whole door Dash and tissue fading ebit dar of a million to a hundred and seventy million in the fiscal first quarter. Clearly the street likes it. Shares up

six and a half percent in after hours. This is Bloomberg time now for the VC round up, starting with Bijou, which is in negotiations with investors including TPG to raise more than five hundred million dollars. The Indian d tech startup is hoping to keep its valuation steady at about two billion dollars during that financing. That's according to sources. Now negotiations are ongoing. It's unclear if the prospective investors

will go ahead with a deal and buys you. Is in talks separately with creditors to renegotiate an agreement governing a one point two billion dollar loan that's in breach of covenants. Sunfire is in talks with investors to raise about two hundred million euros and a new financing round that were put a one billion euro valuation on the hydrogen startup, as according to German newspaper Handles Flat, who cites sources similarly here, though discussions are solo ongoing and

talks yet to be finalized. And over in Pakistan, fintech startup ad Alphi, which helps consumers and smaller businesses, obtained loans, raised a seven point five million dollar funding round. It's a sign of life for the South Asian country's VC market after it dried up with a global decline in tech stocks last year. The round was led by co To Ventures, Clima Ventures, Fatima, Goober Ventures and Zane Capital. I think there's hype and there's substance, and we try

to separate the two. Hype comes and goes. It kind of creates this crazy animal spirits. You can't control it, and so for the better of our part, we try to ignore what happens with hype and focus on the substance. And when it comes to substance, it is just starting to see some of the results in Generative AI already.

Welcome back to bloom Blow Technology IMD Lovelow in San Francisco, and that was part of our conversation with Sonya Huanga Sequoia Capital speaking with us yesterday about you Guessed it artficial intelligence and sticking with AI. Can bing take over Google? That's what Microsoft seems to think. It's reported initial findings after a week of testing new AI additions to it's being search engine with users from more than one sixty

nine countries. The results aipowered answers have earned the approval of around seventy of testers, and Chat in particular has proven a popular edition that's deepened engagement. According to the company, Now people are also using the chat cabable wile bing beyond specific queries for quote more general discovery of the world, and for social entertainment. It's the story we've just got

to stick with. So let's turn to Graylock, who've been investing in AIM machine learning for a little while now in companies like a Debt Inflection, Gretel and many more. You see those names of their port photo companies on the screen. Bring in Graylock General partner, some Mode medi So I don't even know where to start at the moment.

Every day there's a new headline. But you heard so when you talk about the sort of the hype and the reality, where are you on the hype reality spectrum right now in terms of what we're seeing in real world deployment of AI. First, thanks for having me on

excited here to talk to you about AI. As you mentioned, we've been investing in AI Graylock for over a decade, and we believe the shift that we're seeing now around generative AI is equal in importance to the earlier shifts from cloud to on premise software and the shift from desktop to mobile. I think every company is going to be an AI company, and everything we do at work and how we live is going to be transformed by AI. So I met out thinking a lot of this is real.

One mental model that my partner Hoffman and I wrote about I think about how AI might impact our lives is this concept of a copilot for everybody. So get Hub copilot is an initial copilot product that's used by developers that helps developers write better code. Imagine a world where copilots get for lawyers helping them write better briefs, for doctors helping them do medical diagnoses, for salespeople helping

themselves software. I think if we're having this conversation three years from now, all of us will be using these products that feel like copilots in the way we work and live some contexts with your audience. So Reid Hoffman, your partner, he's kind of one of the founding members of open ai. He is on the board. He invested through his own means, his own charity or charitable funds. But I know you guys track what open ai is

doing really closely. We'll get onto your portfolio companies. But for you right now, who or what is leading the way in artificial intelligence? I think you have to start with open ai and give them immense credit what they've done with the transformer model architecture, with products like Dolly, GPP three, Chat GPT, new models that we think will come out later this year. They're really at the front lines of bringing these technology to lots of application developers

and users. And as you know, they expose these and a p i s and we're fortunate to be involved with a number of companies that are leveraging those a p i s on the text and the image side to build products that solve different business use cases and

consumer use cases. You said that to your mind, every company will be an AI company, because you still explain a little bit more what you meant I think if you look at the capabilities of these models on the generation side, whether they're generating text, image, video code, on the classification and discriminative side, looking at a portfolio of loans and predicting what portfolio, which loan is going to default, you're going to see every business have to have an

AI strategy, and we're seeing that already. You talked about Microsoft and the release of their new products around being Google and oun sparred and as fast to catch up. There are a number of early stage companies that are leveraging AI in different ways. If you don't have an AI strategy, you're going to miss a very important computing wave. This is February of November, Chat GPT kind of gets released the world. Yet there are investors like you to have been at this for a while. My question is

how do you feel about that? You know that that now there's a broader interest, But I guess you've been trying to drum up interest in this well before November two. Absolutely, as I said, we've been investing inn ai for more than a decade, and we can talk about some of our companies are scaling today and having real impact. But

I think Chat GPT was an important moment. I've heard it described as the iPhone moment for Generator AI, and I think the power of that interface and the way that end users could actually use it in the real world, it felt like magic, and I think it showed everyone how a can be used. But as you pointed out that we've been investing an air for a long time. So, for example, were investors in a company called KRUSTA crusts

as a generative a company that services contact center. So if you call Rising today, Rising contact center agents are using Generative I and the they interact with you, leveraging the technology Crust has built. And that's just one of many examples. So so you brought up that that particular name, that's we'll bring up on the screen your portfolio companies.

How do you value them accurately? You know, look at those names you're invested in, um, you know, how do they make money is on the top line one question. But actually what we're being asked more often is valuations. Valuations, valuations absolutely, So it's hard to talk about valuations in a general sense. But whatever itsay is that Greylock, we're early stage investors. We invest in a small set of companies and we invest with a ten year plus time

rising right. Depending on the business, there are different ways to think about valuations. Some of these businesses are enterprise companies, so crust as a SAS company it leverages AI to build its SaaS products, saying without normal security, a cybersecurity company that leverages AI. These are durable business models that have stood the test of time and we think will

lead to high growth, profitable and during businesses. I wanted to ask you about Snorkel because I know that you have published blog posts yourself gone on podcast to kind of use them as a neat example as a case study. How do you discern these startups that are promising versus the start You know what I'm hearing from VNCH capsulists and your peers is well, I'm getting a hundred decks through my desk, about one percent of them are actually

focused on AI. The rest just claimed to be. So using that as a case study, explain to me how you've identified this as something with real promise. Absolutely so, when we make an investment, we look at two things. One is what is the problem that the entrepreneur in team is trying to solve? And what type of market opportunity does it represent? And the second is do they have a durable, compounding technical advantage in solving that problem. Storcle is a great example, so snor calls a data

science and machine learning platform for the enterprise. It enables large banks and insurance companies and government agencies to take advantage of all of these advancements we're seeing an AI. When we first met the team, we were blown away by this team's background, having come out of Stanford, having published a number of interesting articles and results around on

ways AI can be used in enterprise contacts. And fast forward to today, they're serving many of the largest Fortune five accounts and enabling them to take something that feels like chat Gypt but actually use it on top of their own data and in use cases that they can have in production today, driving business value. I want to ask you a bit about the read three to enterprise

and sort of broader software companies. There's this idea right that Microsoft may give as You're an advantage because those customers using asual can get access to the open AI A p I S, so that makes it more attractive. Do you think that makes sense as a business proposition for the biggest head companies. I think all of the cloud players are going to need to have an AI story. I think the relationship that Microsoft has with open AI

is a really interesting and smart one. We're going to see similar, similar products get released by Google by AWS that would be my production. And I think as you serve the next wave of applications that leverage AI as a cloud provider, you have to have AI capabilities built in and you better believe that that's going to be a dimension on which customers are going to discern. We have to talk about ethics, and we have to talk about concern The biggest concern is accuracy when it comes

to generative AI. You'll take please, I'm glad you brought this up, and this is why I'm so happy that we have things like chat gybt being these products actually in the real world so that end users can interact with them and these problems canna get surfaced that wouldn't happen if these things were being built in the laboratory.

I'm confident that these things in the real world, with the right guard rail and the human feedback systems, we are going to see dramatic improvement and we're going to see models and products that are trustworthy, speak the truth, and act with high integrity. The phrase AI arms race comes up every day. Now. Is that a fair way of describing what we're seeing in the market right now?

I think it is if you believe as I do, that AI is a wave on the same level of impact as the shift to mobile or the shift of cloud. Everything is up for grabs. We're seeing innovation and disruption everywhere. You talked earlier about search, so that's just one of many markets where we're seeing a lot of disruption. We saw what Mike Saft died with being Google, announcing bard and catching up newer companies like Niva and our portfolio

that are building AI need of approaches to search. We're going to see it disrupt every market, all right, Graylock, General partner Son Morta Medie, Thank you so much for your time and taking us through your take. What what's happening in AI? Now? Coming up? Tesla is recalling hundreds of thousands of vehicles. We'll tell you why next. This

is Bloomberg. Tesla is recalling hundreds of thousands of vehicles after US authorities said it's automating driving technology could increase the risk of a crash yours makers so called full self driving beta system quote may allow the vehicle to act unsafe around intersections that according to Nitzer. Now joining us for more is Bloomberg's Graham Star and editor on our Global business team, Graham, let's get it out there early. This recall requires an over the air update fix, right,

but what is an issue here? That's right, So Tesla will be issuing these over the air software updates by April fifteen. According to Nitza, Um, what's the issue is, these cars are not behaving as up to the standards, the safety standards that knitsa once at intersections. It is going straight at lanes that are turned only. It is having inconsistent speeds when UH speed limits change. It is

stopping for extended periods of time at intersections. Everything that that this company that the agency says could lead to a collision. And and so they are issuing this recall. Um, the recall does not mean that cars are being sent back. Tesla is issuing a software update that they said should fix this issue. The company also says this has not caused injuries or deaths. We're showing a tweet from Elon Musk of course, as we always do, we reached down

to Tesla for comment. They did not reply. I personally reached out to elon Mask Martin Viecker in the i R team. Uh No one replied, but later he tweeted, definitely the word recall for an overdir software update is anachronistic in his view. You can see they're also the shares eventually responding took a while, but down five point seven percent. What do we know about the vehicle's impacted, Graham?

The vehicle's impacted right now, NITZA is saying it's a it's a rare issue, but it is about you know, a few dozen models of model S, Model three, Model X, and mile Model Y vehicles between two thousand sixteen three. So any Tesla vehicle UH produced in the last seven years, um is you know, could be considered part of this recall. And I do recommend that if you own one of these vehicles to go on the nits A website and

see if your vehicle is affected. You know, a lot of the our audience out there on Twitter, on other social platforms, on Instagram, they're saying, you know, why are you guys jumping on this is a software fixed. Why are you calling it a recal? Well, according to Nitzer, it is a technical recal. But the other point that we're making our reporting right is that Elon Musk has talked about how central fs D is to Tesla's valuation. You know that that's what he's talked about in the past. Absolutely,

this is really about where he sees the company. And as we've reported before, what is marketed as full self driving or autopilot often comes into conflict with the reality of the situation. The company itself says on its website that full self driving and autopilot should not be enabled without driver's attention, that the drivers should always keep their hands available to take over um and this marketing and even the labeling of a full self driving has had

people and critics and agencies complain about this. Uh. You know, this is also part of an ongoing investigation that NITZA has had into the company's autopilot and full self driving technology. So this is a real risk for the company. Should this not Should this have any more faults and be something that the US government is investigating a little bit more seriously. Bloom Doos Graham Star, thank you so much

for your reporting thank you now. Snapchat user growth is accelerating, with the app now seeing seven hundred and fifty million monthly users. Joining us for more is Bloomberg's Alex Brinker and Alex this was kind of the big takeaway from their investor today. The stock kind of reactive policy positively in the sense that it paid losses, but all told, closing down pretty significantly. Why is that seven hundred and

fifty million figure important? Yeah, And I was down in Santa Monica at the investor day in person today and when they shared that number, it was clear the market. I saw a little bit of excitement on the user growth side. If you think of a social media company, there's two pillars, right, there's users and growth, and there's AD revenue. Well, AD revenue has been really each challenge. So it's a good little number for Snap to be able to show up and say, hey, look our growth

is not only good strong. It grew in the last ten months, but it's actually faster than the entire year prior to that when it grew at now, if you look at the stock today when that news came out, there was a bit of a jump up about two

hours later. Um was when the CFO took the stage and then started talking about some of the financial bit of the business, which seemed to be a bit more disappointing, right And and you know, we're showing that the share performance on a twelve month basis is still down, so over the last twelve months, what did What did the CFO have to say about the advertising environment right now?

Because you know, I'm not personally using Snap anymore it did when I was younger, but it still comes down to adds when it comes to social media, it absolutely does. And their ad business has had a lot of pressure, not only from macro issues but because of the changes that Apple made that made ads harder to track and target folks. But he basically took a look at past growth in terms of revenue, which the majority of their revenue comes from their ad business. They've been growing at

a really incredibly strong clip until this past quarter. In the fourth quarter, revenue was flat for the first time ever, and they've guided that revenue is expected to fall two to ten percent in the next quarter, the first ever decline. So the CFO was basically talking through with a lot of caveats, saying, you know, if we come back to

a stronger macro environment. If we are able to resolve some of the issues and implement some of the tech fixes that they're putting in place this quarter to improve their ad business, then we can return to growth. But as we saw from some of the analysts and investor questions when we were there in Santa Monica, there is some skepticism around how quickly that macro environment is going

to improve. Evan Spiegel, the CEO, fielded one of those questions about the macro environment, and he said, look, things are still bad, but they're leveling off. They're not getting better, but at least we have some bad stability in terms of where marketers are spending all line. So this fight forward. Snap has this target of reaching a billion users, right, that's the next step up. How does it get that?

It was really interesting and they said the majority of that next billion, which they think they can do in the next two to three years, they will be able to get there through growth outside of their developed markets, so not North America, not Europe, but the rest of the world as they call it, of onboarding new users who have never used Snapchat before in those developed areas

they're really focused on basically young people. They said they're one of their key growth drivers in existing strong markets is to be one of those first favorite apps, as they called it, for people who newly get their smartphones. They already hit about seventy five of users between the age of thirteen and eighteen in their developed markets. So it seems like as those folks age into having a smartphone into their hands, they're trying to make sure that

they're downloading Snapchat at the same time. Alright, bloombergs atting spurrin Ka, thank you on the ground, there a snap invest today down in l A. In the eighties and nineties, John McAfee was a Silicon Valley icon, but after he sold his company and basked in his riches, things took a dark turn. I will not allow them to imprison me and shut my voice down. This season on Foundering will retrace the life of John McAfee. Listen wherever you

get your podcasts. M All right, let's get more to a deep dive into the self destruction of this Silicon Valley icon and bring in Bloomberg's Jamie Tara Bay, host of this particular Foundering podcast series. You spent fifteen months working on this Jamie, what were your conclusions. One of the things that we were really struck by, and there was also a big question that we got about why we even wanted to do this in the first place, is that by by his end, John McAfee was practically irrelevant,

someone who the conspiracists really kind of looked at. But when he was in his forties at a really, you know, sort of formative time for a lot of tech founders, he was someone who was disrupted to the industry. He was someone who became very successful, very wealthy, very quickly.

And one of the things that we noticed and we paid attention to, was the choices that he made once he kind of came into that wealth and a lot of there's so many similarities between him back then and and some of the tech moguls that we see today. He surrounded himself with the enighblers he made. He realized, he recognized the outsized influence he had had, and he made a lot of choices, not all of them good, in the way that he was going to sort of

deploy that influence. J B. Walk us through what we can expect in this series. What do we learn along the way about the man, about his business about the controversies as well. He was an eccentric, Silicon Valley kind of guy, right, and he basically began he came to

our attention with the McAfee antivirus software program. And we begin telling by telling that story, and it's it's very striking because it is the journey of a man who he goes around the world, he works as a computer programmer, and then he winds up in Silicon Valley and he basically stumbles along um this new technology that is evolving that the rest of the world is still only just learning about UM. What he does with it, the decisions

that he makes. He's impulsive, He's a very brilliant man, but he's also he also has a lot of ego, and he also enjoys the attention that comes from that. There's a We spoke to a lot of people that haven't spoken publicly before, and we uncovered a lot of things that that he essentially fabricated or embellished over his lifetime. Bloomberg's Jamie Tara Bay, thank you so much, and you can go and listen to the podcast. The first episode on the early days of John McAfee's career and the

first Warning Signs is out today. Now that does it for this edition of Bloomberg Technology. Don't forget tune in tomorrow Bloomberg's Technology Twitter spaces every Friday, twelve pm Eastern nine and San Francisco. We may have another special guest that wrapped this week's news. This is Bloomberg