From Mahart where Innovation, money and power Collie in Silicon Vallet and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline hide a Bloomberg's WORLDEAD quarters in New York, and I'm Ed Load in San Francisco.
We're back Carrow. This is Blueboy Technology and Ed coming up.
The Tesla challenge that the company cuts.
Its prices in China again, smoking worries of another global price war.
Plus PayPal has a new CEO, finally details on the company's new leader and now he may be able to help a stock that's slumped. This growth slowed post pandemic.
Oh and Zuckerberg telling speculators that it's time to move on from the potential cage fight with Elon Musk. But will we more on that later this hour, But first, let's check in on these markets. It's been a while since I've checked in on the men, and I'm looking at six tens percent higher on the Nasdaq, actually managing to pick ourselves up from some of the concerns we had, particularly anxiety around China. That is why I shine a light and what's happening with the big Chinese names that
are traded here in the US. They are still under pressure, but as much as they were in earlier days trading they're off by more than one point three percent at one point, we're now off by about half of that. This still is the warriores, the anxiety around wealth management and exposure there in.
Over in China, of course, was worrying.
With the property market, basically how much the government will stimulate this particular economy.
We are still seeing some anxiety in the bomb market that yields.
What a couple of weeks I missed in terms of the tenure and the fact that we're now at four point almost two on the tenure that we're seeing we're basically at five percent on the two year, but we still see that yield move absolutely.
Higher on the tenure as it stands.
So still some warriors, I tell you, whether we've seen some resilience over the last few trading days, a little bit of a knockdown on Sunday trading, but remember that's because we have thin volumes, and.
Look at the moment, we have thin volumes.
No a matter really what asset class you look at, but I'm looking at what's happening is in Bitcoin, and we're still managed to tread water in that twenty nine thousand levels.
So after the last few trading days.
We very much feel range bound, a little bit pushing up on the higher side as we speak their ed.
Yeah, three quick news stories we're going to give you more details on during the program. Tests down two percent, trimming prices on higher spec model wise in China. Steve Wesley, who's a former Tesla board member, is going to join us in just a moment. Sticking with the automotive theme. Ford is modestly higher. Peter Stern, longtime Apple alum, is joining Forward to lead the software and integrated services part of that business. We will bring you more details later on.
And then PayPal finally has named it's CEO. We will tell you who that is later in the show. The big story overnight add at Asia is on high or fox Con is the unit we most closely cover. Shares actually up one point four percent. It's basically cut its sales outlook for the year, principally telling us that in the quarter and on a annual basis, the smartphone this is going to decline. In may Caro, they told us that it would be flat in terms of top line growth.
This just adds to every story we've been covering in the last several weeks about the pain the smartphone market's feeling principally here in the United States. But remember Fox one or on Hi, the principal assembler of Apple's iPhone. It matches the narrative that we got from Apple execs just a week ago during earnings.
Yeah.
Apple, of course it's number one customer. But it also reflects what we've heard from quiralcom. When you've been hearing from TSMC this overall narrative that you and I the consumer are slow slowing our purchases of smartphones and the like electronics, but one also about business spend at the moment, how willing they are within this overall global economy.
Ed, we're tracking kind of this like crystal ball of commentary. So Tim kirk Lukeameistrie saying two consecutive corners, a smartphone slow down here in the US. Sony, which people forget, is a massive supplier for the camera sensors the smartphone saying the rebounds coming twenty twenty. So it's a really dim outlook for what is a core piece of electronics for consumers and businesses globally.
And I love the bluebug intelligence perspective always.
You get it in the b wrap up and.
Saying revenue could be affected by muted iPhone growth going into twenty twenty three margin pressure due to perhaps even a lockdown impact that we still remember of China, and.
We want to stick on that theme.
Ed.
We want to stick on the.
China because it's really the narrative of the day, isn't it. Tesla rolling out new rounds of price cuts over there, according to its Wabo account. Now it's reigniting those fears that we'd sort of pushed to the side for a minute. We thought this price war was on hold, But no, No, a whole host of watermakers over in Asia and then last week alone have been tapping back their prices.
So we're really pleased to have.
Well, a former insider, someone who knows the company very well, Wesley Group managing partner Steve Wesley, who served on the border Tesla you shared its audit committee for three years, Stephen, And really I thought we'd sort of put this anxiety to bed, some sort of agreement between the key players in China they wouldn't keep cutting prices, but it seems they have to.
So resolution too. But Elon's hard to predict. But here's where I thing's happening. Every automaker in the world is going all electric. Tesla has a cost advantage over everybody else.
They're simply put trying to grab market's share.
What American investors, I think often don't understand is not only China the largest.
Auto market in the world. Now you've got to win China if you're going to be the global winner. Tesla's being very aggressive.
Interestingly, they make fifty four percent of all Tesla's made in China today. Part of the reason for that is they can make them less expensively, and I think if Elon's trying to take advantage of that price advantage she has, it's a low cost provider.
I mean, you say they're going for market share, but bid is a face competitor. Ultimately, does it spell concerns more globally as well for ev competition.
Look, yeah, no one's been crying for the Chinese.
Of the top ten autograms in the world, seven of the ten are Chinese.
So most Americans are thinking how afforded hum doing?
The realist backdown is this it's Tesla Earth, the Chinese, the Volti Flaging coming in quickly because they the biggest solar vehicles in the world twenty twenty two.
They've got deep pockets global manufacturing. Those are the big three.
Everybody else is trying to catch up, so it'll be an interesting battle. What's so fascinating to me is Tesla really the leader in UBIS for a long time, the first ones to connect every vehicle. They've really led the world, not just to bring battery production in house, increase robotization and manufacturing, but probably most importantly, really taking the line's share.
Of and optimizing for over the air software.
That profit from software sales drops right to the bottom line.
That's why the other use piece this morning.
About Yes You've Got is for and hired Apple's Software Ahead to help them figure out their software pricing.
They need that profitability.
We're going to bring those details about Peter Stern later in the show. Here, Steve, let's remind our Bloomberg Technology audience about these specific cuts. It's a nineteen hundred dollars cut to the two highest spec model wise in China, so a four point five percent cut to the long range of three point eight percent to the performance spec of model. Ye, those are not the highest volume trims. But if Elon Musk came to you and said, you know what, I've changed my mind again. We're going to
cut We're going to cut prices. We just keep targeting volume and growth, what would you have said to him.
Well, OK, because I know better than most Elon's awfully hard to predict, fellow. But I'm looking at the market here and I'm just seeing Tell trade down a bit, and I know investors are thinking, gosh, reduce profitability. I think that's short sighted.
Here. You have a global you know, battle, and.
Testla has a chance to take more territory now, and I think they're doing precisely the right thing. Fifteen profitable quarters, close to twenty billion dollars in profitability last year. They can't afford it. Why not do the land grab now? I think that's what Tesla's thinking, and I think they're.
Right to do it.
Hey, Steve, How's how's China changed since the time you were on Tesla's forward as a priority for the company.
China was not even a speck in the rear view mirror.
You know, for the last fifty years, we've all been looking at the Japanese increasingly to the Koreans. They make out standing cars, and either way, Hundai and a key coming out of the iconic. These are great brands. They're going to be part of the picture. But China, simply put, was not in the picture. Fast forward twenty years. What's really changed? Those electric cars are really better virtually every way. The faster, the better for the planet. They're more reliable.
The big fly in the oint minute is they just playing costs you much, but the cost per kilo one hour has gone down dramatically. Think about this, from eleven hundred dollars kill a lot hour down now to about ninety. The reason that Chinese are doing so well one, the Chinese government subsidizes to the auto companies. With two, most all of the auto batteries in the world are made in China, and that gives them a competitive edge in
battery pricing. The real question is can the Chinese use their edge and lower cost batteries to catch up on the edge Tesla has in manufacturing and software.
Hey, Caroline, Steve's got a great grasp on the data. He's talking about fifty four percent of production coming out of China, But it raises the question of warhod On, what have you cut back in China as well?
Yeah, I mean when we're looking at what near third drop in shipments for the month of July coming from China, Steve, make this global for us for a moment, because they don't just produce in China. Yes, it's been a key area of focus, but they produce largely in the US. Also in Germany they're looking to expand how much are we going to see a curtailment of overall reduction or indeed a curtailment and overall profitability globally here?
Well? Two points one, Tesla loves producing in China because costs here are so low. But you'd be foolish not to be aware of the Zeo political concerns on the lives. And that's why doubling down on the capacity size in the land, expanding capacity in China.
You're about to break ground this month with a new plant in month ary in Mexico. So Tesla's not stup, but they're diversifying.
They're going to other markets like Mexico they can enjoy the benefits lower cost vehicles. But I must say I think Elon having survived the tough times five, six, eight years ago where it wasn't even sure the company would survive. He's focused like a laser on making sure he has a cost advantage over the others. I think he's going to squeeze a lot of the new incumbents, and I think what you're going to see very quickly is this big global shakeout again between Tesla, we're sitting on top.
The Chinese were coming quickly with very low cost batteries.
Volkswagen, which is probably the other Western brand I think, has done the best at modernizing, bringing mattery production in house, and improving manufacturing capabilities.
Steve very quickly a reaction to Zach Kirkhorm, the CFO of the last four years thirteen years of the company, leaving Tesla.
Well, it's no surprise executives at Tesla tend to turn over fairly off of the fact that Zach survived as long as he did. It's a testament to him. But I don't think it's a surprise. You know, people tend to think Tesla is a one person company and Elon may be a visionary, but you got to give him and the Tesla board credit. They've built out their executive team.
They're playing long ball here, and I think as you look at their revenues this year, I believe they'll crest one hundred billion dollars with the highest profitability in the auto industry.
Hard to complain about what they're doing right now. They look a little smarter than.
The rest Western Greek managing part of Steve Westley Greats. Have you back on the show, Caroline, and I thank you very much. All right, Time to move on here on Boombo Tech. That's what Meta CEO Mark Zuckerberg is telling the speculators about the cage fight between him and Elon Musk. Zuck took the threads on Sunday Nights, saying, quote, if Elon ever gets serious about a real date, an official event, he knows how to reach me. Otherwise, time to move on. I'm going to focus on competing with
people who take the sports seriously reference to MMA. Elon Musk responded on X by saying he can't wait to bang on his door tomorrow, which today, And we're gonna have more in that story later this hour, Caroline, Real quick in the EV space, Nikola chees down significantly, almost
nine percent, but they paired losses in this session. The reason I'm tracking this one is they buried the news frankly Friday night and said that a fire at their facility, which came from the battery packs of battery electric trucks, was not foul play as they previously said they suspected, but actually it was a malfunction in one of the suppliers of the battery pack. Again, this is a stock that's been an absolute roller coaster we've been talking about
on the show. Amazon and US regulators are about to meet this week, the final step before a long shot bid to break up the tech giant. Amazon will try and argue that its behavior is harmless, seeking to avoid a full blown antitrust lawsuit in federal court. Will it work? It's the big question that's bringing in Bloomberg's senior executive editor for Technology. You're writing in Tech Daily about the showdown, and Bloomberg reported about the details of this meeting that
the FTC commissioners and reps from Amazon. But it seems like despite the drama of the room, eyeball to eyeball, the FTC is going to go ahead anyway.
Right, Yeah, I mean, it's interesting for what it represents.
It's almost like the whistle at the beginning of the game and the formal of festivities.
But it's a little bit of a ritual.
In other cases that these meetings, also called last rites, can be significant. The company might bring a CEO, they might offer compromises to get out of the litigation. You know, in this case, it's very unlikely. I think that everybody is going through the motions here. The FTC has been on this course probably ever since Lena Khan was nominated
as commissioner by the Biden administration. She made her name arguing that Amazon was a monopoly that behaved competitively, and so I think the company has probably assumed ever since then this day was coming.
And you made some rather nice sporting analogies in your story about that one as well.
Brad, just outline, if you.
Will, just remind us where the key argument you think could land could stick.
Yeah.
I mean it's interesting, Caroline, because unlike other companies Microsoft in the nineties, maybe Googled today, I mean, Amazon doesn't have the kind of commanding market share that we think of as a monopoly. I mean, in some cases it's just a couple percentage points of overall retail. It's high
forties in e commerce in general. But I think the FTC is likely to find this market as US retail marketplaces, so the likes of eBay or Walmart's marketplace new companies like Shean and Timu, and in this respect, Amazon really does have the kind of percentage market share we think of as a monopoly, high seventy percent. And what the FDC is likely to argue is that this situation isn't bad for consumers, which would be the traditional way to
analyze antitrust, but it's bad for smaller businesses. It's bad for competition, and in particular it's bad for the small sellers that are forced to use Amazon, and that Amazon forces to use things like distribution fulfillment by Amazon or advertising is basically increasing the amount of take of percent of the commission that it takes from these sellers and creating a very unfavorable situation that at least will be the FDC's argument.
We've been through this story with Meta in some sense, Apple, most recently market Soft and Activision, and investors don't seem to worry. Look at the shed performance you today. We always ask ourselves are they paying attention the upwood trajectory of this stock would suggest, even if they are, they sanguine about it.
Yeah, two thirds increase this year in respect to Amazon. And look, judges haven't been all that favorable to this FDC either, right, I mean they've lost a lot of these cases, and all the anti trust experts I spoke to think that the odds are long for the FDC with this case as well. So no, I think that
investors are paying attention. I think they realized that, you know, this FDC, the record hasn't been great, and what they're trying, which is a kind of wholesale reinterpretation of anti trust law you know, so far, hasn't been that successful in the courts.
Even after that, stock wise, there are sixty buys from analysts on this stock, zero cells.
Bradstone were neat to have you. Thank you so much as we look ahead to that this week.
Meanwhile, coming up some strange live streaming trends that are taking off on TikTok.
I'm going to discuss them a little bit more.
And before we go to the robot dancers, let's get in on what is the dancer. We work a penny stock just twenty four cents and trades at was a record low last week, after, of course, it said it's got concerns about being a going concern, and it managed to rally once again on the day a third straight day.
This is bluemog technology.
Time for Talking tech First. Former Apple executive Peter Stern is getting a new start at Ford. Sterner's named president of the newly formed Ford Integrated Services, where he'll oversee software and services for some of Ford's key models. Stern served as Vice president of Services at Apple for more than six years, where he was a driving force behind the launch of Apple's portfolio of services like Apple TV
plus plus. MasterCard is buying a minority stake in the financial technology unit of Africa's biggest wireless carrier MTN Group. While the size of MasterCard, Steak won't be disclosed until the transaction is closed, says that it's fintech unit values
it at five point two billion dollars. And Elon Musk has been backing the Population Well Being Initiative Bloomberg's reporting in twenty twenty one, mustinated some ten million dollars to the research group at the University of Texas Austin devoted to the study of population. We now know where that money went. Musk has been outspoken about the dangers of population collapse for some time.
Caroline fascinating one.
Meanwhile, let's move on from an end, because we've got to talk about the latest TikTok trend for just a second.
I didn't you love my dad?
I just had an entanglement with a dollar.
Thank you for the snapbed heart thinking of the pin pin pillar.
H confused. That's okay. It's a relatively new trend.
The users are live streaming themselves while acting like robots, reacting with robot like one liners as if they're kind of in a video game. That kind of stream might be a bit weird, but it's also the biggest live video trend to hit TikTok in the United States, So we've got to talk at all.
It's a brilliant piece written by Alex bro In.
Care to break down exactly antics what NPC non playable character trend is all about? Why is it going to help TikTok sell stuff here in the US?
Well, if you're just somebody who's seeing that for the first time, it looks weird, it looks silly, but it's really potentially.
Important for TikTok.
As you mentioned, Caroline, this is the biggest trend on live stream video in the US for TikTok since it's really been pushing it, and live stream video for TikTok is more than just people you know, getting gifts sent to them making money off of those gifts. It's a
key part of its global commerce strategy. TikTok's super strong in e commerce in places like Southeast Asia and live stream commerce live stream video where folks sell things, that is kind of the key to their commerce over there here in the US, though that hasn't worked.
I talked to sources close to the company and they said, as they've.
Moved commerce over here for TikTok, they've actually had to split their strategy. They're both educating and evangelizing live stream video while they're building.
Out their commerce operations.
So to see something like this where users are organically on their own really kind of creating a trend and giving people a reason to tune into live This brings TikTok that much closer to potentially becoming a global superpower in livestream shopping.
I'm sorry, let's show let's bring it up again. Let's show it again and Alex just explain what is happening. I know MPC, I talk about MPC all the time. Just just literally explain what I'm looking at.
Yeah, this is Crystal, one of the creators that I spoke to.
She is on a live stream and people are sending her things like corn and she'll exclaim it's corn, or they'll spend, you know, ten cents to send her this cowboy hat that you see and she'll say the same kind of yeeha phrase. It's something that has gotten viewers really interested because they're curious if I spend six cents to send her a hot dog emoji, what will she do if I spend more? And it's actually for creators like Crystal who have found success here. Crystal told me
she's making can make seven hundred dollars an hour. I chatted to another guy, John Moss. He's streamed for twenty one hours straight doing a similar kind of thing where he was just insulting people and made ten thousand dollars during that stream twenty one hours.
I mean, cutos.
What I'm interested in, Alex, is the talent that TikTok's bringing over, not just the entrepreneurs or indeed the creators, but just tell us about some of the people going to lead the money making just briefly.
Yeah, absolutely, you have the stars, the big names that you've known, the Charlie Jamilio's and Addison Rays of the world. But trends like this and the algorithm on TikTok itself is really good at kind of birthing new stars.
This live stream trend.
We've seen kind of new people come into the limelight who are really good on live and could potentially be the future. But I will caution it's not all rainbows and butterflies. John Moss said he doesn't know if he'll sell things, even though he'll get on streams, so we'll see if that commerce crosses the rubicon.
Not to mention that like Samani Levine and some of the executives joining too with Alex brancme.
Brilliant reporting, go read it. I'll come back to the new technology.
I'm Calline.
Heind in New York, Ed Ludlow here in San Francisco, carracrit check in on the markets and as that one hundred actually tech heavy index, we go to it every time, up six ten to one percent. Importantly, we're rebounding off the first back to back weekly declined for then as that one hundred of twenty twenty three. If you go back to December, we had four straight weeks where the index declined on a weekly basis, everything from the FED to actually the tail end of last week, we started
getting worried about China. You fold in the Tesla price cuts news overnight in China and it kind of adds to the economic discussion that we're having, and it impacts the technology sector. The other name that we're watching PayPal. We're going to get the details with Jenny Soraine Bloomberg News in just a minute. But the stock, it's up one point seven percent. Alex Chris is coming in as the CEO. Finally we know who new CEO of PayPal
is going to be coming from into it. It's a stock that's kind of come out of the pandemic right and then slowed down because it hasn't maintained momentum that it saw in the depths of the pandemic era. But in the session we are up one point seventy five percent.
Yeah, and let's stick with exactly that.
The changing of the god of PayPal and place to say, Jenny Soerine is with us from Bluemberg News, and I mean, as Chris well known and into it, someone who helped do M and A drive small businesses.
Why is that good for PayPal?
Yeah, I mean I think there's a few different things here. So he led the QuickBooks business, which basically, you know, provides lots of different financial services to these small businesses all.
Over the US.
PayPal has been really focused on trying to get more of those small businesses to add the PayPal button to their website. So I think you're going to see some synergies there. I mean the fact that he led the mail Jump acquisition back in twenty twenty one. We have a clear season deal maker at the HELM and PayPal has been a company that's not afraid to do M and A. So I think between those two things you've got a lot of really interesting ingredients for a really cool mix year.
Jenny does a question how settled this makes PayPal? Right, I think we'll get to the pandemic story in a second. But actually it's also a company that's seen a lot of departures. You know, longstanding executives have left PayPal in the last two years. How does Alex Chris stabilize that?
Yeah, I mean this has been one of the main overhangs on the stock is the fact that you know, Dan announced earlier this year he would be stepping away, and so folks have been really curious, you know, what is a new leader going to look like? Is he going to take it in a new direction? Is this you know, gonna be a whole new strategy at a PayPal? And so I think that's actually still to be determined, you know, especially he's not a name that's very known
to PayPal investors. He's not a payments guy, So I think there will be lots of questions still to come. But at least, you know, the name and having an executive and having a clear plan for when he's coming in that should help clear up at least some of it. But but there is still quite a few unanswered questions here.
A lot have analysts been saying to the hot Yeah, I think, I mean, volks are really excited that they're bringing in someone with like this enterprise sales background and someone with you know, really a clear track record for delivering, especially on the small business front.
But he's not a.
Payment same he's not someone that people really know. So I think there's still a little bit of trepidation, which I think is why you see the start kind of just ching around, you know, up a little bit today. I think there's still a fair amount of questions from Volks kind of going ahead.
Bloombox Jenny Serrain now in New York with all the details, and PayPal's new chief. The other big PayPal story that we've been covering here on Bloomberg Technology carries that PayPal's the first major US financial institution to introduce its stable coin called PayPal usd to dive into the long term goals for this new stable coin. That's bringing Kubta goop to Delta Blockchain fund founder in general partner. This is
an area been covering so closely. All of the notes I read when this news came out last week was about adoption, adoption, headwinds, adoption concerns, adoption, adoption. You think that people will adopt it.
I think if you live first of all, thank you for having me. But if you look within the crypto community, stable coins are here to stay. You're already looking at countries like France, Germany, UK, and China, which has been at the far ahead of the curb, already using stable coins and generating stable coins. I mean, the multi billion dollar empire which Circle has created has already proved the adoption.
What's really fascinating.
About the PayPal world is that it's not crypto building for crypto. I think PayPal is an amazing moment where now you're building for anybody sitting across the world and putting a dollar supremacy as a dollar peg coin, digital dollar coin all over the emerging markets. Because Paypall is one of those US financial institutions where you actually use it more to order merchandises and to have freelancer services across the world. So I think adoption is already there.
Four hundred and fifty million more accounts now have the capacity to pay on stable coins using ethereum.
So that's place.
Oh sorry, go ahead entirely life both of you.
Just to follow up as I step all over Ed's question.
I'm interested in, Therefore, is it remittance?
It's interesting on a day where we have, for example, Argentina, so clearly a country new reference emerging markets, but one has got huge instability in its own currency on the back of political headwinds or concerns and lack of security as it stands at the moment. I'm interested in is remittance, where it's going to be for PayPal. What really does it drive forward in terms of stable coins here.
I think there are three big places where this is going to completely change. The first is your payment system within US or anywhere where you have US to currency.
Going in today's world of Instagram, where I'm ordering stuff from all over the world, instead of waiting for three to five business days or looking at your verification of the cars, now you have a direct payment system, so the business payment system, especially for small businesses, This is a game changer, both domestically and globally.
Second thing is it does change.
It does take away technology wise, the amount of time it takes for your money to settle, for it to reach in a verified manner, but also the cost associated with it apart from a basic gas cost. Actually it doesn't take three percent of your visa fee or MasterCard fee,
so that is a big game changer. And the third, as you said remittance is I think this is really going to be a big one coming from the World Bank IFC background, where we have still today have taken five business day to seven business days and.
Created the world of money market and rebos.
This completely changes the game with a less than thirty second settlements. So in all those three spaces technology wise, it's great. But one thing which most of the people are not talking about, Caroline, is something to something to look where our global politics are moving with respect to US our debt crisis. This becoming a pick point does really change and reinforces the usd as the digital as the most important currency and the supremacy of that currency in the payments is.
And what's so interesting is many have been shining a lot more on the regulatory concerns of the US regarding all things crypto but also stable coins, the worry that these aren't transparently backed in some.
Way ed Yeah, transparency or lack of right, I'm sorry, I just want to make one point. The question then, is do regulators look at PayPal and say credibility, PayPal is getting into this space. We're more interested now and engaging and seeing this through the lens of credibility.
No.
Absolutely right, And it's very very easy to put both the kic things and the idea that please every quarterly basis or every monthly basis show us how do you
really have your reserves in your treasury management. I think those are the very easy things, which even for even for companies like Teether and Circle, they have gone to SEC and said, just tell us what's acceptable, Like any other bank have their dressery, whether those are pure and cash deposits, whether those are accounts receivable, whether those are in teresturies. Just tell us us, treasurees what are the
acceptable ways and you can do a quarterly accounting outside. Anyways, Papal is already a public company and they will have their accounts made public, so I don't think that should be a concern. In fact, what if I would be on the regulatory body, what I would be seeing is how China has used their CBDC across Africa and across Latin America to make sure the payment over blockchain using their currency with the instant settlement now is becoming a
bigger norm and norm in their international trade mechanisms. And why should us be behind and should use this as a way to completely go out and set themselves up.
This is why we wanted your global experience having them with the world banged if SA, I'm interested in their caveature and your experience, like you back to what Polygon start were soah, like the company is well known in the crypto and blockchain space. Does this make crypto and blockchain more exciting for US investments?
For you at the moment?
The two I think, First of all, it definitely puts Ethereum where what it should be looked like, which is a technology based platform and not just a speculative ether technol ether financial acid. So I do think people will see that there is a lot of technology usage for blockchain, but we have been talking about whether you use just Ethereum and you use falling on on top of it,
or stark Net or optimistic rollouts. The second thing which I'm very excited about is this opens up the whole regulatory conversations which SEC has for the longest time has been tiptoeing whether you're looking at it as a speculative financial needs or you're looking at it as a technology. So I'm very very excited that not only for US regulators, but for the whole that beyond certain individual flauds, there's a huge game changing technology which is here to stay and ready to roll out.
Kavita, Goopta, Delta blockchain it's very good to catch up here on Bloomberg Technology. Thank you. They're coming up here on the program. Forty year old Silicon Valley VC firm IVP is heading Caro to London. More on that news next yeah, with IVP partner Eric law Real Quick one Important shares them Video up five percent. Morgan Stanley's out with a note saying buy the stock. This is a stock that's up more than one hundred and ninety percent year to date, but there's been a pullback in August.
You know, we have earnings next week. It's a question and a time to see if people start putting their money where their AI mouth is. In other words, is all the hype around AI really translating to big growth for GPUs in the data center or other context. We're going to keep tracking it. This is Bloomberg. So, after nearly twenty years of investing in Europe, the Silicon Valley firm IVP finally takes the leap and it's opening an
office in the UK, making its hub in London. Eric le our partner at IVP, who's relocating to London himself in twenty four hours time, joins us here on set in San Francisco. I want to start with a very big question actually, which is you have chosen London. Yep, but you're investing in Europe's right. Why London and not a capital of continental Europe?
I think for a variety of reasons.
London practically is an hour closer in time zone into the United the United States. Candidly, it's easier for my family. My wife and children will be joining me there. And well, I've discovered in my decade plus investing in London that I'm very lucky that most people in Europe doing business will speak English. There's still a lot of hours outside the day, and that'll be easier for us.
There are many who say, not myself, many who say London is just fintech and nothing else. Your response, I'm not.
Sure that's entirely true.
Now, we certainly have seen a lot of fintech investing there. We've made our first London based investment in a fintech company just recently called bolt that Io. But I think you're actually seeing a lot of AI companies also attract talent and be built there, and we expect that to continue to.
And of course I mean IVP no stranger to that fintech prowess that London managed to build. Also, of course they weren't British entrepreneurs, but the founders of why is
You Batched? But there's also uipass, Supercell. You know, a lot of have exited some of these companies and you're writing new checks already, Eric, I would just think of well, Pigment, we had the co CEO on previously on this show when they did their latest round that you're in where are you thinking from an industry specific place to be putting money to work?
Because they try and talk I as well.
Across Europe, well AI is top of everyone's mind and we certainly will be looking at more investments there. We've actually already made two that are based in Europe, deep l which is in Cologne, Germany, and Grammarly, which has its roots in Ukraine. So we're very excited to see
that trend continue. But I think what's also really captivated our imagination and has been a driver of the activity over the last dozen years or so for us, is that we're seeing investments across a variety of tech sectors, from mobile gaming in Helsinki and Istanbul, software companies like Pigment, as you mentioned in Paris and a variety of others.
So we actually think that the entrepreneurs in Europe are quite creative and they're going to come up with solutions that we're going to want to evaluate.
It's close.
Look, you can tell from more accents to both and in my heart I mean as Welsh, but you know we come from Europe. We've both been talking about the European ecosystem for coming up to a decade, and yet there's never been this really standout company as much as they've wished it.
You've seen, you know.
They're much hand in when DeepMind was sold to Google. There's always been this desire to see the equivalent of a Silicon Valley giant.
Will that happen in Europe? Does it have to happen? Does it not matter?
I think it already has happened in many circumstances. I mean, we're not investors, but Spotify is a global leader in their category, so I think that that is sort of the tip of the iceberg. I'd say against Supercil, their aspiration was not to be the best gaming company in Finland, it was to be one of the best in the world, and they've been able to deliver on that. So I think that that trend will continue, and that's why we're doing this.
Eric. A big story on Bloomberg Technology in the past couple of weeks has been political developments in Israel, the judicial overhaunt, its impact on the tech sect. How does IVP view Israel as a market?
We find it quite interesting.
We have a number of companies that also have a presence there, and it will be an area we're going to contain to spend time. I'm woefully underqualified to make observations about the constitutional system there, but certainly we do try and evaluate other risks, including political risks, and we're making investments and I hope that is.
Real will come out on the other side of it.
Let's get to the Eric Leao story and on the ground story. Are you going to get on an airplane and fly to each capital city in Europe over the next few weeks and months? How are you going to go and set up a new coverage area meet founders?
Well, I feel like you must be reading our internal memos because that's exactly what we're going to be doing. So I'm moving with my family literally in.
Thirty six hours.
We have two of our team members on the ground already, and this morning we announced we are hiring back one of our former colleagues to help lead the effort in London. And I know you said capital cities, but I would actually put forth you know, we'll spend time in colomn which is I'm American enough to know that that is not the capital of Germany. But we will be spending time in major tech hubs all throughout the continent.
Alex Limb of course, returning to IVP as a general partner, Eric, what is the valuation story like in Europe at the moment? What is the difference in culture of writing checks there? Do you think that you're looking to well become an expert in Well, I'd say the.
Valuation environment more broadly has receded from the excesses of twenty twenty one, so that is also making this an
interesting time to think about building our presence there. I would say that the also the change compared to say, the first five ten years of my career as far as investing in Europe goes, I think the opportunities, the visions, the aspirations are greater, and in many cases that will be justified by the exit valuations, which then trickles down to maybe the entry valuations new investors are paying today.
I'm excited for you.
I'm here, sat here with all my jet lag, having just flown over from London. Used to be based covering tech in Berlin. I'm sure and and I are excited to go out there and see you in Europe. Eric, Yeah, safe trip over to London tomorrow the IVB part. Thank you very much, brilliant to have that exclusive news here to Bloomberg at TV. Meanwhile, coming up thirteen F findings that trickling in more on what the reports are revealing about, well, how hedgeoms are investing in the second quarter.
Read Yeah, it's interesting you bring up thirteen F. Some of the chip names moving to the upside. If you look on the Bloomberg terminal, there have been funds adding these names. Micronup five percent, Bridge Water has added to its Micron position. AMD another one where we see names
adding or growing their positions in those stocks. What is it about these thirteen So we always do this every quarter, will continue to track it all right, going viral, Let's get back to the latest out of the Zuckerberg musk cage fight. METAICEO Mark Zuckerberg's telling speculators to move on from the cage fight between him and Elon Musk. He took to Thread Sunday night, saying He's going to focus on fighting people that actually want to fight Caroline, that
are into MMA. It's time to move on. If Elon Musk is ever serious, he knows how to reach him. Musk had also said, as you probably saw that he had an MRI. He has a shoulder rubbing on the ribcage injury. It requires surgery.
And Hanny also suggested ed that they have a practice at Limixed Martial Arts facility that sarcazard.
His own house, and.
So then he said, Oh, I'm going to come and knock on your door. But ultimately it feels as though Mark Zackobug doesn't think Elon Musk is being serious at all here.
And he's been consistently skeptical. And the point is these are two of the world's wealthiest people CEOs of leading tech companies proposing to fight each other in a cage, which is one reason we track it. But right now it looks like it's not happening.
What is happening is actually we're getting some deadlines, some real hard facts in terms of where people are allocating funds when they're taking money out of because it's a hedge funds disclosure period of course, equity investments for the second quarter in the so called thirteen F filings is coming drip feeding out US Securities and Exchange Commission. Look, tech stocks always in focus thanks to a lot of optimism that has been around artificial intelligence.
Is it sticking?
Hemapama is here with more and some key findings from your perspective. What big picture are we seeing in terms of tech buying or selling.
Yes, so a lot of buying in the tech space. We're seeing that to be the most popular buyer sector amongst the hedge funds that are filed. So far, about more than five thousand hedge funds have filed. We still have a ways to go through the day. Many of them do wait till later in the day to file, but from what we're seeing already, Microsoft, Apple, Amazon, Navidia, Meta, these are the popular buys amongst a lot of the
hedge funds. We're seeing some selling or reducing of stakes across energy, financials and healthcare, so like the non tech sectors. But interesting, you know, to see a push in towards the space.
You know.
For example, Rocos, a pretty big hedge fund, made a significant bet on the NASTEQ one hundred ETF, growing that position to about two point eight billion dollars. He also bought Microsoft and Amazon.
What about co two. This is a big name tech investor. I've written about a lot. They've backed companies that I've covered as a Beat reporter. How have they been in this course have gone, yes.
So they've been very interesting. They've continued their buyings free. If you remember last year they sat down a little bit, taking off their exposure as the market was unpredictable. Now they're jumping back in really increasing their fosure to the market. They took twenty three new positions in companies. They increase their stakes in twenty one others. Among some of the things that they boosted their investments in Microsoft, Amazon, some
of their favorites. So we are seeing some interesting buying there. What about selling, Yes, so quite interesting. On the decreasing of their positions, they decrease their steak and some of these really hot tech companies right so, Navidia, Meta, Tesla, and Netflix. So the question would be are these is this a fundamental change in view, and it's unlikely. You know, Philippe has been a pretty vocal supporter of Navidia and
some of the AI moves. It's a tech company like investor, So what may be happening here is some portfolio management, decreasing exposure to maybe lock in some profits, adjusting the portfolio so you're not oversized in some exposures. So that could be where we're seeing some of the pullback and some of these very.
Hot hot times.
We line.
The Nasdaq one hundred did itself with its redistribution earlier in the month, bream.
Bag teming Palmer with all those thirteen F filings. That does it for this addition of blombog Tchnology, Well we're back together again.
Ed.
Yeah, that's a reason to listen to the podcast and recap. You get both of our voices, Apple, Spotify, iHeart and Bloomberg. This is Bloomberg Technology.