Twitter Fallout and Rivian Job Cuts (Podcast)

actually looks like. Plus a slash in valuation for one of the Europe's most high profile startups, Klarner, being valued now at just six seven billion dollars, down from forty five point six billion just one year ago. We talked to an investor in the company and a primetime shopping event Amazon kicking off It's Today Shopping Extravaganza on Tuesday.

How Prime Day could help Amazon's third quarter online sales game. Meanwhile, let's get back to the scene being set for a just suseruptive legal battle over the future of Twitter, shares of the social media platform falling after Elon Musk walked away from his forty four billion dollar deal to buy the company. Muscoweges look at Twitter misrepresented user data. Twitter plans to assume us too close transaction, but most cut,

Wagner joins us, and just ahead of our conversation. Cut, of course, we understand from a lawyer for Twitter, and it is always the lawyers that went in this. It wouldn't be said Twitter's lawyers saying that Musk's termination is invalid and wrongful, and he says that Twitter has breached

no obligations. Where are you at with this? Yeah, we're getting to the fun part of the uh, you know deal where all the lawyers are just going to start sending each other letters back and forth and we're going to have to pass through all this legally is but you're right now Twitter's turn. Right. On Friday, we were talking, Caroline, you and I were live on air and when we were reading, you know, this letter from Elon Musk's lawyers

basically saying, Hey, Twitter, you violated this agreement. Now Twitter has filed its response and is basically saying the opposite. You know, we have a held our version of the agreement, or are part of the agreement, and it's you who has been misleading or who has you know, violated, right, And so we're clearly headed to a court here, and both sides are going to get to argue their case.

But at least for right now, the lawyers are starting to, you know, put their their respective arguments out into the universe. And what is some of the theories being held as to how could how it could turn out, who could win out. It's not just going to be a one billion dollar termination feel it feels no. I I would be shocked if that's the ultimate result. I would imagine that we're going to end up somewhere in the middle. Right. I think there's two kind of dramatic outcomes that could

come from this legal battle. The one is actually what you just said, that you know, a court rules in favor of Elon Musk and that he pays termination fee and walks away. The other is that they rule in favor of Twitter and they forced Elon Musk to spend forty four billion dollars to buy a company he doesn't want to buy. Now, Alternatively, I think these two sides could settle somewhere in the middle. That to me seems

like the most likely scenario, right. But in that in that case, there's infinite number of outcomes here, so we don't know exactly where they're going to end up. I think like infinite amount of outcomes to pass. Kurt Wagner again, thank you so much for audio expertise on that Friday, and for expertise again today as we continue to follow it's pretty toward story. Let's get more analysis for you.

Let's bringing Mahenya Avico, who covers the company and well, as we're saying an infinite amount of outcomes here mark but from a fundamental basis, without the forty four billion dollar offer, what is Twitter worth? It's probably not too far off from where we trade. If the deal was decided tomorrow was off, probably come off a couple of percent.

But there's some markers in the market. You can look at the multiples that pinterest, UH and Snapchat trade at and uh, you know, maybe there's a little bit of downside to the kind of high twenties and thirty dollar range something like that, but it's not it's not much more dramatic than that. The difference here is, by the way, you know, we've kind of forgotten this and all this. The noise is that Twitter is a good asset generated

five billion and advertising dollars last year. Advertisers are obviously cognizant of and willing to tolerate the body issue UH, and the company generated positive free cash flow margins for several years, you know, prior to the COVID crisis. So it's a business that's had you reasonable scale, decent growth. UM. It's underperformed major peers like Google and UH and Facebook,

but those were always unfair comparisons. It's a decent asset. UH. Recently, it's probably been somewhat impaired by all the uncertainty over this deal, and then going forward, it's probably somewhat impaired by the recession that's taking out growth from almost all Internet ad assets. Does it become impaired by advertisers walking away because of boats as it seems that Karnelo Musk is trying to argue, I don't know it, Carolina, It's possible.

I've run surveys on Twitter for ten years, advertiser surveys on Twitter for almost ten years. It's never come up as an issue. I've never we actually had a channel check or a discussion with an advertiser that said I can buy ads on Facebook, but I can't do it on Twitter because of the bots issue. I've never heard that UH, that there are bots, that there are clip

farms in social media. I think that's well understood. It's part of the you know, it's part of the peril of these these industries and these companies and Twitter and Pinterest and Google and Facebook. I've always had to fight back against these box farms. It's just part of the part of doing business. People run bots for political reasons, they run them for commercial reasons, but it's always been a factor. I don't think it's been an issue for

advertisers over the last couple of years. I think that five billion and ad revenue that Twitter got last year they got they they earned it, and I think uh and advertisers weren't put off by the fact that there were bots on the platform. Has been any upside to this whole fiasco for Twitter? I'm struggling, Caroline. I think there's been no upside. So all you've done is um created a lot of dysfunction within the company. They've lost

some of their top employees. Uh, there's probably been some demoralization of employees because you know, Musk has come out and said that there were too many people working there. How would you feel if somebody was going to buy your company started off by saying there are too many employees at the company. So I just think that what's

happened is very unfortunate. And um I thought Musk had a lot of interesting ideas of ways to improve Twitter and maybe this law come out and maybe maybe we will get some sort of resolution that a reduced deal size. But I my guess is that the worst case scenario is going to come through, which is that this is going to go through the courts for some time, There'll be some sort of breakup fee, and then Twitter is going to have to rebuild a little bit, and that's

probably gonna be a year from now. Uh, And it's very unfortunate. I think what's transpired here of the last couple of months for investors, as all well said, we thank you Mark Mahaney, and maybe trying to find the fundamentals and what is in general and a non fundamental story at the moment a bit of a dramatic reversal for one of Europe's most high profile startups, Klana Bank, valuation being slashed to just six point seven billion dollars

in its latest funding round. We understand that's down from from one point one fully five billion in June one. The Swedish by now pay later. Giant has been burning through hundreds of millions of dollars of course as a startup, and joining us to discuss when next and how we continue to see talent sort of recompense in this market. Andrew, one of Manhattan Venture Partners, Andrew, it's really great to have you on, and of course Klarner one of your

numerous members of your portfolio. And I'm interested is to what happens in these environments, how much how painful it is for the executives leading the business and the people have invested. Yeah, so thanks so much for having me, Caroline.

So I will say that at Manhattan's Partners, where we invest in growth and leak siege companies, much like Clarner while they're really hitting the peak trajectory of their business, is that we still believe that extraordinary companies backed by the investor the best investors, will deliver these types of outside returns. And so even though Clarina has seen the valuation compressed, we believe in their long term prospects very

much so. And I think that they're deploying a number of strategies to keep the existing employee base and executive base retained. Yeah, because talk to us, I mean you're you're someone who thinks a lot about well, liquidity in the secondary market, and a lot of that. Often these big valuations and moments of exit, which are currently the rules of shot to a certain extent, all because it's about talent management. It's about ensuring that they're able to

take some money out have a liquidity event. How hard has that become at the moment? Well, for the best companies in this world, there's always going to be demand, right, So I think that that's something that we always measure when we evaluate companies, whether it's on a primary basis or on a secondary basis. And when it comes to Clarina, there's always been a really healthy volume of activity in the business, and investors are really excited about the prospect

of where they're growing because that's the right now. They are the market leader across all geographies in the buy now, pay later space and growing much further than just that

nature of its business. And so I would say the prospects of the secondary market continue to get rather exciting and have created some really unique opportunities to buy into the business or dollar cost average across both businesses like Varna and others, what do you wanted to see from the leadership Etcana But the leadership of audio companies that you can't have been backing and some that of couls have seen exus themselves, but some that continue to grow

in this environment, how do you want them to be focused more and all profit in this environment? Absolutely so, I do say across the board that we're really focusing on seeing our companies invest in that profitability and increase their margins so that they can get above the line, right and at least be in the single digit profitability margins where Clarina has sit for the last fourteen years

of its business, if not longer. Right. So, Clarina is an exceptional example of a company who knows how to

increase its profitability and control it overall. Though for other businesses across our portfolio and others in the venture landscape, it's that we might want to turn down the not the dial bit on sales and marketing spend and really increase that profit margin, which is really a level of just baking in those levers, right, saying hey, maybe we don't need to spend so much on Facebook ads or LinkedIn ads this quarter, or maybe hey we don't need to put as much money into creating a new layer

of product roadmap and instead just focus on the products that deliver, right and focus on the customers who are there versus creating new innovative products just as a way to be uh unique in their product market fit direction. How about products that had seem a real winner in

terms of acquisition of new customers? Certainly I think of Revolute another European pin up in terms of little success story in the fintech world, and they really had doubled down on offering crypto for example, to bring in new uses. But with the fallout and value and there as well are you'd like me to see products moved away from once you think they'll remain committed to them. I think that what they'll stop doing is just delivering on new products, right.

I think as we look at companies like Clarna and like Revolute, is that they want to shift away from the core focus that they've been you know, honed in on. For Clarina, it's by now pay later, for example, and instead focus on creating volume from their existing user base,

which is something we are really excited about. Right. I think generally companies like Clara realize where their public comps sit, and they want to ensure that they're creating their own market position away from those public comps and seeing that their growth can continue while just honing in on the products that have always been proven to be successful for these companies, right, And so I really love how Sebastian the CEO of Larna today said on Twitter that what

doesn't kill you make you stronger, because it's a it's a business that I think generally understands exactly where their mindset could be to keep honing in on the products that win. And with this new capital and fusion for Karna, it's really going to allow them to keep that expansion growing across the United States, which is something where their

public compa firm has predominantly had a dominant force. But Klarna, as we know, is just growing so much more faster at a three you know, annual growth rate relative to

them as a calm. So we have a lot of hope there from real perspective, how long does this sort of quattening down and the private markets evaluations last four And I'm not saying every business is affected by I think your INFLEXI port of course, which is a company that's well really ramping up because this is supply chain disaster out there and they're a company that can help. But there are areas like Instacom, which this is an

inflationary environment. How old does that persisty think? Andrea, Yeah, so I would say right now, we really need to see what the results of the first half of the

year look like across all businesses. Right I think we're just closing the books on Q two UM and going into Q three, and generally where the reflection of the market is going to sit is what companies will be ready to go out go public going into Q three and ideally the months of September, October and anything before the Thanksgiving holiday for the US companies, That's where I

would see there might be a shifting sentiment. But what's happening is companies like instacart Up for example, are following the registration statement. They're using really broad based language just to describe what kind of statement UM and company they're going to be as a public company and determine whether that's right to go out. So these companies are choosing when to go out based on where the market will be, but at least they're ready to do so if it

opens up. Andrew Wong, thank you so much for your time. Manhattan Ventures Partners, Stay well their Nashville Mimi coming up an exclusive interview with the u S Comma Sex Straight Gena Romando. Stay for the springbak U S Secretary of Commerce, Gina Romando. But he's legislation that would appropriate fifty billion dollars for domestic semi conductor manufacturing will pause. Congress should make exclusively I'm blame that. Take a listen. Yes it

will happen. It's taking much too long, and what's at stake is our national security, even beyond the economy. You know, every piece of military equipment requires chips. If you talk to the heads of national defense contractors as I have done, or senior ranking officials in the Department of Defense, they're all very worried about the delay. But yes, it will

get done. This is at this point in the negotiation. Unfortunately, politicians look for leverage, and while it isn't right to play politics with national security, that's what I think is happening. In the past two weeks, we we made huge progress. We were closing out issues, finding compromise. So I think everyone just needs to come back today, get back to work, and commit themselves to getting it done in the next

few weeks. Let me ask you what difference it makes whether it gets done today or six months to day. What decisions are being made perhaps by companies such as, for example, the groundbreaking out in Columbus, What decisions make that may not be reversible down the road. Well, what

you say is exactly right. Chip companies are making decisions now, literally right now, because they need to meet demand of their biggest customers, in which means they have to start getting cement in the ground on new facilities this summer, in this fall, you know, earlier today. So Global Foundaries has made a choice to expand in France not the United States. You know, that's a loss. You just mentioned Intel, who is saying perhaps they'll slow down their Ohio expansion

in favor of Germany. And the reason is because these big companies are hearing from their customers that they need confidence that the you know, the companies will be able to hit them, you know, supply to them. Seven chip demand is projected to be through the roof, and so these suppliers, whether it's Intel, Microme, Texas instruments, they need to fulfill for their customers. They want to be in

the US. But if the choices are not you know, not fulfilling their customer demand or doing this in France, Germany, Singapore, Japan who who are already providing subsidies today, they're gonna leave America and do that. And so that is the risk. And that's why today, Members of Congress, get back into d C, get back, do your job. Don't let America

lose out. Should we be expecting an announcement from the President before he departs for the Middle East this week on tariffs, on easing the tariffs that are currently applied to a number of Chinese goods, because that ahead of the CPI number Wednesday, will be something I think a lot of people would look for. I'm not sure. I

don't I don't know guy the precise timing. I can tell you that we his team are an active you know, discussions with him, uh something we're talking about every day, and he is doing you know, he's doing his job, which is to say, looking at all the different factors. You will see a decision I think very soon. Whether it's whether it's before he takes off this week, I'm not sure. Just to pursue the China issue for a moment of Secretary, the tariffs are one thing, that's one

part of a much more complex mosaic here. We talked about tariffs in terms of inflation. You've already said that's not going to have that big effect on that. But what about the larger term relationship with China? And let me be specific about this in terms of specifics and tariffs being taken off or not. Is it possible it could be bilateral? Is it possible China could actually give some of the United States to try to reformulate our

trade relations. Uh, certainly that is possible. And you raise an excellent point, which is, you know, part of the discussion that one of the things the President is thinking about, which is to say, if we're going to do this, know what can they do on their side of the equations. So while I can't say for sure, certainly that is possible, and by the way, if it doesn't happen immediately, it's something that we will continue to pursue just in the interest of you know, as you say, fairness, if we're

lifting care offs, what are they going to do? US Commerce Secretary Gina Romando, there with our own David Weston and Guy Johnson. This is Bloomberg Technology. I'm Caroline Hyde in Family Chang. Let's get to a Bloomberg scoop EV maker Ribvian. It's cutting its workforce by five after a hot growth streak, according to sources and Rivian shares they closed down six and our percent on Monday, and that's, of course, was following the report from our one Ed Ludlow.

You help break the story, tell us a bit about where the job cuts are gonna be coming from. Ed. Yes. So it's important to note that sources say these are non manufacturing roles, right. These are not the men and women on the assembly minds actually building the evs. They're kind of back office roles, supportive roles. And Rivian's one of these startups that raised a lot of money before going public, raised a lot of money when it went public,

and they were just able to grow so quickly. They've kind of doubled head counter fourteen thousand employees in the last year alone. And in some of those areas kind of support and sillery areas, they just grew too fast to to too big size. They have duplicates in a lot of Roles. So with the macro pictures such as it is, they're kind of trimming the fat, embracing for a sort of less solid global economy overall. Do you think that this is a case of having overheard, This

is a case of just reorientation. This is a case of just trying to meet the economy where it is. Rivian's interesting because it's supply con strain. In other words, the demand their evs is so great that they can't possibly keep up with it. They can't build the evs fast enough. They do have a lot of cash, seventeen billion dollars on a balance sheet, but I get the sense from insiders also investors that that seven team billion dollars,

a lot of it's already accounted for. Right They're going to build this second factory in Georgia to the tune of five billion. There's also all the R and D costs for the next generation of cars. And even though the CFO, Clim mcdonna is really inexperience, she's a formal Wall Street banker, she's very disciplined, and I get the sense that they're looking to preserve cash as best they can and kind of make it go a long way, So it's kind of all of the aforementioned things that

you put very briefly. Of course, you were looking just last week and how Rivian was well getting snapped up at some valley at least in the photos. Yeah, yes, so r J. Scaring the CEO, was kind of the hot ticket. Every everywhere I looked, A J. Scaringer was there and somebody wanted to talk to him. They brought some evs with them in R N, S, S U, V and and R Once he pick up to some valley and you had all these attendees kind of crowding

around the car look at it. But I'm told that on the Thursday night, Tim Cook, the CEO Apple, actually borrowed one of the pickup trucks with a gang of people and went into town for dinner. Which is interesting because, as we've reported at Bloomberg, Apples looking at its own EV potentially, and you know, in the world of tech, it's interesting to see who's looking at who, and who's

spending time with who. Indeed, on a small world it is over there and Ludlowe looking at everyone and when they're up to we thank you so much, our evy expert there and meanwhile, well, let's get back to it. The key story of the day is Twitter and shares tumble Monday, after Elon Musk walked away, of course, on Friday, from his fully four billion dollar deal to buy the company, setting the scene for what is going to be a pretty disruptive legal battle. Our next guest says, well, Twitter

as well positioned legally blues Pats. Musk is looking for any excuse to get out of this deal, joining us as Anne Lipton Chulean University Associate Professor in Business Law and Associate Dean for faculty research. Wonderful and to have you with us and your expertise, And are there many legal grounds for you know, master stand on here? It doesn't appeal. I mean, obviously I don't know. I don't

know what she might have developed. Escort proceedings continue. But if he's based on what's been stated publicly, he's off heard a number of grounds to argue that Twitter has breached its obligations and therefore he's entitled to walk away, and so far they really just don't seem that substantial. So he claims that Twitter misled him about the spam on the platform. That's what's getting all the headlines, but he's not offered much evidence that it did mislead him.

And even if it did, even if the spam counts were wrong, that's actually not a basis for walking away from a merger. He would have to show not only that they were wrong, but that they were dramatically wrong and we're having some kind of long term effect on Twitter's finances, and that kind of showing just it hasn't been made. There's no evidence that that's the case. Um. Yeah, So each one of his grounds just they don't see

that substantial. Talk to us about the legal precedent here, because if they rule in Twitter's favor, what happens, I mean, can they really force someone to buy a company? And then what occurs? Well, that's exactly the issue. I mean, I think that most people, at least watching from the outside, think that Twitter is a very strong case. The question is what happens after Twitter has found correct then then what do we do? Well, they signed a contract and

the contract basically says that there are two possibilities. One possibility is specific performance, meaning Musk is ordered by the court to follow through with his obligations and actually acquire Twitter, and the other is that must pay a breakup fee of a billion dollars. Obviously, Twitter would much rather he buy the company because he's prompsed to pay forty four billion, and that's bigger than one billion. So the question is whether a court can and will really order Musk to

go through and buy the company. And Delaware has done that. There have been several occasions in the past where buyers got cold feet and they wanted to walk away, and Afford said note and ordered that they actually go through and buy. But this case is much bigger. It's a much bigger dollar figure on the deal, and it's a company that has this huge social footprint, and there's a real question as to whether a court will think it's appropriate to force an unwilling buyer to buy a company

that's so important socially over his own objections. But then the alternative at this contractually it's just a billion dollars,

which doesn't seem right. Yeah, And and to that end, how much to the judges the lawyers involved have to paint a picture of what has been lost for Twitter financially as well, because fundamentally, obviously the picture has changed since he first made the offer, and we all understand that, and some would hypothesize that this is all just a way in which to renegotiate the terms of the deal rather than walk away entirely. But this is also you know,

they've lost Keith talent. How can you assign monterreally value to that. Well, that's exactly why UH parties contract to say there should be specific performance, meaning that must have must have to go through with it, because you can't

put a dollar figure very easily on it. So that's why Twitter and must agree to Originally that the proper remedy would be to order him to close, because there's no way exactly to put a dollar figure on it, and even if Twitter were to try, it would run into the fact that they've already agreed that if it has to be a dollar figure, a billion is the mostly and get So it's really kind of complicated whether

the court is willing to order specific performance. If it's not, is it going to be stuck with a billion dollar cap? But will it actually try to assess the amount of damage to Twitter, which could be much higher? And of course I feel like this is going to go down in the history books but also the legal the legal education books of what we've now learned. We all knew this wasn't from day one an extraordinary offer, an extraordinary deal, and and a very extraordinary person at the top sort

of leading and driving this. From your perspective, does anything change? Do you think this makes companies act in a different way when they have become a target? Wells Elon Musk is so singular. I mean nothing about this deal unfolded the way deals normally do. Um, this sort of overnight purchase where he was pressuring the company on Twitter and

it was signed almost immediately. I mean, if there's any lesson here, it's that if you have sort of an erratic fire, to be a little bit more careful, at least in the drafting of the merger agreement, which is not always very tightly drafted. But I mean a billion dollar damages to have maybe they shouldn't have included that part um. But I'm not sure how many lessons there are for the future, because I'm not sure how many impulsive buys of a forty for forty four billion dollars

of a public company you ordinarily see. I mean, it's the the oddity of the purchase and well and the impression that must gave that he was buying it not for financial reasons but simply because he wanted it personally. That make this so extraordinary and so hard to figure out what the next steps are. And of course everyone equips oh the only winners of the lawyers. Um, well, we'll certainly do pretty well. Um if I think Musk will pretty much whin if he gets to walk away

from this for a billion dollars and nothing more. I mean, because you know, he signed an agreement and created this chaos for this company. And if the only thing he has to pay, I mean, for me, a billion dollars will be quite a bit a green Land. Musk gets you know, what's under his couch and so um, so he I think would make up pretty well if that's all that he had to play. Um. Otherwise he ends up with a company hand lifton extraordinary times. You put

it also eloquently for us. We thank you, Chilean University Associate professor in Business Law and Associate dean for faculty research. We think of adjoining coming up crypto when it could be facing another tumble. But does this actually mean that the regulation for digital assets is more important than ever? Chris and Smith Blockchain Association with us. This is Blomberg. Let's talk about today's crypto report Wall Street. Some of them are expecting the crypto crash to get a whole

lot worse now. Bitcoin is likely to drop to ten dollars. That's according to about of a mixture of Wall Street and retail investors who responded to the latest Bloomberg m Live Pulse survey. Joining us out to debate and also where next for policymaking? Is christ Smith, executive director of Blockchain Association, and please say, as always it's Shinnani Bassa

as well from Bloomberg and Kristen. I want to get your take first and foremost when we can take what we want with a pinch assault to a certain degree of where next for prices? But as we see this unarguable crypto winter upon us, is it now the time to be doubling down on policy making, ensuring that perhaps the protection is there as and when maybe we get

a more intense bout of interest in the space again. No, I think you're absolutely right, And there's a big focus right now in Washington and trying to figure out the rate regulatory framework for cryptocurrencies. It's important to remember that there are a lot of policies in place today. The un ramps and our ramps are regulated for anting money lendering purposes. There's sanctions requirements, there are securities laws that apply in certain instances. But what we really need is

a fresh look at the regulatory space. We need to figure out a framework for stable coins, We need to

figure out a framework for regulating the spot markets. And I think the events that have happened in the market in the in the past few weeks and months have really focused policy maker attention on trying to figure out a path forward, a path forward, and especially as you look at who has claimed the assets at the end of the day in the event of bankruptcys or other forms of unwinding, how to regulators start to make sure that it is indeed the consumers that are protected instead

of the investors in these companies, and what types of attentions does that create moving forward? Well, listen, I think this is the first time we've seen a couple of the um larger companies in the space go bankrupt where there's actually questions about customer assets. So I think that there are some space places in bankruptcy law that we

need to look at this. But I think we're importantly though, we need to have a regulatory home for the types of organ you know, these types of entities that are doing consumer lending. UM. We have not seen in the past very many crypto native organizations be able to get bank charters. UM. I think we need to have a discussion about how can we open it up so that when you're dealing with customer deposits, that there is some

sort of regulatory framework in place. You know, you're really tied in with both the regulators, the lawmakers, and the companies themselves. Realistically, we've been waiting years and there has been very little movement on that front. So realistically, how soon can you see it now that you're seeing customers retail investors lose hundreds of millions of dollars. Well, I think if you look at um kind of the overall timeline, the key moment for getting this done is going to

be three. I think that most regulators have done everything they can within uh, the the authority that they already have to provide guidance in the space, not all of them, but most of them. UM. But what the sort of consensus is we really need a new framework, one that Congress has to put in the law of the legislation. And we've been very excited to see proposals like the Lemus deil a brand proposal and others that are trying to look at these questions in a thoughtful and comprehensive way.

I think the political reality is we're not going to see very much traction uh this year because the election is coming up. There's only a few um legislative weeks left, and something of this magnitude just simply isn't going to move. But what we're doing at the Blockchain Association is with our members are meeting every single week to go deep on a different topic and and finally sort of coalesced around what we think we can live with as an industry and so that we can come to the table

with solutions. So I think there's a lot of work, a lot of discussion, definitely a lot of legal bills, I can tell you that much, UH, and we're really working hard to try to bring actionable solutions to the table, and I think is going to be there. This all comes to other what about all the jurisdictions? Is Europe leading way in some way? There are other regional driving forces that all needing the pack of US as the US. Yeah, No, Europe made quite a bit of UM. I guess you

could call it progress. UH. Last month they passed a sort of a more comprehensive look that impacts legislation that UM looks at both stable coins as well as UH spot markets and things of that nature. I don't think the way that they've landed on UM their policies are ideal, but they have moved forward, and I think that's another factor that will put more pressure on the US Congress in order for them to move forward with with a

more comprehensive legislative solution. How hard is it for regulators to really either make customers whole or keep track of client funds when so many companies are deciding to domicile elsewhere. Dubai is becoming a huge hub for crypto firms Hong Kong, the Muhammas. Even so, how then do customers in the US stay protected? Well, customers in the US should be operating with US based entities that are licensed to operate

here in the US. UM. You know, you there is technology where you can get around any sort of uh you know, geo fencing that's put into place, and we've seen quite a bit of this actually in the derivatives market because there is demand in the US for more access to derivatives and the only way to get around that is to use a VPN and go to some

overseas exchange. So I think actually having better clear rules of the road here at the US will keep consumers protected here um And and you know, make sure that the companies here in the US that are offering these services have the ability to do to meet the demand that their customers, um, you know, the services that they want, and and do that in a way that's much much safer. Christ And have the companies have you been discussing with companies?

So the moral obligations going forward as well, they might not be legal obligations, but many will say, look, this pushed towards saying it was democratization. This further around this FOMO feeling around advertising, particularly at the peak when we're all looking at, you know, adverts that having to be

around the Super Bowl. Have there been lessons learned there and there's there as an element of self regulation going forward that they don't get themselves into this sort of situation again where yes, you can read the small print, but really they should have been more transparent than there is an fd I C protection and the like. Yeah, I know, it's interesting. It's the D five protocols itself,

the true decentralized finance that didn't break. And even with vast changes and prices and a tremendous amount of market activity going on, the DFI protocols themselves, they continued to operate. Right, that's just software. Where we run into trouble is situations where we have centralized entities that are taking possession of other funds UM and also where we've had lending that's gone on in a way that's levered, you know, multiple times over. But that's really been where the problems UM

have have been. And so I think that what we have to do is look at how do we put regulation on those centralized entities UM and what are their obligations. But the underlying technology, these software driven D five platforms, uh, those continued to work just fine, and in fact, you know, even in a tremendous amount of stress, they all continue to perform. One other thing I would point out though, is that the industry itself is swooping in to make

sure that customers are harmed as little as possible. Um, we've seen Sam Bankman created f t X, who's coming and been a backstop to many of these companies. I mean, I've been joking, we don't need Uncle Sam because we

have Uncle Sam freed. Um. That is obviously not sustainable, but it's very much, you know, sort of like JPMorgan back, you know in nineteen seven, that's saying, hey, we don't we see the bigger picture and we want to get through this turbulent time so we can get on the holding all of the services that we think are going to improve so many lives. We thank you so much, Christin Smith and Blockchain Association along of course or their

own Shinali Bassak on all things crypto. Meanwhile, let's get some breaking news because it was one of the biggest SPACs of course, special purpose acquisition companies tonteen Holdings. It was of course Bill Ackman's Pershing Square tonteen Holdings. It's going to return that four billion dollars of money and raised the capital to shareholders, the CEO, Bill Ackman is telling us in a letter to its shareholders at the moment, and of course this is after they failed to find

an acquisition to take out. So clock is taking for many of these SPACs and many of them still without an acquisition. In the field. Amazon Prime Day it's this week, which means the Internet was going to be a frenzy over limited time deals and exclusive prime member only prices joining us. Now what to expect spend Spencer Soaper who covers Amazon, And of course it's a difficult time. Inflation is real. Is it going to be more expensive? We still gonna be able to get the deals that we

used to. That's a great question. You have this conflict, right, so you have it should be a great day for sale because so many shoppers are trying to fight inflation by looking for deals. But then you know merchants and brands and manufacturers, they're all dealing with rising plusts as well, so they don't want to offer step discounts because they want to be worried the profit margins. So it's gonna

attract a lot of people. They're going to spend a lot of money e marketers estimating up about sevent but they're probably not going to get as much as as much with their money as as they'd like to. Yeah, we're all sort of used to that we spending the same amount, but we're getting less and less with it. To that end, how much are they managing to bring

people in more into the actual Prime overall offering. They've obviously been doing some interesting offerings purchasing, you know, grob Hub was the latest one that we understand they're gonna

be teaming with. How much some people committed to this, that's a really great question, and we're definitely seeing signs that that Amazon is finally hitting the ceiling in the in the US Prime membership or some numbers that came out this week that they they are about a hundred and seventy two million Prime members, you know, so that could include multiple people under one subscription and a household, but a hundred and seventy two million members in the

US as of June thirty, which is unchanged from January. Now. Granted they added thirty million and twenty and thirty million and one, so they saw this huge leak during the pandemic. But there's definitely signs that it's you know, leveling off, and we'll see if it starts fading, if people start looking to cut their budgets in the in the face

of inflation. Yeah, just to that end, do you think Amazon is priming it pun the pun, It's prepping itself basically to become even more necessary in this time of inflation pressure, or is a subscription that we're all more likely to cut. Well, the uh, they definitely want to be absolutely necessary, and that's why they keep building things in on it, like video and that sort of thing, so that as you're looking at your budget, you'll think, well,

do we really need Amazon Prime for the delivery? But you know what, we watch the video too, or we get these other perks as well. Now now they're through in Republic you mentioned, you know, they're just trying to pile things on to make it um uh, you know, as compelling as possible as people are looking to put things out of their out of their budget. But granted they just raised it about twenty bucks hundred three nine dollars a year, some people might be be thinking it's

time to cut Amazon loose. We all keep reflecting on our budgets and seeing what's the most integral kind of depends on the programming as well. I'm sure bloom expenses, sof I're going to be bringing us, well, what the hottest deal is apparent. According to my producer, it's makeup rushes solution with Collagen. Who knew that does it? For this edition of Bloomberg Technology Tomorrow exclusive with jes Lee, partner at Sekoya Capital, her advice to find us on

how to navigate the current market conditions. You do not want to miss it, and don't forget to check out our podcast. You can find it on the terminal as well as online on apples. Qualify an i heeart from New York. This is a Bloomberg