Twitter's New Chapter, Pinterest Outperforming Peers

compared to its peers like Snap Meta Alphabet. We'll catch up with CEO Bill Ready to talk about its strategy to reignite the platform. And in China and exitus of workers has threatened to disrupt output at the world's largest iPhone plant operated by fox On Now. The company is said to be raising wages by as much as to keep production going. We're gonna have all the details later this hour. This week, of course, marks the beginning of

a new chapter in the Musk Twitter saga. In the span of just two days, he has completed the acquisition, fired Twitter's top executives, and taken over as Chief Twitter. Joining us now for more. Mark Mhaney, Senior managing director at Evercore, I s I who covered Twitter as a public company, and our very own senior executive tech editor, Brad Stone. So Brad, he's also dissolved the board. He's the only board member as of now. What's actually happening

inside Twitter at this moment. I think there's a lot of anxiety and confusion and speculation right now. Emily employees are bracing for layoffs. They're swapping phone numbers, connecting on LinkedIn, a lot of people assuming they're probably about to get kicked out of the system. We know thanks to Mike colleague Kurt Wagner, a lot of managers had to create lists over the weekend of employees that they were planning to let go today. Nothing's been announced, but it really

only seems a matter of time. And then other than that, they're throwing a lot of things against the wall. You heard this thing about maybe reviving Vine, Twitter's old video sharing service that they closed in two thousand sixteen. Twitter would have to rebuild it to convince creators to come back. They haven't been able to make money on that when they when they had it, so that would be a big challenge. And then this idea of getting people to pay for that blue check mark that we enjoy. Emily,

the verification um twenty dollars a month was floated. I think they're throwing some things against the wall. We do know that Ellen wants to revive subscriptions at Twitter, so maybe that's one piece of a broader plan. But it's still very early. Mark, I someone who covered the company as an analyst four years, What do you make of it? What of what? What kind of a proposition is this

really for investors today? Well, I think it's gonna be a it's gonna be completely revamped over the next year too. And um, you know, I listened to much very carefully for the last six months. I didn't necessarily to hear business plans. I think he had a lot of other reasons for owning the asset, and so it's his now. I think from a from if this were to come out into the public markets again, I guess that this business will be completely revampeded. But if I just step back,

Twitter didn't really do much in the public markets. She was there for what seven years, and uh, it barely moved over that course of that time. It is very volatile. It um, it never really gained dramatic share amongst amongst advertisers marketers. They generated reasonable a modern revenue five billion a year, They had reasonable free cash flow, but they could never really break through beyond being like a second

or even a third tier advertising platform. I haven't heard anything from from us that suggests he's got a plan to to break him out of that. I think subscriptions are are limited as to long term strategy for Twitter. Good strategy, but they don't dramatically move the needles. So I'm sort of I'm skeptically watching this from a distance. I hope he can improve the business model there, but

I'm not I'm not holding my breath on that. But if he can, wonderful In the meantime, I think his intentions were very different than improving the business, and you know, I wish him good luck with the rest that he's trying to do with the business. Brad We reported that in the hours after his takeover, hate speech surged on the platform. Twitter responded saying a lot of that was

inauthentic behavior. Over the weekend, Must also retweeted an article with a conspiracy theory about the attack on now speaker Nancy Policy's husband, obviously, this is a person with a huge audience that obviously creates huge opportunities but also real dangers.

What does all of this tell you, Well, I mean, there was a breathtaking lack of respect with that tweet for the former Senator and First Lady Hillary Clinton, for the Speaker of the House and her husband, for the facts of the case which are now very well established by the criminal complaint coming out of San Francisco. I mean,

really believe the conspiracy theories? I don't think so. What it tells me is that like owning the lips, provoking Democrats being contrariant, this is kind of the animating philosophy right now, not only the right wing Republicans, but the pro business moderates like Elon and David Sachs. They just

enjoy this pointless provocation. And you know this is penn Elon m o on Twitter for quite some time now, Jack Dorsey, We're just getting this headline, Jack Dorsey contributing eighteen million Twitter shares to retain an indirect stake in this company under Elon musk Mark. What do you make of that? And what do potential advertisers who have been working with Twitter for all these years make of what's

to come. I mean, clearly there's a lot of uncertainty. Well, I'll just hit on the second part of the second question, Emily. So this is this is key. I mean, this is this is how of the revenue from Twitter and the pass came from advertising. I find I don't really see a business model in the future that doesn't still have plus to the revenue come from advertising, like it does with every other social media asset. There's nothing wrong with that.

It's a high margin business. Wonderful thing about social media is that they don't have to pay the content providers or play largely don't, so it's a very high margin business. You just need to sell effectively adds against it. One of the things that Twitter has been trying to do for the last couple of years is moved beyond brand advertising to direct response advertising, which has kind of always

been the power alley of Internet advertising. The problem is that those dollars have gone to Google, and they've gone to Facebook and a few other places, and they've only trickled down to Twitter because in part because Twitter has never really had great tools for direct response advertisers. So maybe that's all part of the fix at Twitter. From a business model perspective, that's not going to happen in a quarter or two. That's a year or two slog

for that to happen. In the meantime. Marketers all this debate about whether there's um uh censorship or not on on Twitter. Marketers, I think they just want something that's relatively well regulated. They don't want their brands put against nasty content, whether that's whether that's a verbal or whether it's graphic. Uh and um so I think uh if something changes in the marketplace that makes it less user friendly, makes it makes it if there's more vulgarity on the site,

I think advertisers will pull back from that. So there's a real tough balancing act here between what must he is trying to do and what marketers want. And you know, I saw his tweets to market to marketers over the weekend. He said he would try to avoid the place becoming a hellscape. I think he does that for personal philosophical reasons, but also for business reasons, because if it does become a healthscape, advertisers will flee. Rad Curious what your take

is on these Jack Dorsey filings. We're getting this all from a third ten d that Jack Dorrisey still retaining an indirect stake in Twitter. I mean Jack Dorsey is the author of this whole situation. He personally solicited Ellen to come by the company. He long felt that Twitter would do better as a private company. He helped taking a public with one of the company's big mistakes. So you know, it doesn't surprise me. He's a big fan of Elon's. He wants to be a small part of

of Twitter's makeover. He cares deeply for the company. Uh, so you know he's putting his money where his mouth is. Um, it'll be interesting to see if he has any operational or advisory role in the new Twitter. Of course, it's it's too soon to tell. But no, this doesn't surprise

me at all. Well, speaking of that, I'm curious what you think about him surrounding himself Elon Musk surrounding himself with people like David Sacks and Jason Calcannis, both of the All In Pod, both with a point of view. You've also got Amy Klobuchar, Senator Amy Klobuchar out there saying that she's worried that hate speeches an even bigger liability now on Twitter. Um, you know, clearly we're still

waiting for the plans to form. But you know, how what sort of conclusions are we supposed to draw here about what kind of company he's going to be running. Well, well, look, I think everybody was bracing for Donald Trump to be reinstated onto Twitter at the very first day of Elan owning the company, and it did happen. You know, I feel a little sheepish praising Ellen here for exercising restraint.

But to go back to Mark's point, I think he's now got to balance some of his rhetoric with the realities of running a company and keeping the advertising base and keeping advertisers happy and and fostering you know, kind of kind of reasonably safe dialogue on the on the surface. You know they've talked about in oversight board. We don't there's a lot we don't know. Is that, like Facebook's oversight board, a sort of kind of veto appellate body,

or is it more than management of the company. You know, these are all real serious, hard questions that Ellen and his his friends now who all have other jobs, by the way, have to have to determine. And you know, I wish them well. These are these are tough decisions. Are who knows that's CEO position, according to Ellen is open. He's just the chief twit for now, Bloomberg's Bradstone. Thank

you so much. Mark Mahaney of ever Card, Mark, you're going to stick with us and help us break down some of the big tech results we've seen of the last couple of weeks. Sticking with Twitter, Democratic Senator Chris Murphy said Musque's purchase of the platform should be scrutinized. Murphy tweeting today, I'm requesting the Committee on Foreign Investment to conduct an investigation into the national security implications of

Saudi Arabia's purchase of Twitter. Now, among the investors backing must take over, Saudi Prince Alwa lead been to lall through the Kingdom holding Company and his private office, which agreed to roll over nearly thirty five million Twitter shares worth about one point nine billion dollars. Back now with Mark Mahoney of Avercor to talk about big tech results. Mark, I gotta start with Meta. It's sold off more than sevent so far this year. I just checked its market cap,

less than two hundred fifty million dollars. We're back to October levels. I mean, would you have ever thought this could be possible? Um, after this company has achieved such historic high I didn't think it would be possible. Um Well, I guess I thought it was possible, but I didn't think it was probable, or else I would have had a buy on it. Mikel has been dead wrong on

this for the last twelve months or even longer. This company hit this buzz saw of these Apple privacy changes, competition from from TikTok, and now an advertising economic recession, and then this fourth kind of spoiler alert issue or spoiler issue, which is what really came up last week, which is that the market wants them to cut out the spend on the metaverse, slash it in half, rain

and expenses. It's a recession. When when that happens, you're supposed to kind of marry down, ratchet down expenses and investments to kind of kind of match up with with the deteriorating revenue. And the company is sort of refusing to do that. Zuckerberger's refusing to do that. And I think this last part is really just fight selling on a part of investors who were saying you know, the

It's wasn't the revenue results. People expected softness there. It was that they that the clinging to this aggressive investment horizon in this environment, and the market has said no, that too much. It's no mosque, We're out of here. We're selling now. There were a couple of companies that had strong quarters Apple Pinterest, which is interesting given their role in the advertising business. But of course Alphabet, Meta, Microsoft, Amazon,

all having a really tough quarter reporting. What's the common thread here, Well, just the only thing I uh equivabal with you on is Pinterest. Pinterest revenue results actually deteriorated. Now, the expectations have been set low enough that results came in a little bit better than expected. By the way they did with Meta too, ad revenue came in a smidgin better than expected. So it wasn't a revenue problem.

Is that people just don't want them investing out, particularly they don't want them investing in the metaverse with their return on that investment dollar is so uncertain. What's happening is demanded softening across the board. So the two most interesting parts to me, Emily were Google. This was the first quarter that Google said there was weakness and search. They hadn't said that in March, they hadn't said that in June quarter. They said that in the September quarter.

And search is usually considered to be the most not recession proof, but recession resilient of all the ad platforms. So if Google seeing it in search, you can you can be pretty sure that just about every other company

is seeing it. And then there's Amazon. Amazon, and the June quarter was specifically asked whether they've seen any signs of consumer softness in the CEFO said no, Well things have changed now they're starting to see softness, and they saw it in Europe maybe not surprisingly, and now I'm starting to bleed over to the US. So the real question is how much worse could it get? We know what's getting softer, will it continue to get softer and for how long? And that's that's a really hard one

to know. But it's a macro call. And I think all of these companies, especially they have exposure to the consumer, but even Microsoft and and Amazon with a WS are are saying that enterprises are starting to slow down to we're heading into recession demand trends or softening across the board, and any company who tells you that that's not the case. It's probably be either doesn't know their business or is

not being honest. Interesting point you made about Pinterest. Bill Ready, the new CEO is going to be on the show in in in a few minutes. I'm gonna put your point to him. I do want to ask about the broader advertising landscape and what your outlook is. You know, you also cover Netflix, which reversed the decline and subscribers for the first time in a while. You've got now the streamers going after a piece of the advertising pie in addition to the social media companies going after the

advertising pie. How is this all going to play out well? By the way I think Pinterest is maybe really will set up here. You know, you've got a turnaround story, um executive with a very good execution track record, asset that may not have been run that well in the past.

So there's a turnaround story. By the way, there's sort of is a Netflix too, which is why the stock has been a monster stock to the upside finally over the last couple of months, because there's this new revenue team that they're going to go from zero to a huntred. Question is just how quickly. But you know there there's there's enormous demand for from advertisers for access to Netflix's base. I mean two or your twenty million people who use the site, you know, an hour or two hours a day.

So you've got reach, you've got frequency, and you've got almost like a primetime audience. You know that that prime audience I meant like Amazon Prime s. The average household probably rescuse middle to upper middle income globally for Netflix. So there's just a lot that brand advertisers can tap into. For the first time ever, you can own Netflix inventory,

so that that's what there's something new. If you don't, if you don't have something new, brand new in your in your fundamentals, they are going to get weaker in the back half year and going into next year. That's the advantage that Netflix has right here. I like Netflix is one of my topics, so is Meta. I just didn't. I just thought Metal was gonna show more cost and investment discipline than than they've led on mark human covering tech for two decades. Do you think we're seeing a

real inflection point here? Is there further to fall? And how how long does it take before this turns around well, so to two thoughts, Um and I love the way you set up the question. So yeah, we have a negative inflection here. These are tech is bigger than it was during the last cycle O eight oh nine with the great housing, great financial crisis, Great housing, great financial crisis. Those are the same thing, and so it's much bigger.

So it's more cyclical than it was back then. Look, our our our firm aber Coorien size call is that overall advertising is going to decline mid single digits next year, which probably means to digital advertising is going to be flat up five percent. There's another inflection point yield that I'm super interested in. We'll have to come back to it.

But that's AI. So what Facebook and Google are doing, met and alphabet they're spending seventy billion dollars combined next year on capex related to AI, artificial intelligence and machine learning. I'm fascinating And Bill Ready has been uh, very thoughtful on this topic too. I'm fascinated by what's gonna come out of this. The market is assuming that there's very little return on that AI investment, that AI capital expenditures.

My guess is at Google and and men have probably know what they're doing, and we're going to see some sort of return on it. But but and so when we see that, I don't think that's pricing. I think that creates some wonderful long term buying opportunities on these two stocks. What I fear is that the stocks are first going to go down because of macro and recession before they start moving up because of artificial intelligence. All Right, we're gonna have to dig in to artificial intelligence with

you next time you're back on the show. Markmahenny of ever Core, I s, I always appreciate your perspective, and especially your historical perspective. Given how many years you've been doing this, We're gonna have much more ahead. Stay with us. This is Bloomberg, another story we're continuing to watch. Electronic Arts will develop three video games inspired by Marvel comic book characters. That gives the company access to the most

popular entertainment franchise in the world. The scheme e A is making is based on Iron Man, that is, the billionaire inventor and superhero who was the main character in one of the first hit Marvel movies. Welcome back to Bloomberg Technology and Emily Changing in San Francisco. Let's get back to the markets and social media stocks on the move. Bloomberg's at Ludlow is back and take it away. Yeah, there was a pocket of weakness in the market when

it comes to social media shares. We talked about how Meta closed its lowest level since October. There were reports from down to detect to seven thousand incidences of people saying that Instagram had crashed and was having some glitches and was down. But you would suspect that a lot of the pressure on this stock stems from that disappointing earnings report last week. Snap caught up with that down one point sent Pinterest Interesting had its best day in

more than two months last Friday after strong earnings. I think the street really liked what they saw, but giving up some of those gains in Monday session down one Pinterest really interesting stories. We look at the stock year to day relative to met Her and Snap. We know about softness and the advertizing space, but actually relative to

its peers, Pinterest is held up really well. I'm really interested in what the story is here and what invests see in Pinterest relative to a Meta, relative to a Snap. That said, of course, it is still down pretty significantly year today, and I'm hoping that you can ask which direction the stock goes from here? All right, I will

indeed thank you. Pinterest has been out pacing its peers, as I mentioned, posting strong third quarter results with an uptick and monthly active users after three straight quarters of declines. This as the social media industry grapples with a decrease in digital ad spend while marketers worry about economic uncertainty. Joining me now for more on this bi already, Pinterest

CEO has been on the job since late June. So how is it that Pinterest seemed to buck the ad media spiral we saw with Snap and Meta and others. Bill Well, first of all, thanks for having me Emily. Always a pleasure, UM, And I feel really great about how our team performed in Q three. I think you know we're we're doing some things that are fundingly different than the rest of social media, and I think you're seeing that start to cut through with advertisers, uh, and

and with users. We grew teen percent year on year on a constant currency basis. UH, really outpacing a decelerating market and growing faster than a lot of our peers, which means we're taking share. Uh. And I think part of that is that, you know, number one, we're a positive platform. We're not a place where people go to shout about their politics or to present their seemly perfect life that makes others feel negative. Uh. It's it's a

place where people go to find inspiration. UH. It's a place where people go with an intent and a purpose. And that's a very unique thing in the space, both for what the users get as well as what advertisers get. It's a full funnel ADS solution in the advertisers can connect at the upper, mid and lower funnel and really meet you. There's a multiple points along their journey. And so the brand safe nature of the platform, paired with the full funnel nature of it, UH, user growth returning,

these things are all starting to really cut through. UH. And I think you see it demonstrated in our results. Let's talk about what advertisers get, because obviously we're seeing a broader ad pullback. What is your outlook as we head into three and how much of that you know, pinterest gains? Do you do potentially gain ad market share or not As we head into a potentially pronounced long term economic downturn. Yeah, well, I think it's clear when

you look at our performance relative. Here's this past quarter that we've been gaining share, uh and where a smaller player than many of the others, and so I think there's a lot more opportunity for us to pick up share. That said, we know we outran a decelerating ad market this past quarter, and you know the market looks to still be choppy, and so we're looking to make sure that we show up with really great value for our advertisers. And we're doing that through you know, a number of dimensions.

You know, a couple of which I mentioned around really help helping the advertisers meet the users throughout the full funnel. I think that's quite unique when you compare us to other social media platforms. Most of them have the user and sort of a lean back entertainment mode where the user is there for some other purpose, whether it's to watch a funny dance video or to view pictures of their friends. People come on Pinterest looking for products. More than half of them are there to shop, and so

they're there with an intent and a purpose. And the fact that we get users at the upper, mid and lower stage of their journeys means that we're able to help the advertiser connect across those and really meet users at this sort of magic moment where they have an idea, a general idea of what they want, but they haven't decided what to buy yet, and so that's really cutting through.

And then finally, I just say, you know, every CMO out there has been approached by their CFO saying Okay, you've got to go drive performance, and sometimes that results in a bit of a Sophie's choice where that means that they oftentimes rushed to last click, but it means

they're not getting to tell their brand story. And what pinterest is delivering that we're finding really resonant with advertisers is the ability to tell their brand story in a performant way because we do have the lower funnel aspect of that as well, and and can connect across that that user journey. Let's talk a little bit about users, because obviously investors are excited about the reignition of growth.

Here we had Mark Mhaney, who covers pinterest on earlier in the show, he said, to be fair, expectations for Pinterests were low, though he is very optimistic about you coming in and you know, bringing a new perspective on how to manage this company. What are you doing to attract gen z and how and what is the evidence that that is working. Yeah, so you know, we return to user growth this quarter. We stabilize the user based based return to user growth, and we really doing doing

that by leaning into the uniqueness of the platform. When you think about it as a positive place and a place where people go with intent and purpose, it really is unique across social media. It's also quite unique and that it's a place where people go to express their creativity.

And so we're leveraging those things, leaning into them more, drawing the contrast from the rest of social media, and you know, really leveraging the unique human curation that happens on our platform to drive better and more personalized experiences

for our users. To give you a tangible example of that, you know, you can go lots of places to find a great new dress, but if you think about how to put together a great outfit and what handbag and shoes and accessories might go really well with that dress.

M Yes, we're doing a lot with machine learning, as many others are, but machine learning is only as good as a signal that is acting upon, and we have hundreds of millions of pinners that come to our platform and curate boards that tell us what kind of accessories

might go well with that dress. So when you get recommendations here, it's not just from really great machine learning, it's really great machine learning acting upon signals from hundreds of millions of pinners that are telling us what things go well together, whether it's putting together an outfit, or putting together a room, or thinking about how to put together really great holiday plans for what a great meal might be. All these things. We have great human curation

that happens on the platform at scale. They're just completely unique across the space. I don't think you really see it happening any place else. And we pair that with great machine learning, great advertising capabilities. It's really cutting through to drive user growth and revenue growth. Now, even the point that Pinteresque you see as as being very different from other social media platforms, I'm so curious what you

think about what's happening at Twitter. You know, it's unclear what the business model is even going to be unclear whether advertisers are going to stick around. Is Twitter under Elon Musk, possibly an opportunity for pinterrests to take some of those ad dollars or even to take some of

that mind share, or is it a totally different proposition. Well, I mean, I can't comment on any one specific player, but I would say that when you compare pinterest to social media more broadly, Uh, First, I'd say, you know where this really unique intersection between social search and commerce,

which is totally different than other platforms. I think when add on to that the positive nature of our platform, which we tune for intentionally, uh, and we hear from users that it's a place that they feel uplifted, they feel inspired, whereas oftentimes on other platforms they're you know, seeing people shout about their politics or you know, you know generally activity that you can lead them feeling leave them feeling anxious or depressed or these kinds of things.

And they feel lifted up on our platform. And so we're leaning into that, and as we do that, it makes it a brand safe space for advertisers. And so that's something that advertisers understood about Penchess for some time. We're leaning more and more into that and we're seeing it cut through more and more versus the rest of

social media. How has your Google commerce background come into play thus far and have you had any sort of light bulb moments about how to make that connection from something you see on pinter as to something that you

buy much more concrete? Well, this is a great question because while Pinterest is a full funnel platform, uh, you know, his historically been stronger in the upper and mid funnel, where people would find a lot of things they found interesting on Pinterest, but then they have to go somewhere else to go act upon that. And part of what we're doing is making sure that as people find things on Pinterest, that we're leaning into that intent to action,

making things much more actionable. So I talked about on our earnings call. We want to make it so that every image of every product that you encounter on Pinterest becomes shoppable, whether you find that in a scene or in user generated content. When you see a great product, even if it's you know, some celebrity that's wearing it, you say, oh, I want that product or I want that same look. Uh. That we're making that more and

more shoppable for people. And as we do that, connecting that intent to action strengthens the lower funnel part of our business, and we think there's a lot more opportunity to go there. I think it's historically again been a place where the platform wasn't as strong, and we're making that much stronger over time. And there's good progress already.

I talked about shopping as being up fifty year on year conversions, so really good progress there, but a lot more to do there and as we do it that will be better and better engagement for users and also really great advertising opportunities for our partners. Now, your collage making app, Shuffles, has seen really good traction, I know, especially in the United States, helping with engagement and active users.

What's the longer term vision there and how can you integrate sort of what you're learning from Shuffles into the broader experience. Yeah, so great question, Emily, Shuffles. We've been, you know, quite excited by the progress with Shuffles. There are college making app that has just really resonated with gen Z and I think it's indicative of how there are a number of adjacent use cases that we can

explore with Pinterest. They really lean into the unique nature of our platform where we do have people in that lean forward mode looking to express our creativity. So I think we have license to bring those kinds of experiences to users. Shuffles is one example of that, and I also say it's just one example of how we're cutting through with gen Z. Even separate from Shuffles, our gen Z user base has more than doubled since Q three of nineteen, and for this quarter it was our fastest

growing demographic. So Pinterests is cutting through with gen Z users, and I think for a lot of the reasons that I shared already that it is a positive place. It's a bit of an oasis in the world of social media for free users, where uh, it's a it's a smaller circle. It's a place where the who you know collaborate with closer friends versus you know, having to worry about being shouted down or these kinds of things. Uh. It's just felt as a safer and more inspiring space

by many users. And so that's really resonating with gen Z, and as we give them more and more tools like Shuffles, we think there's a lot more we can do to serve that as a great up and coming demographic. Alright, pinterest CEO Bill already, Bill, thank you so much for joining us as always created from you. Appreciate the extended conversation. All right, coming up, getting a second look. A new team is taking a crack and investigating Tether and whether

the stable coin executives committed a crime. That is next. This is Bloomberg, a Justice Department probe into the stable coin Tether is getting a fresh pair of eyes after struggling to reach a conclusion. Joining us now our Bloomber crypto reporter Matt Robinson And Matt, it's very unusual to redirect an investigation like this. What exactly is the d

o J looking into? Right? So, the Justice Department has long been looking into Tether the last few years about a variety of its statements, for for instance, how much money they have to back the stable coin, also to what they told banks when they were transacting. So this investigation started with Maine justin has moved to prosecutors in Manhattan. UM. So they're looking to see if any sort of you know,

if there's bank fraud violations. Uh, you know, given the size of um Tether, it's the third largest cryptocurrency beyond excuse me, behind bitcoin and Ethereum they want to make sure that those uh, you know, what they've told the banks and is accurate. Remind us what is tether. This is the third largest cryptocurrency. The creators have said it's backed by the US dollar. What does it actually mean

to the crypto ecosystem. It's it's very important. It's very unusual part of the excuse me, crypto ecosystem because it's it's designed as a stable coin. It's it's like a digital uh stand in for dollars. They get started. You know, this was time in the industry where you know, there wasn't a lot that was stable. They wanted to keep your cash or you wanted to keep your dollars and something that you know, I wasn't going to move, you know,

dramatically overnight. So it became just a crucial part of the excuse me of the market because often folks, oftentimes folks are going to be trading Bitcoin with Tether or you know, ethereum and tether. And so it's grown to almost seventy billion dollars um, you know, a massive fund and and you know, the company has come into some other regulatory probes from from other agencies. For instance, the CFTC over the amount of money, the amount of cash

backing their stable coin. So it's an enormously important part of the market and how it functions, um, you know, with traders being able to use it to to make speculative bets on on other cryptocurrencies. What's the likelihood map that criminal charges actually happened here? Uh, you know that's

that's obviously up for d o J to decide. Um. You know that, as we reported, the tether is looking for declination letters, which is basically the Justice Department saying you know, we we've looked at this and now you know we're we're declining to pursue any charges. So that that's you know, that remains to be seen, all right, Bloomberg's Matt Robinson, Matt, thank you so much for that. We will follow your reporting to stay up to date

on this investigation. Workers at a fox Con production plant in central China, the largest iPhone factory in the world, are walking off the job, hitching rides and dipping into their savings to escape another COVID lockdown. Bloomberg's Debby Woo has all of the details for us. Debbie, in your story, you profile woman named Dong Wan Wan who is literally walked I believe twenty five miles um and quit the job to get out of there. Tell us more about

what is happening. So what is happening is COVID recently yells right through well Fox comes up two people's site in central China that makes the world's most iPhones. And after lot also following a lot, the we have seen no trash piling up in dormitories nearly campused. And also that the people who got into a quarantine sometimes are not getting uh meals meals in time, and then uh sometimes they are just uh sort of getting only a

bread for meals. So because of all these issues, uh, some workers have decided that they just want to quit and go home. And because of a lack of our transportation and also strict COVID controls, let's still uh in place in the places at home. So what workers have to walk back to where they come from. So in the story that we reported, uh list twenty year old have to walk about nine hours to get home. You know, the rigid you know, sometimes brutal hours at a fox

can plant has been well documented documented. What is Fox can't doing to get around this and is it impacting supply at all because this slowd own iPhone production, So what is happening in South fox Song is raising wages by almost a third, and then it is also trying to get the backup capacity elsewhere online to make sure

that the supply impact of supply will be minimized. And at the same time, UH we have reported previously that the UH, due to weakeningment, Apple is actually canceling the UH ideas for any more orders for our new iPhones this year. So this is like a given economic headwinds on the one hand, and also giving UH the number of workers require, it's probably not as many I think

it is. We still need weight kind more time to figure out what exactly the impact is coming out of this COVID UH incident in Central China and talk to us a little bit about how this fits into how President she has been handling COVID more recently against the backdrop of what's happening with the Chinese Communist Party. So after the party congress originally previously, people may be expecting that there may be indication that China can come out of UH. THEREI COVID and then no focus more on

economic growth, but clearly it's not happening. So for instance, in uh Hanan or in a Zeno where are foxhansa iPhone campus is located in the local leaders there are still uh saying that they need to a prioritize zero COVID and then not to implement COVID combating measures. So I think it is going to be a bit difficult and challenging for what China ready to come out of zero COVID, And then I think it's hard to predict

when list might be a completely uh go away. All right, Uh well, your story definitely worth a read, reading about Don Juan Wan and many more that we will for Bloomberg News. Thank you, and that does it for this edition of Bloomberg Technology. Make sure you tune in Tuesday our conversation which uber CEO Dara CAUs Rashah after the company reports results. You don't want to miss that. And of course check out our podcast wherever you get your podcasts.

I'm Emily Changing, San Francisco. This is Bloomberg