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00:00> > I'M CAROLINE HYDE BLOOMBERG'S WORLD HEADQUARTERS IN NEW YORK. > > THIS IS "BLOOMBERG TECHNOLOGY." > > FTX'S ATTORNEYS SAY SUBSTANTIAL AMOUNTS OF ITS ASSETS HAVE BEEN STOLEN OR ARE MISSING. TONIGHT -- TODAY'S BANKRUPTCY HEARINGS SHEDS LIGHT ON THE PRIORITIES AFTER THE MISHANDLING FUNDS. ED: CRYPTO CONTAGION WORSE AS WITH THE WARNING OF BANKRUPTCY. FINANCE CEO WHO IS POSITIONING HIMSELF AS THE SAVIOR OF CRYPTO IS TURNED -- TURNING TO THE MIDDLE EAST FOR A CRYPTO RECOVERY FUND. CAROLINE: ZOOM'S CHIEF FINANCIAL OFFICER JOINS US TO EXPLAIN ITS SLOWEST QUARTERLY SALES GROWTH ON RECORD, AND PLANS TO NAVIGATE THE ECONOMIC HEADWINDS. LET'S CHECK IN ON MARKETS. WE PUSHED HIGHER. THIS IS A HOLIDAY SHORTENED WEEK. VOLUMES ARE THIN, DOWN 20% FROM YOUR AVERAGE. THE S & P 500 MANAGED TO CLIMB BACK TO THE HIGHEST LEVEL SINCE MID-SEPTEMBER. WE THANK APPLE, SOME OF YOUR BIG TECH HEAVYWEIGHTS WHICH PUSHED THESE INDEXES HIGHER. NASDAQ UP 1.36. THERE WAS A LITTLE BIT OF OPTIMISM WHEN IT COMES TO CRYPTO. IS THIS MORE A STORY OF DOLLAR WEAKNESS THAN CRYPTO STRENGTH? OVER THE LAST TWO TRADING DAYS, IT HAS BEEN UNDER PRESSURE. LOOK AT THIS PUSH HIGHER, TRADING ABOVE $16,000 WHEN WE ARE LOOKING AT BITCOIN. ED: SOME BIG NEWS IN THE LAST HOUR. HP INK WILL CUT UP TO 6000 JOBS OVER THE NEXT THREE YEARS, REPRESENTING A SLOWDOWN IN DEMAND FOR PERSONAL COMPUTERS. THAT AS ITS EARNINGS DISAPPOINT. THE STOCK HIGHER IN AFTER HOURS, IT BID ALL OVER THE PLACE. THE STORY THAT WE WILL MONITOR. EARNINGS CONTINUE TO BE A GOOD STORY. LOOK AT THE MOVERS, STOCKS WE HAVE BEEN WATCHING THROUGHOUT THE SESSION. ANALOG DEVICES, $3.15 BILLION FOR THE NEXT THREE MONTHS. THAT IS SETTING IT APART FROM THE REST OF THE CHIP INDUSTRY, WEATHERING THE STORM. ZOOM, SLOWEST QUARTER OF GROWTH ON RECORD. WE WILL TALK TO THE CFO ABOUT THAT. CHINA, ANOTHER BIG STORY. I HAVE BEEN LOOKING AT CHINESE TECH STOCKS, OUTPERFORMING. SURPRISE REVENUE GROWTH FOR INTERNET GIANT AND -- GIANT BAIDU. WE ARE WATCHING JD.COM, CUTTING MANAGER SALARIES BY 20%, THEN DISPERSING THAT MONEY AMONGST THE GREATER WORKFORCE. ALIGNING ITSELF WITH XI'S, AND PROSPERITY INITIATIVE. INTERESTING STORY ON THE BLOOMBERG TERMINAL. SOMETHING IS CHANGING WHEN IT COMES TO CHINA TECH. CAROLINE: REALLY GREAT GLOBAL PERSPECTIVE. LET'S BRING IT CLOSER TO HOME. THE STORY HITS ACROSS THE WORLD, THE FTX STORY. WE EMERGED FROM THE FIRST FTX BANKRUPTCY HEARING ON TUESDAY. IT INCLUDED AN ATTORNEY REPRESENTING THE FIRM, SAYING A SUBSTANTIAL AMOUNT OF THEIR ASSETS ARE MISSING. LET'S BREAK IT DOWN. KATIE GREIFELD. SHOCK AND AWE, ALMOST BECOMING NUMB TO IT. WHAT DID YOU TAKE AWAY FROM THE HEARING? KATIE: A FIERY FIRST DAY. IN ADDITION TO WHAT YOU WERE SAYING ABOUT THE ASSETS BEING LOST OR STOLEN, THIS BACK-AND-FORTH ON THE TOP 50 BIGGEST CREDITORS, THE FACT THAT THEIR NAMES ARE REDACTED, WE DON'T KNOW WHO THEY ARE. THAT WAS AN INTERESTING STORYLINE. IT IS REALLY UNUSUAL THAT THEIR NAMES WOULD NOT BE MADE PUBLIC. THERE WERE AT LEAST TWO GROUPS OF CRYPTO CREDITORS. THEY SENT THEIR LAWYERS THERE. ONE OF THOSE LAWYERS WAS PROTECTING -- OR WAS WORKING FOR MEMBERS OF THAT TOP 50 GROUP, REALLY ARGUING THEIR IDENTITIES SHOULD BE KEPT SECRET. FOR NOW, WE KNOW THAT THEY ARE GOING TO REMAIN UNIDENTIFIED. THAT IS INTERESTING WHEN YOU TRY TO MAP THE CONTAGION ABOUT WHAT MORE SHOES ARE WE WAITING TO DROP. WE WOULD LIKE TO KNOW WHO IS ON THAT LIST. IT IS GOING TO REMAIN UNDER WRAPS FOR NOW. ED: MISSING ASSETS. A DEBATE AROUND THE ASSETS, OF WHO SHOULD BE DOING WHAT ABOUT WHAT TO TALK ABOUT WHAT IS HAPPENING IN PARALLEL IN THE BAHAMAS? KATIE: THAT IS THE THING. WHAT COURT HAS JURISDICTION HERE OR IS GOING TO HANDLE IT? THAT HAS BEEN A TURF WAR THAT HAS ERUPTED. WE KNOW FOR NOW, THESE DUELING LIQUIDATION PROCEEDINGS IN THE BAHAMAS, THEY WILL BE TRANSFERRED TO DELAWARE. YOU ARE STILL GOING TO HAVE FTX'S U.S. RESTRUCTURING ADVISORS IN THE BAHAMAS. THEY WILL TRY TO WORK OUT RULES FOR SHARING THE INFORMATION. FOR NOW, IT LOOKS LIKE THAT IS BEING TRANSFERRED TO DELAWARE. ED: KITTY GREIFELD, THANK YOU LET'S CONTINUE THE CONVERSATION WITH THE CEO OF THE CRYPTO TRADING PLATFORM, FALCON NEXT. YOU HAVE A HISTORY WITH FTX WHICH WE WILL GET TO. I FIRST WANT TO ASK YOU, WHAT ARE YOU SEEING AMONG YOUR USER BASE, CUSTOMER BASE, IN A CRYPTO MARKETS? WHAT DOES THAT REFLECT BASED ON WHAT IS HAPPENING WITH FTX AND THE FALLOUT FROM IT? > > FIRST OFF, GOOD TO BE BACK. WHAT WE ARE SEEING IN THE BROADER CUSTOMER SENTIMENT IS DEFINITELY THE FIRST FEW WEEKS WERE SHOCKED. EVERYONE KNEW THAT ALAMEDA WAS A CONTRA PARTY ON FTX. WITH THE LACK OF SEPARATION, IT WAS A HUGE SHOCK. ESSENTIALLY, ALTHOUGH CUSTOMER CHATTER IS ALL ABOUT WHICH SHOE IS GOING TO DROP NEXT. PEOPLE ARE PAYING A LOT OF ATTENTION TO THAT SPECIFICALLY. SPECIFICALLY TO ASIAN EXCHANGES, THEY ARE DOING DUE DILIGENCE AND MAKING SURE THINGS ARE OK. EVERYONE IS VERY CAUTIOUS AT THE MOMENT. ED: YOUR RELATIONSHIP WITH FTX, YOU DID TRANSACT THROUGH FTX. EXPLAIN YOUR HISTORICAL RELATIONSHIP WITH FTX AND WHERE IT STANDS NOW? RAGHU: WE DID HAVE ALAMEDA AS ONE OF OUR TRADING PARTIES AS WE STARTED THE BUSINESS. IF YOU WEEKS TO A MONTH BEFORE THIS ENTIRE CONTAGION, WE ENDED THAT RELATIONSHIP. IT IS ONE OF THE LARGEST ROGUE RIDGES ON THE PLANET. WE WORK WITH ONE OF THE LARGEST LIQUIDITY PROVIDERS OUT THERE, FTX. WE HAVE A SMALLER BALANCE SHEET, BUT WE ARE IN A GOOD PLACE NOW. CAROLINE: WHEN THE WITHDRAWALS WERE STOPPED, DID YOU HAVE ASSETS ON THE PLATFORM? RAGHU: COULD YOU REPEAT THAT AGAIN? CAROLINE: WHEN WITHDRAWALS WERE STOPPED, WHERE YOU LEFT WITH ANY ASSETS FOR OTHER COUNTERPARTIES ON THEIR PLATFORM? RAGHU: IF I UNDERSTAND YOUR QUESTION CORRECTLY ABOUT THE ASSETS ON THE PLATFORM, ESSENTIALLY, THIS IS GOING TO BE AN EXTREMELY COMPLEX LEGAL SITUATION. WILL DOUBLE JURISDICTIONS, MULTIPLE ASSETS, MULTIPLE REGULATORS AT WAR. WE ARE PREPARED FOR A LONG, DRAWN OUT LEGAL PROCESS. THAT IS WHAT AS IN A LOT OF OUR CUSTOMERS ARE GETTING UP TO. THE SECOND ASPECT OF IT IS A LOT OF INFORMATION IS MISSING. TODAY'S HEARING WAS A GOOD STARTING POINT. AT THE SAME TIME, WE DID NOT GET A LOT OF INFORMATION YET. WHAT WE ARE SEEING IN THE DEBT MARKETS IS ESSENTIALLY PEOPLE HAVING THREE CENTS TO FIVE SONS ON THE DOLLAR IS WHERE THINGS ARE BEING PRICED AND. CAROLINE: ANY ASSETS THAT YOU WERE HELPING MANAGE AND MOVE AROUND, WHERE THEY TRACKED IN ANY WAY? FOR YOUR IMMEDIATE REACTION FUNCTION AT YOUR BUSINESS WHEN WITH -- WHEN WITHDRAWALS WERE HALTED? RAGHU: THE FIRST THING THAT WE WERE LOOKING AT IS ESSENTIALLY THE NEWS FLOW AND ALL OF THE INFORMATION WAS QUITE CONFUSING AT THE START FOR EVERYONE. BECAUSE IT WAS A SHOCK TO THE INDUSTRY. THE NOTION THAT THERE IS A MASSIVE LIQUIDITY CRISIS AT FTX WAS A SURPRISE TO US AS WELL. AT THE SAME TIME, WE WERE OPERATING WITHIN OUR RISK TOLERANCE. THAT IS THE ADVANTAGE OF COMING TO A BROKER VERSUS GOING DIRECTLY TO AN EXCHANGE. WE HAVE A SPECIFIED AMOUNT OF FUNDS THAT WE DID NOT CROSS AT FTX OR ANYTHING ELSE OUT THERE. THAT WAS THE REASON WHY WE WALKED OUT OF THIS WITH A SMALL POSITION RELATIVE TO OUR BALANCE SHEET. ED: CAN YOU GIVE US ANY SIZE OR SCOPE ON HOW YOUR BUSINESS HAS BEEN HIT BY A LACK OF FAITH NOW IN THE INDUSTRY BROADLY? A LACK OF TRUST NOW IN THE INDUSTRY BROADLY? RAGHU: Q2 TO Q3 WHERE RECORD VOLUMES WITH RECORD NUMBER OF CUSTOMERS ON BOARDED FOR THE COMPANY. IF YOU LOOK AT THE LAST TWO OR THREE WEEKS, TRUST IS BROKEN. WE SEE THAT. ONE OF THE VERY INTERESTING DATA POINTS IS EVEN WITHIN THE LAST 2, 3 WEEKS, WE ARE NOT SEEING A LOT OF CUSTOMERS PAUSE AND GO AWAY FROM THE -- FROM THAT THAT WAS TO PRESENT. . THAT IS GOOD NEWS FOR THE SECTOR. DEFINITELY THERE IS A LOT OF DOUBT. WE NEED TO REBUILD TRUST. WE ARE NOT SEEING INSTITUTIONS WALK AWAY COMPLETELY FROM THE SPACE. CAROLINE: WHAT ABOUT THE FUNDERS OF YOU? SERIOUS DU ANNOUNCED ON SOCIAL MEDIA, $150 MILLION CAME TO YOU FROM HACKERS SUCH AS WELLINGTON MANAGEMENT, TIGER GLOBAL. OF THOSE BACKERS AND CROSSOVER FUNDS, ASKING YOU FOR MORE DETAILS ON YOUR BUSINESS, ARE THEY ASKING FOR SOME -- ED: I THINK HE HAS LOST YOUR ABILITY TO HEAR YOU. BUT SHE IS ASKING ABOUT YOUR BACKERS, INVESTORS. HAVE YOUR INVESTORS BEEN PHONING YOU AND SAYING, WHAT IS GOING ON, WHAT IS OUR EXPOSURE? RAGHU: A LOT OF INVESTOR CONVERSATIONS, ESPECIALLY IF YOU LOOK AT THE ROSTER OF INVESTORS ASSOCIATED THROUGH FTX. THESE ARE THE BIGGEST NAMES ON THE PLANET. THERE IS A LOT OF CONFUSION AND CHAOS IN THE EARLY DAYS WITH OUR INVESTORS AS WELL. WE DID SPEND A LOT OF TIME THINKING THIS THROUGH WITH OUR INVESTORS, IN TERMS OF RISK LIMITS. WE WALKED THEM THROUGH THE BALANCE SHEET. THE GOOD NEWS IS FALCONX AS A COMPANY WILL NEVER TAKE DIRECTIONAL THREATS. THE BIGGEST LEARNING CURVE OF THE 2008 CRISIS, AND WHAT LED TO THE VOLCKER RULE, IS IF MARKET INFRASTRUCTURE COMPANY START TAKING BETS, THE CASCADE APPLICATION WILL BE HUGE. FOR THAT REASON, WHEN WE STARTED THE COMPANY, WE ALWAYS WERE ON THE PRINCIPLE OF NEVER TAKE DIRECTIONAL BETS. THAT HAS RID THE COMPANY -- OF INVESTORS. ED: RAGHU YARLAGADDA, CEO AND COFOUNDER OF FALCONX, THANK YOU. COMING UP, HOW ECONOMIC UNCERTAINTY IS AFFECTING ZOOM. THIS IS OTHER TECH COMPANIES ARE TRIMMING COSTS. WE WILL TALK ABOUT THAT AND MORE WITH ZOOM KEEP -- ZOOM CFO KELLY STECKELBERG, NEXT. THIS IS BLOOMBERG. ♪ CAROLINE: LET'S TALK ABOUT THE SHARES OF ZOOM. THEY DROPPED TUESDAY AFTER THE COMPANY ACCORDED ITS SLOWEST SALES GROWTH ON RECORD. IN NUMBER OF ANALYSTS WERE REACTING AND YOU HAVE THE BREAKDOWN. ED: SOME ANALYSTS DID CUT PRICE TARGETS. AT ONE POINT, THE STOCK DOWN MORE THAN 10%. WE CLOSED DOWN ALMOST 4%. WHAT WAS INTERESTING FOR ME WAS MORGAN STANLEY, MAINTAINING EQUAL WEIGHT ON THE STOCK. THEY ARE SAYING EVEN THOUGH GROWTH WAS BETTER THAN EXPECTED, IT DID NOT SLOW DOWN AS MUCH AS FEARED, THEY CAN'T GET RID OF THIS NARRATIVE AROUND THE STOCK, THIS BEARISH NARRATIVE AROUND ZOOM. YOU AND I HAVE BEEN DISCUSSING ZOOM FOR WHAT FEELS LIKE A LONG TIME. IN REALITY, IT GOES BACK TO THE BEGINNING OF THE PANDEMIC WHEN THIS NAME BECAME A HOUSEHOLD NAME. STILL, REALLY BIG UNDERPERFORMANCE YEAR TO DATE. ZOOM IS ONE OF THE GREAT LAGGARDS, ESPECIALLY WHEN WE CONSIDER THE NAMES YOU AND I HAVE TRACKED SO CLOSELY, DOWN 60% YEAR TO DATE. HOW DO THEY RETURN TO GROWTH? IN THIS GENUINE POST-PANDEMIC PERIOD. CAROLINE: LET'S ASK THE WOMAN WHO KNOWS IT, ZOOM CFO KELLY STECKELBERG IS WITH US. TALK TO US ABOUT THE ECONOMIC HEADWINDS, MACRO AS THEY ARE, HOW DO YOU AS A COMPANY NAVIGATE THAT? HOW DO YOU RETURN TO GROWTH WITH YOUR SMALLER CUSTOMERS IN PARTICULAR? KELLY: WE HAVE TWO SEGMENTS OF OUR BUSINESS. WE HAVE THE ENTERPRISE, WHICH IS SUPPORTED FROM OUR DIRECTOR OF ORGANIZATION, IN THE ONLINE PORTION OF OUR BUSINESS. THE ENTERPRISE SEGMENT IS GROWING WELL. WE HAD 20% YEAR-OVER-YEAR GROWTH IN Q3. THIS IS WHERE WE ARE SEEING THIS TRANSITION FROM BEING A REALLY KILLER MEETING UP BUT EVERYONE KNOWS AND LOVES. WE BECAME KNOWN FOR IT DURING THE PANDEMIC. TWO BECOMING A PLATFORM THAT REALLY PROVIDES ALL OF YOUR COLLABORATION AND COMMUNICATION NEEDS, WITH ZOOM PHONE, ZOOM CONTACT CENTER, ZOOM ONE, A BUNDLE THAT BRINGS THEM ALL TOGETHER. THE AREA WE ARE SEEING HEADWINDS IS IN OUR ONLINE SEGMENT OF OUR BUSINESS. THIS IS, BY ITS NATURE, MORE INTERNATIONAL. MUCH MORE IMPACTED BY THE STRENGTHENING DOLLAR AND THE IMPACT OF FX. AS WELL AS THE IMPACT WE ARE SEEING IN EUROPE FROM THE WAR. THIS IS THE AREA WE ARE SEEING A LITTLE BIT OF MACRO AS WELL. SOME OF THESE CUSTOMERS THEMSELVES BEING IMPACTED BY SEEING CONTRACTIONS AND THUS RETURNING TO COST-CUTTING POTENTIAL CONSIDERATIONS. WE HAVE SEEN A TURN IN THE SEGMENT OF OUR BUSINESS RETURN TO PRE-PANDEMIC LEVELS. IT IS DOWN TO 3.1%. WE ARE SEEING SOME CHALLENGES, AS I SAID, HEADWINDS IN THE NEW AD APPEAR THAT IS WHAT WE ARE FOCUSED ON. WHAT WE NEED TO STABILIZE IN ORDER FOR IT NOT TO HAVE THE DAMPENING EFFECT ON OUR LONG-TERM GROWTH. ED: YOUR LONG-TERM GROWTH. COULD M & A DRIVE A PART? I THINK YOU HAVE TALKED ABOUT M & A IN THE PAST. HOW DO YOU USE M & A AS A TOOL FOR GROWTH? WHAT KIND OF COMPANIES WILL HELP YOU GROW IN THOSE AREAS THAT ARE DOING BETTER? KELLY: WHAT WE HAVE SEEN BE SUCCESSFUL FOR US IN THE PAST IS ACQUIRING COMPANIES THAT HAVE TECHNOLOGY THAT ACCELERATE OUR BUILDING OF THOSE TECHNOLOGIES. FOR EXAMPLE, LAST YEAR WE ACQUIRED A SOLVATE, WHICH BROUGHT CONVERSATIONAL AI, A MUCH NEEDED CAPABILITY INTO OUR ZOOM CONTACT CENTER PRODUCT. WE CONTINUE TO LOOK FOR OPPORTUNITIES LIKE THAT WHICH ACCELERATE OUR DEVELOPMENT. WE ALSO LOOK FOR OPPORTUNITIES THAT COULD BE A COMPLEMENT TO US. WE RECENTLY ANNOUNCED AT ZOOMTOPIA THAT WE HAVE AN EMAIL AND CALENDAR INTEGRATION, ALSO EMAIL AND CALENDAR SERVICES FOR SMB CUSTOMERS. THAT IS THE PERFECT EXAMPLE OF HOW WE ARE CONTINUING TO EXTEND PRODUCTIVITY TOOLS, AND THE PERFECT OPPORTUNITY TO CONTINUE THAT EXPANSION THROUGH POSSIBLE M & A. CAROLINE: LET'S TALK ABOUT -- WHEN THERE IS M & A, LET'S TALK ABOUT THE FOCUS OF COSTS. ANALYSTS WERE IMPRESSED BY THAT COST CONTROL. HOW MUCH ARE YOU HAVING TO DEPEND AND LOOK AT FUTURE COSTS OF YOUR LABEL? KELLY: ZOOM, BY OUR NATURE, WE HAVE ALWAYS BEEN A FRUGAL COMPANY. WE HAD AN INTERESTING SITUATION THAT DURING THE PANDEMIC, OUR GROWTH REALLY OUTPACED OUR ABILITY TO HIRE AND INVEST. WE HAVE BEEN FOCUSED IN THE LAST COUPLE OF YEARS OF BEING CAUGHT -- OF GETTING CAUGHT UP. THERE WERE AREAS THAT WE NEEDED TO INVESTED. WE ARE VERY CLOSE TO REACHING OUR LONG-TERM TARGETS, WHICH MEANS WE WILL THINK VERY THOUGHTFULLY ABOUT HIRING AND INVESTING GOING FORWARD IN AREAS THAT ARE FOCUSED ON DRIVING INNOVATION, DRIVING GROWTH. OF COURSE, WE WANT TO BE ENSURED THAT OUR EXPENSES ARE NOT OUTPACING REVENUE, AND NEED TO DO THAT IN A MAJOR -- IN A MEASURED WAY. THAT IS THE MESSAGE OUR LEADERSHIP TEAM IS FOCUSED ON, THAT OUR EMPLOYEES ARE FOCUSED ON, ESPECIALLY AS WE PLAN FOR FY 24. ED: I MENTIONED THE STOCK MOVE ON TUESDAY. AT ONE POINT, DOWN 10%. ALL TOLD, PAIRED SOME OF THOSE DECLINES. THIS WAS THE SLOWEST QUARTER OF REVENUE GROWTH YOU GUYS HAVE RECORDED. HOW MUCH PRESSURE DO YOU AS A MANAGEMENT TEAM FEEL RIGHT NOW? KELLY: WE ALWAYS TALK ABOUT THIS INTERNALLY. WHAT WE CAN CONTROL IS OUR OWN EXECUTION. AND WE ARE ALIGNING OUR EMPLOYEES AROUND CONTINUING TO FOCUS ON DELIVERING ON CUSTOMERS NEEDS, ON BUILDING OUT GO TO MARKET INFRASTRUCTURE, WHERE WE NEED IT FOR EXAMPLE, ONE OF OUR FOCUSES AND INITIATIVES IS BUILDING OUT OUR PART OF THE ECOSYSTEM ON AN INTERNATIONAL BASIS, IT GIVING EVERYBODY FOCUSED ON THAT RATHER THAN THE STOCK PRICE IS REALLY THE MESSAGE. THAT IS WHAT WE CAN CONTROL AND THAT IS WHAT WE FOCUS ON AT ZOOM. CAROLINE: ABOUT CONTROL OF THE COMPETITION? AND INNOVATION IS TO FEND OFF SOME OF THAT. ARE YOU HEARING FROM CLIENTS THAT THEY HAVE TO CUT AND THEREFORE THEY ARE GOING WITH TEENS? OR ARE YOU HEARING THAT THEY CANNOT MAKE THE PURCHASE THAT THEY ESTIMATED IN THIS TIME? KELLY: WE HAVE BEEN PLEASED WITH OUR RENEWAL RATES, ESPECIALLY IN THE ENTERPRISE. AS WE ARE ALL CONVINCED THE FLEXIBLE WORK IS HERE TO STAY, ORGANIZATIONS REALIZE IN ORDER TO KEEP THEIR EMPLOYEES PRODUCTIVE AND HAPPY, THEY NEED TO PROVIDE THEM THE PROPER TECHNOLOGY, WHICH INCLUDES ZOOM MEETINGS, ZOOM PHONES, ENSURING THE PROPER TECHNOLOGY IS IN THE ROOMS. HOWEVER, THEY ARE BEING THOUGHTFUL ABOUT THOSE PURCHASES. WE HAVE A VERY COMPETITIVE AND COMPELLING TOTAL COST OF OWNERSHIP. ZOOM ONE IS A BUNDLE THAT BRINGS ALL OF OUR MOST NEEDED PRODUCTS TOGETHER AT A COMPELLING PRICE POINT. WHAT WE DO SEE IS MORE SCRUTINY AROUND DEALS. UNDERSTANDING AND SHOWING HOW WE CAN CREATE VALUES FOR CUSTOMERS MAKES ZOOM A GREAT ALTERNATIVE, EVEN IN THESE ENVIRONMENTS WHERE MY PEERS CFOS ARE BEING THOUGHTFUL ABOUT COMMITMENTS AND INVESTMENTS FOR THE FUTURE. ED: ZOOM CFO KELLY STECKELBERG, THANK YOU FOR JOINING US ON BLOOMBERG TECHNOLOGY. COMING UP, THERE IS A NEW EV MAKER ON THE BLOCK. SORT OF. MY CONVERSATION WITH THE CEO ON THE HEELS OF THE COMPANY STARTING PRODUCTION. THIS IS BLOOMBERG. ♪ ED: EV MAKER FISKER HAS FINALLY STARTED BUILDING ITS VEHICLES TWO YEARS AFTER GOING PUBLIC. THE OCEAN SUV STARTED ROLLING OFF ASSEMBLY LINES IN AUSTRIA. IT IS TARGETING 40,000 UNITS IN YEAR ONE, AND ALREADY HAS OVER 63,000 RESERVATIONS. I CAUGHT UP WITH HENRIK FISKER, CHAIRMAN, CEO AND FOUNDER OF FISKER, AFTER HE RANG THE BELL AT THE NYSE. HENRIK: I THINK WE ACTUALLY IN MY OPINION, ARE AT MAYBE JUST A HIGH POINT OF THE RECESSION. I DON'T THINK WE ARE GOING INTO A RECESSION. I THINK WE ARE IN THE MIDDLE OF IT AND GETTING OUT OF IT. I CAN REALLY FEEL THAT WHEN WE TALK TO OUR SUPPLIERS. THEY ARE GETTING PEOPLE BACK INTO THEIR FACILITIES. WE HAVE HAD A ROUGH TIME GETTING ALL OF OUR SUPPLIERS LINED UP. WE HAVE MANAGED IT TOGETHER WITH THE POWERHOUSE IN THE AUTOMOTIVE INDUSTRY. WE ARE TAKING A CAUTIOUS APPROACH. WE ARE ONLY MAKING 300 VEHICLES IN Q1 NEXT YEAR. THEN JUMPING REALLY FAST UP TO 8000. THE REASON FOR THE 300 IS BECAUSE WE WANT TO MAKE SURE ALL OF OUR SUPPLIERS COME WITH US. WHAT WE ARE ACTUALLY ARE SEEING IS OUR SUPPLY CHAIN ARE VERY GOOD. IT HAS BEEN TOUGH. BUT THEY ARE THERE AND THEY ARE WITH US. ED: SMALL VOLUME OF VEHICLES IN Q1. ARE THESE VEHICLES COMING HERE TO THE UNITED STATES? AND HOW DOES THE IN FISKER -- THE INFRASTRUCTURE LOOK TO SERVICE THE EARLY CUSTOMERS? HOW DO THEY TAKE DELIVERY, WHAT HAPPENS IF THE CAR HAS A SERVICING ISSUE? HENRIK: WE HAVE OUR OWN TECHNICIANS, MOBILE TECHNICIANS, WHICH WE CAN SEND ALL OVER THE U.S. WE ALSO HAVE A DEAL WITH BRIDGESTONE, WHICH HAS MORE THAN 2000 FACILITIES ALL OVER THE U.S. WE ACTUALLY HAVE MORE SERVICE FACILITIES AND THEN SOME OF THE LARGEST AUTOMAKERS. WE ARE WELL SET UP. WE HAVE A COUPLE OF SERVICE CENTERS, A SPECIAL POWERTRAIN CENTER IN CALIFORNIA, IF THERE IS ANY MAJOR ISSUES, WE CAN BRING THE VEHICLE THERE. THE QUALITY I HAVE SEEN OF THESE VEHICLES COMING OFF THE LINE IS AMAZING. I'VE NEVER SEEN ANYTHING LIKE IT. I HAVE BEEN OVER 30 YEARS IN THIS INDUSTRY AND I FEEL GOOD ABOUT OUR PRODUCT AND THE QUALITY. ED: THAT WAS FISKER'S CHAIRMAN, CEO AND FOUNDER HENRIK FISKER. I HAVE BEEN WRITING ABOUT THAT COMPANY FOR MORE THAN TWO YEARS. MONTHLY, HENRIK FISKER WOULD SAY NOVEMBER 17, THAT IS WHEN PRODUCTION WOULD -- WILL START. 2022. AND TO HIS CREDIT, IT DID. CAROLINE: THEN THE BACKLOG OF ORDERS, THE PRODUCTION THAT COMES, IS IT GOING TO START TO BE A CAN -- A TRUE COMPETITOR? ED: IT IS IMPOSSIBLE TO SAY. THEIR MODEL IS TO OUT RISE -- OUTSIZE MANUFACTURING. THAT IS WHY THEY ARE CONFIDENT ABOUT HOW MANY THEY CAN BUILD, WHY THEY ARE ABLE TO MAKE IT SO AFFORDABLE. YOU LOOK ON THE SCREEN, IT IS MORE IN LINE WITH WHAT AMERICANS LIKE. BIGGER CARS. WHETHER IT WILL BE SUCCESSFUL, IT WILL HIT THOSE TARGETS, WHO KNOWS. CAROLINE: REMIND ME THE PRICE POINT? ED: ABOUT 40,000 U.S. DOLLARS. IF YOU GO ON TESLA'S WEBSITE, NEAR $80,000. THAT IS AN ASTONISHING PRICE POINT TO COMMIT TO. THAT IS WHAT WE KEPT ASKING HIM. WHAT ABOUT SUPPLY CHAINS, INPUT COSTS, SEMICONDUCTORS? HE SEEMS UNFAZED. CAROLINE: YOU BRING OUT THE BEST AND THESE PEOPLE WITH THE LONG-TERM RELATIONSHIPS YOU HAVE. HE SEEMS LIKE QUITE A CHARACTER. I'M NOT SURE WHAT THE WHOLE GLOVE THING WAS WHEN HE RANG THE BELL. ED: COMPLETELY LOST ON ME. MUST BE SOMETHING TO DO WITH ELECTRIFIED. CAROLINE: MECH SHIP -- MAGICIAN VIBES. ED: ANYWAY, COMING UP, MORE ON THE FTX FALLOUT, AND HOW MUCH A SETBACK THIS WILL BE FOR THE DIGITAL ASSET ECOSYSTEM. THIS IS BLOOMBERG. ♪ CAROLINE: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." I AM CAROLINE HYDE. ED IS IN SAN FRANCISCO. . WE ARE TALKING APPLE WAIT TIMES TO GET YOUR HANDS ON THE NEW TOP-TIER I 14. A LITTLE WORRYING FOR ANALYSTS AHEAD OF THE KEY HOLIDAY SEASON. ED: LOOK AT THE DATA. IF I GO ON APPLE'S WEBSITE, TRY TO BUY AN IPHONE 14, IT WILL TELL ME THE DELIVERY DATE IS DECEMBER 30. THERE IS A CHORUS OF ANALYSTS THAT ARE WORRIED CONSUMERS ARE LIKE, IT IS NOT AVAILABLE NOW, I WILL WAIT, AND THAT COULD IMPACT SALES FOR THE HOLIDAY QUARTER, WHICH COULD IMPACT THE STOCK. A STOCK THAT HAS PERFORMED BETTER THAN THE S & P 500. STILL DOWN YEAR TO DATE. THAT IS THE SUPPLY SIDE OF THE STORY. THE DEMAND SIDE AS WELL. UBS -- UBS EVIDENCE LAB HAS DONE ITS ANNUAL GLOBAL SMARTPHONE CONSUMER SURVEY. 7000 RESPONDENTS AND PEOPLE SURVEYED ACROSS KEY MARKETS, U.S., U.K., GERMANY, CHINA, JAPAN, AND THE U.S. AND CHINA, THE NUMBER OF RESPONDENTS THAT SAID THEY WILL BUY AN IPHONE AT SOME POINT IN THE NEXT 12 MONTHS IS DOWN A PERCENTAGE POINT FROM THE SAME PERIOD LAST YEAR. IN OTHER MARKETS LIKE THE U.K., JAPAN AND GERMANY, THE NUMBER OF RESPONDENTS SAYING YES AFFIRMATIVELY, I WILL BUY AN IPHONE AT SOME POINT IN THE NEXT 12 MONTHS IS UP. IT IS INTERESTING TO LOOK AT THE CONSUMER BEHAVIOR. ESPECIALLY THE INSTALLED BASE AGE. THAT IS A SMART WAY OF SAYING HOW LONG BUT CONSUMERS ARE HOLDING ONTO THEIR SMARTPHONES. IT CREPT UP IN THE MOST RECENT SURVEY TO AROUND 20 MONTHS. IMAGINE HOLDING ON TO YOUR SMARTPHONE FOR 20 MONTHS. THE REASONS WHY ARE MORE INFORMATIVE. WHY DO PEOPLE UPGRADE THEIR IPHONES? BECAUSE THE BATTERY IS BROKEN OR THE BATTERY LIFE IS DRAINED, BECAUSE IT IS SLOW, OR SIMPLY BECAUSE IT IS DAMAGED. THEY DON'T SEEM TO BE MOTIVATED BY UPGRADING TO THE LATEST HANDSET BECAUSE OF THE TECH. REALLY INTERESTING PRODUCT TO WATCH. CAROLINE: I DON'T HAVE TO IMAGINE 20 MONTHS. I LIVE 20 MONTHS. I PUSH PAST 20 MONTHS. MAYBE I'M NOT GOING TO BUY ANY ELECTRONICS THIS HOLIDAY SEASON. WE CAME TO YOU, OUR FOLLOWERS ON TWITTER, OUR AUDIENCE, ABOUT WHAT IS YOUR SHOPPING LIST, YOUR SANTA'S LIST? MOST PEOPLE STILL WANT EXPERIENCES. WE ARE IN THIS POST-COVID LIFE WHERE WE WANT TO GO OUT AND ENJOY OURSELVES. 35.5% OF YOU SAYING THAT. 26% THINK IT IS ELECTRONICS WHERE THEY WANT THEIR MONEY TO BE PUT TO WORK. APPAREL AND FURNISHINGS, STOCKED UP TOO MUCH IN COVID. A FEW OF YOU WANT COLD, HARD CASH. I'M PLEASED TO SAY AHEAD OF HOLIDAY SHOPPING, WE WANT TO GET A SENSE OF HOW PEOPLE ARE SPENDING AND WHETHER THEY ARE BEING MORE THRIFTY OR THOUGHTFUL. RENEE MORIN IS WITH US, HEAD OF SUSTAINABILITY AT EBAY. WHAT YOU GIVE US IS AN INTERESTING TAKE OF WHERE GEN Z ARE PUTTING THEIR MONEY TO WORK. I HAVE CERTAINLY STARTED TO READ MORE MUCH -- READ MORE OF MY ITEMS. IS THAT FOCUSED ON MONEY AND A RECESSION WORRY, OR IS THAT FOCUSED ON SUSTAINABILITY IN THE HERE AND NOW? RENEE: IT IS BOTH. I THINK E-COMMERCE IS SELLING AND BUYING OF USED AND PRELOAD GOODS IS A DUAL ISSUE. PEOPLE HAVE THE OPPORTUNITY TO GET ONLINE, SELL THINGS THAT ARE LAYING AROUND THEIR HOUSE, AND MAKE A PROFIT. POTENTIALLY AN EXTRA COUPLE DOLLARS IN THEIR POCKET AS WE HEAD INTO THE HOLIDAY SEASON. THEY ARE HOLDING THE ENVIRONMENT. NOT ONLY DOES THIS ITEM GET A SECOND LIFE AND NOT GO TO LANDFILL, BUT YOU ARE HELPING TO AVOID ADDITIONAL CARBON EMISSIONS BEING PUT IN THE AIR, WHICH IS CRITICAL WHEN WE ARE IN THE TIME OF A CLIMATE CRISIS. CAROLINE: WHAT ARE PEOPLE SELLING RIGHT NOW? RENEE: THEY ARE SELLING EVERYTHING YOU MENTIONED THAT PEOPLE WANTED. ELECTRONICS, APPAREL, HANDBAGS, SPORTING GOODS, WHATEVER YOU CAN IMAGINE, WE HAVE IT ALL ON EBAY AND PEOPLE ARE BUYING ALL OF THOSE ITEMS. BECAUSE THEY ARE ALSO CONTRIBUTING TO THE CIRCULAR ECONOMY. IT IS A DUAL WIN. A WIN FOR YOUR POCKET AND THE PLANET. ED: EBAY, STORIED TECHNOLOGY NAME. TO SOME PEOPLE, A BLAST FROM THE BACK -- FROM THE PAST. BUT A LOT OF THE DATA I HAVE READ THROUGHOUT TUESDAY SUGGESTS THERE IS A YOUNGER AUDIENCE GOING TO EBAY IN SEARCH OF GOODS, SELLING GOODS. . MY QUESTION IS WHY? ARE THEY DRIVEN BY COST CONSCIOUSNESS? ARE THEY DRIVEN NOT SO MUCH ABOUT COST CONSCIOUSNESS OR VALUE FOR MONEY, TALK US THROUGH THE SPENDING PATTERNS YOU ARE SEEING. RENEE: WITH THE GEN Z AND MILLENNIALS, THEY ARE NOT HAVING THE SAME STIGMA ATTACHED TO BUYING USED, A PRE-LEFT ITEM, THAT MAY BE MY GENERATION DID. THEY ARE SAYING THERE ARE MANY -- THERE IS MONEY TO BE SAVED. WHILE YOU ARE PARTICIPATING ONLINE AND THE CIRCULAR ECONOMY. BUT THEY ARE ALSO HAVING THE BENEFIT OF KNOWING THEY ARE NOT CONTRIBUTING EXTRA WASTE TO THE LANDFILL, NOT CONTRIBUTING EXTRA OMISSIONS TO THE ATMOSPHERE. THAT CIRCULARITY OF SEEING USED GOODS BEING SOLD AND BOUGHT ONLINE IS INCREASING. OVER 50% OF OUR SURVEY PARTICIPANTS SAID THEY ARE SELLING MORE USED GOODS ONLINE THAN THEY HAVE IN PREVIOUS YEARS. WE ARE SEEING A TREND HERE. ED: WHAT ARE THE WEIRD AND WONDERFUL THINGS PEOPLE ARE BUYING? LIKE REALLY WEIRD, REALLY WONDERFUL? RENEE: REALLY WEIRD AND WONDERFUL, THERE IS AN OLD STORY FLOATING AROUND ABOUT SOMEBODY TRYING TO SELL THEIR SOUL, BUT THAT DID NOT FLY. THAT GOT SQUASHED QUICKLY. BUT THE WONDERFUL THINGS ARE THOSE UNIQUE FINDS. THERE IS A TEACUP YOUR GRANDMOTHER MAY HAVE HAD IN A SET AND IT WAS BROKEN, AND THEN THAT ONE ITEM IS ONLINE AND YOU WERE ABLE TO MATCH IT AND BRING IT BACK AND PUT IT WITH THE SITE YOUR GRANDMOTHER HAD. THERE IS A LOT OF OPPORTUNITIES ON EBAY, NOT JUST FOR THE SELLERS BUT FOR BUYERS AS WELL. I WOULD LIKE TO MENTION A RELATED ISSUE THAT WE ARE WORKING ON RIGHT NOW, IT HAS TO DO WITH CONGRESS AND 1099 K FORMS. THERE IS A LIMIT RIGHT NOW ON SELLING ON EBAY AND OTHER MARKETPLACES OF FIX HUNDRED DOLLARS. IF YOU SELL $600 OR MORE WORTH OF ITEMS THAT COULD BE LAYING AROUND YOUR HOME, YOU WILL GET THE CAPS COME JANUARY UNLESS CONGRESS ACTS NOW TO CHANGE THIS THRESHOLD AND RAISE IT BACK UP SOMEWHERE NEAR WHERE IT USED TO BE. A YEAR AGO, IT WAS $20,000. YOU CAN SEE HOW THIS DISTANT 10 -- DISINCENTIVIZES, THE POTENTIAL FOR SELLING GOODS ONLINE THAT YOU CAN MAKE A COUPLE EXTRA DOLLARS AS WE HEAD INTO THE HOLIDAY SEASON. WE REALLY DO NEED CONGRESS TO TAKE THIS SERIOUSLY, AND TAKE A GOOD LOOK AT IT. CAROLINE: THAT IS INTERESTING. WHEN YOU HAVE GONE INTO LUXURY ITEMS, YOU HAVE BEEN FOCUSING ON AUTHENTICITY AND LEANING INTO, IT HAS HOLD BACK THE WHOLE NFT CRAZE, BUT THE FOCUS ON SNEAKERS, COLLECTIONS, WHAT PEOPLE WANTED TO BUY OF COLLECTIBLES. IS THAT GOING TO BE HIT? WHAT IS THE PRICE POINT ALIKE AS WE GO INTO THIS SLIGHTLY SLOWER ECONOMY? RENEE: I DON'T THINK I HAVE THE DATA TO SPEAK TO THE PRICE POINT BEING THE SUSTAINABLE. WHAT I CAN TELL YOU IS THOSE LUXURY ITEMS THAT ARE BEING RESOLD ARE JUST AS VALUABLE IN TERMS OF AVOIDING EMISSIONS AND AVOIDING WASTE AS LOWER AND ITEMS. THE SWEATERS IN MY CLOSET, THE AVERAGE AMERICAN HOUSEHOLD FROM OUR LAST SURVEY HAS $4000 WORTH OF RIT -- OF THINGS IN THEIR HOUSEHOLD THAT THEY CAN SELL. WE ARE HEADING INTO THE HOLIDAYS, THAT COULD BE THE DIFFERENCE BETWEEN PUTTING A PRESENT UNDER THE CHRISTMAS TREE, OR EXCHANGING GIFTS DURING KWANZAA, OR EVEN PUTTING THE TURKEY ON THE TABLE. WE DON'T WANT TO SEE THIS 1099 K FORM WHICH COULD BE REALLY CONFUSING AND DISINCENTIVIZE INTO CASUAL SELLERS, IMPACT WHAT WE WANT TO SEE IS PURSES A PATIENT IN THE CIRCULAR ECONOMY. ED: EBAY HEAD OF STIFFS -- HEAD OF SUSTAINABILITY, RENEE MORIN, THANK YOU. PICKETING TO DIGITAL ASSETS. CATHIE WOOD IS DEFENDING BLOCKCHAIN TECHNOLOGY AFTER BUYING SHARES OF COINBASE THIS WEEK. HERE IS SOME OF HER CONVERSATION WITH CAROL MASSAR AND TIM STENOVEC ON BLOOMBERG RADIO. CATHIE: THE INFRASTRUCTURE, THE TECHNOLOGY HAS NOT SKIPPED A BEAT THROUGHOUT THIS ENTIRE CRISIS. THE ASHTRAY IS AT AN ALL-TIME HIGH AND THAT IS A REAL INDICATION OF THE SECURITY OF THE NETWORK. ON ETHERIUM, WE ARE SEEING THE TOTAL VALUE STAKED AT $24 MILLION. THAT IS AN ALL-TIME HIGH. WE THINK THE INFRASTRUCTURE IS WORKING BEAUTIFULLY. AS FAR AS COINBASE, THIS IS AN ONSHORE, REGULATED COMPANY. AND WANTING TO HELP SHAPE REGULATIONS, BRIAN ARMSTRONG, THE CEO, AND ALICIA, CFO, HAVE BEEN LEANING INTO WHAT IS GOING ON RIGHT NOW AND SAYING, OK, REGULATORS, WE NEED MORE CLARITY IN ORDER TO PROTECT INVESTORS. THOSE WHO WANTED TO GET INVOLVED WITH A CERTAIN TYPE OF CRYPTO WERE FORCED OFFSHORE. LOOK AT WHAT HAS HAPPENED. I THINK THAT COINBASE IS GOING TO COME OUT HERE LOOKING VERY, VERY STRONG. IT JUST LOST A VERY BIG COMPETITOR IN FTX. TIM: WHAT IS THE MARKET MISSING? THAT COULD BE ONE NARRATIVE, BUT AT THE SAME TIME, WE HAVE NOT EXACTLY SEEN SHARES OF COINBASE RALLY SINCE FTX'S COLLAPSE. YOU THINK THAT REPRESENTS BROADER CONCERN ABOUT PEOPLE'S INTEREST IN CRYPTO FOLLOWING FTX'S COLLAPSE? CATHIE: NOCATHIE:, I THINK IT IS MORE FEAR. MANY PEOPLE SAY WE DON'T KNOW WHAT WE DON'T KNOW. WHAT WE DO IS WE STEP BACK, PUT A LITTLE PERSPECTIVE INTO THE SITUATION, AND WHAT DO WE HAVE? THE ENTIRE CRYPTO ASSET ECOSYSTEM IS AN $800 BILLION ECOSYSTEM. APPLE IS THREE TIMES LARGER IN TERMS OF MARKET CAP. THAT IS SOME PERSPECTIVE. MANY PEOPLE ARE SAYING, OK, IS THIS ANOTHER LEHMAN? COULD WE SEE THE DOMINO EFFECT HERE? HAVE GIVEN YOU ONE REASON WHY. THE BANKING SYSTEM BACK IN 2008-2009, TRILLIONS AND TRILLIONS OF DOLLARS, AND IT WAS THE GLOBAL BANKING SYSTEM. RIGHT NOW, FROM FTX, IT SEEMS WE HAVE $5 BILLION TO $10 BILLION IN CREDITORS, AS FTX HAS FILED A BANKRUPTCY. THEY WILL BE MAKING CLAIMS. IF YOU LOOK AT LEHMAN, THAT WAS $1.2 TRILLION IN CLAIMS. AGAIN, TRYING TO PUT PERSPECTIVE. THIS IS FRAUD. ED: THAT WAS CEO CATHIE WOOD. COMING UP, MORE ON CRYPTO. AVALON PRESIDENT JOHN WU DISCUSSES THE CRYPTO CONTAGION AND ITS IMPACT ON TRUST IN THE BLOCKCHAIN ECOSYSTEM. THIS IS BLOOMBERG. ♪ CAROLINE: CRYPTO NEWS ABOUND. LET'S GET YOU UP TO SPEED. FTX'S ATTORNEY TOLD A BANKRUPTCY JUDGE THAT A SUBSTANTIAL AMOUNT OF ASSETS HAVE BEEN STOLEN OR ARE MISSING, IN WHAT HAS BEEN CONSIDERED "ONE OF THE MOST ABRUPT AND DELIBERATE CORPORATE COLLAPSES IN THE HISTORY OF CORPORATE COLLAPSES." BLOOMBERG HAS LEARNED THAT BINANCE CEO MET WITH MIDDLE EAST INVESTORS TO RAISE MONEY FOR HIS CRYPTO RECOVERY FUND. WE REPORTED YESTERDAY GENESIS WARNING POTENTIAL INVESTORS IT MAY HAVE TO FILE FOR BANKRUPTCY, UNLESS IT CAN RAISE NEW MONEY WHY BY ACKNOWLEDGING THERE IS A $2.8 BILLION IN OUTSTANDING LOANS, INCLUDING TWO RELATED PARTIES SUCH AS ITS PARENT COMPANY. FOR MORE ON THE STATE OF THE INDUSTRY, THE PERSON BEHIND A LOT OF THIS BREAKING NEWS IS SONALI BASAK, AND JOHN WU IS WITH US AS WELL. FOR SOME FOREMOST, LET'S TALK ABOUT HOW EXHAUSTED YOU ARE. WHAT IS IT LIKE, YOU ARE IN THE -- IN THE UNDERLYING TECHNOLOGY, YOU ARE ABOUT GETTING FINANCE TO RON AMEL -- TO RUN ON A MORE UNDERLYING EFFICIENT TECHNOLOGICAL BANNER. ARE PEOPLE BEING PUT OFF COMING TO YOU AT THE MOMENT? JOHN: A LITTLE BIT. I HAVE TO SAY, THERE IS DEFINITELY A LACK OF TRUST IN THE SPACE. THERE WERE A LOT OF PEOPLE WHO WERE ALREADY DISTRUSTFUL OF THE SPACE TO BEGIN WITH. WITH ALL OF THESE THINGS, THE DRAMA THAT HAS HAPPENED IN THE LAST FEW MONTHS, THEY FEEL LIKE THEY ARE GOING TO EQUATE THAT WITH THE ENTIRE SPACE. I'M IN THE MIDDLE, I SEE A LOT OF ACTIVITY, I SEE A LOT OF DIFFERENT PARTNERS AND BUILDERS, MARKET MAKERS. I CAN TELL YOU IT IS JUST A SMALL PERCENTAGE OF THESE PEOPLE. BUT THE SMALL PERCENTAGE OF PEOPLE HAVE A LOT OF CONTROL BECAUSE THEY ARE IN LARGE CENTRALIZED ENGINE CASH ARE THE BACK -- THE BAD ACTORS. SONALI: THE NEWS ABOUT FTX NOT DISCLOSING THE NAMES OF THE 50 CREDITORS, THE TOP 50. THIS IS SUPPOSED TO BE AN INDUSTRY ABOUT TRUST. IS THERE A PROBLEM TO NOT KNOW WHO THOSE TOP 50 CREDITORS ARE? JOHN: AS A CRYPTO NATIVE, I BELIEVE IN FULL TRANSPARENCY AND DISCLOSING EVERYTHING. IN THE SITUATION WE ARE IN RIGHT NOW, I ALMOST FEEL LIKE NOT DISCLOSING THE NAME IS ACTUALLY GOOD. IT COULD CREATE BANK LOANS AT SOME OF THESE PLACES. THEY ARE STILL OPERATING WELL. CAROLINE: TALK TO US ABOUT WHAT YOU ARE WORRIED ABOUT IN TERMS OF CONTAGION. YOU HAVE TALKED ABOUT THE LACK OF TRUST, THE WORRY OF A LACK OF TRANSPARENCY. EVERYONE IS LOOKING AT THE EXCHANGE THEY USE OR THE TOKENS SOME OF THE EXCHANGES HAVE ISSUED THEMSELVES. HIS CONTAGION, ARE THERE MORE SHOES TO DROP? JOHN: I THINK YOU GUYS HAVE DONE A GREAT JOB OF COVERING GENESIS. IN MY SEAT, I THINK GENESIS IS A BIGGER ISSUE IN TERMS OF THE CAPITAL MARKETS OF CRYPTO THAN EVEN FTX. GENESIS WAS THE LARGEST LENDER OUT THERE. THEY HAVE DONE UNSECURE AS WELL AS COLLATERALIZED LENDING. THERE IS NO ONE ELSE DOING THAT LENDING. WITHOUT THEM IN THE MARKETS, ALL OF THE PEOPLE IN THE VALUE CHAIN, ALL OF THE COMPANIES LIKE MARKET MAKERS WHO NEED TO BORROW IN ORDER TO DO MARKET-MAKING, YOU ARE GOING TO SEE LIQUIDITY GET SAPPED OUT OF THE MARKETS, SPREADS WIDEN, KNOW INVESTORS WANT TO COME IN AND YOU HAVE A VICIOUS CYCLE. GENESIS IS AN IMPORTANT PART OF THE CRYPTO CAPITAL MARKETS. CAROLINE: HOW MUCH DOES IT SET AT BACK IF WE DO SEE A BANKRUPTCY FILING BY SUCH A JUGGERNAUT SUCH AS GENESIS? JOHN: MANY, MANY YEARS. WE ARE GOING TO NEED SOME WHITE KNIGHT TO COME IN, MAY BE A TRADITIONAL FINANCE PLAYER WHO HAS DABBLED IN THIS SPACE AND IS WILLING TO COME IN AND TAKE SOME RISK. IF YOU LOOK AT A LOT OF THE THINGS OUT THERE IN TERMS OF INSTRUMENTS THAT TRADE, THERE IS CLEARLY A DIFFERENT SENTIMENT FROM THE COMMUNITY TOWARDS CRYPTO VERSUS THE CRYPTO NATIVE COMMUNITY. CAN LOOK AT THE PRICES IN TERMS OF THE FUTURES CURVE, THE CME FUTURES CURVE, THE OUT MONTHS ARE REALLY NEGATIVE FOR BITCOIN. WHEREAS THE PERPETUAL'S IN THE CRYPTO NATIVE MARKETS, WHICH ARE ALSO UNDATED FUTURES, OUR FLUTTER. IT IS NOT BACKWARDATION. SONALI: WHAT DO YOU THINK ABOUT TRADES LIKE THAT? YOU LOOK AT THOSE CME FUTURES, YOU LOOK AT WHAT IS HAPPENING WITH THE GRAYSCALE BITCOIN TRUST. THESE ARE FINANCIAL ASSETS LIKE ANY OTHER FINANCIAL ASSET. IS IT A GOOD MONEYMAKING OPPORTUNITY, OR IS IT TOO RISKY TO TRADE? JOHN: IT IS AN INCREDIBLE ARBITRAGE OPPORTUNITY THAT YOU CAN MAKE 25% ON ANNUALIZED BASIS. THE ISSUE IS YOU CANNOT FIND THE COUNTERPARTY TO HELP YOU PUT THAT TRADE ON. BECAUSE NOTHING IS FLOWING IN THE MARKETS RIGHT NOW. THE LARGEST LENDER OUT THERE HAS A RIPPLE EFFECT TO EVERYONE ELSE, SO THEY ARE NOT LENDING COUNTERPARTIES ARE NOT TAKING RISK EITHER. SONALI: WHAT DOES THE CRYPTO MARKET LOOK LIKE WITHOUT THAT LEVERAGE? JOHN: WE GO BACK TO THE PREVIOUS CYCLE. WE TALK ABOUT 2015 22018. LEVERAGE NEEDS TO BE CONTROLLED. LEVERAGE IS NOT BAD. IN EVERY ECONOMY AND EVERY MARKETPLACE, YOU NEED LENDING AND BORROWING TO SOME EXTENT, OTHERWISE YOU DON'T HAVE MONEY GROWTH. WE NEED SOME OF THAT BACK INTO THIS MARKET TO GET THE MARKETS GOING AGAIN. CAROLINE: I'M INTERESTED IN THIS TALK OF A TRADITIONAL FINANCE GIANT, KIND OF A CROSSOVER INVESTOR WHO HAS DABBLED ALREADY. WHO COULD DO THAT AND HAVE THE WILL OF THE REGULATORS, THE WILL OF WASHINGTON ON THEIR SIDE? JOHN: FIRST OF ALL, I THINK ALL OF THE EXISTING PLAYERS, WHEN THIS IS ALL DONE, I THINK 80% OF THE COMPANIES IN THIS CRYPTO CAPITAL MARKETS WILL BE GONE. 20% THAT ARE STILL AROUND, THEY ARE GOING TO HAVE TO TAKE A LEADERSHIP ROLE, THEY NEED TO WORK WITH REGULATORS AND COME UP WITH GOOD REGULATION, EVEN IF IT IS BAD REGULATION, IT IS BETTER THAN NO REGULATION. THEN YOU WILL HAVE PERHAPS BANKS COME IN TO PICK UP THE PIECES AND BUY PARTS OF THE MARKET STRUCTURE BECAUSE THEY WILL BE MORE COMFORTABLE AND INJECT LIQUIDITY. OR YOU HAVE TRADITIONAL MARKET MAKERS WHETHER IT IS CITADEL COMING IN, THEY HAVE DABBLED IN CITADEL SECURITIES, OR A JANE STREET OR WELL-KNOWN FREQUENCY FUNDS WHO ARE ADAPTED IN THIS MARKET. SONALI: WHAT ABOUT THE TRADITIONAL PLAYERS HERE? WE REPORTED THIS MORNING, APOLLO IS LOOKING TO LIST A DIGITAL ASSET STRATEGY ON A BLOCKCHAIN, YOU ARE DOING SOMETHING SIMILAR WITH A BUNCH OF COUNTERPARTIES INCLUDING KKR. ARE THEY CONCERNED GIVEN THE BROADER RHETORIC AROUND CRYPTO? THOSE TOKENS, YOUR BLOCKCHAIN, HAS A TOKEN AS WELL. JOHN: EVERYONE IS A LITTLE CONCERNED. I CANNOT SAY NO ONE IS CONCERNED. WITH THAT SAID, EVEN IF THE CAPITAL MARKETS AND CRYPTO ARE BROKEN, THAT TECHNOLOGY IS STILL CONTINUING. APOLLO'S ANNOUNCEMENT OF RAISING A FUND USING A TOKENIZED VERSION OF THAT, TOKENIZED AND PART OF A KKR FUND, SHOWS THE TECHNOLOGY AND INNOVATION WILL CONTINUE AND THE BENEFITS WILL ACCRUE TO THE PEOPLE WHO ARE IN THE SPACE. SONALI: ONE OF THE CONVERSATIONS I HAD WITH THE CEO OF FIGURE ABOUT THIS PARTICULAR ANNOUNCEMENT WAS THAT STABLECOINS COULD BE AN ON BOARDING RAMP FOR THESE PRIVATE EQUITY FUNDS. CAN THAT HAPPEN? IS THERE ENOUGH SECURITY AS IT EXISTS TODAY FOR IT TO BE A FEEDER INTO THE FINANCIAL SYSTEM IN A BIGGER WAY? JOHN: YES IN TERMS OF THE SECURITY. THAT IS THE ULTIMATE BENEFIT. WHEN YOU HAVE MULTI PARTIES THAT NEED TO EXCHANGE IN -- EXCHANGE INFORMATION AND PAYMENT, THAT IS THE REAL BENEFITS OF A BLOCKCHAIN TECHNOLOGY. YOU NEED A TOKEN IN THAT SENSE, WHETHER IT IS A STABLECOIN OR DIFFERENT COIN. THAT IS THE BENEFIT THAT YOU CAN PROVIDE TO CUTTING COSTS AND CREATING MORE EFFICIENCY IN EXISTING FINANCIAL SYSTEMS. CAROLINE: IT WAS JUST LAST WEEK THE NEW YORK FED WAS TALKING ABOUT DIGITAL DOLLAR AND PILOTS. STILL INNOVATION TO BE HAD. JOHN WU, WE THANK YOU FOR COMING ON AND TALKING ABOUT SPACE. , SONALI BASAK AS WELL ALL OVER THE STORY. A SURPRISE LOSS IN THE WORLD CUP. IT HAS CUT IMPLICATIONS FOR CRYPTO TOO. THIS IS BLOOMBERG. ♪ CAROLINE: GOING VIRAL. SAUDI ARABIA SCORING ONE OF THE BIGGEST WORLD CUP UPSETS EVER BY BEATING ARGENTINA 21. MISSY GAVE ARGENTINA AN EARLY LEAD. SAUDI ARABIA SCORED TWO GOALS IN THE SECOND HALF OF THEIR CLINCH VICTORY. ARGENTINA LOSS AND HAS SPILLOVER EFFECTS. THE ARGENTINA FAN TOKEN OVERTHREW PARTNERSHIPS CRASHED 23 PERCENT. ARGENTINA IS AMONG INTERNATIONAL TEENS AND DOMESTIC CLUBS THAT OFFER FAN TOKENS, PORTUGAL'S TOKEN IS DOWN AHEAD OF THE MATCH AGAINST GHANA ON THURSDAY. I CAN'T GET OVER THE AMOUNT OF THINGS THAT ARE GOING VIRAL AROUND A SOCCER OR FOOTBALL AS WE WOULD CALL IT. RINALDO FROM MAN UNITED WITH 500 MILLION INSTAGRAM FOLLOWERS, HE IS WALKING. I UNDERSTAND THAT IT IS CONSIDERING ITS OPTIONS FOR SALE. ED: RENALDO IS OUT OF UNITED. IT'S OFFICIAL. THAN THE OWNERS, THE GLAZER'S, MINORITY EQUITY OWNERS COME OUT AND SAY YES, WE ARE LOOKING AT OPTIONS FOR THE CLUB AND IT IS ALL ACROSS INSTAGRAM, TWITTER. WE SHOULD BE TALKING ABOUT THE WORLD CUP ON THE PITCH, WHAT IS HAPPENING OFF IT CONTINUES TO DOMINATE THE HEADLINES AND WHAT PEOPLE ARE TALKING ABOUT. CAROLINE: MY ENTIRE TWITTER, INSTAGRAM, WHATEVER, TIKTOK, IS A FLOOD OF WORLD CUP NEWS. THIS MAN OWNING INSTAGRAM BECAUSE -- WITH HIS AMOUNT OF FOLLOWERS. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY." ED: CHECK OUT OUR PODCAST AND ALL OF THE PLATFORMS YOU GO TO. THIS IS BLOOMBERG.

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'Bloomberg Technology' Full Show (11/22/2022)

"Bloomberg Technology" is our daily news program focused exclusively on technology, innovation and the future of business hosted by Caroline Hyde in New York and Ed Ludlow from San Francisco. (Source: Bloomberg)

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The David Rubenstein Show: Peer-to-Peer Conversations" explores successful leadership through the personal and professional choices of the most influential people in business.
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