Protected tries to of an old law that has protected facebook. The coronavirus takes a toll with tech leading losses. Earlier, apple cut its revenue guidance for the march quarter with the outbreak continuing to impact the iphone maker supply and demand. Impactful,navirus is but not permanently impactful. In other words, it is a temporary blip. On the demand side longer term for apple, i dont see any issues so that gives me a lot of confidence we will see a nice rebound when this is over. 20 of revenue, a huge part of the supply chain. If the virus isnt contained, this will be a problem and longer term, china and the u. S. Are likely to be at loggerheads. I think the virus could be a problem longer market thing. Is no better ceo to handle the current challenges then tim cook and while it is currently concerning, having him at the helm is very reassuring. It is quite hard to shift production in a number of weeks. Emily we got more reaction from the Senior Research analyst at cowan who joined taylor riggs and paul allen to say why he thinks the supply disruption wont hurt demand. What youou think are seeing today and since apples big announcement yesterday was the fact that a lot of it, besides demand, it is really supply chain disruption, and it has taken a while for the supply chain to ramp up. There is an opening in china, which is a positive but at the same time, the virus is still a threat and people are being cautious. It is in effect that will play out over the next month or so. Will take, and of march, which is end of march quarter, to get 100 position rates and that is a double whammy from the fact there is some slowdown in demand, but it is a supply. Taylor weve gotten guidance from apple saying they would miss on the top line. Full that into your estimates on the bottom line. Krish first and foremost, apple did not give quantifiable analysis. The biggest impact will be on the iphone, because people do buy it as a cyclical product. That is one of the biggest reasons for a big cut. Butoes impact gross margin, apple has said they are going to invest in the modem business, which they bought from intel and of december. They will invest in tv eps was down, so 2. 24, from 3. 03 to mainly because the optics will stay high because they will invest in future opportunity. More on apple and the broader impact of the coronavirus on global markets, we are joined by mark lehman, president of jmp securities. Does apple highlight how much more revenue guidance and uncertainty we could really start to see from a lot of these companies . They are clearly ahead of the game. To first Big Tech Company mention coronaviruses impact in the Third Quarter and i dont expect the last. It is amazing how resilient the market was today. At marketng preview close yesterday and speculations on chat boards how bad the market would be today and the nasdaq was up today. It shows the amount of liquidity in the market, the amount of demand in the market and frankly, there must be a lot of people shorting the stock because no one was expecting the stock market to be slightly up today. You clearly have numbers that have been as good if not better than people expected. Rates really dipping this year. Look at the 10 year from january 1 today, it has been enormous in terms of the bond. The yield has gone down. There is a lot of liquidity in the marketplace and these liquidity bubbles i dont want to use that word completely a lot of people have been waiting for a correction and waiting for a correction. We just havent seen that. Of 2018, the end we havent seen a big correction. More and more people have capitulated into this year, despite news from apple being negative for the market. Paul so huge and interconnected, is all the bad news around the supply chain out of the way yet, because as the saying goes, there is never just one . Be morethink there will news ahead of us because everyone has been anticipating those numbers he mentioned earlier about the number of cases and number of new go down precipitously at some point and that has not happened. The longer this goes on where we are highlighting how many new cases there are, the longer this virus goes down and the longer supply chain is inflicted. It is a seasonally slow period. We have the Chinese New Year at the same time, so it is a seasonally weaker period for tech. Like a good engine, supply chain takes a while to ramp up so i would expect more announcements over time. Nmily that was mark lehman of jmp securities. Givings considering rival apps more prominence after criticisms it provides an unfair advantage to its own product. Here is Bloombergs Mark Gurman with joe weisenthal. One of the preinstalled apps is very key. These are the services you will use and like you said, they are hard to replace. Withend me a text message a web link, it will always take me to safari. There is no way, even if i have chrome installed, to change that given apples on safari edge over the competition. That is what apple is considering changing. Giving an option ios 14 to switch from safari to chrome in that example. Is this to get ahead of potential antitrust concerns over the use of its own platform . I think that is a big part of it. This is something the house, the u. S. Government, was asking questions to apple about. To had a story in october detailing this issue. Apple, seeing what is happening search and android in the eu. But it is also a bad user experience. Lets say im a Google Chrome user and im not able to use it to its full potential. Maybe ill switch to android. How many apps are we talking about that could be affected, apple apps . Apple has 38 apps preinstalled on the phone, our count. Are firefox, Google Chrome, outlook, gmail, yahoo mail, the list goes on. Option,if they give the you got to figure the default apps are going to remain the defaults for 99 of users. Mark thats the best way to put it. To thinkt going theres anything different, but the 1 is really key. Apple, even though they have a billion and a half customers now, that small user base of people who are early adopters, diehards of the company, super loyal, they influence their friends and other people. On the security issue, is there any issue this would compromise from a security aspect that some people find attractive about the iphone . Mark in some cases, allowing some features to not default could cause security concerns, but in terms of the web browser and mail, those are not big concerns that willie influenced. Will be influenced. Im emily chang Bloombergs Mark Gurman. Morgan stanley makes the biggest acquisition by a wall street firm since the financial crisis. We will talk with Ceo James Gorman about why the bank is buying e trade. If you like bloomberg news, you can listen on the bloomberg app, bloomberg. Com, and in the u. S. On sirius xm. This is bloomberg. Emily Morgan Stanley is diving deeper into retail by buying discount brokerage e trade for 13 billion. Gorman, the james acquisition is a response to customers wanting more access to Digital Banking. We spoke to gorman shortly after the announcement thursday. Weve had a strategy in place a long time to continue to diversify and build out our Balance Sheet wide businesses. We did mesa west, a small Asset Management deal ive always felt e trade was an incredible brand, an Incredible Company with great technology, clearly doing stuff on the digital side at a pace that was ahead of where we were so we had the constant debate of build versus buy. We felt we were in the position to make a bold move and went for it. I was e trade the right business as opposed to a newer business . You said digital was a big deal, did you consider robin hood . James i like e trades business model. Clients, thet of huge workplace business, one of the best Digital Online banking businesses and they sit on assets. Point onethree trillion, stock member sitting on 600 billion, 21 billion in combined wealth revenues based on margins of 30 . It is not comparable. Robin hood is a completely different kind of business, so i like real businesses, real clients, real profits, theyve got all of it. Real clients, but much different than Morgan Stanley had traditionally taken on. How does this change the fabric of Morgan Stanley . James less than you would think. I dont think it changes the fabric much at all. The stock clients are all Corporate Institution so that is not different at all. For many of us, having Advisory Relationships have online cones accounts whether it is banks or Financial Institutions providing advice. The channels in the last 20 years have come together. What youve got to do is build businesses that make your clients happy, be convenient for them, not to yourselves, and for our Financial Advisors, already our clients, including myself, workingtantly electronically with Financial Advisors with Morgan Stanley. The channels have converged. 13 billion is a pretty hefty price tag for e trade. What do you tell the people on wall street who might believe you are overpaying . James i think they are jealous. That doesnt bother me at all. To 3 billion premium and made 8 billion in revenue, it is for the half months of revenue. Foreign half months of last years earnings to buy and a with 600titution billion in assets, three hundred billion in revenues that will improve all our financial models. This is a nobrainer from that perspective. This morning, you said this would create a fullscale digital bank, checking, savings. James they have it. Also has 4000 employees, you have more than 15,000 advisors in your Wealth Management unit. Do you need 20,000 people to run that part of the business five years from now . James we actually have a lot more. You are talking about the advisors, which we have about 15,000. ,ll the supporting Staff Customer Service reps, ops managers, risk management, and technology and support around it, it is probably a 35,000 person business. Jobs,are obviously some but most of this business just fits neatly inside Morgan Stanley and will be run as e trade inside Morgan Stanley. As the bank goes digital, does that mean fewer employees to make it happen . James goodness no. This is an opportunity for clients to expand with us. They are doing Digital Banking with other institutions. Now they can do it all at Morgan Stanley. We think we have 7 trillion of assets between e trade and Morgan Stanley. We want to bring those funds here. You have the number one stock trading business in the world, as well. Jpmorgan is trying to knock at your door when it comes to that business. How does the e trade acquisition and tear trading business . James that is the equity business, number world. We were number five post crisis. Technology within our trading platform, i think e trade could be added and vice versa. We are excited about using some of their technology, not just in Wealth Management but across our Asset Management platforms as well as equities and fixedincome. Emily that was Morgan StanleyCeo James Gorman. Prompted a downgrade from wells fargo security analyst mike mayo. He spoke with Bloomberg Vonnie quinn and guy johnson. You cant be a bank analyst without being a parttime tech analyst and this acquisition of Morgan Stanley buying e trade is about Digital Brokerage and Digital Banking. I think it is a fair question, companybillion for a that is the stock market sensitive . This interestrate sensitive at a time when you have peak Retail Investor engagement and high stock prices . We are not saying this is the bottom. Acquisition, this a 10 pe company paying 15 times earnings for another company just for starters is not ideal. Guy ive heard a lot about the corporate stock prime business and the fact this is a fantastic business and undervalued at e trade. Does that argument not stack up . In the whole idea of revenue synergies. If a Brokerage Firm can get customers through a variety of ways, digital delivery, or through the workplace and to the extent Morgan Stanley has a broader suite of products, if you are an e trade customer, you should say this is fantastic. I would love to be in e trade customers even more right now ofause you have so much more Morgan Stanleys research and really have ways to that experience. Having said that, if you are a Morgan Stanley shareholder, that comes with a lot of extra complexity, and i think cost over time. The synergies expectation, just like with the other mergers ive seen over three decades might be too optimistic. Guy do you think it was a competitive process . Do you think others were involved . Mike we have no idea at this point, and i cant wait to find out. There were some changing control positions put in place for management just in january. Certainly a lot of questions about the timing of those, but could other buyers coming here . Emily i was wells fargo security Senior Analyst mike mayo. Coming up, lithium batteries have long been touted as the solution to carbon anna been i am anna edwards carbon emissio but that means otherns. Environment and ethical problems. This is bloomberg. This week, tesla got a new street high target from the most bullish analyst on the street, raising to 928 from 729, citing teslas solar and battery products. Vulnerabilities in hightech cars are under scrutiny after analysts said they were able to trick a tesla into speeding with a strip of electrical tape over a 30 mile per hour speed limit sign, causing it to mistakenly read 85 dollars an hour 85 Miles Per Hour and accelerate. Hastric car maker tesla agreed to buy cheaper batteries that do not use cobalt for its model three production in china. The lithiumion batteries are a mean alternative to cobalt and nickel products. Lithium batteries have long been touted as the solution to carbon emissions, the production of lithiumion batteries might mean more problems. More. Ergs alix steel has alix the 20th century was the age of the internal combustion engine. The 21st century will belong to the battery. By 2040, the majority of cars sold will be powered by batteries. Emit lesshim it pollutants, but the batteries have their own challenge. Lithium is a water guzzler. If lithium prices stay low, it may not be the word the cost worth the cost to mine. The riskier method of pumping saltwater under ground to extract it. Nickel is used in cathodes and boosts density to allow electric vehicles to travel faster and farther. It is not clear whether minors in indonesia can even keep a steady stream coming. Cobalt presents an ethics problem. It helps keep the battery cool during charging and discharging, but they are terrible conditions for miners in kongo, the top producer. Some workers reporters have found are as young as four years old. A cleaner car may not be made more cleanly. Emily for a look at how other automakers are trying to keep up with tesla, alex spoke with the former tesla engineer and ceo of lucid, a potential competitor. She asked how long tesla can dominate the ev market. Tesla is the technological leader. His is a tech play technology has been recognized and i think that has been a major factor in the recent surge in the share price. A techucid Company Competitor to tesla or will it want to be a car company like ford or gm . I guess all of those things. First of all, we are a tech company. This is a technology lay and that is not sufficiently recognized but there is room for lucid. We have a world of Luxury Products which are dominated by the german automakers like gm and vw. Lucid is a luxury ev company and will compete with core competitors, which are the german companies, the cities s class is our core competitor Mercedes S Class is our core competitor car. There is room to just decide tesla. Alix part of the issue with the transition has been money. Automakers are pouring money into this, billions. It is not yet profitable for them, even though battery prices are coming down. Are you going to need more money to make all of this happen . Peter well, weve got great funding in place. We are in a healthy financial place for the start of production. To accelerateunds the growth of the company because we have a window of opportunity for the next few years. We want to accelerate our growth. We will need more capital to do that and want to accelerate the growth of a sustainable mobility to the world and right now, that is what mankind needs, a Widespread Adoption of renewable, sustainable mobility through renewable sources. Some numbers put on how much more you think you will need to raise . Be 6 dont want to two specific here because it is early days, but the auto business is capitalintensive. We are talking nine figure sums. Alix you feel the market is open to that, because they seem to punish traditional oems when they have the fire people and cut their buybacks and reward tesla. What is the response . Oems aree traditional struggling because they have their process fees, their methodologies, and many of those are suited to this rapid transition to electric mobility. We are a startup with a startup mentality. Lucid is based in Silicon Valley, and we are very entrepreneurial. With our spending, and our whole business philosophy is run that way. What is different about a lucid car or batteries or execution from, say, a tesla or other evs out there . Peter worldclass technology. We supply the batteries to all the cars so we have a race proven Battery Technology underpinning our car. Emily i was lucid ceo peter rawlinson. Ll to come, the eu sick seeks to dictate terms of tech competition. You will hear from the eu competition livestreaming on twitter, find us technology. This is bloomberg. Emily welcome back to the best of bloomberg technology. Im emily chang. The eu has unveiled a new strategy for deploying Artificial Intelligence in europe. Legislative plans have new rules on firms that want to deploy similar technologies in europe. Companies like facebook and google will not be exempt. The move is the latest attempt to leverage its vast developed market and compete with the u. S. And chinas hightech power. As the European Commission unveils its white paper on regulating social media and ai, commissioner Margrethe Vestager said she favors one eu digital tax for the companies. She spoke with bloombergs maria tadeo in brussels. Theres a difference between a shift and tone in tone and a shift in behavior, and i think everyone appreciates that we can have a debate about the responsibility of giant platforms, but i think the important thing is to see real while we are still considering whether regulation is needed to make sure all the things we decided in the real world are represented in error digital reality. Eu has beenow the pushing hard for tax reform on digital services. Is that something you think this year will be the year we finally see some move . What we arehat is pushing for, because we would want to tell all the many businesses who pay their taxes and the many people who work in businesses that pay their taxes that they are not faced with from digitalition businesses who have been able to escape because corporate taxation doesnt understand digital value creation. We will do our best within the framework to create a global consensus. Maria you are meeting a lot of executives, going back to Mark Zuckerberg but not just him. Do you get a sense they get a sense you are serious about this and they have to pay more tax in europe . Margrethe i think so, yes, and if eachd it is tricky member state makes their own system because they have to deal with one set of rules in one country and another set of rules in another country and maybe it is easier to say this is how it is done in europe. One stop, here you go, these are the taxes you have to pay. Emily that was European Commissioner Margrethe Vestager. Meantime, new scrutiny on an old u. S. Law that protects Companies Like google and facebook from lawsuits over content their users post. Of theection 230 Communications Decency act passed in 1996. Back then, it was hoped the law would allow the internet to flourish but the u. S. Attorney general william barr gets his way, the rules will change. Broad immunity to platforms that purposefully blind themselves and law enforcers to illegal conduct on their services does not create incentives to make the onl ine world safer for children. For more, we spoke to bloombergs ben brody who is covering the story. Attorney general layout a lot, child safety, the power of platforms. We heard a lot of other people talk about drug sales,. Gun sales, online misinformation. Weve heard about hate speech. The list goes on and on but the question of what we do about it, and that is up to congress, that is not something that has been settled on. We may be getting closer, but ultimately, congress is going to have to change the law if it is going to change and that means thisat is going to change year, passing something in an election year. We are not there yet, but we are seeing pressure on companies as part of the broader tech lash. Emily how are google and facebook responding . Ben this is one of their bottomline issues they are always going to be going out there and talking about, how important it is in their lobbying. They didnt come to this workshop. It is unclear whether they were invited, and they dont necessarily talk about it publicly. It is often through trade groups but what the trade groups will tell you is that section 230 protects free speech online and makes platforms less likely to cut you off. It also allows the platforms to take down that really offensive stuff. 230 protects what you dont take down, but it also protects what you do take down and they say that create the Legal Environment that provides the proper incentive to use the attorney generals word to take down that most offensive content, but i think none of us really want to see online. Your point about social media companies, we had Mark Zuckerberg in europe recently calling for more regulation, but how genuine is the call being perceived . Ben i think there are a lot of people who say it does not go far enough, that they dont really believe that the platforms have the publics best interests at heart here. I think what is fascinating is seeing these companies approach what is essentially a fractured regulation around the world. Various regions of the world, content t bringing on andr these companies saying we are worldwide businessesoles,. How do we harmonize these regulations . Ec facebook coming out this week saying tell us what content is offensive and we will block it. You have Tech Companies trying to get provisions like 230 into trade agreements, to export 230, which is uniquely american, around the world. You see companies trying to get uniformity on a variety of levels, whatever that looks like. Into how does this fit the broader and ongoing scrutiny from the doj . Into past acquisitions, which have a global impact, given how enormous and influential these companies are around the world. Ben absolutely. Attorney general barr told us something we didnt necessarily know before, which is the idea to do the 230 workshop grew out intoeir already looking competition. And his mind, those things are closely linked. If you talk to people who study tech policy, they will tell you 230 to trust are vastly different issues and taking down 230 could possibly entrench the but at leastbents, in attorney general barrs mind, these two issues are linked, part of the broader techlash and he wants to pursue them at the same time. I think those things are only ramping up and he, by holding this workshop, even if there isnt consensus, is providing a forum to go to congress and say look, here are the complaints. Here are the variety of things we think you could do about it. It is on your plate. And emily that was bloombergs ben brody. The Semiconductor Industry last year suffered its worst annual slump in almost two decades, hurt by a trade war between the u. S. ,nd the largest the largest chip producer, and china, the largest consumer. Bob swan, urging them to engage in constructive dialogue on the trade tensions. He spoke to bloomberg brads tone and they talk about intels Global Supply chain. For a global company, we have huge r d and manufacturing we need in the u. S. , so markets outside the u. S. Creating value for our customers and making money, gives us more capacity to invest in the u. S. R d. We have all had to adjust and adapt in a variety of ways, and i say that meaning we play a large role in china. Market big consumption both on the pc and server side. You have a Large Manufacturing base and a large chunk of employees in our Design Centers in china. It is an important market for us and the u. S. Please had to adapt our supply chain to have flexibility to to moveme of our oems their assembly so they dont have to deal with tariffs. Weve had to stop in cases as export laws change. Weve had to stop shipping to some customers. Retaining market access, protecting our ip, and adjusting and adapting to the rules of the road. Have serious is the risk that in response to the trade war, china could double down on the development of its own indigenous chipmaking capability . I know they are nowhere close right now, but over the long term, is that a threat to intel . Bob i look at it in a slightly different way, whether it is a hyper scale with incredible capabilities, whether venture semi,l going into whether it is China Building their own capabilities. It all leads back to the rate and pace of innovation. To continue to defy the odds and do things that nobody else can do, such that when they have to make these decisions, intel and the role we play in the world is near the top of their list. That presumes, they are thinking rationally and they may be, but another irrational aspect is International Security and national dependence. Is it more realistic china develops a chip capability because of these global tensions . Bob and so many ways, we have to focus on things that we can focus onbut we also things that we can control and influence. Along the way, i still come back to the same answer. Pace of innovation and deliver things that nobody else can do continue theath to trajectory for the company. Speaking of things you can control, have you moved any production out of china . I know you have some memory chip production in china. Bob we had a very global footprint in the u. S. , ireland,ntly, israel, we have an assembly in malaysia and vietnam and china. So we have a very global footprint, so we have the flexibility to adjust and that in where we make things around the world. So far, we have diversity in our footprint. We call it a virtual factory, so we have the ability always to move things around and optimize and manage risk. Emily that was intel ceo bob swan. You can catch the whole episode of bloomberg studio one point 0. Ow 1. 9 next, developing a programming language. Later, one sneaker marketplace wants to change the way people shop. This is bloomberg. Emily blockchain in 2020. Will reality live up to the hype . This book to deliver on his promise. Digital asset is backed by giants like samsung. Here is my conversation with the ceo. We are looking to use the money to expand to reach into Different Industries. We are also looking to increase some of the developer tools we have been building in recent to achieve some of their ambitions using the technology. Paul youve got some high profile partners. Can you tell us more about some of the things you are working on for them . Yuval as the industry progresses over the past few years, youve seen what is similar to the early days of cloud, blockchain is becoming more and more mature and you are seeing players like vmware, microsoft, amazon enter the space and offer their services. Developclients we help solutions but we have partners such as vmware, microsoft. What we do is Work Together with them to bring some of our expertise and some of their expertise to be able to deliver some of these projects to our clients. Emily weve seen so much and heard so much hype around blockchain. Is it oneu think to five years out when we will really see the promise of this technology that people like you and others have been touting . This year you will start seeing some projects in production. There is some announcement that recently happened that are trade u. S. Ow you treasury repo using blockchain and you are going to see that happening this year. You are going to start seeing other projects in Different Industries like the Health Care Space starting to move closer and closer into production. At the end of the day, technology is pretty invasive and there was a lot of hype, but at the end of the day, to implement this kind of technology that is pretty invasive into some core systems will take some time but i do think this year, you will start seeing some of these products in production. Emily facebook with libra make a lot of noise last year. Weve seen some of the biggest players drop out. Would you count facebook out of the discussion at this point. Yuval first of all, this entire industry should thank facebook for their effort, because i skeptics have gotten a wakeup call and that is a good thing because at the end of the day, this technology will happen and will shape the next technology, so from that perspective, i think the industry owes a lot of thanks to facebook. When it comes to Capital Markets and to money, regulators are extremely concerned and what could have been done better is how the industry worked with regulators. This is something that we take to heart extremely with every project we do. We work with regulators to work within the current Regulatory Framework and if there are changes that need to happen, we work with them on that. In the case of facebook and that caught the regulators by surprise and caused a lot of the backlash on facebook. Emily it is not just big tech giants like google and facebook feeling the heat of u. S. Regulators, but rising players like airbnb. The worlds biggest timesharing app has been citing rental regulations in cities across the country, seeking to clarify its legal status and protect thousands of listings. Airbnb has filed at least 11 lawsuits against city and state governments since 2008. For more, we spoke to mark milian, our bloomberg tech editor. What is behind it is a company that is essentially trying to create a new industry that is in some gray areas of we law in many places, so have seen over the years, and in recent years, the company has filed at least 11 legal actions against major u. S. Cities. Boston, new york, several places in california, and they are essentially seeking to come in some cases, change the law or carveout exceptions for themselves. It is part of this very letsive Silicon Valley change the way things work and in some cases, to parallel to uber did in the early days. 120 lawyers, a budget of 60 is there any sign they are willing to work with governments or is it hostile . Theyve made some concessions but it is a company that realizes they need to change the way things work in certain cities and carve out some of se exceptions in order probably in the coming months will try to lift list its shares publicly, so they want to be able to show they have got a secure position in some of these big places like new york and where theyelsewhere have had challenges from officials about whether their service is even legal. There is a lot at stake for the company. Ares on shortterm rentals local, but they can be cited as precedents for other locales. Other companies that do the same thing are also keeping a close eye on this. Homeaways hasd been the subject of some of these legal issues in the past, in anybnb is the biggest markets, including the u. S. , and so they have had to take a in takingsition cities and states to court in order to secure the market for everybody, but most of all for themselves. Emily that was bloombergs mark milian. Still ahead, how an online marketplace aims to make sneaker resale more accessible. Our conversation, next. This is bloomberg. Want a pair of kanye west easy kicks without the pricey tag . Enter the exploding sneaker resale market, dominated by an Online Platform you can buy used and new sneakers. Taylor riggs spoke to the cofounder in our retail transformed segment. Goat is the Global Platform for style, so we really want our whole mission is to make our feel and looky the greatest, so when we launched goat in 2015, my cofounder, his first pair of jordans were from when he was 10 years old from his dad, so 20 years later, he went on the largest marketplace of the time, ebay, to buy the shoes. He bought them, received them, and took them out of the box and they turned out to be fake. And age, in this day spending 300 on a pair of shoes and still have to worry if they are fake . Lets build a marketplace based on trust and safety. We pioneered what we call ship to verify. Whenever you buy something on goat, the seller doesnt ship to you directly. It ships it to one of our warehouse is globally for us to authenticate. We use Machine Learning technology to authorize these products and quality inspected and send it to you, the buyer. We arey we have a here to protect the buyer. You have mentioned shipping twice now, and you are passing the cost on to the customer. What was your Decision Making to pass the shipping cost onto the consumer and not eat it yourself . Such a bigse it is value proposition, because there are so many counterfeits in the industry. Last year, we prevented 72 million on our system. An additional cost, but for the consumer, would you rather spend 500 on a pair of shoes and have it the fake or spend a couple extra dollars on shipping to make sure something is authentic . Thats what we have seen, where the customer understands the value in our value proposition. Taylor there is a big trend in the retail market, direct to consumer. How are you handling the increased wave of direct to consumer . Eddy for us, because we are primarily in the secondary , we accept all forms of purchase. Whether the consumer buys it direct from a brand like adidas or nike, or through a retailer like foot locker. The case is the fact that for us, nike entity does have certain skews they released direct and these brands have a few hundred skews at any given time they are selling. On traditional websites, it is probably 1000 or 2000. On goat, we represent the past, present, and future for sneakers. Youave over 75,000 skews can buy from, which means yes, you can buy the current season styles direct, but if you want something from five seasons ago, Something Like my nostalgic cofounder, that is when you go to goat. Emily that was goat cofounder eddie lu. Life in space for on the dragon spacecraft, up to four paying customers will be able to buy seat through a booking agency called space adventures. Previously arranged flights on russias space craft. The word on how much theyll cost. That does it for this edition of the best of bloomberg technology. We will bring you the latest of tech throughout the week. Tune in, 5 00 p. M. In new york. Check us out on twitter, technology. Check out quick take on twitter. This is bloomberg. [ fastpaced drumming ] [ fastpaced drumming ] jonathan from new york city for our audience worldwide, im jonathan ferro. Bloomberg real yield starts right now. Jonathan coming up, more signs the coronavirus is spreading beyond china, hitting supply chains, taking a bite out of u. S. Economic data, sending u. S. 30year bond yields to an alltime low. We begin with the big issue, the data providing a little more fuel for the treasury market. What a mixed bag for u. S. Data. Demand delay versus demand destruction case. Ism going up, pmi going down. I still think there are challenges