I want to start off by sort of taking the temperature here. I want you to listen to what the former twitter ceo had to say. Frothy. Word association. Late stage private valuations are quite high. Its just too crazy right now. Its got all the sort of hall marks of that 20002001 where you are like this is getting it feels like that with just the prices youre seeing being paid for things that dont even feel like they are really working at scale yet. Those were interesting comments yesterday. Do you dproagree . Its a good place to start to not disagree with dick when it comes to perspective on Silicon Valley. However, i would say comparing it to 2000 and 2001, we are under two on the ten year. Multiples are an inverse of that. I look at it. Our Gross Software index is off 30 from the highs. Certainly, we can point to examples. Were going to talk about them today of late stage private valuations that are high. We have a tremendous amount of capital. But i would say as a general matter, i dont view Silicon Valley as frothy. I dont think its 2000 or 2001. I think Real Companies are being built with tremendous scale. I think valuations are full. They are respectable. You look at next door. Valued are out. And people have said there is not a lot going on. I think we are disproving that and showing there is a lot of innovation going on. So to your point about dicks comments, i look at the market. You have volatility under control. There is a hunt for yield. Most of the innovation growth in the last decade has come from tech and investors want to be in tech. You always have to stay disciplined. I think things are getting out of whack no. Not at all. What do you think i have been outspoken about the oversupply of capital for half a decade. I may have been there is a lot of money in late stage private. I love the perspective that we have for the next question of whether its a good time to take Companies Public and whether its a good time to be an investor in those companies in the Public Market. We get perspective from everybody. Sarah, is now a good time to take a Company Public . It should be just the company. Is it a good time take a Company Public yes, if you have a recurring reven revenue. I think next door is on that path. I certainly wouldnt goal any company around going public. Is there investor appetite on the other side right now yes. And i think that will continue as long as we see the environment stay where it is in terms of volatility and a hunt for growth and where the rates are. I have breaking news. What do you have we have this announcement that john bolten has resigned. The president making this announcement by tweet. Here is what he pointed out. He said i informed john bolten that his services are no longer needed at the white house. I thanked john for his service. I will be naming a new National Security adviser next week. This comes as something of a surprise given that within the past hour or so the white house announced bolten would be part of a briefing coming up at 1 30 p. M. Here on the east coast in the White House Press briefing room. That apparently no longer going to be operative. Bolton was seen as to some degree out of step with this administration, more of a traditional neoconservative, much more aggressive in terms of foreign involvement in a host of countries around the world so maybe not a good fit necessarily for this particular president. The breaking point in the relationship here seems to have been this decision by the president to invite leaders of the taliban to camp david in the week before 9 11 to negotiate a final wrapup to the war in afghanistan. Bolton was said to be against that decision. The president very much for it although he announced he was canceling the visit because of their continued military action in afghanistan. The president here seeming now to have this final break with his National Security adviser according to his timeline last night and this morning when the resignation was given to him. Well wait and see who the new National Security adviser is here. Thank you very much. Back to him as needed. Back to our conversation in the meantime. Why dont you entertain that question of whether it is a good time. I have always been a big believer that it is always a good time to take a company into Public Markets. There are people who share my beliefs that it really is just about playing at the next level. You get out there among some of the smartest investors in the world and they hold you to a high standard. That makes you execute better. I view it as the right step for anybody who is ready to take the next step. I think that Silicon Valley has become so competitive in the Venture Capital market that the level of discipline invoked from the board is just not there. I think too many people have to worry about whether they have a buddybuddy relationship with the founder. And the buy side can be a lot tougher. I think that makes the companies execute a lot better. Mark zuckerburg said that he made a mistake. He went public two years two late and that it pushed him on mobile in a way that was helpful. Well have more on those sorts of topics when we get to uber because i think it is relevant to that conversation. Youre speaking to an investor audience. Investors, people trying to make money in the market. Is now a good time to do that . I think, when you are coming public in a world where facebook is growing at 30 and growing at ten times you better come to the Public Markets with a growth story with a margin story as we have seen. And so for my perspective its about the path of the company from the moment they go public. Shopify is up 20 x since 2015 as a public company. During that same period, uber is flat as a private company. So the Public Markets will reward success and they will penalize companies that dont have a path to profitability. What does it say that if you look at the performance of the i. P. O. S there is a distinction. Lets take the outliar, the performance of enterprise versus consumer. The Enterprise Companies have done pretty well. The consumer ones not so much. It comes back to the Business Model. I think that point is very valid. If you look at Companies Like zoom, pinterest, they have a great Business Model and hit the Public Market with the right degree of discipline, you will get rewarded for that. When investors are not sure is your Business Model going to work it can work over time. Total believer in that phrase about in the long run it is a weigh in machine. The key is throughout it staying true to your strategy, knowing where your growth is coming from. Its what we think about a lot with next door, making sure we are always on point and you need to think about your people in all of this. Yes, there are investors, but employees are also shareholders. You need to be careful about what that mark is and where it goes from there because employees are a big part of the equation. The performance says you better have a path to profitability thats well defined for investors . Absolutely. There is a lot of Value Creation going on in the private markets. You look at bite dance, an incredible private company in china, one of the three leading internet platforms. Its gone from 10 billion valueuation to 80 billion on the back of phenomenal Revenue Growth and profit growth. That will likely be in the ipo pipeline. The idea that there is not Value Creation going on in the private market or in the markets just misses the point. Next door has created tremendous amount of value, targeting neighborhoods. I think you will see those. Clearly the market shifted and this year has been the year of enterprise software. Stan miller went on cnbc and said im short the market and Long Enterprise software. When he is talking the cloud, we know that people are paying attention to the software market. And overemphasizing profitability, i would stay a little clear of that because investors pay for growth first. You need to be thinking about your strategy. Over and over again with sales force, he knew how to keep going back and reinvesting. This question about valuations and whether things are fraurth frothy leads me to bank. They have had a profound impact out here in the valley. Next door is the vision Fund Investor in any way in next door we like investors that are clearly aligned to bringing value to our company. Who knows Consumer Internet trends better . Great investor when you think about consumer technology, someone that pushes me every day. We want to make sure that we align our Investor Base to those who will push us on how to make the Company Better over time. I think that one of the things that is frequently part of their arsenal is using capital as a weapon. So you get into these discussions about profitability or not profitability. They enter your market. I dont care what industry youre in. I dont care if they invest in you. If they invest in your competitor, youre engaged in a game. Now, certain one reason we love things like social networks are they are not exposed to price competition in that way, but ride sharing is, banking is which i think is the next industry that will be exposed to this kind of capital as a weapon thing. Its real. One of the challenges is if you are on the boards of these companies is choosing not to engage is seeding the field. So i think its one of the toughest things a board has ever had to analyze. Any board in the history of business. No one has faced this. We saw it in enterprise in the case where two Enterprise Companies raise a billion dollars each and just put it into sales. Its a hard challenge. If you dont engage, you lose. The soft bank effect. Im totally on board with bill. Capital is a weapon of economic destruction is a problem. Soft bank is a huge investor in door dash and uber. Those two are smashing it out. Its leading to huge burns. I dont think thats a net positive for Silicon Valley. I dont think its a net positive for those companies or soft bank. I look at soft bank and i would luchb if you look at the Value Creation created over the course of the last two decades, the vast majority came from a single bet on alibaba. I think soft bank ought to be investing off of its Balance Sheet in what they know best. The idea that they will raise 200 billion from the saudis and others in order to continue what i think is a dangerous game of investing in Competitor Companies and pitting them against one another, i hope they shelf the idea for vision two. Wouldnt if lets say soft bank pulled back out here, wouldnt that have a negative impact i dont know that that would be greeted as a great thing in some circles out here. I think you can overcapitalize a company and lose all the constraints. I think the best innovation often comes when you are really under the gun and having to be held really tight because you dont have a massive Balance Sheet to throw at a problem. If you look at Silicon Valley and Companies Like whats rr app where engineers create a business that went on to be huge. You cannot scope it just in terms of scale of Balance Sheet. I think too much Balance Sheet really degrades your discipline frankly. Been great having you. I know you have to run off to an engag engagement that you have. Were going to come back and riff on more stuff. Here is what else is coming up on halftime report. Shares of one of the hottest ipos of the year falling more than 25 since its debut. Is ubers growth story running out of gas plus counting down to apples big event. Less than one hour, a new line of iphones expected. Is the tech giant innovating enough for investors rkalftime report live from one maet in San Francisco is back in two minutes. I get it all the time. Have you lost weight . Of course i have ever since i started renting from national. Because national lets me lose the wait at the counter. And choose any car in the aisle. And i dont wait when i return, thanks to drop go. At national, i can lose the wait. And keep it off. Looking good, patrick. I know. vo go national. Go like a pro. Welcome back. We continue our conversation. We were just talking about soft bank, one of their Largest Investments is in wework. Very much in the news. According to his sources it is full speed ahead on the ipo despite calls or reports that soft bank wants them to shelve it. What should they do . At the end of the day, they have to go to market. They have to talk to investors and see where the market is going to clear as to the ipo. I think there is a fascination with the idea that it was marked by a single investor in the private markets over 40 billion and now it is only going to go public at 20 billion. The number of 20 billion companies created over a period of less than ten years is a very short list. So while i think there is a lot of fascination because it involves soft bank, it is potentially a down round ipo. That will be a bad look. I think its a bad look and i think it is a bad look that you have a founder ceo piling out of shares, who is buying jets. You have supermajority voting control of the company. At the end of the day, the board has to look in the mirror and ask do we need to make adjustments . The buy side. Those of us investing in the ipos, we will hold it accountable by way of what were willing to pay. We have to say that three years out we think this will be worth well more than its worth today. I was going to ask you that next. We invest in technology companies. This is primarily a Real Estate Company. Im not in a position to opine on the innovations because frankly i dont know how durable the advantage of a short term lease versus a long term lease is. I dont know that i want to own a Real Estate Company heading into a recession. Clearly the market is speaking and saying right now that the company isnt worth what the private market was marking it. Benchmark is an obvious investor and a big one is you are restricted legally. You cant talk about it. I want everybody to know why you are not opining here. Let me ask you this sort of related to wework bought not really. Do you still support founder ceos should founders continue to run the companies as they go into the Public Market . I think the best outcome as can be seen by the looks of everything from microsoft to google to facebook is when a founder takes it all away. It is by far the best outcome. It is best outcome for venture investors. Most ceo searches are a 50 50 gamble. It is very rare to land someone who is just incredible. No one wants to make that transition unless they have to. Whether or not you have the wherewithal to scale as a ceo which includes things like leadership and being able to manage 10,000 employees,we hav to live through that every time. Those are the questions that exist around we work. You went through this issue with travis at uber. That didnt sort of color or paint your view on whether these folks may be great innovateers and great creators, but not such great stewards. I think like were talking about the like superupper echelon of the private companies that make it to this level. So out of the ten that made it to this level, five have had the type of founder that can go all the way. Thats what you are hoping for and what you as a board member are trying to make happen. I almost consider it unfortunate that we werent able to make that happen in the uber case. That wasnt the optimal path. We have this debate sort of what kind of company you are. You said wework to you is a Real Estate Company and not a tech company. There is another company that will have its road show as early as tomorrow. And thats peloton which tells the world its an everything company. I can go down the list and read exactly what they say they are, tech, product design, social connection, apparel, logistics. No Machine Learning not yet. What does that say, though, bill, about these companies having to sell their story as best they can to the market place . I think being good at narrative in the Public Markets is extremely powerful. Its the best are always great at being able to tell their story. There has to be substance behind it. Absolutely. The best is to have a ton of substance and to be a great story teller. I think peloton has an interesting brand, interesting product. I think a lot of what you are seeing them opine on is how they can leverage that brand to be more relevant to the consumers they serve, the people who use it are fanatical about it. They have a significant pricing umbrella and they have the opportunity through adjacent products. And create a Network Effect by having a Community Angle to the whole thing. Brings me to uber. Notable obviously investor is benchmark. What do you make of whats happened since the ipo you guys had someone on in the past week or two who said two things. They said the markets that they are in are highly competitive and that they are really low i agree with the first one. I think the markets continue to be competitive for all the reasons we talked about. I think the question is exactly the opposite of that. There is no one competing in ride sharing that hasnt been willing to lose a billion dollars a year. There were three or four other players in the u. S. Market. I dont remember their names. Theyre gone. The auto makers and google all threaten to enter the business. That didnt happen. I think they are high barriers to entry. They are highly competitive. Food delivery you have players being funded by this capital as a weapon concept. Uber has 13 billion dollars on the Balance Sheet and aim to be a player in the market. We talked about the narrative. Has darra not expressed the naur tchb in a good enough way . If you think about where we were when we took over, we had fires burning in several places in the u. S. I mean it figuratively and all over the world from a regulatory standpoint. Took those to the Public Markets, changed the brand and culture inside the company. Im thrilled with what he has done. Can you see a path to profitability . Investors seem to be questioning whether there is one. A number of companies have gone through that transition, amazon, twitter, snap. This is part of what you talk about you come to the Public Market and the Public Market will push you harder. Public markets are saying we want to know there is a path to profitability. They started talking about the contribution from the ride sharing business and started disclosing more details around that. I think food is more competitive. That may take a little bit longer. They are extremely well capitalized and are aware that the street cares about this. You know, bill and i were talking about this on the ride up in our uber. You think about the global and demographic trends that are tail winds to the company over the course of the next decade. Then you look at the progress they made in a very short period of time. Contribution margins over 20 . Their ride sharing business is bigger than every other ride sharing in the world combined. They are competing in every market even in places like china where they had meaningful equity stakes. I look at where the company has come. I think that even dara was surprised at the Market Reaction. But that is what im talking about as risk premiums change, and theyre changing, q 4, we had a 20 draw down because people were worried that rates were going up. Today rates are low. People are willing to go further out. In the case of uber and lift, people are saying we are going to wait and see until you demonstrate how you get to the 25 margin that youve talked about. I think the narrative is good. I think q 3 and q 4 you will see accelerating top line dproeth. I think you will see expanding margins. I would suspect that this does have the opportunity to be an amazonlike story. You mentioned mark cuban earlier, his view on ipos and taking Companies Public. He came on my show and said that uber waited too long and that its a mature company. So i agree with him that they waited too long. I am a big fan of Companies Going public sooner rather than later. I think the company has incredible growth. Lets look at the fact that i think most analysts for 2020 have 85 billion in gross. That is a massive business this company is less than ten years old. To have 20 or 30 growth on that top line is phenomenal. And one of the things brad talked about like long term trends, kara talks about why i dont know why anyone would own a car anymore. She is a first mover. We spent 100 yeefrz bui 0 yearsa car centric society. You can have a fourdecade growth driver for ride sharing as more and more people move away from car ownership. The timing question is so important especially as it relates to Something Like uber, because it certainly was the case that all the money seemed to be made in the private market. By the time the company went public, the public investors were the ones left holding the bag. Listen, this gets back to a point that bill made earlier. The private markets have excess capital. He has been talking about it for at least five years. With excess capital, that squeezes risk premiums. People are willing to pay forward. So in the case of uber, they were paying forward three or four or five years. Just remember, those private marks are just that. They are marks. They are not necessarily liquidity. When they get into the Public Market they may have marked it at 70 but now own it at 35. Most of the big shareholders who i speak with i think see the world the way we do. The Management Team is turning the corner. The ride sharing business is doing well. We think that the eats business creates an opportunity for a local market place that frankly at a local level could rival amazon in terms of things you can buy and have delivered same day. I think the opportunity is great. But to sarahs point earlier, at the end of the day, they have to deliver. If they dont deliver, well be talking about this two years from now as a company that failed to deliver. I get more calls today about people inquiring ongoing long than being dismissive. Now that the stock is pulled back, you have a 55 billion market cap, 13 billion in cash, 13 billion conservatively. There is like 25 billion against a company that does 85 billion gross next year. Even in the darkest days in 01 when amazon was being held to the same question, it traded about 0. 5 against. And then it went up to 1. 3 and 1. 8. I dont know if you are one of the ones calling bill. You have increased your position. We increased our position because i believe in the road map that the company has laid out. If you believe in that road map, then the company shouldnt trade 0. 4 times. Just that multiple expansion alone makes this stock a double, but im also very sober as to the fact that this is not a 30day investment. Its going to take years for this to play out. I think over a period of years they can build a business worth over 100 billion. We hit whether a company should go public. There is the question now to consider of how to go public, whether a traditional ipo is the right answer or direct listings. And who knows who will be the next. Your view on that. Is that going to be the norm. I think i been digging into this ever since Barry Mcarthy led the way. I apologize to the Silicon Valley community that took me two decades to figure this out. But i think Silicon Valleys been on the bad end of a bad joke for about four decades now in terms of the traditional ipo process. The more i have studied and contrasted, the more i realize that. I brought along some data. This data is compiled. You guys have had him on. He is a professor at the university of florida. He has tons of ipo data. The first slide is about under pricing. This is solely looking at the difference between the price that the stocks handed out to the night before and to close the next day. So over 39 years thats been 171 billion for Silicon Valley companies. Its been increasing lately. Just year to date we are at 6 billion in under pricing. If you study the way it works, the next slide is more surprising. So the next slide, i asked jay if he had ever run analysis by under pricing. He said it is easy to do. This is ten years of data over 100 ipos per under writer. What you see is astonishing. What you see is that no one questions who the two best investment banks are. So it turns out that if you go with the best investment bank, you get the worst execution. You get the best. Here if you choose to work with the top under writer, you get the worst execution. Wouldnt it be nice for a company like slack to have that support at time of going public . From the under writers. The word under writer is a myth. They dont put capital up. The only capital available is the companys own capital. Once it breaks, they make a profit on that m. I didnt realize you were that much of an evangelist. Listen, when they were on you have to understand what happen happens they put it all in a file which makes you think there is a process here. Then if you have any of them on, ask them what the target overallocation is for standard ipo. They will tell you 20 x. 20 x over supply is a euphemism for we are about to ignore 95 of the demand for your stock, intentionally ignore 95 of the demand. In a direct listing process, they match supply and demand. They use the standard opening process thats used to open every stock every ay. One of the ultimate ironies is if you do a traditional ipo, you do a direct listing the next morning. Just the only people allowed to sell are the ones we handed the stock to the night before. Thats why this is set up to fail. I kept studying that list of the lead under writers and wondering how could that possibly pbe tru . There is an area of study in economics called the agency problem. And there is a variant. You have an agent looking after multiple parties the company. If you look back at the chart and say what if their job is to pass along the most profits they possibly can to the buy side, then the chart makes sense. You have to make sure you realize. Bills thought about this a little bit. Were huge supporters of a really tough scrutinizing process by the company to evaluate direct listing versus doing an ipo. If you need to raise primary capital for the business, it may work out better that you doan initial public offering. The one thing im absolutely certain of is the spotlight that bill is shining on this, that were shining on this and many others are shining on it is going to close the gap. The days of handing low priced securities, diluting the company to a bunch of long only shops in boston and new york, i think those days are over. I think its a tiny handful. I think that at a minimum, this will go a long way in educating an ecosystem about an alternative. The alternative is real. An algorithmic approach makes more sense. And so where we are on audit committees, we are requiring the company to consider this as an alternative. Talked about fairness and access. If you are in a direct listing, an order a penny higher you get filled. That is not true in a traditional ipo. Rooet is often held to five percent and you have no guarantee to get access. The people getting that cheap stock, that 171 billion of value transfer is a handful of the best accounts. I know the twitter feed is blowing up right now which is bill, slack is down from 38 to 24. Doesnt that mean tht direct listing model doesnt work this is about the delusion suffered by the company on the day that it lists. How a company performs down the line has to do with the fundamentals of that business, has nothing to do with whether they do an ipo or direct listing. Really good conversation. Lets get to sue herera with the headlines. I hate to interrupt. That was great. We have other news to tell you about. Here is what is happening. Michael bloomberg is pledging 1 160 million to stop kids and teens from vaping. He says the goal is to ban flavored ecigarettes and stop companies from marketing their products to children. We just have to do something. 160 million we will spend on this campaign to start. I emphasize to start because we are not going to stop and walk away from it. Voters are heading to the polls in North Carolinas ninth district. The scene has been vacant for nearly a third of the 116th congress because of a voting fraud scandal. As a result, the North Carolina state board of election decided to hold another election. Many see it as a barometer for how the nation is feeling right now. Wendys is relaunching breakfast across the u. S. Next year t. Serves breakfast at about five percent of locations. It will spend 20 million this year to help franchisees hire 20,000 employees to support the effort. The stock is down big. Lots of competition in the breakfast space. Ill send it back out there to you. Thank you, sue herera. The count down to apples big event is on. Were talking stock and tim cook. Wel do it next on halftime report. For farmers here, this is our lifes work. But when a recall happens, perfectly good food goes to waste. Now, weve got away around that. Looks good. Were on target. Blockchain on the ibm cloud helps pinpoint a problem anywhere from farm to shelf. Its used by some of the biggest retailers everywhere. A nice wedge. So more food ends up on your table, is that daddys lettuce . Yeah. And less food goes to waste. In the human brain, billions of nefor people with parkinsons, some neurons change their tune, causing uncontrollable tremors. Now, abbott technology can target those exact neurons. Restoring control and harmony, once thought to belost forever. The most personal technology is technology with the power to change your life. Three big breaking stories, one will apple deliver well bring you headlines. It kicks off at 1 00. We will have analysis. National security adviser john bolton out at the white house. The president saying he and others strongly disagree with many of his suggestions. We will have more on that. Finally, according to the china warning post, china is expected to dprooe to buy more Agricultural Products as the two nation s prepare for a meeting next month. Thanks so much. 15 minutes from now apple will unveil the latest iphones. Lets talk about what is going on with apple. It comes as there is criticism about whether the company is innovating enough. They havent done anything innovative. The ipods. Im being dead serious. I think it is time to pass the baton. Steve jobs passed away. The phone has been in decline since. So peak phone was 2015. The major problem is they believe that any company that inoivates out there is not as good as theirs. Okay. Fire tim cook . His principle accusation is that they are not innovating anymore that other people are innovating faster. The reality is that innovation slows down. They have a Services Business growing over 20 a year. If you rewind the clock a couple years they are doing exactly what they said they would do. Berkshire i note continues to be a large shareholder. I understand that jason wants the new thing. I own tons of apple products. I love everyone of them. Im not considering an alternative to any of them. When they make an announcement like later today, i will look to see if i want it, and if i want it, i will buy it. If there are a lot of customers like me, its a stock you want to own. Is he a good steward of the capital that they have which is enough to fill up the bay out here. I think returning capital is a fine and legitimate thing to do particularly when you have an annuity like business which is slowing down. Whether or not they are spending 16 billion in a way that will yield a high return, i cant tell you. If i had time i would play you the sound byte throwing daggers at them. Its easy to do sitting from the sidelines. Im speaking with our capital. We have over a billion dollars invested in the company. And were highly supportive of management trading at ten times for a Company Growing over 30 and on the right side of history. Have they done everything right . I think its very difficult for a company of that scale with this magnitude of social innovation to do everything right. Im confident this team is doing the right things. When i look at what the regulators are doing, regulators going after google for bundling services, thats been a complaint for a long time. I think there is legitimacy to it. When it dmooz comes to facebook, i think the company has gone above and beyond in terms of implementing gdp. Whats your comment on the Tech Industry in itself . Your industry is under fire big time. A quick comment on facebook which is our companies that advertise are finding that facebook is taking increasing portion of share relative to google. There really are two digital platforms now for scale advertising. I havent seen that wane in any way. Facebook has crossed over into ecommerce which is a hard thing to do. Im not sure twitter and snap have made that transition. Alibaba. You recently increased your position in alibaba. Is that right . Its a small position for us. Our bigger bet in china the Chinese Consumer is holding up. The headlines are quite negative on china. All multiples have compressed. We were buying it for less than two times for a company that was growing over 200 . So like we dont think chinas dead. The economy is clearly slowing. We think ultimately reasonable heads will figure out trade issue, but pinduoduo will do great on the back of the chinese middle class irrespective of what happens in the trade situation. May we talk about so it much for obvious reasons back east, were so close to d. C. And the news that filters out of the administration, how much are people talking about the trade war, impacts from china, directly on technology companies, whether the hit name has come across . Look, some companies are more exposed to it, if are you sourcing products from china, obviously, this is something thats much more in your view than if you are not. Look, im a fundamental, i think last time on the show i said im a fundamental believer in free trade and the free trade list bodes for everybody. So i hope, more than anything, that the administration gets this together and we get back on path with china. I think its critical to the markets. Are you thinking more you know clearly about the kind of companies that you are investing in and willing to put capital in as it relates directly to the trade war . No as you know, were investors in united airline, united spent time in hong kong, there is risk in india and pakistan and carno coming from coin clearly itiment e impacts these businesses, the companies we have invested in have navigated around those political challenges, it would be better if we had fewer political challenges look at whats going on in the market the market is up 20 , obviously, we had a draw down in q4 even yesterday when you had these regulatory challenges announced by all the ags, i noticed that google and facebook out performed. So i think a lot of this concern, a lot of these risks are baked into the market. Microsoft the story of microsoft do you think its appreciated enough what Satya Nadella has been able to do at microsoft, Richest Company in the world i think now by market cap. The entrepreneurs i talked to are highly aware of what hes done and achieved and the contrast that hes brought to the company and how doubling down on the enterprise has really unlocked so much wealth and value. You own the stock. Dont let me underestimate it well i think the cultural change, the optimism to be at microsoft today. Their ability to recruit engineers, their ability to take on big challenges, the focus they have as a business. What theyre doing in the cloud. So were investors across the date in tableau and mongo and we see azure is more than holding its own against aws and as Companies Move to the cloud, take a company take i like united airline, they dont want to be hard wired single threaded to aws the two names in the discussion i know you had the ceo of google cloud, unfortunately, theyre not really in the discussion we see a hybrid cloud conversation that includes aws nationally. As you guys have talked about, satya is not under the gun. So there is all this political heat from washington they probably have more leeway on acquisitions. Who would have thought ten years ago that today youd be using words like exciting talk abouting about microsoft i dont think many people would have placed that bet listen, leadership. Not as the Investor Base. Leadership matters. A few blocks from here, a decade ago, steve balmer stood on stage and laughed at the idea of giving away software on a mobile device he laughed at the idea of the app store. He laughed at the idea that this was going to overtake the pc and so, is Steve Ballmer in Steve Ballmer, you had an aggressive inspieshd leader. But he was wrong at big bets on key moments in time in microsofts history, satya bet big on the cloud hes evangelized the cloud he is a product leader he comes in out of the Sales Organization really has the heart and soul of the product organization, respective entrepreneurs. So i do think its a big day in seattle. En we will take a quick break, wh we come back, we will take your questions next. One market next. Are help ing Healthcare Companies advance diagnostics and prevent blindnessanies in patients with diabetes. Everything looks good. You have beautiful eyes. By the way, shes the it wasnext mozart. G day. But sophies enthusiasm cannot bebe dampened. E. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Are we supposed to dance . Boy bands without dancing are just ok. Get a better than just ok unlimited plan with spotify premium included on americas st network. Only from at t more for your thing. Thats our thing. The light beer youve been waiting for has arrived. Lower carbs. Lower calories. Higher expectations. Corona premier. All right. We are back here in San Francisco. Bill gurley a story for you. Literally crossing as we speak uber and lyft poised to lose the fight over the california bill reported by the wall street journal. That bill would require socalled gig workers being classified as employees, not contract orkers. Thats a big deal for uber and lyft. It is, two quick things on this, one, i hope that all regulators will take the time to understand that most of these drivers greatly value the freedom and flexibility to be able to work whenever and wherever they want there is no job at starbucks or mcdonalds you can come in monday and tuesday and not show you wednesday and thursday thats feature of this job the second thing is, look, i spoke earlier about there being higher i have a report in front of me where a guy studied five different episodes of increased regulation and all the stocks went up in every case and so it takes scale to be able to get involved with government and adhere to regulation and so, oddly i dont see it as a negative for this stock. I hear your sort of call that regulators heed the advice you gave, the governor is going to sign that, its going to become the rule of law. As i understand it, all their really doing is reaffirming the decisions that been made by the california supreme court. Lets do some questions from our viewers if we could, first on this, a good one, dual class structure. How is the dual class structure battle in the Public Markets going to play out . You know as bill mentioned earlier, Corporate Governance and Venture Capital needs to improve, dual class structures i think are a generally a bad idea and when you go public, you are going to take a discount if you have a super majority voting control, et cetera, because we need to have the confidence, that not only the company has a great stew ward for the long term but that changes can be made if the company goes off track and so i generally think the dual class is a bad idea. I think if the street is a proponent of the principle thats involved, like taking the ceilo case i think the street zillow case i think the street is okay with it. To the extent the stock break, its an anchor open your business, they ended up changing it over time because the street actually cant invoke change. As bill said, there are very few founder ceos, you asked this question at the beginning of the show, should the ceo that takes the Company Public, it is rarified air for a founder to have the skill set to found the company to do the things necessary in order to grow the business at hypergrowth scale and then lead it on a multidecade journey and so solidifying that in the form of super majority control can be very dangerous so i would just urge people to be slow in that decision yeah. This has been a great hour to spend with you guys. There is so much going on here ied wonder what the happened scape will look like, hopefully, we come back six months from now and see if koslow is right, you guys are right maybe there is a longer runway tan people think out here. Thanks for having us. That does it for the halftime. The exchange begins now. Thanks, scott welcome no the exchange, everyone, im kelly evans. We have three breaking stories were watching right now first on trade, china is expected to agree to buy more Agricultural Products as the two nations prepare next month we saw Market Reaction a few monlths ago. John bolton is