Role at the online marketplace. Who will help invigorate the floundering company . We begin with what was a historic week in washington. On tuesday, House Speaker nancy pelosi formally opened an impeachment inquiry of President Trump. The Investigation Centers on a phone call President Trump had with the president of ukraine and whether the president betrayed the nations security by seeking to enlist a foreign power to tarnish a rival for his own political gain. In this case, the son of former Vice President joe biden. While the story was not techrelated per se, an interesting tech company did show up in the partial transcript of President Trumps call with ukrainian president. That company, crowd strike. I spoke with their Ceo George Kurtz about the mention of his company in that president ial phone call. George the only reaction i have is that in 2016, we actually performed the dnc investigation. We worked very closely with the fbi and turned over all the forensic data, and we stand by the conclusions that we had, and they were backed up by the intelligence community. So, i think a lot of what we have done has already been said, and after that, you know, i do not understand where we are with things. Taylor fold this forward, then, into broader comments on where you think your company fits into general election security. We are approaching 2020. George well, election security, i think, is a very important topic. If we think about how electronically connected we are with Voting Machines and we are past the hanging chads of yesteryear, i hope, so when we think about the ability to protect those systems, it is incredibly important for our democracy as well as just the integrity of the election itself, so its a big topic. Taylor and what is your role in working with, lets say, federal agencies like the fbi, or with the dnc or the rnc . Where do you see yourself playing a role . George well, we are certainly not partisan, so we help all sides of the aisle and work closely with a lot of state, local, and federal Government Agencies to make sure they have the best security in place going forward. Taylor i could do Financial Analysis all day long, so lets dig into some of the earnings and what we can expect from you. Lets go through the income statement. Talk to me about topline growth. Im looking here, really solid, triple digits. Expected to slow maybe a little bit, 84 or so in the coming years. Where do you see sources of future growth . George one of the things when you look at crowdstrike is its ability to cross sell modules. And that is a key element of our success. When we started the company, we looked at Companies Like salesforce and workday and servicenow, and thought there should be a pillar of Cloud Computing for cybersecurity. The security cloud had not been done before. Part of our success is being able to collect data, security telemetry at scale and be able to create new modules on top of it and be able to cross sell that into our Customer Base. If you look into our most recent earnings report, about 50 of our customers actually have four or more of these modules. We have 10 of them today. That has really worked out in our favor in terms of being able to go back to our Customer Base in addition to getting new customers. Taylor and has this shift to the cloud provided a lot of future opportunities . George absolutely. I think thats one of the areas where we have seen the model we have created as a true cloud native architecture be embraced. And its one of the reasons we have been so successful. In 2011, end Point Security delivered from the cloud was not so popular. 2019, its a core element. It is not just about endpoints and laptops and servers. It is really about protecting workloads, and those could be on premise or in a cloud like amazon or the google cloud, and that is really important. You have to be able to protect these wherever they are at. Taylor when we take a look at the bottom line, not profitable yet, but losses are slowing. What is the pressure right now to be profitable . George the way we look at it is first, what are the Unit Economics . We have really good unit. N nymex economics as some of the legacy i call them fossilized vendors get acquired, change their business model, try to move to the cloud, which is difficult for them to do, we think it is a great opportunity to go out and get new customers. We added 730 net new customers last quarter, which is over double from the year before. So, as long as we continue to increase the rate of adoption of our technology, we will continue to invest there, but whats most important is the amount of money we spend on sales and marketing from a unit Economic Perspective is right where we want it to be. In fact, it is on the upward end of being very efficient. If you look across the companies in general. Taylor there has been a lot of market consolidation. Nantech, vmware been bought out. Does the consolidation help or hurt you . George i think it is a net positive for us and i think its a Natural Evolution of this market. If you look at what happened in salesforce automation, oracle buying sebold. I think the natural comment around that is the fact that it was very hard to shift from a perpetual model of legacy architecture into something that is cloudbased and truly subscriptionbased. So, a lot of the companies you talked about were having a hard time making the transition in the cloud architecture as well as their overall revenue model and they had these mixed subscription models, which is very difficult. Taylor you ipoed in june. It has been a tough year for some companies that maybe are not profitable, valuations still too high. Any advice you give on how to ride the wave . George well, i think, first, you have to start with a Great Company. I think the elements of a Great Company to ride that wave is that they have something to do with the cloud. They are sasdelivered. They have a subscription revenue model. They have high retention rates where they keep adding adding new modules or bits. And i think those are elements that make you successful. I think the market is smart enough to figure out what companies have great earnings potential in the future, and those are the requisite characteristics that we have seen, and we are fortunate enough to fall into that category. Taylor that was crowdstrike Ceo George Kurtz. Coming up, a tough ride for peloton. The Company Begins trading as nasdaq opening nearly 7 below the ipo price. We hear from ceo john foley. And if you like bloomberg news, check us out on the radio. You can listen on the bloomberg and in theerg. Com, u. S. On sirius xm. This is bloomberg. Taylor tech ipos were in the news this week. Peloton debuted on the nasdaq, thursday, dropping nearly 7 at the open after raising 1. 6 billion. Bloombergs jason kelly sat down s ceo john foley shortly after its trading debut. John we are playing the long game. We see this as literally building millions and millions of subscribers around the globe in the coming years. And now we have the money to do that. We are fully funded after todays primary, so we are feeling confident. Jason and when you think about the last couple of days and really the last couple weeks, you mentioned the markets. I mean, wework is on everybodys mind. It is a tricky ipo market, to say the least. Do you have a sense of sort of where the miscalculation was . Or if there was one . John i tell you, jason, this is my eighth fundraiser, peloton. This is the funny thing. People either see it or they dont. There are believers and nonbelievers. The people have believed, who have invested in peloton, they have been very, very happy, and we will continue to delight the Capital Partners who invest in us. Jason you mentioned fully funded. What will you do with some of that money . What does expansion look like . John we are doing things like building a 50 million streaming Television Studio in new york city, another in london, where we will hire our Foreign Language instructors. So german instructors are being hired in london to stream to our german market, which we open in 60 days. We are investing in new content, new verticals, the treadmill market in canada, the u. K. , germany. We are in investment mode. Someone earlier today was saying you are losing money. Its like, no, it is semantics, we are investing money and feel very good about what we are doing. Jason how do you feel about the Consumer Market . You sell a very highend product. We are in a bull market. We continue to be, other than some volatility that we are experiencing. What do you hear back from your customers, and maybe more importantly, your potential customers about their willingness to write a big check or charge something pretty big on their credit card . John one of the most important things we think about at peloton is the optics of affordability. If you have a peloton bike and you and your partner ride it, it is insane value visavis anything else. Interestingly, i know jason, you wrote the book on fitness, so you know this, but fitness has been a recessionproof category for the last 15 years. More dollars went into fitness in 2008 and 2009 as they did every year, so there has been secular growth for the last 15 years. And we think if we create the best value in fitness, on average, our bikes are ridden 12 to 14 times a month, divided by 39, you are paying a couple of dollars for a workout, it is obviously orders of magnitude better than going to the boutique fitness world, and we will show over time it is better value than going to the gym. Jason you have described the company in the s1 and the roadshow as all sorts of things, a technology company, a media company, it obviously does a lot more. Where will you be primarily spending money . Is this a content push thats coming . John yeah, i would say at our core, we cannot Hire Software engineers fast enough. So we are a software company, tech company at our core. Weve had to learn our way into media, now we have 13 Emmy Awardwinning producers. And we just hired this fantastic new chief content operator. So she is going to build one of the most special media divisions in any category. But our core, to your question, the investment will go into technology. We will open retail stores, logistics, more markets, but certainly, Software Engineering is at our core. Taylor that was the peloton ceo john foley with bloombergs jason kelly. And this week brought pretty of turbulence to wework. Cofounder adam neumann stepped down from his ceo role tuesday in a move designed to salvage the companys planned ipo. The copresident and chief Financial Officer and sebastian gunningham, the vicechairman, were named coceos. I discussed the executive shakeup Brett Wallace and gene munster. I think the writing was clearly on the wall that this is where the momentum was. My reaction is to think of this in three chapters. There is the past and things that happened that were very good with wework. Leadership was not as good. The leadership had a lot of the power that built the company. Then there is the present, and i have to applaud everybody involved in how smooth this is going so far. If you look at the clock, it was just a few weeks ago this started, and they already have some replacements, temporary or permanent. Adam, the way he stepped aside, was respectable. And so, i credit the company for that. It is different from how ubers leadership change. It took a lot of time to find a replacement. I think that was what was most surprising to me, the pace. Then there is the question about the future. To circle back and quickly talk about the timing of this ipo, i think it is unlikely that anything happens in that october frame. Because now Equity Investors are going to want the Senior Management to have a handle on the business, and that simply takes time. If i was going to guess, i think it would probably be early next year if they want to maximize the valuation here. They could do something more quickly, but Equity Investors would factor that in with an even lower valuation than what we talked about. All in, good move for wework, but we are still a ways away from an ipo. Taylor brett, i could arguably give you a victory lap. You and i spoke in the last few months after you wrote a smart but scathing report on wework about their financials. What changed for you today with the announcement . Brett what we found ourselves saying about the situation is that wework suffered from three things that when put together are not good news for a company. The first is significant losses, the second is opacity, making it difficult to analyze the company. And then third is really arrogance. There are a lot of things to put in the bucket of arrogance, the related party transactions, 20 votes per share, a number of things. The only thing that changed today is possibly the third bucket, arrogance. But losses and opacity, those two problems remain. And having watched this play out over the last couple of weeks, among our customer group, a month ago i was not hearing anyone saying adam is the problem. And even a week ago, i was not hearing anyone saying adam is the problem. So this is a new solution, but im not sure it addresses some of the problems people have had most significantly about handing over 3 billion or 4 billion to this type of company at the type of valuation they were looking for. Taylor gene, i fold you back in here as an equity analyst. Corporate governance change does not change the top or bottom line fundamentals. And the fact that this company is losing tons of money. Is that still the biggest concern . Gene i think no, and i know that that is not consensus thinking. I think that this business, it is a concern if investors dont know that. They understand that this business has a ton of cash need. And i think the leadership piece is really critical here. Because it sets the tone. Just think about all the leaders of these tech companies. It is almost like the companys performance is embodied in the leader. I think it is critical. I dont think the cash burn is the critical issue for investors. I think they understand that. I think that if you want to think about upside to the story longerterm, clearly how they spend money will be important and how they scale the business. But i think this is a little more meaningful if they can really kind of change some of that. I do want to catch myself as well. When i talk about the change at the top, that is a really hard thing to do. To change the culture of a business to be more judicious. And that is why i think it will take longer to actually get public. There will be some teething and the company will probably see some departures around this before the rankandfile are comfortable. Taylor and gene, talk to me about the big risk of removing that visionary leader. We talked about elon musk, who is associated with tesla. Mark zuckerberg, associated with facebook. You talk about uber and their leadership changes. What is the risk that you remove neumann and the vision goes with it . Gene it is probably the biggest risk. And i mean, thats the catch22, there needed to be change. But the best ideal to answer your question, it is a material risk, culture is critical. As an equity analyst, i always focus on income statements and balance sheets. As a private investor, as a venture capitalist, i realize that even with public companies, culture is absolutely critical and cannot be overstated enough. It is going to be if i had the hefty responsibility of stepping in in some capacity, that would be my number one concern, not to lose the vision. Taylor that was Brett Wallace and gene munster. Coming up, amazon focuses on Alexa Privacy as it unveils new gadgets in seattle. Well have the details of their newest product lineup, next. This is bloomberg. Taylor on wednesday, amazon introduced the echo studio, a highend speaker to rival sonos devices, the apple home pod and googles home max. The new device looks similar to the home pod, making it noticeably larger than any existing echo. The speaker costs 199 and is now available for preorder. I caught up with amazons senior Vice President of devices and Services Dave limp to ask about the changes. Dave we have taken a different take on how audio is developed. Basically we have five speakers built into it that gives the sense of music surrounding you, kind of how the artist wants the music to be portrayed, and we think that is an industry first, and we are looking forward to seeing how customers like it. Taylor you are taking on big rivals. Sonos, apple, google. Are you happy with your penetration rate . Dave we think that this isnt a winnertakeall game, first of all. And you mentioned one of those companies who is a great partner of ours in sonos. They are really, really great partners. And we think customers want selection. That has always been the case with amazon. We offer lots of selection and choice. And we want to give that same choice, whether it is sonos or our products, and we are looking forward to seeing what customers think and whether they like it. Taylor the pricing is interesting to me. 199 versus the homepod at 299. It feels like everyone is really trying to be competitive here on pricing. Are you worried that it is a race to zero . Dave i dont think so. What we tried to do is price our products with as much value as we possibly can. We have always had the philosophy from the first day with kindle to price our products in a way we want to make money as amazon in the device and Services Business and customers use the products, not when they