Transcripts For BLOOMBERG Bloomberg Technology 20240713 : co

Transcripts For BLOOMBERG Bloomberg Technology 20240713

Money amid Public Market turmoil. The Public Market, New York Stock Exchange president Stacy Cunningham discusses the popularity of direct listings and the atmosphere in a delayed wework public listing world. First, our top story. Facebook has discovered four separate misinformation networks, three to iran and one to russia. Zuckerberg says it shutdown the networks as part of an effort to counter foreign influence campaigns. This was on a press Briefing Call early on monday. Zuckerberg also addressed a bloomberg scoop in which he privately recommended several potential hires to the campaign of Pete Buttigieg. This should not be taken as an endorsement. Mutual friends from college who introduced me to pete a couple years ago. I did a Facebook Live event a couple years back. It is widely known that i met him. And when a number of colleagues who i had worked with at facebook or my Philanthropic Foundation where interested in working there, they asked me or my wife, priscilla, to send over their resume. So i did that. I think this probably should not be misconstrued as if im like deeply involved in an to support their campaign or Something Like that. Taylor to discuss, i want to bring in Iona College Political Science Professor and applied economists senior advisor. And also with us, sarah frier. Sarah, let me start with you. What did we learn about these emails and what zuckerberg said about recommending some hires to the campaign of mr. Pete buttigieg . Heah we learned zuckerberg, has this relationship existing. And even despite becoming a punching bag for other democratic candidates, namely joe biden and Elizabeth Warren and even despite concerns from the conservative side about whether he might be biased, he has chosen to give some support to a president ial campaign. I think whether or not this is an endorsement, it is still a rare move in the direction of helping someone out. That we should not over read into it but we should note this is a powerful person working behind the scenes on behalf of a president ial candidate to help them out. Taylor jeannie, you say while it is not illegal, it may not be wise. Explain what you mean by that. It is a risky strategy. And im starting to have questions about Mark Zuckerberg and facebook strategy and some of these instances. We talked last week their response to the Elizabeth Warren advertisement where he basically walked himself into suggesting maybe they should be regulated like network news. Now we understand that a few months ago, at least he is suggesting people to work for a president ial candidate who, at the time, was a second tiered candidate, is now moving up. These are risky strategies for the company as a whole. It would be one thing if Mark Zuckerberg stepped aside as ceo of facebook and was doing this as a private citizen. He has every right to do it. Theres nothing illegal. At a timealso risky when facebook faces so many headwinds from washington. And from both sides of the aisle, quite frankly. Democrats and republicans who want to take a stab at facebook for what they suggest have been practices that they find problematic. Elizabeth being primary among them, yes, Pete Buttigiegs primary opponent. I think it is risky all along. Im questioning where this advice came from, if anywhere. Taylor in all of your years as study of studying this, what is the precedent . Is it abnormal for someone in the private sector who is running a big company to be doing this or are we reading so much into it because it is Mark Zuckerberg . Jeanne i think we are reading a little bit into it because it is Mark Zuckerberg. Usually ceos at this level try to be careful. Sure, they will donate two packs and political campaigns as private citizens. Mark zuckerberg has done that, you see that across the board with big tech and other companies. But they do try to be careful about choosing favorites. When we see those donations, they generally try to play both sides of the aisle, or to donate to pacs in which they are donating military or others. I think this is a questionable strategy for Mark Zuckerberg. I think we heard that in the clip you played, where he said please dont read too much of this into this. This is not an endorsement. I think he knows he has stepped into it a little bit. I would not suggest this will be a huge problem for them if this is all it is but i think he has to be careful Going Forward. Taylor sarah, you have been covering a little bit about the policies of these candidates. This is notable that it is not Elizabeth Warren, one of the bigger critics of big tech. What do we know specifically about Pete Buttigieg . Why this individual . Why this campaign . Sarah he has been a little lighter on tech. He has not said we should break up the companies. Listen, this campaign is so unique because we have gotten to a point where the candidates understand facebooks dramatic influence on the outcome of the election either way. We are going to see a transition from candidates blaming the media for perception problems and transition toward a blaming facebook. We have already seen warren and Biden Campaign directly based on facebook. Weve seen trump criticize facebook. It is correct to call this a risky strategy. Buttigieg has not been as hard on the company. Maybe a personal relationship is part of why. Taylor does this give you more pause for concern about techs outside influence on politics . Jeanne it absolutely does. It plays into what Elizabeth Warren has been saying all along. Quite frankly, not unlike what donald ran on in 2016. That there is this connection between big attacks, big pharma, these big money corporations and washington, d. C. That is what Elizabeth Warrens entire campaign has been built on. I would add one thing to this. We heard in the third quarter, Elizabeth Warren became the top draw for tech employees. In playing this strategy and this game, Mark Zuckerberg is giving to somebody who certainly is the number to draw of tech employees but not the number one. He also risks alienating his own employees. And that is a big risk for the company as well. I think almost from any angle, you have to be very careful when you walk down this path. I hope he knows that at this point. Taylor we push the story forward to the 2020 election. Earlier in the conversation, you brought up the ad, highlighting facebooks position of free speech. Taking an ad, even if it is false, and not wanting to be a fact checker, but being a platform of which all ads, all political ads can be out on the platform. Do you agree with facebooks position on that . Jeanne i think they have a really big problem when it comes to this. Elizabeth warren has underscored that. I think they have every right to do this. But i think their response was problematic when they suggested they are doing it because like a networks, they want to remain neutral. They have said all up all along up until that remark that they did not want to be regulated by networks. You cannot have it both ways. This is where again i think they have to be very, very clear as to who and what they want to be. I think Elizabeth Warren, with this ad, and she is not alone, she is the most wellknown to challenge them on this, has forced them into a corner. I dont think it is going to be long regardless of who was elected until we are going to see some form of regulation that facebook probably is not going to welcome. Taylor sarah, did we learn anything else new today around Election Security . Sarah absolutely. We learned facebook has taken down even more misinformation campaigns from actors including in iran and russia. Zuckerberg even mentioned china on the call, another entity that may try to meddle in the United States president ial elections. I think it is fair to say this is still a whackamole problem, that they are still building up their defenses here. It is safe to say the problem has not gone away. Whether it has gotten worse, i think the company has understood how to solve problems similar to what russia ran in 2016 but they will keep coming up and they will change in their nature. The company is staying on alert. That said, i think we should not just look to the foreign misinformation that is spreading on facebook, but also the way that domestic players are using facebook ahead of the election. And the hyperpartisan context and misinformation and ads will become an even bigger question is we get closer and closer to the election. Taylor sarah, we are getting closer and closer to wednesday. What do we expect from mr. Mark zuckerberg on libra on wednesday . Sarah it is going to be primarily about libra, but once he is on the stand, they can ask him about whatever they want. I expect they will also ask about some of these issues with misinformation ahead of the election, about things like problems with discrimination in their ad targeting. That was a big issue for their committee when it comes to housing paired once he is on the hot seat, this hearing could last for hours. We could cover a lot of ground. Stay tuned not just for libra, the on controversial cryptocurrency, but also on other things that have come up and we will continue to discuss with the election ahead. Taylor professor jeanne zaino and Bloomberg Technology sarah frier, thank you both for joining. Coming up, softbank to the rescue. The latest on weworks latest plan to be revived thats next. If you like bloomberg news, check us out on the radio. Listen on the bloomberg app, bloomberg. Com and on sirius xm. This is bloomberg. Taylor more twists and turns for wework. Bloomberg has learned to softbank is planning to take control of the company, one of the japanese conglomerates biggest investments. Bloomberg technologys allen hewitt joins us with the latest. Softbank taking control. Is this what wework wants . We are not sure yet this is happening. This is more details that we have all and on the deal that softbank is proposing. To be clear, it is similar to what we reported on late last week but with some new details. It sounds like the package they are putting up for consideration will include a debt package as well as several billion dollars, up to 3 billion of a tender offer for existing investors and employees. This is something where the package, this is a way softbank would potentially get control of the company if the board agrees to it. Again, they are still considering this as far as we know against a competing offer from j. P. Morgan for a 5 billion debt deal. That could get them the cash they need. Taylor im glad you brought up that offer. Every day it feels like they are weighing the two. Any sense of what the board finds most important to the company . Ellen i think there are competing interest at play. You have to imagine if you are, for example, a serious stakeholder inw but not softbank, you anticipate a softbank deal would mean you would get diluted. A debt deal on the other hand do get the company an injection of cash without needing to do additional dilution. That is risky. It will be a big burden on the company to pay back those loans over the next x number of years. Taylor walk me through that valuation. Our colleague wrote about this in his latest opinion piece. Softbank could still come ahead. Every time they invest, they are lowering their average price. Their ipo could benefit. The other stakeholders who got in late, they are not seeing their average price in which they are investing dropoff. What does that mean for them . Are right, you are watching the valuation of wework drop rapidly. As we talked about in january in their last funding round with softbank, at least it rounded up 47 billion. These deals we are talking about, floating the valuation around 8 billion. A huge drop. As you mentioned, softbank, if they go forward, this would be probably instake the secondary offering at a valuation of around 8 billion. Whatever the number is, they are lowering their average price for the shares they bought while later investors who will be stuck at may be having bought in at 20 or higher. That is going to create may be some tension between different investors and depending on when they came in, they may be ending up with a raw deal compared to softbank who has a chance to lower their average price. Taylor that at the end of this,w will softbank be judged . Throwing bad money at more bad money or if they can turn this around, be seen as a hero . Ellen if they can turn it around, that will be incredible for their reputation and for the financial outcome they would like to see from their investment. It is in the tens of billions of dollars. Above 10 billion at this point. Reputational he, they are at risk. They used to have this halo around them that said if you get money from softbank, it means they are investing in you and make you the king of your industry. I dont know if people are feeling that way. That may affect their ability to get into deals in the future. Taylor we hear that every day. Thank you. Coming up, we speak to the ceo of Silicon Valleys newest unicorn, insta bait. We take you inside the company and how it got its valuation. Thats next. Bloomberg technology is livestreaming on twitter. Check us out technology. This is bloomberg. Taylor Silicon Valley got another addition to its stable of unicorns on monday, that is instabase. The Business Tools company instabase says it has raised 105 million at a 1 billion valuation paired most people have not heard of the company. They offered only a single sentence saying it help solve problems and create new breakthroughs. Here to tell me more about the company and its latest valuation, instabase ceo, and also with me, sarah kanaan, partner at index ventures, and one of the backers of instabase. Let me start with you. Why does the world need another computer . Answer that question, what is your Business Model . Basically, the way to look at it, if you go to your iphone, you have apps you can find to get food delivered to your home. If you go to a service company, they do not have an app store where they can find an app that is income their vacation. The question is why is that . We tried it answer that question. Like, what is missing . What does the world need from the perspective . We look at what are the key Building Blocks and tools that needed to be built. That is what instabase is. It is a platform that gives you number of tools and Building Blocks that businesses can use to build new applications that help them launch their business. Taylor the Business Model, how do you make money . Anant currently, number of toog blocks that businesses can use to build new applications that help them launch their business. Taylor more than 50 of the companies are our customers. Taylor all the scrutiny of the Public Markets, how important is it to at least be able to see the path to profitability . Is it five years, 10 years, what is that timeline . Sarah the key is to invest in a company with a great Business Model the great thing about what anant and his team has built at instabases it is a rare opportunity to build a defining business. If you think about what apple did for people in their consumer lives by giving them and i found where they could get everything on demand, that is what instabase is going to do through their products. Enabling banks, health care companies, Insurance Companies to build all the processes they need to do their work to deliver more value to customers. To answer your question, we really do want to have Business Models at work today and in the future. The great thing about instabase s we talked to a number of customers who already are paying millions of dollars for the product with a long line of others that wanted to do so. The companys cash flow positive today. That could change. There are fundamentals we feel good about today and in the future. Taylor has the pressure to see that path within a timeframe increased as of late . I think certainly, in a rich valuation market which we are in, value multiples are at a historic high. You want to invest in companies where the potential is large. You want to invest in outlier businesses that can deliver that return, even at those high valuations. Taylor she mentioned valuation. 1 billion. What was the most recent funding round going to be used for . Anant mostly we will spend that money to scale market function so we can scale for different industries. Customers come from banking and insurance. Going into health care and we canent, and also so build the app score store. Taylor how careful do you have to be of growth at any cost is not acceptable in this market environment . Anant we have had really good Business Model so far. We have had cash flow neutral so far. We have not spent any money that we raised so far. Belong as we continue to disciplined, we can grow without getting into trouble. Taylor you talked about the big valuation. As you take a look at your irr, how do you make sure that you are finding good businesses, but also being aware that there is a lot of cash chasing too few good businesses . Sarah thats right the way i think about it is you need to be in a huge Market Opportunity that can sustain Larger Companies. Even if you are entering in high valuation, if there is opportunity, you can generate a 10 extra return at these leve

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