With so many businesses working remotely. One of the biggest work from home names is slack, which has seen a flood of new customers as remote work continues. Shares had been soaring, but got pummeled in the last few days after the Company Reported a miss on feelings expectations. Ceo of us to discuss the slack. This is a pretty big move and one of the biggest selloff of slack shares in particular since you have been a public company. What is your take . It gives the backdrop of a lot of volatility. I definitely think the billings missed you mentioned is important. We were a pretty young company, 6. 5 years old. We are coming into our sophomore year. There is rightfully a lens of skepticism on whether this growth is durable. Happened this quarter is different. We had the pandemic. Record unemployment. New paid 8000 net customers in the quarter. That brings the total to 130,000. 130,000 businesses, they are small and medium businesses around the world. They more accurately reflect the broad economic condition. When those companies freeze hiring, do layoffs, that shows up in our billings number more or less instantaneously. On the other hand, the positive effects take longer to materialize. What you will see happen over quarters, thee next couple years, we will continue to build credibility with investors and in the market. We are confident this growth is durable and the future of the future that we are building is one that has a lot more opportunity than the one we are leaving. A little bit long answer, i apologize but i think it is important context. Emily for the Second Quarter in around, speaking of the backdrop, you havent provided a billings forecast because of the uncertainty ahead. What dont you know about the future . How much volatility do you see coming forward . Stewart things are getting a little bit clearer now. Probablyhey are still i think we will be in this situation longer than people anticipate and there will be thinking that is stuck. Back ing we will be office is really soon. Slackhis perspective of as a business, now that people have for six months not had to commute, now the people for six months had the flexibility and efits of working from home and i apply this to us as well their imagination has been opened. You have to acknowledge this is not normal life. Cafe oncant sit in the a the weekend or the amenities of life they are used to. Nevertheless, we proved to ourselves that we could start working from home in a weeks notice and continue operations. That signals a real shift. That is longterm. That is structural. That provided a lot of growth in our new customer adds. Up 60 year on year. I am excited about that, but even more excited a lot of that was driven by what we were doing. New products. People creating teams for the first time. Especially slack connect. A portion of that is increasing the relevance of the category. Those customers are going to grow with us and become the driving force of the business over the next couple years. Emily you have been very supportive of working from home. You said slack employees can work from home indefinitely. On the other hand, i interviewed the coceo of netflix. If he has any say, netflix are going to come back to the office as soon as they can. He used the word it will be just a little blip in history. What is your reaction to that . Stewart he is probably right in history. He is a pretty smart guy. Maybe there is something im not getting here. What we have seen is a real change in the Market Dynamics and game theory. We compete with netflix for employees. We compete with twitter for employees. That is literally for the last couple decades been an intense part of the competitive struggle in the technology world. A lot of people decided they want to move closer to family or dont want to live in a small apartment. Or if they dont have to commute, maybe they will have a bigger house that has a yard. People are really moving. Companies are hiring remote workers. That is not easy to undo. Staff,see 30 of your 50 of your staff begin to make choices that will make it hard for them to come back in the office, it is a little bit of a oneway door unless you are willing to let go of all of those people. I think organizations who insist that people come back to the office will be at a competitive disadvantage for talent. Last week we launched a new organization. We are incubating it, called future forum. The mission is to reimagine management. 12 of employees say they expect to be in the office all the time at some point in the future. A junk expect chunk expect to work remote permanently. Maybe we get together every other week for several days to brainstorm and generate work. When we are sitting at our Computers Working we dont need to be at the office. It changes from commercial real estate to the way offices are set up. That has yet to be worked out. It is going to be tough to stand against the current and still be able to attract and keep the people you have. Emily he filed an antitrust complaint against microsoft with the European Commission and warned microsoft could retaliate against slack. I am curious if their posture has changed since the complaint was filed. Are they friendlier than they are on the surface . Stewart no change. Its hard to quantify. The important thing for us and them too is the market is so big is they will not be a limiting factor on our success, in the short term anyway. It does insert some friction in the buying process. The oldfashioned fear and uncertainty and doubt. On the other hand, our win rates are unchanged during this period. We have consistently won in environments where teams and slack go headtohead. The more common case is teams and slack are used alongside one another. Teams is a videoconferencing app like zoom. It does not do the same thing as slack, so they are not really replacements. Would our sales life be easier if microsoft ceased to exist . Absolutely. But 49 Revenue Growth from last year and an acceleration in the rate of new customer acquisitions demonstrates we are doing ok anyway. Emily we are less than two months away from the election. Twtiktok has become a lightning rod in international elections. If President Trump stays in office, what does that mean for Silicon Valley and what if biden wins . Generic,this is not a i dont deal in hypotheticals, it is actually fairly hard to compute the ramifications. If trump wins, i think we will get extra trump. He will have been emboldened. Term so hee his last doesnt have anything to lose anymore and we will get a lot more of what we are getting. Biden i think is going to be returned with be concerned with a real return to normalcy. As a business, i prefer the second path. As an individual citizen i do as well. I am feeling pretty confident this is not that going to be a disaster. The magnitude of the impact of things not going things going wrong is something to be concerned about. Emily looking forward, you made a partnership with aws on videoconferencing. Curious what jasons you would like to build out adjacents you would like to build out are. Is education going to be a bigger sector on slack . What are some future product areas you are looking to explore . Stewart the big one for us is called slack connect. It allows two or more organizations to share across organizational boundaries. That may or may not sound impressive if you dont use the product. Of the peoplet you deal with at work are vendors, suppliers, professional services, the whole web of relationships with other businesses. Ini s a big movement collaborations, but for compliance. Very attractive proposition for enterprise. The challenge we have as to figureoday is try out how processes that today must be some goodness be synchronous could be replaced with asynchronous. How much of what we see on the Consumer World with snapchat and instagram stories, how much of that could make its way to the enterprise and take the burden off the perpetual videoconferencing. Emily interesting. Something we will be watching. Ceo of slack, great to have you on the show. Thank you for stopping by. Speaking of educational technology, we will have more with the former secretary of education arne duncan about how the return to school is going so far, what he thinks needs to be done. That is next. This is bloomberg. Kids have to be able to learn anything they want anytime, anywhere. Find their passion, figure out what they want to do with their lives. Emily the Trump Administration may give tiktoks chinese owner more time to line up a sale. Are ben brody from washington, who has been following this story. What is the latest state of play between the president and tiktoks owner . Ben they are barreling toward that deadline. Hold microsoft and oracles in as bi oracle in as bidders. Is simply notit going to be possible to meet that deadline. The administration deciding whether they are going to give more time to tiktok and bytedance. It is looking like they are leaning toward it, but it hasnt reached the president s desk, so things are still scrambling. Emily what are the chances this continues to go on, that they missed the deadline and miss the deadline because bytedance really doesnt want to sell tiktoks u. S. Assets . Ben it seems entirely possible bytedance might decide it cant please both nations. The reporting we have gotten is the review by the chinese authorities is going to take weeks, if not months. It seems almost guaranteed the u. S. Will have to move that deadline out if it does ultimately want to see a sale rather than shut the app down. Is another 45 days before the formal shutdown from that National Security process. The administration has given two or three different deadlines. They do have a little bit more time, but this was the immediate moment they were treating as if they had to get a deal. Deadline butts up against the president ial election. You imagine politics are going to be playing some role. What do we know about the status of talks with microsoft and walmart and oracle . It seemed those talks were pretty far along. Ben our understanding is they had moved fairly far along. The chinese regulations came out at the end of august. It blindsided essentially the three companies and sent everybody scrambling back to their various partners to figure out who they can please and on what timeline. It is really rambling things scrambling things. It may not be possible to please both nations. Things are going to get hotter in the u. S. Right up through november 3. They will get more intensely political. That is the space they are operating in. It creates a real risk that this could all faall part amid geopolitical tensions. Emily ben brody continuing to follow the tiktok story. Thank you so much for that update. Diving back into our ongoing virtual classroom series focusing on how the pandemic has reshaped the way employees work, we socialize, and students learn. With some schools reopening, some staying remote, we have seen entire School Systems having to shift to adjust to this new normal. Earlier i spoke with arne duncan , the former u. S. Secretary of education under the obama administration. I got his take on how the return to school has gone so far. I am trying to be honest how angry and frustrated i am with the lack of federal leadership, the dishonesty. They are playing things down. The lack of resources. This has gone from a Natural Disaster to a manmade catastrophe. We shouldnt be in this situation. You and i shouldnt even be talking today. Tens of thousands of lives lost. Millions of millions of childrens special education around the country. It is extraordinary. Tragic. Just heartbreaking. Having said that, at the local level, unbelievable leadership, empathy, compassion, urgency. I am talking constantly with superintendents across the country to figure out Food Distribution, telehealth during these tough times, and yes, education. Horrific leadership at the top. Amazing, Inspiring Leadership at the local level. Emily i have four kids. As a parent i am feeling this. We are lucky we have access to technology. But even i am concerned. What are your biggest concerns about how this could play out . Arne unfortunately multiple concerns. One is the political pressure to physically open. The goal is to stay open. And higher k12 education side, there is a rush to reopen. You further traumatize students and endanger battles. The health risks are significant. Have so many children across the country who are newly food insecure due to families losing jobs or hungry. Schools have done an amazing job of keeping Food Distribution throughout the pandemic. Schools are safety nets. It sounds a little odd, it was easier when everything was shut down. Now in these hybrid situations where kids are coming two days a complicated. Ore people are working so hard that the millions who are hungry have access to food. The telehealth piece is so important. Teachers, counselors, psychologists reaching out to kids dealing with trauma before. Many additional students now dealing with trauma. Figuring out the best ways to help kids learn, whether it is physically, virtually, or in many cases hybrid. There is a small percent of children who i think learn better in this situation, but there are many falling behind. I worry about those who fall the furthest behind. I would love to see a Massive National tutoring program. There has been no appetite for investing in Public Education unfortunately. Emily what do you think the longterm impacts could be on our children . An expert from mckinsey yesterday said this would impact the earning power of our kids, which would impact gdp in the future. Arne it depends on how long this is going to last. We are in a worse position as a country than when this started in march because we have not taken it seriously. The very concerned about socialemotional impact and academic learning loss. We had the covid slide in march and may and traditional summer slide. I think it is a fascinating time for you and i as parents to talk to our kids about empathy, about fairness, about how interconnected our lives are. My family is ok, but yours isnt, that isnt good enough. We have to take care of each other. The importance of science. Hope over the, i next 30, 50 years, this next generation will be committed to solving problems and helping each other in ways that might be profoundly important for our country and the world. Emily how do you think this could change education, especially Public Education . Does the School System looked different on the others, assuming and hoping there is another side of this . Arne for me the goal is not to go back to normal, because normal did not serve too many kids well enough. We have to do something better. A couple places where this could go. One is the idea of kids learning in a brickandmortar building nine months out of the year. That doesnt make sense. Kids have to be able to learn anything they want anytime, anywhere. Find their passion. Figure out what they want to do with their lives. Whether you are in chicago or a native american reservation, we have to make access to the internet as ubiquitous as water and electricity. We have to empower kids. We should have done this five or 10 years ago, but now we have to do it. Let kids pursue their passion. That would be a huge step in the right direction. Secondly, we need to focus on seat time to focus on competency. Lets call it algebra. Traditionally you pass algebra by sitting in class five days a week for nine months. I think you should pass algebra when you know algebra. That might be four months, maybe it is after 15 months. There is no right or wrong answer. You just need additional help. People should be able to move at their own pace. Those are a couple things that should change. Not going back to normal wear too many kids were not getting what they needed. What covid has done is expose the tremendous inequities across our country. And education is no exception, the kids who are the most marginalized and disadvantaged get hurt the most. Fighting for fairness, for equity. Orther it is a physical virtual tutor, we cant behind these uncomfortable truths of how inequitable so many things are in our country, including education. U. S. arne duncan, former secretary of education. You can catch the full version of that interview online. Coming up, tesla under fire for its use of mandatory arbitration, a tool that effectively keeps harassment complaints quiet. We will speak to an activist investor pushing for a first of its kind proposal to teslas board. This is bloomberg. Emily welcome back to bloomberg technology. A fresh selloff and make a cap tech shares for the fourth loss in 5 in five days as investors remain concerned that valuations are stretched too far in this fivemonth rally. For more, i want to bring in Abigail Doolittle who has been covering all the ups and downs. One of the highlights you pulled out . We were looking at slack, oracle and peloton earnings. Abigail after the bell, some earnings reports to take a look at before looking at the volatile day that is our keyword, volatility, uncertainty, and that was the case on the day. That was a case on these movers after the bell because we see mixed results oracle up 3. 4 . Which analysts were not expect. On cloud sharing, that is a big deal. This may be my own opinion but i feel like there is some tiktok optimism on oracle, the fact that they want to diversify, that seems to be helping. She we put up a great quarter and boosted their outlook. The stock is down 1. 4 and looks like the company may be saying something about uncertainty, that keyword so many are using around online sales. Perhaps that is why investors are selling that off. Peloton up 7 , a stayathome darling. They are saying theyre cheaper bike is going to help. As for the day it was, it started off promising. 1 and thenasdaq up s p 500 had been up. 8 but midmorning, there is disappointing news around exit and it seemed to encourage with offeem to have a big risk close. Applega cap down 1. 8 and and amazon yesterday getting a nice bid after that mega cap route. It suggest there could be more technical selling at hand. Has in holding its 50 Day Moving Average and that tells you the near term buyers that bought the dip yesterday are still there if that support fails to hold, there could be much bigger declines and had. But today, there is still some hope. Lets talk about potential Silver Linings ahead. There have been some bright spots we have