♪ emily: i'm emily chang and this is "best of bloomberg technology." we bring you all of top interviews from this week in tech. coming up in the next hour, amazon held its annual shareholder meeting. activists and protesters turned up the heat on the normally low key affair. we're on the ground in seattle. plus the price of bitcoin remains well off its december highs, and regulatory concerns have slowed down ico's. has the crypto craze run out of steam? new revelations in the early stages of gdpr's. why google may have the upper hand and critics are not happy.

but first to our top story. amazon holds its annual shareholders meeting in seattle. while the event is generally low key, interest this year was high. various activist groups protested outside the meeting wednesday over taxes, working conditions, diversity and more. meantime inside the meeting ceo jeff bezos said they will take increased government scrutiny in stride and shouldn't take such close examinations personally. bezos said all institutions including corporations should invite scrutiny and added that the company has grown from 30,000 employees in 2010 to nearly 600,000 today. we spoke with bloomberg tech's spencer on the ground in seattle. spencer: probably the biggest question that came up was on the

anti-trust issue. the biggest question, you're getting so big, getting so much attention. what is your take on all of this? bezos's response was it should be expected and he talked about the company's growth going back maybe just to 2010 when they were at 30,000 employees to nearly 600,000 today. he mentioned that any institution of that size should expect scrutiny. and basically his comment was the only thing we can do is not take it personally. we have to make sure that when the scrutiny does come, we pass with flying colors. that was his basic message to shareholders on concerns about anti-trust issues. emily: now there were protesters of various kinds there. amazon air pilots, some people protesting bezos' amount of control at the company, saying the ceo and chairman roles need to be separated. walk us through the cast of characters. spencer: there was a group of people saying that bezos needs a boss on some of the signs, and they want to see the chairman/ceo role broken into two, to give bezos more oversight and break up the power

concentration he has over the company. the board was against that. so that was one group, and they were outside with signs and things. there were some environmentalists there. they had signs with a big globe that said, you know, "big size equals big responsibility," emphasizing that amazon needs to be a better steward. there was an lgbt group, they are concerned about amazon's search for hq2 locations, that several of the states that are finalists have laws that are discriminatory against the lgbt population. so they were here protesting. they had a big box truck rolling around. there were even some pilots that fly for prime air, and they were concerned about contract negotiations, some union pilots trying to put pressure on amazon to put pressure on their employers to give them a better contract for their employment. emily: spencer soper in seattle at the amazon shareholder meeting, thank you. for more on amazon's agenda going forward this year, i want to bring in our bloomberg global

senior executive editor brad stone who wrote all about amazon in his book "the everything store." also with us bloomberg intelligence's jitendra waral. let's start with the anti-trust issues. that was really top of mind for jeff bezos. what do you make, brad, of what? brad: it is sort of a measured response, like a mature response. consistent with what we have heard from amazon. we welcome the scrutiny. we need to pass it with flying colors, he told the shareholders. i mean, look, he has the advantage that what we have been hearing from washington has been a sort of emotional argument, right, around the post office, postal rates. amazon, mary meeker's report, amazon got a 28% market share in the u.s., the strongest market, it is by no means a monopoly. you have to sort of redefine antitrust laws to put amazon in the penalty box. i think he speaks from a position of confidence. emily: we will talk about the highlights from mary meeker's report later. i want to talk about the business. amazon continues to maintain

small margins. it used to be a big concern, but recently shareholders have not been saying anything about it at all. i wonder, you know, are profits and concerns about profits at amazon a thing of the past? jitendra: sort of. revenue growth was always the key and will continue to be the key because the market share is significantly higher. now what is interesting after the whole foods era of amazon, investors expected them to take a margin hit, but they did not. they actually surprised on the upside. so what they ended up doing is, instead of changing the model, they started taking the low hanging fruit, no pun intended. and basically just taking that and squeezing efficiency out of the system. they are maintaining margins while maintaining double-digit growth at a very high revenue base. very few companies in the world can do that consistently. that's the focus. emily: i recently spoke with stephanie landry, who is the head of amazon prime now and amazon fresh. i asked her about two hours

delivery and how they can continue offering such a thing at such a low cost. take a listen to what she had to say. stephanie: two-hour delivery is expensive. in order to think about cost, we are focused on efficiency. we drive efficiency in a lot of ways. first, knowing where the customers are and what their demand patterns are helps a lot. next, we leverage a lot of the algorithms and logistics expertise that amazon has developed over the last 24 years. we are great at bringing stuff to customers, so we think we have a lot of advantages to be able to do well in this space and drive efficiency over time, and then scale, getting customers to actually use the product. those are the things we're focusing on to drive costs down. emily: brad, do you buy the argument that, at a certain scale, they can drive the cost down? brad: yeah, that is the history of amazon supply chain. they go and the introduce something like prime back in 2007, they take a massive loss because they are guaranteeing today delivery.

delivery. you know, and at the time it was $79. but there are enough people using it that they are filling the trucks, and it becomes profitable over time. emily: i want to ask you about some of these privacy concerns. we've covered the alexa issue where alexa recorded a couple's private conversation and sent it to a contact, there's also facial recognition software that amazon has been basically giving away to law enforcement, which the aclu has said is also a privacy violation. how serious are these? brad: these are not great. the echo is in the foot race. google home outsold echo in the first quarter of this year. it reminded me of the iphone saga, where apple admitted they were integrating the performance -- degrading the performance of the battery. the conspiracies about the echo turned out to be true, but i think the brand is so strong that, they came out and

explained the accident and they will survive it. on the aws front, giving away the software recognition to government. look, amazon wants to be in the business of government. they are competing with microsoft with the $10 billion jedi contract. i think these privacy concerns are a speed bump for amazon. jitendra: i actually think it's a good thing is happening now. it is just starting to take off. this is almost like an era where we shifted from mouse and keyboard to touch screens, and smart phones. now it is voice. that is how big this deal is going to become later on. more issues coming up now, it's more to solve it before the industry explodes. you can actually expect billions of devices in the future being voice activated, voice controlled. privacy being at the forefront right now is actually a good thing. emily: that was bloomberg's brad stone and jitendra waral. alibaba is leading the purchase of t.o. express for $1.3 billion. alibaba's logistics arm will collaborate on everything from delivery, warehouse management to technology. chinese express delivery has ballooned in the last few years alongside a boom in online

shopping as consumers demand faster and more reliable shipping. still ahead, as the u.s. midterm elections near, cyber threats are at an all-time high. how are countries battling it out in cyberspace? we will ask the ceo of cloudflare. and if you like bloomberg news, check us out on the radio. listen on the bloomberg radio app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪

♪ emily: the u.s. department of homeland security has installed a new software sensor in computer networks in dozens of states. the goal is to detect any possible threats or breaches during an upcoming election. but some critics say it is not enough. meantime several countries are fighting a new war online. and the number of attacks, increasing every year. bloomberg quick take looks at which nations are turning the web into a battlefield and how they are doing it. jordan: cyber warfare is the

cyber attack that has the backing of one nation with the intent of hurting another. >> it is using a computer and using hacking to accomplish something that you ordinarily need a bomb or a gun to do. jordan: this takes on a lot of different forums. it could be infecting a computer by holding it hostage with ransomware, disabling it with a flood of messages, or with good old-fashioned malware like a virus or worm. >> shutting off the power is a big one. shutting out of services in a hospital of course. transportation networks. if you shut down rail service or shut down port services. jordan: a number of countries including the u.s. are known to have active cyber warfare programs. but -- >> russia decided to really go on the offense and be noisy and make it known that they have these capabilities, and that they are ready to use them. jordan: like causing two large scale power outages in the ukraine or manipulating social media before elections. >> the thing to worry more and more about is not cyber warfare but these operations.

like the ones in the 2016 election. jordan: attacks growing by the thousands each year since 2006. those are just the attacks we know about. >> i think there is just a lot that happens in the wartime that the general public is not aware of. you have no idea how often cyber warfare is used. we just have no idea. emily: for more on the top cyber security threats in the u.s. and around the globe, we're joined by matthew prince, who works to improve performance and security for data platforms, and bloomberg tech reporter jordan robertson you just heard in that piece. he covers cyber security for bloomberg news in washington. i want to start with election meddling, matthew. and talk to me about what the risks are. the biggest risks are right now, as we approach the midterm elections. matthew: one of the things we are seeing when we work with state, county and local governments around the world is that often times, the aims of attackers are not necessarily to influence the direction in one direction or another but just to discredit elections in general.

and so we are seeing attacks on sites that people can use to register their vote or they can figure out where their polling place, or where the official results are published after the fact. making sure there is integrity in our entire election process is really critical for a democracy like the united states. emily: so for example, the department of homeland security says these things called albert sensors are detected in 29 states. they detect traffic coming in and coming out. is that enough? matthew: one of the things that is hard in states is elections are inherently local. they are run by someone who is on their own, a county administrator, and that percolates up to the federal level. these people feel very vulnerable to the widespread attacks that are there. i think what the department of homeland security has done is a great first step in understanding and getting a landscape on what is going on. there needs to be additional effort to harden and support those administrators that are helping to support this critical function of our democracy. emily: and of course 29 states

is not 50 states. jordan, i know you have been doing a ton of research. give us a little more on the status when it comes to where states are and what they are working on to prepare. jordan: as you mentioned, we had reporting last year where 39 states that were targeted by the russians, known to be targeted by the russians in the 2016 election. since then, the department of homeland security has suggested essentially that all the states were likely be probed or scanned. there are some fingerprints of these attackers on some of these election systems. some of the national security folks we talked to will say, that is a really big deal because those guys are no joke adversaries. so if you can't fingerprint of them in one place, there are things you haven't caught in many more. states are trying to get up to speed. but as matthew points out, part of the problem is this, like to think of hackers like we see in the movies. they are breaking into these systems, tinkering with individual votes, to tilt it one way of a candidate or the other. that is not what they are after.

they are after disrupting things like voter registration or even vote counting. one of the big concerns that the national security folks have is the tally. most counties have upload sites where individuals who are responsible, you know, for the tallies at individual stations will go and upload results to the county level. you know, those are all data links that can be disrupted by hackers. that is really what a lot of folks of the national security community worry about. is that those links are disrupted and that the county gets disrupted. emily: matthew, is russia the only country we need to worry about when it comes to u.s. elections security and security around the world, or are there other countries trying to get in on this game? matthew: if you think about who the adversaries of the united states are and who would benefit from undermining the confidence in u.s. democracy, all of those countries are trying to think about how they can potentially

influence elections. and so we spend less time thinking about who the particular countries are and spending more time picking about how can we support those individual states, county, city officials that are administering these elections. we run something called the atheneum project where we give serviceudflare's core to state, county, and local government in order to make sure that, regardless of the russians, chinese, or some kid in iowa in his basement, if they are trying to disrupt your election, we got your back. we can protect you and help you stand up for whatever it is that comes apart. what is pernicious about this, again, it doesn't matter, as jordan said, whether the attacks push the election one way or another. if we are worried about these attacks at all, it undermines our faith in democracy. that's what the attackers are trying to do. emily: these elections, potential election attacks are very top of mine, but as jordan talked about in his piece, you know, we are also concerned about attacks on the power grid, and these can have much more

sort of far-reaching implications. what should we be worried about right now beyond the midterms? matthew: i think the internet was never designed to do all of the things that it does. and we have come to rely on it as this critical piece of infrastructure, but it does not have the performance security, reliability traits that we would have designed the network to have from the beginning. at cloudflare we are really proud to be one of the organizations looking to build a stronger internet, whether that is stronger elections or something like the athenian project or working with companies to make sure their infrastructure is hardened or individual small businesses that might be targeted by hackers. what we need to have is a faith in the underlying foundation of the internet, regardless of what the services are being provided on top of. emily: now jordan, something you raised recently is not just the tax on software, but hardware which can be even more difficult to detect, more difficult to prevent.

you know, what is the scale of the threat here? jordan: well, emily, part of the problem with attacks on computer hardware as we have seen this year with vulnerabilities spectre and meltdown, which attacks computers' microprocessors. they leave virtually no trace. a lot of the things we have been talking about the last 20 years has been software-based attacks. once you discover them, once you fingerprint them, you can remove them from the computer in most cases. the problem with hardware attacks is twofold. one, they tend to leave no trace. no record of the attack happening. and two, if you discover a piece of malware is embedded in your hardware, you cannot remove it. you literally cannot remove it. you have to throw away the hardware. so this is where spy agencies have dwelled for a very long time. i mean, this has been an open season for years and years and years. for the u.s. and the chinese and russians and for all the really advanced attackers that want to get embedded inside an organization's computer systems. the cyber security is starting

now to take a hard look at how do we secure these computer systems that are not part of government networks, or banking networks, or these networks that are already very heavily protected. how do we secure hardware for the average person walking around with the supercomputer in their pocket, in their phone form? these are threats the national security committee, banking sector, the highly defended sectors have looked at for quite some time. but when it comes to consumer space, the idea of a hardware attack is one that the security industry is now starting to grapple with. there isn't an easy fix. emily: thanks to matthew prince, ceo of cloudflare, and bloomberg's jordan robertson. coming up, we have had a few days to process gdpr's impact and it turns out the ad industry's fears about google domination may be true. how the tech giant captured the largest share of europe's digital land market next. this is bloomberg. ♪

♪ emily: tesla's model 3 sedan has now scored a coveted recommendation from consumer reports. the magazine initially declined to recommend tesla's mainstream model after testing showed it took longer to stop than a ford f-150 pickup. since then ceo elon musk has ordered an over-the-air software update that improves braking by almost 20 feet. this was enough to raise the model 3's overall score for the car to be recommended by the magazine, but testers still have concerns about wind noise, a stiff ride and an uncomfortable rear seat. for months before european data privacy laws came into effect, google's rivals fretted that the search giant was poised to benefit at their expense. and after a few days of operating under the new rules, those concerns may be warranted. google captured an even bigger share of marketing spent on may

25, gdpr's first day of implementation, than it normally does. this according to a lead tech company. we spoke with bloomberg's caroline hyde and mark bergen from london. mark: we saw a couple things happen on friday when it went into effect. a lot of european marketers and publishers stopped spending automated advertising. they were a little nervous that these new rules where every single company, there is just dozens of company along this for supply chain, they are now required to give consent. a lot of them pulled back and said we know google is in compliance and they have enough lawyers, so we will spend with google because we are more comfortable. there are some companies that claim google was shifting more dollars in that direction. it sounds like a move back to equilibrium, but it demonstrates

the concern that these companies have that google is very powerful in this market. emily: you have a quote from one of them saying anybody that says gdpr is a good thing is it a monopoly or a liar. mark: it is anyone who is prepared that in the sense that there was this concern there would be mayhem that struck on may 25. and a lot of companies didn't know what the future holds. emily: now caroline, what are you seeing on your side? because some u.s. publications are avoiding running ads at all right now, and some of them, are still unavailable in europe. caroline: yeah, in some ways it is incredibly frustrating. i was a loyal reader of the "l.a. times," i still cannot access those websites because they just decided to step back from the huge market of the e.u. because they're worried they're not compliant with gdpr. but also relievingly, it has been a nice experience when i go

to the washington post or the new york times, they are not targeting me at all. instead they are only running adverts for their own offerings. it is similar for the new york times and usa today has not got a single advert up there whatsoever. as a user, you either get nothing or a more pleasant experience when going on to these particular websites. it really is showing who is ahead of the game and who is really rather nervous. emily: so you have got a quote, mark, from publishing groups saying google is effectively putting a gun against publishers' heads. this is a flagrant abuse of their dominant position. is this an opinion that you think is going to be mitigated in the coming days? mark: you see the exact point where some publishers are saying we are not going to serve any personalized ads, and that is something from a lot of these groups. google did not give them adequate time not to prepare in advance. i think it again speaks to the fact that google and facebook dominate the advertising market. there is some dispute about how google is identifying and being

the controller of the data, and you know, these publishing groups say google is saying we need access to the data in order to do things like detect ad fraud, to improve our ad products. the publishers are saying this is a land grab. i think google has been working behind the scenes, as with facebook, especially in the e.u. around the antitrust issues to mend their relationship with publishers. that is pretty far way. i think axel springer, a large german publisher, has been the most vocal in the past, and we have seen them come out and say -- and we have not seen them come out and directly say that google are crooks. this is not coming directly from the publishers. this is coming from trade organizations whose job is to punch it up. emily: thanks to caroline hyde and mark bergen. coming up, amazon held its shareholder meeting on wednesday amid new questions being raised about the power held by its board. we will discuss next. and a reminder all episodes of "bloomberg technology" are live streaming on twitter. you can check us out @technology

weekdays 5:00 p.m. in new york, 2:00 p.m. san francisco. this is bloomberg. ♪

♪ emily: welcome back to "best of bloomberg technology." i'm emily chang. as we have been discussing, amazon held its annual shareholders meeting in seattle on wednesday. shareholders rejected a proposal that would have required amazon to separate jeff bezo's chairman and c.e.o. roles. the meeting raised new concerns about the power of bezos and the board. directors recently adopted a policy that required women and minorities be considered for board seats. we spoke with the c.e.o. of the board list that connects women to serve on public and private boards. >> i applaud any company that takes steps in the right direction. moving toward having a more diverse board will be positive for the company.

i think it sends a great signal to other companies. the hope is that others follow, but let's be honest, there is still a long way to go. this is step one. emily: amazon has three out of 10 directors are women, though they are all white, though actually it's above average when it comes to gender representation in similar industries. similar size. is it fair to pick on amazon? >> i think there's always more work to do. right? yes, certainly, fortune 500 companies, 20% of boards held by women. private companies, only 7% of board seats are held by women. amazon is at 30%, but not at parity. there will always be more. emily: one of the issues that has been highlighted, the wall street journal just had a big story about founder control and the amount of control tech ceos have, especially if they get special stock, dispensations, special voting rights, influence over the company.

we have seen how that can work in the wrong direction like at uber. is that part of the problem when it comes to the lack of board diversity? >> absolutely. diversity, we can think about that in a lot of different ways. ethnic, cultural, dispersion of power. i think at the core of it is it is about having a diverse set of voices at the table. i think it gets dangerous, as you pointed out. we have seen the results of that at companies like uber. i think it's very important the power remains distributed so the board can play its role in corporate governance and have oversight power. emily: a bank study found that while more startups are focused on diversity and inclusion programs, when you do the math, the majority have all-male boards and don't have any female executives. more than half of them don't have any female executives.

how powerful is a diverse board in terms of that trickle-down effect and encouraging diversity elsewhere across the company? >> it is absolutely critical. these things come from the top. if you have a different point of view, expressed at the table, you are very likely to better meet company challenges and that are likely to have better financial outcomes and the data shows that. it is critical. it is also critical for culture. as we see some of the changes happening at the top, it is easier to embed that diversity in the employee base. emily: we recently read a story about how amazon hq two has a great opportunity. starting from scratch, creating 50,000 new jobs to say, why shouldn't those jobs be half and half men and women, represent people of color in line with the local population? do you think that is realistic?

>> absolutely. as you pointed out, when amazon puts its mind to something, they can make it happen. i do not think there is any reason why this isn't possible. there is a phenomenal pipeline of talented women at all levels, the board certainly and all the way up through the pipeline. there's no reason why amazon can't tap into that talent to bring more diversity to the table. emily: i want to talk about that. because so many people say to me, we interviewed this amazing woman, executive at this company, but she is so in demand, she chose another board to join. >> yep. emily: what is the actual supply like? because so often i hear, we can't find the women. >> the supply is strong. this is not a supply issue, it

is a demand issue. emily: why isn't the demand finding the supply? i know that's what theboardlist was founded to do. sort of improve that disconnect. >> there are a couple things. the first is a topic of independent board members. at private companies in particular, when only investors are on the board of a company, which tends to be a male-dominated industry, i think it's harder to bring in some of the gender diversity. seeking out operator point of view via an independent board member is a great way to get diverse points of view. i think the other issue is homogenous networks. when people are doing a board search very traditionally, they reach out to their own network. one of the things theboardlist does is search for emerging talent or talent that the homogenous network might not have access to. emily: is a board focused on technology only? >> no. we started with tech, but there are great women across all verticals and theboardlist represents that community. emily: where are you seeing progress, and where other

challenges? other industries in particular that are better than silicon valley? >> we see progress like some of the changes amazon has made, albeit a little difficult. as we -- difficult to get to. but as we see these things move, i think it is a positive sign. there is a ton of more work to do and we need to remain focused on it. emily: it's not just about adding women, it's about adding people of color, different kinds of diversity, which might be a little more difficult to quantify. is the rooney rule something you would like to see every board do? i mean, what are some strategies for companies finding themselves in this predicament, to find hidden talent? >> again, i think theboardlist is a great place to start, because it is a tool, a platform that provides visibility beyond your first-order network. we know great people know great people. our platform is built on an endorsement model. you can be sure that those people on that platform are board ready. no concern about qualifications. that is certainly one thing companies can do. i think also it's about, like i said before, just embedding

diversity into the conversation. there are so many companies taking steps to embed this in recruiting processes, from the language used in job descriptions to the process they use to get referrals, from the employee base. there are a lot of changes that can be made at a fundamental level to make a difference. ♪ emily: shannon gordon, ceo of theboardlist, thank you. it is another sign of trade tensions between the u.s. and china. the trump administration will set limits on china visa applications starting next month. in some cases, it will reduce the amount of time a chinese citizen can stay in the united states. the white house says it is to protect american intellectual property from being stolen. coming up, bitcoin hits below its 12 month trailing average. we'll talk to the c.e.o. of coin list about some of the regulatory hurdles cryptos are up against, next. this is bloomberg. ♪

♪ emily: facebook is facing an expanded class action lawsuit for discriminating against older job seekers. the communications workers of america alleges facebook's algorithms direct more ads to younger workers, filtering out older candidates. companies like amazon, cox media and t mobile were among those who used these filtering tools. the union alleges that even facebook used the age filtering to find its own employees. bitcoin enjoyed a boom, but are we now looking at the beginning of a bust? the cryptocurrency hit below its 12 month trailing average for the first time since october 2015. it is not just a bitcoin. hop into my bloomberg. we'd seen the rise and fall of a number of cryptocurrencies. a lot of the volatility is due to regulatory uncertainty. however, initial coin offerings have raised more money in 2018 than last year, and we are not even halfway through the year. we are joined by the coinlist

ceo andy bromberg. prior to this, andy was c.e.o. of sidewire. also, joe weisenthal is joining us. ♪ >> we're seeing two things happen here. the first is a bifurcation between low quality and high quality projects. last year, investors were not yet sophisticated. they were figuring out the market. anyone could raise. now we're seeing the high quality ones raise large amounts of money. the low quality once not as much. this raises interest from investors all across the world whether you're at the eiffel tower or golden gate bridge. you see them talking about ico's all the time. that increases interest. it will drive the industry forward in the next couple months. emily: a similar question to you. is this the start of the boom or beginning of a bust? joe: i do not know the answer. i wish i did know the answer to

that but i do find it to be pretty striking the way in which we see this relentless decline. obviously, you mentioned bitcoin, but pretty much all of them, all at the same time, despite the fact that we get a pretty steady drip of news coming out about infrastructure being built out, institutional interests being developed, partnerships between startups in the area and legacy companies doing trading. you know, so much of the hype in the second half of 2017 with daschle was about this -- 2017 was about this wall of institutional money that was supposed to come into the space. we see a lot of the building blocks for that continuing to happen, but it's obvious that has not translated into price increases the last i think a lot -- the way i thought a lot of people would have guessed.

emily: and at the same time, the doj has opened a criminal probe into whether there is manipulation. joe, how serious is this? joe: i think it is serious. we don't really know the details or what specific things are going to be going after, but there are obviously a lot of pretty shady activities in the space. there are pump and dump rooms where people get together and try and manipulate a coin. there are credible allegations of false trading designed to spook people into thinking the price is doing one thing and not the other. but i also think that as part of this theoretical institutionalization of the space, you get a lot of players who are happy to see bad actors rooted out. emily: how much of a concern are the shady activities in the business you are in, and the concern about impending regulations? andy: they are real concerns. especially the shady activities. we look at this developing quickly. traditionally, it developed over decades or even centuries. we are seeing the same thing happen in crypto markets in months or years. instead of having time to figure out all the different components of the market, it is happening so quickly. there are a lot of bad actors and they need to be rooted out. we are happy with the doj investigation and manipulation

needs to be stopped. at the same time, i think regulation often is a good thing and figuring out how regulations apply to the crypto space is really important. we have seen very forward looking statements from the agencies so far and we expect to see it continuing. we see it as a good thing for the space as it gets professionalized. to joe's point, the institutionalization is happening. that requires regulation to come in. emily: you are working on building on a platform where accredited investors can invest in the ico's, but isn't that the thing ico's were created to destroy? andy: with he ico's were created -- we think ico's were created to fund protocols. we work with credit investors because we want to work under u.s. securities law and offer those securities to american investors. we also partner with companies like republic, an equity platform allowing nonaccredited investors to invest.

at its core, we think access being granted by the token industry by ico's isn't necessarily that it has to be granted everyone in the world, but just that it opens up fundraising. traditionally, venture capitalism is done by relationships and very few people get access to deals. in this world, even if it is just an expansion of credit investors, that is more over investments. emily: the amount raised is down from a march sort of spike. what is your read on that? joe: the levels are still extraordinary. this sort of speaks to what i was talking about before, the sort of two different crosswinds. yes, you see the prices declining and signs of the air being let out of a bubble, but still, the interest is enormous. to andy's point about ico's all over the world, it is still pretty remarkable how even with the price decline, it just doesn't feel like there has been any letup whatsoever in the talk and interest in this space. and emily, i'm sure your inbox and email address is flooded with blockchain and ico pictures from pr people. mine hasn't slowed down at all, even with the out price decline. emily: absolutely. add the word blockchain and people think you will get some sort of enthusiastic response, but it's actually the opposite right now. andy, who are your investors? is it mostly high net worth

individuals, family offices, hedge funds? andy: when we talk about the investors who are investing in these token sales, there is a huge swath of people, and it's challenging to characterize. everything from small retail investors that write $100 or $1000, all the way up to endowments, cryptocurrency hedge funds. of course, you see the majority of the money gets from hedge funds, but we see it way more from smaller retail investors that are excited to invest in token sales. they have access to deals they might not otherwise have.

emily: coming up, one hedge fund manager has a novel way to turn a profit from investing in tencent, whether shares go up or down. details on that, next. plus, why goldman sachs is betting big on blockchain. getting into late funding rounds, exploiting the blockchain to tackle what they say is a $9 trillion business opportunity. we will hear from the c.e.o., next. this is bloomberg. ♪

♪ emily: facebook is planning to offer whatsapp paying services to all of india starting next week, even without a partner. fourth partner state bank of india will join once they have the system in place. this according to people familiar with the matter. the rollout shows just how urgent the race is to win market share from local rivals google and alibaba.

whatsapp has more than 200 million users in india. while tencent remains one of the biggest tech firms in the world, the stock has seen dramatic swings over the last year. one hedge fund manager says he has a novel idea, to invest in tencent without taking on so much risk. the partner and founder and c.e.o. detailed the strategy to bloomberg's stephen engel. this from hong kong. take a listen. >> the stock has been bullish for so many years that people are not assigning a high probability to a selloff. just to be clear, we are not necessarily calling for a big selloff in the stock, but if one were to occur, they would have a significant amount of value. reporter: what is the distribution of your call? because you're also saying go long with some shares. >> that's right. we would do this on a, what we call a theoretical delta. when you buy the put, we're recommending to buy the march 2019, 25% out of the money put,

that means we have a 10 delta. that means you buy about 10% of the stock when you buy the put. the effect of that is, where the stock to rally a lot, you will lose money and the premiums, but make quite a bit of money on the stock you are long. this bet really allows you to make money in extreme moves either way. if it's down a lot or up a lot, you will actually make quite a lot on this trade. reporter: would you consider your call a bit of a contrarian view? a lot of the put option premiums are so low, because look at the consensus ratings on the stock. more than $500 is the consensus rating. we have one morningstar calling for 641 over the next 12 months. it's at 399 right now. the bets from the institutional banks, it is rising. >> that's my point. the dominant view is that it can only go up. so if it were to go down, it will catch people by surprise. i think one of the things i talk about in the presentation is

from a market cap point of view, the company already has a half a trillion dollar market cap. it's amazing. no question about it. but the market knows that, investors know that, and analysts know that. if the stock hits the target people have, up 30%, it will be bigger than google. the world's fifth largest stock. up 85%, it would be bigger than apple. the world's first trillion dollar stock. can that happen? for sure. but it's not probable in the next six to 12 months. emily: that was benjamin fuchs speaking with stephen engle. supply chain payment company trade shift is raising $250 million in funding led by goldman sachs. and psp investments. the new round of financing brings total funding to $400 million and values the company at $1.1 billion, after they launched a new service enabling blockchain finance. a cloud platform for the supply chain, they describe it as sales force for the chain. that is now offering blockchain

based payment solutions. we spoke with tradeshift c.e.o. christian lanng. christian: if you think about supply chain, they are very complicated. they have very different partners working on different tiers. what we do is provide our customers with a platform to run everything that happens in their supply chain. for a lot of scenarios, they need to collaborate with third parties or multi-stakeholder ecosystems. for all of those scenarios, we allow them to collaborate, share data. this has been produced in a sustainable way or whatever you want to do, you can send those things to the blockchain and all of the other partners can see that, they can have access to it. without needing to open data. it allows people to collaborate much more efficiently. emily: i read the accounts receivable market is a $9 trillion market. how much of that could you potentially address? christian: it is massive. consumer transactions are around

$5 billion in trade already, it is roughly the same as amazon. out of that market, just in the u.s., it is $1.2 trillion in outstanding payments between companies. so if we can make that more efficient, move capital faster, letting people trade more efficiently, that is a massive opportunity. emily: goldman sachs, one of your investors, i was speaking with a david solomon a few months age president of goldman sachs, about blockchain and bitcoin in particular. take a listen. david: blockchain is very interesting technology, but whether or not cryptocurrency is becoming a value, that is something we will watch very carefully. emily: what i find interesting is you don't actually accept

cryptocurrency as a payment form. isn't that kind of an oxymoron? christian: in blockchain, especially as you look in business, crypto payments are not very stable means of payment. if you have a business you want very stable currencies. this is a problem. the ability to coordinate large complexes of people is more relevant. i think having transparency for financing, being able to provide payables to share them with your bank and creditor is much more important than moving currencies first, when it comes to companies. i think we need to see a next-generation of currencies that are far more stable until it is really relevant. emily: i sat down with the ceo of stripe and they stopped accepting bitcoin as a form of payment. take a listen to what patrick stripe told me.

patrick: it was trending towards a digital value. i think it is a valuable thing in the world. i genuinely wish them the very best. it works less well for our use case. this was not so much like a decision where we wanted -- it was declining rapidly. if it starts increasing again as a payment method, great, we will go back at it. emily: that is on an upcoming edition of "bloomberg studio 1.0." i asked him, does he think stripe could be on the wrong side of history with this decision. do you think at some point there will be a cryptocurrency that works as a store value? and will that be bitcoin? christian: i think it is hard to imagine without goldman's backing to create some stability. i think you are dealing with the fortune 500, they want to make sure that the currencies they trade our insured and backed. right now, i don't see bitcoin being it. i don't think bitcoin is efficient enough. that's another big problem. we run through thousands of transactions per second.

again, i think there are many other use cases. as an entrance problem, if i am a fortune 500 company, i need to handle a lot of different things in my supply chain, logistics, sustainability, payments, trading. and the actual payment piece is a very small piece of that pie. there are much bigger problems, like track and trace. knowing where my goods are. making sure the consumer goods are put in front of consumers in china, are coming from the right sources and have been tracked all the way. those are really big problems for business so i think blockchain will help. emily: that was christian lanng. c.e.o. of tradeshift. that does it for this edition of "best of bloomberg technology." we will bring you all the latest in tech throughout the week. next week, we are at apple's wwdc. tune in at 5:00 p.m. eastern. 2:00 p.m. in san francisco. remember, all episodes are now live streaming on twitter. you can check that at technology weekdays. that's all for now. this is bloomberg. ♪

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carol: welcome to "bloomberg businessweek." i'm carol massar. jason: and i'm jason kelly. we are here at bloomberg headquarters in new york. carol: in this week's issue, general motors signing a winning strategy in china. jason: that's right. i don't think many people have heard of it outside of china. carol: exactly.