emily: i'm emily chang and this is the "best of bloomberg technology." we bring you all of top interviews from this week in tech. coming up in the next hour, amazon holds 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 rollout.

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. in fact, 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. a shareholder simply asked, 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 even going back maybe just to 2010 when they were at 30,000 employees to nearly 600,000 today. and he mentioned that any institution of that size should expect scrutiny. and basically his comment was the only thing that 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: yeah, so there was group 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 some more oversight and break up the power concentration he has over the company.

the board was against that. so that was one group, an 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 actually 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 for us 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 jindra waral. ok, so let's start with the anti-trust issues since that was really top of mind for jeff bezos. what do you make, brad, of what bezos has had to say? 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 quote, 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. look, amazon, mary meeker's report from today, 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. and i think he speaks from a position of confidence. emily: we are going to mention some of 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. and i wonder, you know, are profits and concerns about profits at amazon a thing of the past? jitendra: sort of. like, so, revenue growth was always the key and will continue to be the key because the market share they are chasing is significantly higher. now what is interesting after the whole foods era of amazon, investors expected them to take a margin hit, as they expand, as they spend, but they did not. they actually surprised on the upside. so what they ended up doing is, instead of changing the whole whole foods model, they started taking the low hanging fruit, no pun intended. and basically just taking that and squeezing efficiency out of the system. so they are maintaining margins while maintaining double-digit growth at a very high revenue base. and very few companies in the world can do that consistently. so that's the focus. emily: i recently spoke with stephanie landry, who is the

head of amazon prime now and also the head of amazon fresh. i asked her about two hour 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 really 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 really leverage a lot of the algorithms and logistics expertise that amazon has developed over the last 24 years. we are really great at bringing stuff to customers, and 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, just getting customers to actually use the product. and 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: oh yeah, that is the history of amazon's supply chain. they go and the introduce something like prime back in

2007, they take a massive loss on it because they are guaranteeing two-day 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 are 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 some of these? brad: these are not great. the echo is in this foot race with the google home. google home outsold echo in the first quarter of this year. it reminded me of the iphone saga, where apple admitted they were degrading the performance of the battery of new iphones. 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 their recognition software to governments. look, amazon wants to be in the business of government. they are competing with microsoftith 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. y-space computing 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. so 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 10% 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 ordinarilyne. jordan: this takes on a lot of different forms. it could be infecting a computer by holding it hostage with ransomware, disabling it with a flood of messages, also known as a distributed denial of service attack, 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. so 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 ukraine or manipulating social media to sway elections. >> the thing to worry more and

more about is not cyber warfare but these operations. like the ones in the 2016 elections in the u.s. jordan: attacks growing by the thousands each year since 2006. and those are just the attacks we know about. >> i think there is just a lot that happens in wartime that the general public is not aware of. you have no idea how often cyber warfare is used. we 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, ceo of cloudflare, which works to improve performance and security for data platforms, and bloomberg tech reporter jordan robertson who 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 generally. 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. and making sure that 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 now installed in 29 states. they detect traffic coming in and coming out. is that enough? matthew: one of the things that is hard in the united states is elections are inherently local. they are run by someone who is on their own, a county administrator, city administrator, and that percolates up to the federal level. so 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 being able to get a landscape on what is going on. but 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 on this. give us a little more on the state of play when it ces to where states are and what they are working on to prepare. jordan: sure. yeah, 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 that essentially all the states were likely at least 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. these are serious adversaries. so if you can't fingerprint of them in one place, there are things you haven't caught in many more. so states are trying to get up to speed. but as matthew points out, part of the problem is this, we 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. what they are really after is 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 in most states 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. and that is really what a lot of folks in 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 election 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 thinking about how can we support those indil states, city officials that are administering these elections. so we run something called the atheneum project where we give away cloudflare's core service to state, county, and local governments in order to make sure that, regardless of the russians, chinese, or some kid in a basement in iowa, 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 is, again, it doesn't matter, as jordan said, whether the attacks push the election one direction or another. if we are worried about these attacks at all, it undermines our faith in democracy. and that's what the attackers are just trying to do. emily: these elections, potential election attacks are

very top of mind, 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: well, i think that 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. and so, at cloudflare we are really proud of being one of the organizations looking to build a stronger internet, whether that is stronger elections or something like the athenian project or working with power 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 it. emily: now jordan, something you

raised recently is not just attacks on software, ttacks on 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 attack computers' microprocessors, is they leave virtually no trace. a lot of the things we have been talking about the last 20 years has been software-based attacks. so 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. there's no record of the attack happening. and two, if you discover that 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 open season for years and years and years. for the u.s. and the chinese and russians and all the really advanced attackers that want to

get deeply embedded inside an organization's computer systems. so the cyber security industry 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 that's walking around with the supercomputer in their pocket, in their phone form? these are threats that, again, the national security committee, banking sector, the highly defended sectors have looked at for quite some time. but when it comes to the consumer space, the idea of a hardware attack is one that the security industry is really just now starting to grapple with. and 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 ad 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 more 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 stie, and an table 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 spend flowing through europe's ad market 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 from london and bloomberg tech's mark bergen. mark: we saw a couple things happen on friday when it went into effect. a lot of european marketers and publishers stopped spending on 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. so a lot of them pulled back and a lot of them 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 that google was shifting more dollars in that direction.

it sounds like that has moved back more towards 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: that quote 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 exactly what the future holds. emily: now caroline, what are you seeing on your side? because some u.s. publications are reprtedly avoiding running ads at all right now, and some of them as i understand it, are still unavailable in europe. caroline: yeah, in some ways it is incredibly frustrating. say 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 rather 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. 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 rather 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: yeah. you see the exact point where some publishers have opted, we are not going to serve any personalized ads, and that is something from a lot of these groups. that 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 sort of 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, or to improve our ad products. the publishers are saying this is a land grab. i think that 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. i think that is pretty far way. i think axel springer, which is a large german publisher, has been the most vocal in the past, 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 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 ceo roles. though the event raised new concerns about the power of both bezos and the board. directors recently adopted a policy that required women and minorities be considered for board seats. we spoke with shannon gordon ceo , of the board list that works to connect women to serve on public and private boards. shannon i applaud any company : that takes steps in the right direction on this topic. moving towards 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 follo but let's be honest, i mean there is still a long way to go. , this is step one. emily: amazon has three out of its 10 directors are women, though they are all white, though actually it's above average when it comes to gender representation in companies of a similar industry similar size. ,so is it fair to pick on amazon? shannon: well, i mean i think there's always more work to do. right? yes, certainly, fortune 500 -- companies, 20% of boards held 1000 by women. private companies far worse at 7%. there is a lot more work to do. it is great that amazon is already at 30%, but not at parity. there will always be more. emily: one of the issues that has been highlighted here -- the wall street journal just had a big story about founder control and the amount of founder control that tech company ceo's have, especially if they get special stock, dispensations, special voting rights.

they have a disproportionate amount of 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? shannon: absolutely. i mean, diversity, i think 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 around the table. when you consolidate power in one seat, the ceo with super voting rights, i think that gets dangerous, as you pointed out. we have seen the results of that at companies like uber. so i think it's very important that the power remains distributed so the board can play its role in corporate governance and really have that oversight power. emily: a silicon valley bank study found that while more startups are focused on diversity and inclusion programs, they say when you do , the math, that majority of them still 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? shannon: right. it is absolutely critical. right? i think when these things come from the top -- first of all you , have a different point of view, expressed at the table, you are very likely to better meet company challenges and that -- and have better financial outcomes and the data shows that. it is critical. also being critical on the culture front. as we see some of the changes happening at the top, it is easier and easier to embed that diversity in the conversation at all levels of the employee base. emily: for example we recently , read a story about how amazon hq2 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, to represent people of color in line with the local population? do you think that is something that is realistic? shannon: absolutely.

i mean as you pointed out, when amazon puts its mind to something, it can make it happen. i do not think there is any reason why this isn't possible. there is, you know a phenomenal , pipeline of talented women at all levels, the board certainly and all the way up through the pipeline. and so 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 , oh, women, executive at such and such company, but she is so in demand, she chose another board to join. shannon: yep. emily: and so what is the actual , supply like? because so often i hear, we can't find the women. shannon: the supply is strong. this is not a supply issue, it is a demand issue. so -- emily: why isn't the demand finding the supply? i know that is what the boardlist was founded to do. sort of improve that disconnect. shannon: there is a couple things. the first is a topic of independent board members. so 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. right? so seeking out operator point of view via an independent board member is a great way to get some diverse points of view. i think the other issue is homogenous networks. right? so when people are doing a board search, very traditionally, they reach out to their own network. one of the things theboardlist -- things the boardlist does is search for emerging talent or talent that the homogenous network might not have access to. emily: is a board list focused on companies only or on technology only? shannon: 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 -- where are you seeing challenges? other industries in particular that are better than silicon valley? shannon: i think we see progress like some of the changes amazon has made, albeit a little bit difficult to get to. as we start seeing 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, adding different kinds of diversity, which might be a little more difficult to quantify. is the rooney rule, is that something you would like to see every board do? i mean, what are some strategies for companies that, you know, are finding themselves in the so-called predicament to find these, you know, find hidden talent? shannon: i think again 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. so you can be sure that those people that are 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 their recruiting process, right, from the language used in job descriptions to the process they use to get referrals, from the employee base. i think there is a lot of changes that can be made at a fundamental level to make a difference. gordon,hanks to shannon ceo of theboardlist, thank you. it is another sign of trade tensions between the united states and china. the trump administration will set limits on china visa applications starting next month. in some cases the new measures 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 will talk to the ceo of coin list about some of the regulatory hurdles cryptos are up against, next. that is -- 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 also 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. but it is not just a bitcoin. hop into my bloomberg. you can check out this chart on gtv. we have seen the rise and fall of a number of cryptocurrencies. litecoin.ripple, 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.

to discuss, we caught up with the coinlist ceo andy bromberg. coin list is where investors discover high-quality projects. prior to coin list andy was ceo , of sidewire. our bloomberg executive editor and host of what you miss joe weisenthal is joining us. >> we are really seeing two things happen here. the first is a bifurcation between the high-quality projects and the low-quality last year, investors were not ones. yet sophisticated. they were figuring out the market. anyone could raise. now we're seeing the high quality ones being able to raise large amounts of money. the low quality once not as much. the second is just increasing interest from investors all across the world whether you're at the eiffel tower or the pyramid of giza 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: so i will put a similar question to you. isn't the start of the boom or the beginning of a bust?

joe: i don't know the answer to that. i do 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 -- legacy companies doing trading. you know, so much of the hype in the second half of 2017 was about this wall of institutional money that was supposed to come into the space. and we see a lot of the building blocks for that continuing to happen, but you know it's , obvious that has not translated into price increases the way i think a lot of people would have guessed. emily: and at the same time, the doj has opened a criminal probe into whether traders are manipulating the price of bitcoin and other digital currency. joe, how serious is this? joe: i think it is serious.

we don't really know the details . we don't really know what specific things are going to be going after, but there are obviously a lot of pretty shady activities in the space. there is pump and dump rooms where people get together and try to manipulate a coin. is credible allegations of false trading designed to spook people into thinking the price is doing one thing and not the other. by 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: andy, 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 as a market that is developing very quickly. traditionally, it developed over decades or even centuries. we are seeing the exact same thing happen in crypto markets in the space of 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 these need to be rooted out.

we are happy with the doj investigation. we think there is market manipulation happening, and that 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 that continue. we see it as a good thing for the space as it gets professionalized. to joe's point, the institutionalization is happening. and 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: well we think ico's were , created to fund protocols. they would not otherwise be able to raise the funding they need. 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, which is 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 granted everyone in the world, but just that it opens up

fundraising. traditionally, venture capital fundraising is done only 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 innovation over traditional fundraising methods. emily: the amount raised is down over the last couple of months from a march sort of spike. what is your read on that? joe: the levels are still extraordinary. and again, this sort of speaks to what i was talking about before, the sort of two different crosswinds. because yes, you see the prices declining, and signs of the air being let out of a bubble, but still the interest is absolutely 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 interest in this space. and emily, i'm sure your inbox

and your 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 they are going to get some sort of enthusiastic response, but it's actually the opposite right now. you know andy, who are your , investors? is it mostly high net worth individuals, family offices, is it hedge funds? andy: yeah when we talk about , the investors who are investing in these token sales, it is a huge swath of people, and it's challenging to characterize. we have everyone from small retail investors that write $100 or $1000 worth of money into the sales all the way up to an endowment's, family offices cryptocurrency hedge funds. , of course, you see the majority of the money gets from institutions but we see it , way more from smaller retail investors that are excited to invest in token sales. to get access to deals they might not otherwise have. emily: that was andy bromberg

and bloomberg's joe weisenthal. 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 ceo, next. this is bloomberg. ♪

emily: facebook is planning to offer its whatsapp paying services to all of india starting next week, even without a partner. fourth partner state bank of india will join once it has its 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. and 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 ceo benjamin fuchs detailed the strategy to bloomberg's stephen engel. this was from the conference in 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. and 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. stephen: so what is the distribution of your call? i mean because you are also saying go along with some shares. benjamin: that is 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. and the effect of that, steve, is were the stock to rally a lot, you will lose money and the premium, but you are going to make quite a bit of money on the stock you are long. this bet reallylows you to make money in extreme moves either way. it is down a lot or up a lot, you will actually make quite a lot on this trade. stephen: would you consider your call a bit of a contrarian view? because 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 stock right now. the bets from the institutional banks is continued rising. benjamin: that's my point. the dominant view is that it can only go up. so if it were to go down, it is really going to catch people

by surprise. i think one of the things i talk about in the presentation is just from a market cap point of view, the company already has a half a trillion dollar market cap. it is an amazing company no , question about it. but the market knows that, investors know that, and analysts know that. were the stock to hit some of those targets people have, up 30%, it would be bigger than google. the world's fifth largest stock. up 85%, it would be bigger than apple, almost 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 the partner and founder benjamin fuchs speaking with stephen engle. supply chain payment company trade announced it is raising $250 million in funding led by goldman sachs. -- 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 based finance. a cloud platform for the supply chain, they describe it as sales

force for the supply chain. that is now offering blockchain based payment solutions. we spoke with tradeshift ceo christian lanng. christian: if you think about supply chains, they are very complicated. they have very different partners working on different -- on a single product, moving multiple tiers down. what we do is provide our customers with an internal cloud 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 where blockchain is a really good fit. for all of those scenarios, we allow them to collaborate, share data. if you have a statistic proving this has been produced in a sustainable way or free of carbon whatever you want to do, , you can send those things to the blockchain and all of the other partners around the piece of ecosystem so they can see they can have access to it. without needing to open data. it allows people to collaborate much more efficiently. emily: you know, i have read the

accounts receivable market is a $9 trillion market. how much of that could you potentially address? christian: so actually b2b is massive. consumer transactions are around $5 billion in trade already, it is roughly the same as amazon. so out of that $9 trillion market, just in the u.s., it is $1.2 trillion in outstanding in payments between companies. so if we can make that more efficient, if we can move capital faster, letting people trade more efficiently, that is a massive opportunity. emily: now goldman sachs, one of your investors, i was speaking with david solomon a few months ago, the president of goldman sachs, about blockchain and bitcoin in particular. take a listen to what he had to say. david: blockchain is very interesting technology, but you know whether or not , cryptocurrency is becoming a real store of 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: no, actually i think blockchain, especially as you look in business, crypto payments, they are not very stable means of payment. if you have a business you want very stable currencies. this is a problem. i think the ability to coordinate large complexes of people and companies is much more relevant. i think having transparency for financing, being able to provide payables for instance you can 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 relevant for the b2b stocks. emily: i sat down with the ceo of strike -- stripe recently, and the company had stopped accepting bitcoin as a form of payment. take a listen to what stripe ceo patrick collison of stripe told me. patrick: it was trending towards a digital value.

i think that is a valuable thing to have exist in the world. i genuinely wish them the very best. it works less well for our use case. and this wasn't so much kind of like a decision where we wanted to be the arbiter. it was declining rapidly. if it starts increasing again as a payment method, then sure great, we will go back at it. , emily: that is on an upcoming edition of "bloomberg studio 1.0." i had 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 is, you know works as a store , value? and will that be bitcoin? christian: i think it is hard to imagine without honestly goldman's backing to create some stability. i think at least for large companies, you are dealing with the fortune 500, they want to make sure that the currencies they trade in are 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 sometimes thousands of transactions per second.

so 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 from 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 that 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 be applied before. emily: that was christian lanng, ceo 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. and remember, all episodes are now live streaming on twitter. you can check that at technology weekdays. that's all for now. this is bloomberg. ♪

haidi: standing alone, president trump faces criticism and a cold shoulder with the g7 leaders next weekend. ramy: china issues a blunt warning, all deals off if the terrorists go ahead -- the tariffs go ahead. haidi: job numbers signal the u.s. economy remains strong, but the june rate hike will be the last of 2018. ramy: in it for the long haul, literally airbus sees soaring demands