"all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. emily: i'm emily chang in san francisco. this is "best of bloomberg technology." volatility is the main headline. tech is leading the way. divided, a new report of tension between zuckerberg and sandberg. how are the troops responding? bitcoin hitr ago, $20,000 and it has tumbled more than 75% from the peak.

have the best days coming gone? the tech route is in the stock market. apple, amazon, facebook, and out the bet have lost over 800 billion dollars combined since the end of august putting silicon valley on edge and raising concern, have we reached peak tech? .aught up with bob o'donnell tech regulatory this are just beginning. the biggest thing in the room is that the u.s. economy is heading for a significant slowdown, not necessarily a recession, but growth is headed toward 2% or less. that is more than wall street expected from the slowdown. event, not just a tech it is an entire market event. are blowing out of bond spreads. there is recession fear.

what has added fuel to the fire is the leadership, the place where everyone has money, the think that stocks, have started to unravel. i do not think we will have a christmas rally. ultimately, we might have a -- capitulation panic, maybe before the year is over, where it goes below the overall lows we had this year and probably goes lower and creates panic about imminent recession at the end of the bull market. that could be a good buying opportunity. we have to wait and see. emily: is the fear warranted? >> short-term, warranted. we are living in an era with unrealistic valuations for big tex companies. we have to back and look at this at a macro level. have hadally, we

companies build up valuations that most people said, this is not realistic. in a way, it is not surprising. we are finally seeing a mature tech industry being perceived not as a teenager, but as someone in their 30's and more mature. i think all of these things influence this and fundamentally, these are strong companies long-term. near-term, valuations need to be corrected. wall street is taking advantage of the turn down to readjust the valuations. >> is this about valuation or is this about sustainability of business models? if people are not buying as many iphones or buying into facebook, is not a problem? -- isn't that a problem? not so muche about adjusting valuations as it is adjusting growth rates for the industry as a whole. i am not a tech expert. it seems the pace of innovation

in technology is slowed from what it was that drove this. the last big thing was the iphone. the ipad was big, but it becomes a bigger iphone. the i watch has not been are shattering. twitter and facebook are hugely popular but they have basically been the same for a length of time. the constant pace of innovation to more dramatic products that drove demand is slowed and it brings into question, not so much valuation, but what growth are you going to put on a company like apple? is it hitting the ibm microsoft mature cycle where you have to downgraded? there are challenges to the entire internet. who gets to decide what constitutes hate speech or fake news or manipulation? is it all free speech/ -- speech? is the internet going to be open

or regulated and who gets to be the moral authority to do that? the decisions will greatly affect the business models of a number of companies. not to mention, how much can you monopoly status, much like there was to microsoft in the past. there are a number of challenges to an industry that is way over owned from an investment perspective. when we put those two together, it is a challenge with the sector, as well as the overall mark. >> how big a threat do you think regulation is or is it about trust in the companies? people are fundamentally questioning, can do i want to share my data? regulation is an issue for facebook. i am not as concerned for the other faang stocks pretext despite the monopoly prospect? >> yes. i understand there are concerns around to fake areas.

fundamentally, if you look at what is going on, there are a lot of interesting technologies destin elements. -- developments. these valuations were based on expectations that cannot continue forever. we are seeing growth expectations coming down and in recognition that they cannot possibly have continued. there are things coming. there will be interesting things in 2019, foldable phones. a lot of people have their doubts. emily: i am not so sure. >> here is the thing. all kidding aside. has beenal market concerned with smartphones being the last big innovation. i say, is there a different way to think about the devices? i think it is an interesting category. it brings the wow factor back. it gives people a new way to consume services, netflix on different types of devices. ♪ emily: that was jim polson and

bob o'donnell. gloom around the global electronics industry, going gloomier with foxconn. the biggest a somewhere of iphones is cutting $2.9 billion from expenses in the next year citing a difficult and competitive year ahead. the company is also -- also said the ifo business days to reduce expenses by $900 million next year as a plans to eliminate 10% of non-technical staff. the news follows a bad week for apple after four suppliers cut revenue estimates because of weak iphone demands. tore joined from taipei discuss. >> 50% of foxconn's revenue comes from apple. they have a number one supplier. they are important to foxconn. six of the 20 billion and cuts is in the iphone division. there is a lot more in other division.

what that tells us is this is not an iphone only problem. it is broader. foxconn's catalogue of clients includes hp, cisco, dell, a long list of international names. they are all impacted. they all feed into the wider issue that we are seeing in the electronics industry and the foxconn is the one company that gets hit by all of it. emily: what is the wider issue that people are just not buying hardware? o'er the market is not growing as much as it has been? we have a macroeconomic headwinds. it a lot of people are getting caught up in trade tensions, u.s.-china tensions. it is bigger and deeper than that. that is a distraction. we know that apple itself is trying harder to sell more units.

in the last earnings, they said, we will not tell you how many we ship, only focusing on revenue. it will not be good news on the shipment side. the smartphone market overall has reached its peak in terms of growth numbers. more people will continue to buy smartphones, but not at the same level. pcs are not back in vogue. we look at other areas of hardware. the apple watch may take up some flak. things like service, devices are being made and sold are step by consumers like you and me never seen. they them to server farms and serve up videos -- netflix videos. we never see the hardware but it is there. if there is a slowdown elsewhere, and the internet area , in spotify or facebook or google, if those slowdown, we could see that impact wider. theomes back to foxconn,

company that has its finger in all of these companies because it is the largest manufacturer. ♪ emily: bloomberg opinions in taipei. third-quarter revenue soared 49% at xiaomi. they relied on the present an emerging markets to offset demand for devices. shipment rose and the global smartphone market strength 6%. coming up next, will those to hold the power at facebook ever change? our next guest says they have to. julie goodrich next. check us out on the bloomberg app and on sirius xm. this is bloomberg. ♪

emily: to our continued coverage

of facebook and crisis, critics are out apples forced following reports of bad management. in a public statement last week, ae board said to suggest that new about russian interference or try to ignore up prevent investigations into it is grossly unfair. in the last 18 months, facebook with the full support of the board has invested in more people and better technology to prevent misuse of its services, including during elections. zuckerberg and sandberg are members of the same board standing behind them. sendingguest has been the alarm for change in the power structure at facebook. ofie goodridge is the ceo northstar asset management and they currently hold over 37,000 shares in the company. aey have been clamoring for one share one-vote policy at facebook, something zuckerberg has avoided. she turned is from boston on monday. >> this is the problem with

corporate governance when you have an insider board. mark zuckerberg hasn't how are to fire anyone -- has the power to fight your anyone of the board members at any time. it takes away the sense of autonomy that other board members have. they are concerned about maintaining the relationship with the company. i think it is problematic. emily: do you sense an opportunity to be agitate for this? do you have plans to do so? same shareholder revolution file. probablyolks know, everyone listening does, mark zuckerberg has primarily class b shares, giving him 10 times the voting power. that means, he controls 51% of the vote but only owns 30% of the stock. that is a problem for other shareholders.

for example, and the resolution we fired -- filed last year asking for there to be one vote per share, to only have one class structure, class a, what ended up happening is we only got 21% of the vote. all of the other shareholders who voted in favor , we'veresolution received 81% of the class a share vote. that is really high. you have other investors calling for an actual board shakeup, calling for mark zuckerberg to step down as chair. here is jonas grown. we need somebody genuinely independent with gravatar us and can speak with a tour -- authority and confidence of the rest of the members of the board. they need to be somebody with a broad diversity of experience, tech experience and the could

also be merit in having someone from a traditional media, the newspaper industry with a deep understanding of the role of media and society. someone with time on their hands because this is going to be a long few years ahead of the company. zuckerberg responded saying this is not part of the plan as of now. what would you like to see him -- would you like to see him step aside? >> the person i would like to see step aside as peter keele. i would like to see the vote structure change. i think it might not be great for him to completely separate side, although i would certainly vote in favor of that. i would support trillium on that resolution. the issue for me is that when you take a founder like zuckerberg and have them step aside, it means something scary for the shareholders.

is thatwhat he needs are corporate government -- governance. he needs to let go of insider shares and go back to a one vote per share structure. when the times tried to throw sheryl sandberg under the bus, these guys are responding to issues that occurred in the course of doing business over several years. what is scary is that they did not anticipate that these kinds of things could happen. that is the scary thing. if you look at somebody like peter keele, he was very instrumental in supplying cambridge analytic through the other company that he is the ceo of with ways to access this and to infiltrate the facebook system. he is the one that could have said, hey, we want to be careful about our governance here. i want to dig a little

deeper into your thought on peter keele, who is very controversial on the facebook .loor for a number of reasons mark zuckerberg has said he supports key all remaining on the board because he adds to the diversity that they would like to see represented. talking about his association where he is a cofounder, not the ceo. talk to me about why you want to see peter keele of all the board members, to step down. out withe when he came his outrageous support, hugely ,ublic support of donald trump he ends up holding himself high as a representative of facebook. it was not facebook that came

out with that but what has happened over the last several virtue ofacebook, by the way, it started to change the way to business. instead of taking regular advertising for people looking for issues or computer equipment, they started taking money for political ads. that is very similar to the way peter keele came out publicly about his support of a political candidate. united.all citizens i do not think it is appropriate. in fact, it is illegal for facebook to have taken ads from or inign power to support any way have a say on any sort of elections in the u.s.. it is not legal to do that.

i do not know if they need a corporate governance person or a government affairs person who really under fair -- understands how security works or if they need somebody to think about, are they making so much money from running political ads that they need to keep running political ads? they need to keep running commentary from paid sources around political matters? i how facebook imagined itself. i am sure that -- now all of the

middle-age people still on facebook, still using it, i do not think that is why they go on facebook. it is one thing to report the news, another thing to create the news. >> that was julie goodrich. coming up, time to go after elon musk. the story is ahead. live streaming on twitter. check us out. follow our -- follow tictoc on twitter. this is bloomberg. ♪

emily: nasa is launching a safety review of rolling and spacex, the two companies it higher to fly astronauts to the space station. according to the washington post, the review was prompted by the behavior of elon musk he was seen smoking marijuana on a podcast that went online. spacex says it actively works to promote workplace safety. wider was an artist, a blacksmith, an aerospace engineer, and more, a renaissance man. he will not be forgotten for much longer. we have the story. ♪

>> this is the story about a forgotten genius. artist, sculptor, modern day leonardo da vinci. invention was the realm to pierce science-fiction. mans also a story of this and his fixation on the past and living on borrowed time. this is the guy he wants everyone to know about, alexander wipers. >> this is probably the most photographed one so far. >> randy discovered him in 2008. for the first time, his sculptures were put on sale. randy snapped up the lot. dealer, he dreamed of

hitting it big by finding an unknown artist and make him famous. he figured out wigers was his man. ♪ during his hunt into wigers life, he'd discovered hand-drawn deadlines for an aircraft dating back to the 1920's. he had invented the first flying saucer. >> that was an amazing find. i saw the blueprints. it was undeniable that he was a creator. ♪ wigers called the machine that copter.ter, -- disk it was a unique concept, when he thought cities of the future would make use of. he patented this in 1944 and tried to sell it. >> he started sending all of

these letters to companies telling them about his invention. ♪ as a word of the disk cope -- copter spread, the u.s. military still the idea. this is accusation they denied. evidence of the theft was there for all to see. images of his flying saucer seat into popular culture, influencing everything from architecture to cars and movies. >> a two-seater maybe the car of the future. >> a whole flurry of stories. the first saucer. he designed a flying saucer 23 years ago. the man who invented the flying disc. he did not seem to be after compensation as much as recognition. wigers, randy discovered a

kindred spirit, and man who lived by his own rules and created a legacy using his own hands. >> what would you say to alex if you sign now? >> -- saw him now? >> i did dream about meeting him. i figured it was a spirit of wigers telling me i am doing the right thing and i should continue my mission. ♪ emily: that was bloomberg's ashlee vance. it has been almost a year since bitcoins skyhigh $20,000 mark. now it is hitting the $4000 are. -- mark. this is bloomberg.

emily: welcome back. i am emily chang. the cousin who peddle bitcoin to you last thanksgiving has some explaining to do this year. this time last year, and doctors were bragging of their good fortunes epic dinner table as the cryptocurrency was in the middle of a bull run that would see more than double for a record of $19,511 just before the christmas season. this year, the story is different. bitcoin is pressing for thousand dollars and does not seem like there will be a turnaround soon. we come up with better paid chief commercial officer to discuss. >> bitcoin has become mainstream

adoption around the world. brand recognition. we should not look at the price so much. it is what is happening behind the scenes. things like fidelity launching next year or square watching next year or blackrock launching. until those come out, i do not think there is a way to mark it moving either way. emily: bitcoin has gotten a lot of play. it is worth three listening. take a listen to what they had to say last are. >> it will blow up. demonstrates short it, it could between thousand before this happens, but it will blow up. it is a fraud. >> he later said he regretted saying that. i wonder, if he is being vindicated. >> i disagree with him on the front comment.

this is go up and down. something that goes apple obviously come down. year, hisagine next bank will also be launching a product. companies and that the coin space doing ipo's -- there is a bank with a lot of crypto -- there could be a car beside you next year. jp morgan will try to get in. i think he will be changing the tint soon. --could be key one or two to q1 or q2. >> should we start looking at cryptocurrency as different currencies? will other currencies break away from bitcoin or are they all the same? >> there is a big difference between bitcoin and everything else. bitcoin is the hundred pound gorilla. that is the one with the mass network, the traditional -- are building around.

i do not know what will happen to the other ones. they are being rolled by the fcc right now. the market is dead right now and maybe a couple will survive. none of them will survive the way -- and less bitcoin survives first. emily: what does uncle sonny synnex think you bring? -- next thanks giving? there are traditional incumbent spiting bitpay, it should be an exciting time. around the world we are seeing adoption by bitcoin. over $1ill process billion this year, even though the price drop 75%, we processed over one billion muster because people are using bitcoin as a way of payment transaction. emily: where is the place next year? >> at they launch the products, you will see the price around 15,000 possibly 20,000 by the end of next year.

that depends on when the traditional in comments launch and they move -- incumbents launch and they move slow. emily: that was chief commercial officer forbitpay. airbnb is one of the most anticipated ipos for 2019. there is a crackdown on illegal renting across the u.s.. does that stand in the way of the public debut? weight watchers, an iconic american company with a new name and new approach to business. how does tech bit into the vision? we will find out. this is bloomberg. ♪

♪ emily: 219 is expected to be a bigger for ipo's. last public met memo friday, they announced more than $1 billion and think what a revenue, calling it its

strongest order to date since 2008, the company has become one of the most valuable startups in the u.s. with a current valuation of $31 billion. we spoke with airbnb's global head of policy and public affairs on monday and started by talking about how airbnb has been handling the deadly wildfires in northern california. what we see in northern california and southern california is something that is devastating. we have seen tremendous herbalism from first responders and everyday people. we have been honored by our hosts, we had over 2500 hosts open up their homes to over 1800 people who have been displaced by the fires. that is not airbnb, those are our host. we are grateful for that. the highappealing to your angels and all of us. it is awesome to see amidst all of the catastrophe.

thank you for asking. feeling in san francisco, but nothing like what people are going to on the ground. emily: our hearts go out to them. i want to talk about growth. you are going into the holiday season, a big season for airbnb. you say you have record bookings over things getting weekend. how long can we sustain the growth? >> over a billion dollars in revenue in q3. by the robust growth. ultimately, that is tracking to a community model on airbnb. we only do well at the hosted well in the house only do well at the guest to well. a network effect globally. you can see that underneath growth numbers, 91% growth in beijing. over 70% growth in mexico city and england.

ultimately, what is underlying the foundation is people are looking for this type of travel. to doeople are looking home sharing travel, people to people travel. abraham lincoln and gandhi did home sharing. whatrticular, this is consumers are looking for, particularly millennial consumers will be 75% of all consumers going forward. emily: give me an estimate on beijing. you had a head who resigned over an issue. one of the founders went last year. you mentioned 91% growth. you are starting from a low bar because the business was small. how do you expect that to expand? >> looking at our global members , will be are seeing in china reflects the same thing we are seeing globally. we are blessed with growth being driven by the network effect. what we are seeing in china is interesting. the underlying dynamics and

trends that we saw with the business earlier are in china. when airbnb was first launched, the majority of users were millennials. in our china market right now, 85% of consumers are millennials. there are 400 million millennials in china. significant player in outbound travel, people going from china abroad. they come back and begin to travel domestically and airbnb begins to grow as a result. the type of growth in beijing is replicated in similar numbers depending where you are looking throughout the country. china is a place you have to get up every day and work hard. team ofan incredible chinese folks on the ground in beijing and other offices around the country. we know we need to keep working. emily: you quietly removed listings and the jewish west bank settlement.

this is something up no palestinian groups have been pushing for. why now? >> this is an incredibly complex part of the world. incredibly difficult issue. 2016 when came up in we were asked with questions about 150 listings in the occupied territory. -- spent timeime trying to understand the issues and put in place a framework to help us reach a decision. understanding the situation and talking with experts and stakeholders, taking a look at the degree of human suffering and what is contributing to it and looking at safety issues, and ultimately, whether our product or business are contributing to issues. using that framework, hopefully we made the decision -- we made the decision to remove the listings. we are saying that knowing it is controversial.

that is an incredible part of the world with incredible people and this is a really hard choice we struggle with. we are not a government, not the experts. we get put into the situations and believe -- a lot of people are talking about tech company is taking responsibility, we wanted to act as opposed to react. we use the free market to drive the decision. -- framework to drive the decision. emily: you are still looking for a ceo. why is it taking so long? >> are you interested? emily: [laughter] it might be a conflict of interest. >> given the historic nature of the company, some of the issues we have talked about, there is incredible interest in this role. we have had incredible folks we have had conversations with. i will be sure to let you know when we have reached a decision. we have talked about the fact that we want to be ipo ready by 2019.

we have not announced if and when we take a next step. we are looking for someone who appreciates that community model. we want to be at the first century company. do we deliver for host?? then the guest can deliver -- alice can deliver to the guests and guess deliver to the community. why we have gotten so much drive a socialwe value proposition that drives our growth, echoes back to the early question of, how do we continue the growth? we deliver on the community model. you ended force arbitration, not just for sexual harassment but discrimination. we have not seen other companies do that yet. how do you plan to handle this between host and guest? >> our model is different than some other sharing company models. our partners. we have an impressive policy

which broadly deals with discrimination types of issues. you have to agree to the standards before you can even come on the platform. employees,es to our that is another example of how we are trying to build the community model. i come out of democratic politics in the u.s. i did labour politics while i was working in democratic politics. personally, it is interesting and exciting to see companies understand the value of their employees and community. employees are pushing for companies to be responsible. i think it is great. the companies understand that they only succeed if they can recruit great candidates. it is a cool thing to see that develop and a good indicator of where we're going as a society. >> you mention your time at the white house. i have to mention you are the master of disaster.

how would you master facebook's disaster right now? what are they doing wrong? >> i will be careful here because i do not work at facebook and i want to be respectful. say, as a general approach, ultimately, people have to be comfortable with the mission and principles and value. proactivelyto exhibit those. we talked about being proactive versus reactive. day, there isthe north star, mission, principal. viable if you are actually executing them. it is easy to say all of those things when it is an easy decision. when it is a hard decision, you

get tested. politicians are always tested not uneasy stuff, but in a crisis, because that is where your character gets exposed and you have to make decisions. some of the folks at facebook at the top and throughout the company are good people and ultimately, they will. do those and they tried to do those.they have done some collective stuff. i do not know what is going on there. global head of policy and public affairs. still ahead, weight watchers is no more. rebranded as ww, the company is looking to load new users with a digital strategy. they had a conversation with the president and ceo. this is -- we had a conversation with the president and ceo. this is bloomberg. ♪

emily: there is a signal that t-mobile's arguments for buying sprint may not be winning over officials responsible for putting the deal. t-mobile says it would help it compete more vigorously against at&t and verizon.

give it an edge and building a five do network. -- a five g networks. weight watchers is in rebranding mode. it is now ww. it is trying to capture the holistic wellness space. a partnered with blue apron and a digital strategy targeting ww reaching out to young moms, dads, college gets, and more. we spoke with mindy grossman. there are so many avenues of work happening right now. we launched the points 2.0, which took the science, similar of what we do to nutrition, and using it for customize activity. we are integrating active audio fitness with a map -- app. we integrated headspace.

i am excited about a rewards program that has been in work for him was a year. it does not reward you for spending money. a rewards you for everything you do for your health and nutrition. you win wellness wins. in 20%seeing an increase of nutrition tracking and 80% of activity tracking. connect communities launched in canada. it will be rolling out to the rest of the world. that is to find forums. ofhave a whole universe activation that will happen between now and the end of the year and into 2019, when they do a big brand relaunch. even from there, they are constantly innovating. we have teams around the world in new york, and a group he or, we are looking to double our text up and -- textbooks and.

--tech footprint. emily: shares are down since june. what are investors not getting? >> we have a lot of new investors and coverage. it is a matter of educating everyone on the seasonality of the business. that is a big fusion. you need to -- confusion. you need to look at the member base year by year quarter by quarter based on the business. emily: january 1 is a big day. >> we are wellness 365 now. january no doubt that has loads of people deciding they want to get healthier. it is important to note that results this year have been fantastic. our subscriber base is up over 25%. sales at 17% year to date. operating income. significantly above where we have ever been. we have hit every single quarter

at all-time highs for the company. the team has done an incredible job and it is a matter of getting people to understand the trajectory of the business. the second thing is, as much as we announced what has been launched and is launching, the reality is, the true brand launches everything inherent in what we will be offering to the attomer is really happening the beginning of 2019. that is what we have been to paring for and activating. what we have already activated, with we are seeing an impact on retention and the impact on recruitment. emily: you have new partnerships. there is blue apron. integration with the voice. how do you think this will bring the business forward? >> if you look at where we have prioritized, it is will it recruit, will it elevate the brand.

when you look at partnerships like headspace, we are providing greater value for our members. a rewardswith program, which will have an impact on retention. frominly, with the move not just being weight loss, the giving people eight wellness platform, that is the big recruitment message and allows us to have a broader range of partners. we want to own a healthy kitchen. our partnership with blue apron, we watched -- launched the first ww cafe, we have a line of kitchen products. --ry food product we make you do not eat weight watchers food. you can eat anything you want. the products we make have been 100% reformulated to reflect a healthy living brand. that will be launched on all of our direct channels in january.

the first branded store for all of the products will launch on amazon at the beginning of february. a global company, 11 countries. other plans to expand? we inspire healthy habits for real-life people, families, communities, the world, everyone. that means, the world. 70% of our business is in north america. the next largest market is u.k., germany, france. inhave a big opportunity both latin america and asia. we have said we will be doing the strategic work. market entry will come next. by the end of 2020, we will start the development in newmarket what we are building the markets we are in. emily: a conversation with ww

ceo mindy grossman. that does it for this edition of best of bloomberg technology. we will bring you the latest in tech throughout the week. we are live streaming on twitter. be sure to follow are gloating -- global breaking news network. have a wonderful holiday. this is bloomberg. ♪

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