and be healthy. get off the floor and get on the aerotrainer. go to aerotrainer.com, that's a-e-r-o-trainer.com. >> from bloomberg world headquarters in new york, i am caroline hyde. romaine: list look at where we see it -- stand. stocks lower on another volatile session. tesla finally skills up. caroline: electric cars, snapchat, crypto. it is still in the zeitgeist. even eat more avocado toast because avocado just got

cheaper. up 4tle out with earnings, 00% this year and they are reporting if it consecutive quarter of profits and says they will remain on track to deliver 500,000 cars in 2020. it is not just the numbers. they want to hear about commentary, about more proof profits can keep coming. regulatory credit or no. investors today already cheering snapchat. the fueled eight surge in social media stocks. theset was not just stocks. hitting its highest level since june, 2019. paypal announcing they will allow customers to use cryptocurrencies. these were hot in 2017 and are still hot now. joe: retro day. i am sure a lot of people in 2017 would have said it is all a

bubble. maybe one day they will be right, but a lot of these trends,, whether they be electric cars cryptocurrency, going on a lot longer than people think. tesla's number. the stock is up a little. romaine: i am interested in this tesla story. potential competition. we talked a lot about niccolo the past couple months. we got word that general motors is going to move ahead with talks for that investment in nikola. it will be interesting to see how those talks go and more importantly, what comes out of the talks, an actual product, something that can maybe compete with tesla, which for a while had a good portion of the ev market to itself. joe: let's bring in leigh drogen. we always talk to you about these red-hot growth companies. i am curious how you think about a company like tesla in the context of the current environment.

because a $400 billion car company, it is growing, but revenue is up what, 40% year-over-year? it is not like one of these companies growing 100%, it does not have software margins. is it like with some of these other growth companies, or is it in its own category of things in the market? leigh: first of all, i feel like such a basic millennial today because i bought back into bitcoin last week for the first time since december of 2017, and i bought a tesla in july. so, whatever. funnywith tesla, the thing is that it is actually about to hit that growth curve. it is not right now, but when we look at the estimize consensus for deliveries and revenue going out two, three quarters for about we are going to see 100% year-over-year growth in deliveries according to the community of independent analysts on our platform. so it has not been that kind of

company. it has been more the story than the actual delivery of results. but if expectations are met, it will start to become that. caroline: we know that you get a really broad range of news at estimized that contribute to expectations. worry about elon musk's decision to go along growth? -- to go long growth? leigh: profitability has surprised to the upside over the last couple quarters. while it is not anything really to write home about, i think it adds to the surprise that he has put up positive numbers. the broader theme around this is what it has been basically for the last couple years, which is that the evaluation that tesla trades at is completely insane relative to they cannot sell enough cars on this planet in order to live up to the

evaluation they are trading at. at these margins or even higher margins. definitelyty is betting on this company becoming a services company in the future. part of that is they expect the battery technology is somewhat proprietary, and expands into many other industries. but i think that there is a big piece of this story that builds around driverless cars becoming a services company eventually with much higher margins. and if they get that right, there is the tam there for a reasonable valuation if they get it all right. i have, i own the car, obviously spent the time on the autopilot stuff. it is not there and it will not be there for a while. romaine: i am curious about what -- what you just said pit are we focusing too much on the production numbers and maybe not paying attention to the longer-term potential for things

that i guess are not the car itself? leigh: i look at it this way. the upside catalyst of elon being able to get the manufacturing right in the short term is a positive catalyst, because i think there is a lot of negative sentiment baked into the history of this company fumbling around with that aspect. so there is upside there. i do not think there is downside in missing it because they do not care if one or two quarters kind of slips up. a littlen it may be hard to short the stock is because if they hit these numbers that the analysts expect over the next two, three, four quarters, it is really hard to short a stock into eight 100% year-over-year delivery number. you may have to wait for the next turnaround to really want to get bearish on it. romaine: the short end has come down a lot. joe: people have been shorting

this one forever and they continue to get polarized on it. i was thinking about wework. that was a company that said it looks like a real estate company but it is actually software, something like that. they are going to have incredible margins. is that the risk with tesla, that people are too much fantasy about them having some other business line besides selling cars, where they make a lot of money, then people wake up? leigh: 100%. that is exactly the corollary here. wework, the second wework ever made. it was very obvious to see that that story was kind of never really going to happen for them. they were just a real estate company. tesla is right a car company with bad margins that does not really make that many cars right now. proprietaryhave a set of software, and they lead

in a very important feature industry. and if they can consolidate that and make it a reality, then evaluation makes somewhat of a sense. what i necessarily bet on that before g.m. gets to market, riviere and and all these other companies get to market, and kind of feed the quacking ducks of ev and driverless public market-rate? would i bet on that long-term? not the bet that i would like to make here. caroline: i am mesmerized by the slow train moving behind you. i want to be mesmerized by the pictures we have of the electric. how much do you think the competition is? leigh: the competition is definitely real and it is coming. the biggest question is not whether gm or ford or volkswagen can produce an ev that competes on the basis of the range and the price and all those things.

i think it is actually going to come down to, do consumers want to buy into the autopilot and the full self-driving, which is not really exist right now. do they want to buy into that relative to something that is comparable on all other sectors? my bet is that the driverless stuff really is a selling point. it was for us. i think it will be for others. but for the stock, i do not think that will matter. i think retreat is ev and not driverless. once they get to market with serious products, that will really weigh on the stocks. romaine: we are speaking with leigh drogen. he is going to stick with us, because after we come back, we are going to discuss snap, really setting the tone for social media ad strength. that is coming up next. this is bloomberg. ♪ ♪

today we are focused on some of the hottest part of the market. we were just talking about tesla . you know what else is hot? advertising. ok, well, snap. snap of course came out last night with great earnings. there was a pretty decent rebound going on in digital ads. joe: snap absolute the crushing it. i don't know if people would say this was left for dead, but it kind of was a few years ago. people thought they were crushed by facebook. a monster day in terms of reporting strong digital ad sales that it lifted the entire online social sector. facebook, twitter, pinterest, all having huge days, with snap telling the market just how lucrative that still is. caroline: so lucrative.

still being used, 250 million daily active users. quarter of a billion people still addicted to this thing, putting on dog faces, however you want to change your features. romaine: it is more than that. snap?ne: are you on romaine: we are. caroline: all three of you? ok. i am going on. joe: let's bring back leigh drogen, founder and ceo of estimize. the story overall continues. some of these companies go down, some go up, but it seems like the rush in general, digital advertising, social media, nothing really slowing it down. leigh: yeah, it is the same trade we have seen for a while. it is even accelerating as some of that money that really badly wanted to rotate into cyclicals that thes has realized

overall kind of economic situation that we are in is status quo. the tsa numbers are ticking up a little, but people are really not leaving their homes, as much as we would all like to hope that they would for economic reasons obviously. and that will continue to drive the social media trade. we are all at home on instagram, pinterest, basically buying home goods. fomo, i'mttle of this looking at instagram and getting all these ads for whatever, and it is hard to understand the quality of all these little companies selling these things you definitely might want. but there's no doubt about it that people are definitely transacting off of those ads right now. romaine: that brings us back to the broader question about these longer-term changes that might be taking place within the market. we are all on snap, instagram, quibi. i guess the question still comes, are these things really going to be lasting if the covid

pandemic ends, and we are already to go back in the sunlight. are we still going to be looking at snap, instagram and the like? leigh: i think figuring that out is everything to the trade over the next two years. what we are seeing in terms of the data, because we can all have anecdotal expectations around the stuff, but if we look at the out quarter estimates, three, four, five quarters out from some of these names, we are still seeing upward revisions relative to where we were two and three quarters ago, which to us, tells us that there is going to be a lasting effect regarding the user acquisition and engagement that is taking place over the last couple quarters. yes, some of the future growth has definitely been pulled forward, but also, the addressable markets have definitely expanded here. and i think that as consumers get used to this type of

behavior, a lot of it is just not going to change out the back. definitely you are going to see dollar flow go back to stuff like going out to the movies, going on vacation, and that will take some of the discretionary income away from purchases that are happening online right now. but the behavior of purchasing it online, we do not see the data that says that will go away. caroline: also we continue to see the progression of how these companies monetize that. we have seen facebook embrace deals with shop five, looking to make more purchases. snap, a big one is to how it can monetize itself. how are your clients and you thinking about that? basicallyociated with all these firms has done incredibly well. modify --ow to monetize their users better. i think there is something

deeper going on inside the company's right now, and i have friends inside some of them, which they are taking risks they may not have taken previously, at pushing out new products that could monetize. because everything is just going so well right now that they have got the room to make some mistakes there, and they are going to hit on some of these, and it is going to push those revenue growth rates from where they were at 30%, 35%, 40%, to 60%, 70%. and that will keep the stocks on fire. joe: how do you think about politics risks? of course we saw doj come out versus google. other elected officials are free -- increasingly calling for more aggressive regulation of big tech online advertising. at some point does this become an actual concern for investors? because people always talk about it, but it never seems to show up in stock prices? leigh: my view definitely has a long tail risk of being wrong in a big way, but my view has been,

for a while now, that it is just a lot of noise. if we look at the doj's filing against google, it's incredibly narrow. in fact it hurts apple more than it hurts google in the short-term. that that, the fact doj filing was so narrow i think says so much about the ability for the government to get its act together on a large scale to actually take a run at this. and the bigger picture there is even if i think they wanted to, that they would really know how. even if they had the cojones to do it, or the political backing to do it, i do not think they would understand how to break these guys up. it would be really difficult. you saw what facebook did the other day. they now allow you to message from instagram across channels to facebook messenger. i mean, that is obviously going

against the concept of breaking these guys up, but they are just doing it right in the faces of the government right now. so, long tail risk to my position, for sure. if they get their act together and do it. but i do not see the probability of that happening being anywhere reasonable. joe: great perspective as always on all things growth. thanks to leigh drogen, founder and ceo of estimize. coming up, the price of bitcoin hits its highest level not seen since the summer of 2019. paypal contributing to those gains today. we will talk about that next. this is bloomberg. ♪ ♪

caroline: today we are focused on some of the hottest part of the market. we have talked tesla, social media stocks. now we are going to turn to crypto, particularly bitcoin.

joe: bitcoin has actually been on a real tear lately. we mentioned before the price hitting its highest level since summer of 2019. look at the last month, up 22%. it was around $10,000 a month ago. now it is close to $13,000. pretty impressive. the big one today of course paypal, the popular payments platform, saying it would allow its users to buy bitcoin and transact with it and other cryptocurrencies. it is up 5.5%. i think you get this sense of a positive cycle where companies think doing crypto stuff will boost their stock price. who knows. romaine: you go back to the bubble days of bitcoin when i got up to about $19,000 and there was a lot of talk about where is the utility. it will be interesting to see this embracing. joe: for more on this let's bring in jennifer surane.

the bigger of regulated financial entities out there to embrace crypto. jennifer: for sure. it is interesting because one of paypal's competitors, they have long embraced crypto. you see them playing a bit of catch-up, but still very ahead of most of the market in terms of not really seeing very many other regulated entities looking to get into the space. it will be interesting to see if this kicks off a flurry. caroline: they are saying we are all going to start buying things for this but i do not think many people are wanting to do a legendary pizza transaction, spending $10,000 in bitcoin on a papa john's pizza. going to beare you able to do with paypal's crypto? because you certainly do not be able to seem to trade it, which is basically all anyone seems to

do with it. jennifer: the idea is you can buy, sell, or hold it. but if you go to your grocery store and they allow you to use paypal checkout, they are allowing folks to, in that moment, say i have $35 worth of crypto, let me convert that really fast and do my transaction at the grocery store. so the idea is, you are not exactly transacting with crypto but you're getting one step closer. it will be interesting to see what this does in terms of crypto as a utility versus the leading asset that has long been. romaine: we can all use it to buy our space flight to mars. what happened to a lot of the push to incorporate the blockchain aspect of cryptocurrency more into the traditional banking sector? we do not hear much more about that. jenny: could kind of has fallen off. paypal today talked about this all came from their own internal blockchain group.

facebook is still very interested in their blockchain group. ado think you are right, that lot of the emphasis and excitement has fallen off. it seems like a lot of the banks especially if you blockchain as may be good for certain areas like commercial lending, but it's not really going to have the widespread usage people purported it would back three or four years ago. caroline: our central banks looking at it? jenny: that has been a really interesting theme, especially during this pandemic. a a lot of central banks were maybe a little reticent and are now open to it after they have seen this real need to get money out to their citizens faster. this could be one way of doing it. i think it is still early and probably just an idea at this point, but definitely this crunch that they have seen in getting money out to people real quickly and they are looking for more digital ways to do that. thank you.

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emily: this is bloomberg technology. coming up, tesla blowing past estimates on revenue, earnings and cash. the ev maker is standing by its promise to deliver half a million cars this year. we will have the play-by-play as the earnings call gets underway. faces the biggest antitrust action and possibly a century. rivals a