caroline: from bloomberg's world headquarters in new york, i'm caroline hyde. joe: i'm joe weisenthal. romaine: and i'm romaine bostick. the russell 2000 outpacing the broader markets for the first time this year. joe: the question is, what did you miss? caroline: the sun is out to day, and airbnb more than

doubling in their trading debut, one of the biggest birthday rallies on record. this comes just one day after doordash saw its shares also surge, and the two companies are the most recent examples of exuberance among investors. gains, even as some notable big names faced increasing risk. it's quite amazing. it has been seen out there third is and question marks over those surges. our people putting money not only in big tack, but in these new ipos? joe: you are not convinced that airbnb is worth more than every hotel company combined? i am not sure that is true, but it might be those, and you see the exuberance in this chart, the weekly inflows into the ipo etf, which tracks ipos. look at the bars in the last few weeks.

want neway, people issued, they want ipos, you see it right there. romaine: more than half a spacss -- doesn't supposed topacs price tonight, and look at it, joe. it rebounded. sell your bitcoin and by airbnb. welcome more, let's bloomberg markets reporter kailey leinz. knew that speculator mania was in full swing, but this drives it home. ey: twice as much as marriott, maybe not all hotels, but that is an impressive valuation, the 113% surge in this session. it follows doordash yesterday, those two capping off what have

been a record december for new issues in terms of volume. the highest we have ever seen in the month of december, topping 2001 and 2003. it's not over, we have two more ipos in the form of wish and upstart next week. gng ready -- spacs getting ready as well. if you look at the lens of the upaissance ipo etf, it is , and the s&p 500 is not even up 10%, so you can see the speculative frenzy. it begs the question as to how much of this we can blame on retail? they have been all in on the speculative frenzy, the broader -- volume ofthe bal call options, but it is amazing to watch this play out. it also begs the

question, are bankers getting this really wrong? why are they upping the prices when they see ipos going through the roof? why isn't airbnb higher? kailey: that's a question we have been asking all day. is this ipo process fundamentally broken? i think it comes back to the retail conversation. how can you factor in the appetite that is driven by retail investors, how much they can factor into this? iny have been factoring broader markets for the duration of 2020. institutional investors have to catch up, but in these two ipos in particular, it is the antithesis of that value trade that everyone has been calling for. when i wrote the 2021 outlook, everyone is calling for value overgrowth. small caps are overlarge and airbnb and doordash do not signal that to me. an interesting

narrative. what we saw today, it really was value in some of those small and mid-caps, cyclicals outperforming the market. on the same day, we had eye-popping gains out of airbnb and a second day of gains ai, and i'm sure doordash will bounceback up. kailey: a lot of investors are looking to snap up this stock, looking towards the vaccine, the reopening, traveling and renting houses once again. but the value trade, maybe not so much. romaine: kailey leinz, giving us that update. stick around, we are counting down until the release of "evermore."just kidding . the founder and ceo breaks it all down. this is bloomberg. ♪

romaine: today we are, of course, focusing on these ipo debuts. it has been quite a week. you talk about doordash, airbnb, these names are coming to the public market, to a certain extent, in defiance of the current economic backdrop. joe: absolutely. the numbers are absolutely eye watering, both the headline market caps -- we are looking at -- i guess you could call these value stocks, doordash, a 59 billion dollar market cap after an 85% pop. billion, and i think it's negative something. who could have predicted all this cheap money would have driven up ipo prices?

here -- lead drove n is here.drove were you surprised by airbnb and doordash? lee: i wasn't. i have some norming, nonfinancial friends who over the past couple of weeks had given me a call and said, i'm going to buy this airbnb ipo. i said, at what price would you buy it? they said, it doesn't matter. i'm just going to buy it. i do think it's representative of more general sentiment regarding the long-term liability of airbnb. i think doordash is a bit of a different story, largely because, you know, people have been a little burned. there are a lot of companies in the delivery states that did not work out, but i think people were a little surprised at how well doordash has done fundamentally and made progress

towards being profitable here. but when it comes to airbnb, everyone is looking out for, 5, 6 years and saying, if this company is not a $300 billion company, everyone would be very surprised, given the market and the very direct monetizable model. romaine: this is clearly a bet on growth. we joke about the lack of profitability here, some estimates, doordash had 50% market share of the u.s. delivery space and airbnb, of course, has a certain niche all to itself for the most part, at the moment. a lot of these companies are really out of place where, if all goes well, they can deliver some phenomenal growth. right, lee? lee: that is what these people are seeing, the robinhood traders as well as the institutions. they are sitting there and saying look, if you are going to make a long-term bet and be a

real investor, you want to invest in companies with huge, total addressable market but look like there on the runway to achieve a good portion of those. , thereu look at airbnb is not much better out there right now. the other interesting thing about airbnb right now, because of what has happened in 2020, the comps in 2021 are going to be really, really easy. when we come around the turn here for the next year, they are going to have four reports that are really easy to put up great numbers on. the 2022 numbers are going to be a lot harder there, but if you have a year runway where you basically get a free pass on what the revenue growth is going to be, that's a pretty good recipe for a big profit ipo. doordash?about no profits in a year in which,

you know, business for takeout maybe one of the best years ever, given the boom in take out . a really cutthroat industry. a lot of questions about these so-called gig economy stocks. there is anxiety about the restaurants, many of whom feel frustration, they are given into much of a cut. despite all these concerns, investors paying quite a bit of a, quite a bit more. should there be any anxiety about their ultimate path to profitability, or is it a clear runway for them as well? leigh: at the risk of doubling down on a bad bet -- or not bad viewpoint, id don't love this company here in the market right now for that exact reason. one, you are going to deal with incredibly difficult comps in 2021, given -- we will have somewhat of a recession, you

know, in delivery back towards experiential dining in person at some point in 2021 here. so that's obviously going to make growth a little bit harder. more to the point, and i have been wrong about this, and that's why doordash is interesting. they have made believers out of some people in regards to the actual fundamental model. i did not like the fundamental model for any of these companies, and for many of them i was right. for this one, it looks like i was wrong, which is why i think doordash has surprised a lot of people with the market cap that has been given here. personally, out of all of the high-growth names here, the high valuations that i would want to be invested in, doordash is not one of them. it's interesting, because these are b2b's, and they are being held for an awful lot by retail investment. youd this be perpetuated if get more b2b's?

that has the star power behind it, but i am interested in how much retail can continue to sustain the levels of an ipo, and how much of the buy side that use to can factor in retail interest? leigh: they are definitely looking at a lot of different measures. there's been a lot of talk about and just call ratio how the adoption of using calls in the market and playing options -- i see a lot of those charts going around online. ie interesting thing for me, don't think it's necessarily a measure of sentiment. i think it's a measure of user adoption, another way to invest. which doesn't necessarily say that it's a huge upside, speculative bubble here, you know? should a lot of these people be using call options? do they understand what they are doing? probably not. but there are a lot of products

that have been adopted where users do not understand what they are doing, and they continue to be adopted at larger rates. i don't mean that is something that is going to turn around. there is a secular growth trend in using options, certainly some of the new brokerages have made it easier to do so, and the institutions are definitely taking note of that and how that impacts some of these better-known names. joe: great stuff. we appreciate you joining us, as always. drogen, thank you. up next, legal trouble at facebook. the antitrust case across the company. what could happen next with instagram. this is bloomberg. ♪

amazing -- disney yesterday updating us and apparently, they've got additional 12 million subscribers in just one month. course, november, they had 74 million subscribers, they now say disney plus has 86.8 oflion subscribers as december 2. quite mind blowing. pivot top -- let's all things streaming. we have been talking about the beginning of tech companies' p are shiftingut we to facebook. you make so much money and get so good that they try to tear you down, or that is one interpretation of what is going on with facebook. yesterday, the ftc in 46 states,

plus two territories, going after facebook, accusing them of illegal monopolization, wanting to force them to break up instagram and whatsapp. this will be a story that plays out for quite some time now. joining us with more, the open market institute of policy. thank you so much for joining us. ,rom a legal basis in your view how would you describe the essence in the case against facebook? >> well, the essence is that facebook did not acquire and grow and maintain its monopoly power by competing based on outperform competitors. instead, it pursued a bio or or bury strategy, where for companies it could not

buy, they would bury them with anticompetitive conduct. antitrust laws have been weakly enforced in the tech sector, the clayton act does prohibit mergers that might lessen competition or create a ag'soly, and the state sued facebook for both of those claims, and the ftc sued facebook for the sherman act violation. joe: the general assumption is yes, this is how a lot of companies act, particularly in the tech space and with social media there is almost an expectation for companies to act that way by investors. is there not some sort of enforcement mechanism in the government to clamp down on this ? what's stopping them? it's not clear that there is anything there that they can stop.

sally: there is definitely a way of stopping these illegal mergers. ptc did look at the whasap and instagram mergers, but the clayton act does not have a time limit. often when an enforcer is looking at a merger, they are making guesses about the future. they might not have the evidence about that time, but they have the evidence now. of facebook's defenses that they put out there was the idea that --. the clayton act, if there wasn't anything there to be applied at the time, why would there be something there to apply in the future? sally: i think these murders were illegal at the time, and the ftc did not see the evidence , did not have enough evidence at that time from its view to block the deal. the evidence is now abundantly clear, that they were illegal. they did tend to create a

monopoly and substantially lessen competition. the other important thing to remember is that the sherman act prohibits illegal monopolization. what the states and the ftc are arguing, there was a pattern of these paid acquisitions combined so an illegalata, monopolization over a course of several years. it is not just looking at independent mergers, but patterns of monopolization. facebook's reaction has been pretty muted. many knew this was coming, of course, but there is a feeling that they won't be broken up. that is too difficult to exert. when you talk to margaret vesti on europe, she is not saying break them up, but exerting fines. what do you think are the more likely business changes that

will be forced to happen? breakup isink likely, thanks to european enforcement efforts that have largely failed. kudos to her for bringing this case against google, but none of her remedies have worked. there were behavioral remedies, and unfortunately, these tech companies are too hard to modify in a berlin -- behavioral way. structural reform is going to be what we ultimately need to see in these cases. joe: what do you mean by structural reform? conglomeratione of these different businesses, or something about how big tech giants are forced to do business, whether instagram is part of it or not? of the tech giants have a problem with controlling

the platform and competing on the platform. the argument for structural separation is separating out commerce from the platform itself. facebook, it is hard to understand how it does that, but it does do a preferential practice of giving its --, but there is an the winners and losers of content. part of it is about removing the incentives and ability to favor different types of benefits or your own self over others. with facebook, what we really need is competitive restraint on facebook. you know, if you look at the cambridge analytica scandal that angered so many people, they removed facebook and chose to use instagram, not realizing

facebook had bought instagram. it was the number one substitute. we can have better innovations of how to do social networking in a way that is less harmful. hubbard, welly thank you so much for joining us. she speaks of innovation. one company that is doing just that is in the world of streaming, disney. we get an update from disney on disney plus. they say they have 86 point 8 million subscribers, guys. they are going long, long star wars, ten star wars shows, 10 elrble -- marv shows. joe: sometimes i think these big media companies take some big franchisor intellectual property and try to milk them for all they are worth. romaine: do you think tends star

wars, 10 marvels is enough? bloomberg technology is up next. have a great evening. this is bloomberg. ♪

>> this is "bloomberg technology ? --"bloomberg technology." wonder $44use at did a share, more than doubling its ipo price and pushing the company into the $100 billion market cap club. my chat with brian chesky and his reaction to the price