>> from the heart of where innovation, money and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. emily: i'm emily chang in san francisco and this is bloomberg technology.

coming up, robinhood files to go public and lots of revelations. massive losses in the first quarter and crypto trading. we will cover it from all angles. plus, we dive into virtual worlds where ar, vr social networking converge. what are the opportunities? turns out there are a lot of them. jeff bezos welcomes an 82-year-old pioneer to the flight crew. i had up the new shepherd launch, now just weeks away. we will have all the details. she was supposed to go to space 60 years ago but never did. we will introduce you to her. all those stories in a moment but first, u.s. stocks advancing on a fresh batch of economic data. kriti gupta has the latest. kriti: the story today was low-volume. a lot of people during up for the july 4 long weekend. that results in the slope drifting higher. the s&p 500 up less than half percent on the day. you saw tech underperform. in relative to recent gains, half a percent is not that much in perspective.

the nasdaq 100 flat on the day. big tech stocks flat on the day. yields, which tends to move tech a good chunk, only down one basis point. let's look at something i think is pretty interesting. those chipmaker stocks. that is a crucial piece of the tech trade. we do actually see a massive move. i want to zero in to the year-to-date move because it looks like a sideways trade. they are inching higher. some of that has to do with very specific players. let's look at some of the movers today. that is where you did see a lot of the action. a lot of it was in the red with nvidia being the major player. that was the one upside gainer. micron was the big heavy header, heavy volume for that stock. falling with concern that demand might be peaking even with positive third-quarter fiscal results.

you had mks instruments agreeing to a deal to buy a special chemical group for $1.4 billion. still very much trickling in right now. i do have to point out applied materials which have been moving quite a bit lately down and taking down the index altogether. emily: thanks for breaking down those moves. turning now to robinhood, filing for its ipo to list on the nasdaq. we will break down what we learned. a lot of revelations here. we were waiting for this for weeks. what were the most surprising takeaways. sonali: just how much money it has been making from crypto. that was one revelation with a lot of that money, almost a third. a lot of money being made from doge coin in the recent quarter. they swung to a profit last year in the first quarter of this

year. in the first quarter of this year, they posted losses. they had a slew of losses and regulatory failures they have to contend with. class action lawsuits over the 2020 outages. payment for order flow practices, which has another six class actions. trading restrictions. another 50 punitive class action lawsuits. prosecutors take a look at new inquiries. emily: talk to us about the risk factors because they talk about whether -- if, for example, the sec decided to crack down on payment through order flow, that would be a risk. what did they say? sonali: that is a huge risk. we know they have created half

of their revenue from payment through order flow. they have begun to diversify. the question is how quickly they can start to diversify away from that being such a core piece of their revenue. other risk factors that were really interesting given that 20 to 35% of their ipo can be going to retail investors. they also guided there could be a lot of volatility in their stocks. they also cited top headlines from the media as another risk factor. we knew that robinhood would be a risky stock for investors. another thing to be thinking about also is, does their growth starts apply to? while we saw the -- start to plateau? you saw the greatest number of that happening in february in the middle of the quarter. we don't have numbers. after the first quarter.

should that start to moderate, there are questions about growth. at an estimated $40 billion for this listing, that is already more than 40 times last year's revenue. it will be going public pretty richly. emily: as you mention, they were profitable last year but they had a difficult quarter. you wonder if that is a one-time thing or if that is something that is going to continue. sonali basak, thank you for breaking that down. the enforcement division and ceo of a law firm, good to have you back on the show. we were waiting for this for weeks. it was not happening. our source told us the sec was asking questions. what can you tell us about what you imagined was going on behind the scenes as this company tried to get this document out the

door? >> there are a host of disclosures when a company goes public. there is going to be a huge magnitude of disclosures that take place. so no doubt in the filing that robinhood made for its bid to go public, there is a host of material critical information that has to be disclosed both good and bad. including its operations, its profitability, regulatory actions or investigations including class actions and the potential impact upon the price of the stock. it was a huge undertaking, but it is very much a sign of things and an indication of things to come once robinhood becomes a publicly traded company. emily: a lot has happened since you and i last talked, which was at the height of the gamestop craze. we have seen the ceo testified before congress.

doubling down on customer support. doubling down on the investment of the stability of the platform. from what you have seen, is robinhood a legitimate platform for trading or do you have concerns? >> from all indications, it is a legitimate, viable platform that appears in my opinion to have undergone growing pains, which is not atypical of new emerging companies in the financial industry or in any business space. with it comes growing pains and with it comes less than perfect policies and procedures. my strong sense is robinhood like a lot of other companies that grew extremely quickly, there is an element of catch up both on the regulatory side and

the business operations side as well as the disclosure side. that was evidenced in the announcement yesterday where robinhood pay the largest in fines for a variety of infractions. it is a very good indication that it is real. there is clearly a following, but they need to pay attention and have vigilance for compliance particularly if they are going to be a publicly traded filing company. emily: you used to work at the sec. a top robinhood executive was a former sec commissioner. robinhood does have this regulatory expertise on the inside. from your perspective, has that helped? do you see that vigilance they need?

>> i know dan. he is a great guy. he is a very good lawyer. i think it is a benefit to robinhood to have somebody with that experience and track record, an institutional knowledge of the sec involved. i think with time, they will bring more resources on. they will learn from past indiscretions. they will improve business operations and achieve i assume a higher level of compliance. going public, that will all be laid bare in a much more transparent basis. robinhood like any other publicly traded filing company has to file financial statements, audit financials on an annual basis, needs to disclose events like wrigley

torrey actions if it is deemed to be material to the business operations of the company. as you indicated, need to disclose executive compensation and share structure, etc. emily: we are going to be covering every step of the way on their road to ipo. former senior counsel at the sec's enforcement division. always appreciate your insights. coming up, we are going to take a deep dive into the world of augmented and virtual reality with a managing partner who just launched an etf that will allow you to invest in the technology driving this new meta-world. this is bloomberg. ♪

emily: a 26-year-old software engineer at microsoft was working on the company's e-commerce platform when he came across a major bug that enabled him to steal more than $10 million. he would later be found living off the proceeds at a seven-figure lakefront home but he got caught. for more now on what is most likely the biggest xbox sheet in -- cheat in history, the quicktake story of the day. max what exactly happened here? , >> what happen here is as prosecutors called it, a very old-school crime with a high-tech mo. this xbox store engineer -- this is someone working on

microsoft's online store figured out he could basically get an unlimited number of gift cards printed up. then he figured out a clever way to turn those cards into cash. like many companies, microsoft operates its own virtual currency. it creates these codes, which can be used to buy either games, content, virtual goods but also physical goods. laptops, speakers. he basically figured out there was a loophole in the way microsoft was handling its internal testing that allowed him to create an unlimited number of these. it is as if he found his own microsoft currency printing press. emily: there is an interesting quote in your story where a colleague says microsoft left the doors to its own completely -- its own vaults completely unlocked. why did it take microsoft so long to figure it out? at what point and how did they

eventually catch him? >> the crazy thing about this is that the fraud was so big before it was found out. the other thing that is interesting is they assume this was some kind of sophisticated outside hacker. it turned out, inside employee who was guessing his colleague'' passwords. a lot of them had 1234. you don't bet a big company like microsoft that that kind of thing wouldn't be happening. they did not realize this was possible. he made some kind of classic mistakes, he had some stuff shipped to his house. he used a computer he had used to do the illegal stuff to log into his work computer. what is interesting is the role that crypto played. what he was doing was buying these codes, then going on to a website that was a marketplace for digital goods. you can sell and buy gift card

codes. for a while, they were not doing any of the anti-money laundering things. it does not sound like money but it kind of is money. that misunderstanding was at the heart of this fraud. then he was turning it into bitcoin and laundering the bitcoin through a mixing service where it takes some crypto and exchanges for other crypto. it more or less cleans the digital currency. that was not how they found him. they found him because of mistakes he made in the real world. emily: quite an elaborate scheme. i am not going to give it all away but this guy was sentenced to nine years in prison. it is a great read. check it out. thanks so much. i want to take us into the meta-verse. the so-called accelerating convergence of online games, social networking, user

generated content and augmented and virtual reality. you can invest in this new burgeoning world through the new meta-verse etf. joining us for more is the creator of that etf. great to have you here on this show. i feel like we have to start with the question, what is the meta-verse? do tell us. >> i think you did a great job of teeing that up. the best way to think about it is a quasi- successor to the mobile internet in much the same way the mobile internet builds off of the internet of the 2000's. the internet is not necessarily going into a smaller computer but into virtual simulations enabling the purchase of things in the real world through those environments but also purchasing things that solely exist in said virtual environments. we think about the augmentation of the world around us, not just about ar and vr inside the store but the connectivity of the real

world through internet of things into virtual simulacra at the same time. emily: you worked in the entertainment industry for many years. you worked at amazon studios. i'm curious, how do you see the meta-verse replacing traditional forms of entertainment? how does this actually change our lives? >> that is a great question. it is like most new formats. something that is at first additive to existing behaviors and then slowly absorbs more of that. in much the same way we started listening to broadcast.com in the 1990's. generations primarily consume media through their phones. we have seen early examples when you look at the travis scott concert in fortnite. we are seeing people purchasing music in these virtual worlds.

the overall trend is you can think of many of the habits we have today transitioning to said worlds. they privately backed start up, kkr is one of the largest investors, you can think of it as a version of peloton that exists solely in virtual environments. emily: bloomberg intelligence believes the market opportunity could be 800 billion dollars by 2024 to you can invest in it through 2024. you can invest in it through your etf. who will be the leading players? >> we can identify a number of companies already better public. those include unity technologies, which is one of the largest cross-platform companies when it comes to game engines and real-time rendering.

think of the technology that allows virtual environments across any device, an end point that can be brought to life. we have a number of other companies. companies like nvidia, broadcom, the various power companies. we have to think about this like we do the internet. some of the end consumer platforms where the estimate of 800 billion is organized but we have to think all the way down to the companies who produce the hardware we use to access the meta-verse, the computer chips. the companies that need to deliver this at ever-increasing bandwidth and reliability. all the way down to netflix and tinder who have to find new ways to exist in this averment. emily: curious how you see the worlds of d5 and the meta-verse potentially converging. this is another 10 knology folks -- technology that some folks are really bullish on and i imagine there is some

intersection. >> for a very large contingent of the population, blockchain is synonymous with the meta-verse. i cannot believe it is not a strict requirement. all the things that blockchain does can be done through other means. the question is is it a superior way of doing said things or is it the likely way to which we do that? the best technology standards do not necessarily win. we can take a look at vhs versus betamax. one of the reasons why epic games has sued apple is on the premise that this stage of progressive taxation through distribution actually strangles the for-profit developers. the crypto community believes this is a way to build outside of the platforms, outside of the gatekeepers to own collectively the technology through which

they were built and control the gatekeepers and take most of the cut. that is a strong argument. it will take time to see whether or not it will pan out. emily: thank you for giving us such a deep dive into the meta-verse. we will be watching and following your new etf. matthew ball thanks so much for , joining us. coming up, jeff bezos prepares to step down as ceo of amazon. the tech giant has revived its core values. we will tell you what new ones are on the list. this is bloomberg. ♪

emily: the story we are watching days before amazon founder jeff bezos steps down. the e-commerce giant has revived its corporate values. amazon employees have always been expected to abide by the 14 corporate values. now they have two new ones. the new leadership principles strive to be earth's best employer and success and scale bring broad responsibility. require employees to take into account the well-being of their coworkers and society and the planet beyond the company's walls when they are making decisions. twitter tapping into the world of nft's peer the social network will offer 140 new non-fungible tokens. the first move into the world of digital assets that have grown in popularity since the first of the year. twitter says it is experimenting

with nft's on its platform as they have become a hot topic of conversation. coming up, we are going to speak with a guest from benchmark capital. this is bloomberg. ♪ (announcer) back pain hurts,

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emily: some news out of california. the state has set a date for the gubernatorial recall election. september 14. that is the date the election will happen that could oust democratic governor gavin newsom. we will cover that as it happens. there is money flowing into middle east startups.

>> this was a sizable round led by softbank. bringing up some of the details, 400 and $50 million in the round. it gave this dubai based startup a deal -- valuation of more than $1 billion. this is one of the big themes of the global pandemic. specific startup kitchens that serve many different restaurants, specifically mobile orders. different restaurants share a space and you can only use them for food delivery. it is something you think would die after the pandemic. they are going to use this money to expand into saudi arabia. later, into asia. a fantastic concept. you wonder about the longevity. some of these concepts born out of the covid pandemic, will they last?

softbank is betting that this one will last. kitopi finds itself a $1 billion company. emily: thank you for bringing us that story. after a pandemic level, the ipa market seems to be red-hot with almost 350 350 billion dollars raised in initial public offerings. with us is a partner at benchmark capital. confluent just went public last week. thank you for joining us. we had jay on the show. interestingly, you invested in his company like a month after joining benchmark. i know there is this window where you are not supposed to make an investment for the first six months, but you had conviction. what gave you that conviction? >> we are trying to find a handful of special companies where you have a combination of

an incredible entrepreneur, and emerging-market, and that came together. it wasn't even cold confluence. we were fortunate to get introduced really early and have that feeling. it has been quite a journey from three people to 1500 plus and less than seven years. emily: what do you think about the technology? obviously in part, their growth has been attracted to the pandemic, being the sort of central nervous system for the adoption of technology people are using. is that going to continue post-pandemic? when life returns to so-called normal. >> i don't think the pandemic -- it has been very important in terms of making companies realize digital is the competitive frontier. that is where they are going to win or lose customers. that is where they are going to win or decline in revenue.

for a lot of companies, the general moved to the cloud and digitalization has happened over a decade plus. it will continue for the years two,. it doesn't have any signs of slowing. emily: your partner has been on the show many times, pushing the value of direct listings over traditional ipos. how much debate was there around your table? >> it is a great example of a company that is in the portfolio that did not need to raise primary capital. a direct listing is definitely a better approach in that case. we will see more and more of those. in the case of confluent, we

wanted to raise capital. the direct listing was not an option. as soon we can get through the regulatory hurdles, such that companies can direct list and raise capital, that will unleash a torrent. emily: the last six months have been active in ipos. do you see systemic change in the ipo market? positive change? the complaints have been this is an antiquated way to get to the public markets that do not necessarily benefit the people they are supposed to benefit. >> i think there has been change in the ipo market. competition tends to unlock possibilities and make everyone put their best foot forward.

the competition from direct listings and even spacs has made some improvements. confluent was an example of a company that did not have a green sheet. a lot of these companies have earlier lockup releases. you do not have this artificial six month cliff and then all the insiders can sell. you can stage it out over time. i think there have been some meaningful steps forward. i think there is still a lot of progress to be made. a direct listing is the path and place that will end up, hopefully. emily: robinhood filed to go public. bill has been outspoken about robinhood. when you look at a company like that, what do you think about the legitimacy of their business model? >> i saw the news the s-1 came

out or flipped, but i have not had a chance to read it. obviously, a lot of companies, not just robinhood, use that as their business model. that seems to be a regulatory question more than anything else. certainly outside my area of expertise. emily: you are one of the newer generation of benchmarks partners. we are seeing the more traditional venture capital industry evolve. how do you expect the firm to evolve, to respond to that? where are you going to be placing your bets? >> it is one of the really cool things about the benchmark partnership. we tend to be about five active partners at any given time. that has been an evolution.

it is always something where we have some newer partners and some partners retiring. the thing we have stayed true to is we love finding a handful of really special companies, opportunities every year. each one of us makes 1-2 investments a year. we think of them as commitments. they are decade long commitments. we are making 1-2 of those a year. they are well thought out. we are able to work with those companies for a decade plus, like in the case of confluent and see them all the way through to massive success and beyond. that part of the model is going to stay true. valuations move up. the dynamics, the industry and where the whitespace is changes over time.

the core model, we stay true to that and we love it. emily: you have confluent under your belt. we will keep watching how things evolve. thank you so much for joining us. all right, coming up, california's push to go green. regulators have approved a proposal for 8.5 gigawatts of green power. we will talk about the move to a greener grid next. this is bloomberg. ♪

emily: chinese automaker geely is exploring fundraising options after backing away from listing in shanghai's nasdaq style exchange. >> directors decided we will

seek the opportunity to be listed in stockholm nasdaq stock exchange. but we did not have any timeline requirement. we believe the market -- will come with very hot -- we are committed to the ipo. >> would you be looking for a valuation above daimler? >> we cannot say. a target to beat daimler. but we are quite committed that huawei will be given good valuations by the market.

we will see the communications between the volvo team with the regulators and also potential investors. we don't have any pressure on the timeline. we believe we can move quite fast. >> could volvo make apple's car? >> i think it is up to them. new-car development ideas. >> including apple's car. >> i mean the new model, smart cars with all the best features of connectivity, automated drive. shared mobility.

we want to provide the best user experience. >> have you or any of the team at geely had conversations with apple? >> no. >> but you would welcome that conversation? >> yes. for your information, we are open to partnerships with, you know, strategic industrial and internet leaders who form the strategic partnerships that you have seen. we have a partnership with baidu. we are very open to introduce this kind of partnership and business models with any potential strategic partner. >> tesla has faced a few headwinds.

they have had to do a software fix for vehicles. there have been concerns about security features. is china turning in tesla? >> the chinese government and also chinese consumers -- in the end, the product should satisfy the fundamental requirements for customers. including not only connectivity, modern designs, but also safety and quality. so i don't think anybody will try to make any obstacles deliberately to tesla. it is just the market. emily: rare interview with the ceo of geely and tom mackenzie. california has been one of the most aggressive states to make that move to go green.

first, trying to get as many electric cars on the road as possible. now they are trying to do away with nuclear and gas plants. regulators approving a proposal for 11.5 gigawatts of green power. joining us is our reporter. what is california doing and what does it mean? >> the state is trying to replace its largest source of carbon free energy, from the diablo canyon nuclear plant. there is an agreement for it to shut down by 2025. there were concerns about the plant being located your some seismic areas. safety concerns and cost concerns the plant was going to have to meet certain environmental requirements that were going to be really expensive in terms of making upgrades. the state has to replace that power. since it does have a goal like you said to have a green grid by

2045, what they are looking for is carbon free energy to replace that nuclear power plant. that's going to have to come from renewables like solar and wind as well as energy efficiency. they are going to try to put a lot of batteries on the grid to store that renewable energy and push it onto the grid when the sun is not shining and the wind is not blowing. emily: the recent heat waves have taxed the grid across the country. is this a preview of more of what is to come with climate change? >> yes. that is a great point. what people are saying now is we have a grid built in the 20th century but it is not prepared for 21st century weather.

california had a brush with blackouts during the heat wave when they were asking consumers to dial back air-conditioners. we saw rolling blackouts in washington during a historic heatwave. yesterday, a utility in new york, con ed, asked all of new york to conserve power to maintain stability in that grid so they did not have blackouts. emily: what is next? what are you watching for? >> the big question is how does california and the rest of the country make this transition to green energy but maintain reliable power flows. what you are seeing is a lot of fossil fuel plants retire. those are being replaced by intermittent sources of power that cannot be called on all the time. the challenge grid operators in

california and across the country face, they have to find a way to get this renewable energy in the grid and also backstop it with other sources that are clean. emily: mark, thank you for bringing us that story. we will continue to follow how that evolves. coming up, blue origin has revealed the third person who will be heading into space in its july 20 mission with jeff bezos. 82-year-old wally funk joining the spaceship. more, next. ♪ and a sweet debut for krispy kreme as the company went public. shares rose above the ipo price. it is one of 18 companies to come to market this week. this is bloomberg. ♪

>> you are in zero gravity for four minutes. you come back down. we landed gently on the desert surface. we open the hatch. you step outside. what is the first thing you say? >> i will say honey, that is the best thing that ever happened to me. [laughter] emily: welcome back to bloomberg technology. that was jeff bezos and wally funk. blue origin unveiling the third member of the mission. they will head to the stars july 20. six decades after completing astronaut training, 82-year-old wally funk will be joining jeff bezos and his brother aboard the new shepherd. joining us with the details, ed ludlow. such a heartwarming video. what do we know about wally funk? she was training as an astronaut 60 years ago and she never got to go to space.

but now she will. ed: at 82 years old, she will be the oldest person to go to space. she's had such an incredible live. she was part of the mercury 13. an initiative by nasa to prove women could go into space alongside male astronaut colleagues. but the program was shut down. she never did go into space despite completing the official training. she flew more than 19,000 hours as a pilot. and taught 3000 people how to fly. so an incredible story, now being able to do it at 82, even if only for a few minutes. emily: talk to us about what these astronauts are doing. has she been eating her wheaties? what is jeff bezos eating for breakfast? what do they need to do to prepare to do this?

ed: we don't really know. we know they are going to turn up three days ahead of the launch. blue origin told me all of the astronauts, pilots, are compliant with the requirement blue origin has set. has wally funk passed the medical in order to go up into space? have the other astronauts? that is what blue origin told us. they are fit enough to undergo this mission. emily: we know there are six seats in the rocket. they still have not prevailed -- revealed the auction winner. do we have any information about who's going to fill the other seats? ed: we still think there are only four going up. before wally funk was announced, we thought it would be a trained professional astronaut. someone either currently an astronaut recently retired. that has not been the case. jeff bezos, his brother mark

bezos, wally funk. we are still waiting for the auction winner. they say they will unveil it before the weeks ahead which is july 20. emily: do we know for sure the last two seats will not be filled. ed: what i am hearing from blue origin is they will keep them empty. there is no sort of an to press. you simply recline back, stare out the window to take it all in under extreme force and aerodynamic stress. and 60 miles above earth, four minutes of weightlessness before you slowly trickle back down to earth. sounds easy. i am stressed thinking about it. i would be terrified to do that. terrifying. emily: me too.

i would want an experienced tour guide but we will see. ed ludlow, thank you so much. i am emily chang in san francisco. thank you for watching. this is bloomberg. ♪

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