>> from the heart of where innovation, money, and power collide in silicon valley and beyond. this is "bloomberg technology" with emily chang. [no audio] emily: tries to sue the exchange if coinbase earn interest on their digital assets.

brian armstrong says they are using imitation -- intimidation tactics. we break down the evolving battle royale. elizabeth holmes officially on trial. she could face up to 20 years in prison is convicted on fraud and conspiracy charges. we will take you to the courthouse live on day one. a moment of truth for gamestop. we break down the quarterly results and see if brian cohen is delivering on his turnaround strategy. that in a moment. let's look at the market. >> it was another big risk off day for the major indices. the s&p 500 down for the third straight day. a stretch of losses we have not seen since mid-july. a lot of investors were warning it was going to be a seasonally challenging period. that september would be a rocky month for markets and equities. that is what you see playing out this week. even big tech down. as well as the russell 2000 index of smaller companies.

down more than 1%. areas of performance are cryptocurrencies. bitcoin was down as much as 17% at one point. it really continued. the underperformance down about 2%, hovering around $46,000. the big crypto centric area that has been in focus today is coinbase. shares closed lower by about 3% after the sec approached coinbase -- we heard from the ceo saying that s.e.c. was looking into the lending products they would hope to offer in the next couple of weeks. so we have shares lower for the day today. emily: thank you so much for that update. for more reaction on the sec versus coinbase and what it means for the crypto industry, i want to bring in a leader in another crypto burgeoning platform, ftx.

sam, setting the stage, the sec threatening to sue coinbase over these lending practices. armstrong out with a lengthy tweet storm calling the sec's approach gutsy, saying they -- calling the sec sketchy. saying they using intimidation tactics. as the leader of another crypto platform, what is your take? >> we don't see what happens behind the scenes in that conversation. we have only seen one side of it. i can say that everyone in the industry would love more regulatory clarity on some points. i think that is a note that you heard expressed, and you will hear expressed from a lot of players. on the other hand, there is frustration from regulators on what they see as an industry that has players. i don't think you would include coinbase among the ranks. i can see the frustration, given his series of tweets. but i say that without having been part of any of those conversations. stories can always be different

from the other side. emily: i want to walk through some of armstrong's tweets. he said some sketchy behavior coming out of the sec, but in this case, they are refusing to offer any opinion in writing to the industry about what should be allowed in why, and instead are engaging in intimidation tactics. our door remains open, hopefully the sec steps up to create the clarity this industry deserves without harming anyone in the process." earning interest on savings is textbook, but are crypto platforms trying to re-create banking without the regulation of traditional banking? >> it is a good question. it depends on the structure of the product. what you have seen in crypto has been different things. especially when you look at things like defi yields, and where it fits into the regulatory regime. you can look at a lot of other

products, which have some relationship to existing regulatory structures but are not perfect analogues for them. i think that can make it tricky for regulators to decide the right interpretation of some of these. i think it often gets down to the details of how things are structured. and i think there is a lot of different phrasings. it can be a bomb like product, -- as a bond like product. as yields, phrase it as a loan, something totally different. i don't know what is going on under the hood or what the conversations included. but i think the sec's approach -- it matches some of what we have seen, which is rather than saying "here is -- we are going to lay out all of our thoughts

on this topic --" an essay of what you do see from regulators, mas writing explicit guidelines and thoughts about what they know, what they don't know, what they are thinking about. i think the sec, it has been these are the laws, we are just interpreting the laws. here is our interpretation of them. here is how it pans out. as opposed to getting into the details of what their thought process was that got them there. emily: you have celebrities stepping into the game, and you have twitter asking for help, including steph curry, the community asking him to get help. steph curry a brand ambassador with a share. tom brady responded to curry, whatever you do, don't laser i.

what does a celebrity promotion get ftx? >> if you look at our history, comparing to coinbase, we have about four times the daily trading volume coinbase has. they have about 30 times the user base we do. it is a pretty stark difference. it's a reflection of the differences in the approach in price we have. coinbase has been a new leader in western retail products for crypto. it has been the leader by a very wide margin. ftx has had a lot more professional users, more institutional users, or at least more institutional volume. and a lot less of a print in terms of the broad base of consumers. we are trying to branch out and really increase our footprint. and sort of reach some of the people who might be learning

about crypto for the first time. a lot of what we are thinking is what we can do to serve highly engaging, powerful, and reach tens of millions without diluting our brand. i don't think there are a lot of people in the world to get that. but tom and steph are two of them. we have been excited working with them. they are great guys. and they are engaged, that makes us a lot more jazzed. emily: reese witherspoon tweeting that she bought ethereum for the first time. kim kardashian getting slammed for promoting ethereum max. clearly you've got everybody trying to understand what is going on. i wonder if there are downsides to celebrities jumping on the bandwagon when there still isn't a lot of clarity? >> i think one thing we have seen, which we appreciated, has been that -- especially when we

talk to people like steph curry and tom brady -- i have done a lot of diligence. we did not just call them up and offer them money. that is not what is happening. but i do think 2017, you saw things that looked distressingly like that and they did not end well. but what we have seen with the partners we value the most, they have done a lot of diligence on us, we have had many calls, they talked to a lot of our partners, a lot of their partners. they do a lot of business into how we operate. i think you will hear again and again from them the most important thing to them, that they feel good about the company's they are working with -- companies they are working with. it is important to us that they feel that way and they can represent that. what is important is when you do start to see celebrities getting in, that they are for it and really do their homework.

emily: sam bankman-fried, thank you so much for joining us. we will see how it continues to play out. coming up, the trial of elizabeth holmes begins. an update from the courthouse as the prosecution and defense state their case. a quick look at game stop shares falling. they are reporting a second-quarter loss wider than wall street projections. we will have more. this is bloomberg. ♪

emily: the criminal trial of

theranos founder elizabeth holmes has begun. she faces federal charges of defrauding patients and investors with revolutionary blood testing technologies. at one point, she -- more than $9 billion before suspicion was aroused. ed ludlow is outside of the courthouse. walk us through day one. the prosecution laying out their case. ed: the prosecution was more brief than the defense. they said it was about lying and cheating. they had documentary evidence in the form of text messages, emails, and witnesses that would prove elizabeth holmes was aware with the issues of the technology theranos had, and the negative impacts the testing brought to various customers. they gave an example of a false case of pregnancy from somebody that had done one of the theranos tests. another gave a false hiv diagnosis. there were two separate schemes.

one to defraud investors out of money because they were out of funds and were laid in bringing the product, and another one for the doctors and customers using the service themselves. emily: what about the defense? have they laid out an argument for psychological abuse from her business partner that we thought was coming? ed: this is much more interesting. they leaned heavily on the idea that elizabeth holmes generally believes in theranos' technology, the company's mission statement to lower the price of blood testing, laboratory testing. and ultimately, just because the company fail, it didn't amount to a crime. they made concessions she was not technically qualified to run the lab. that she should have brought someone who was in sooner. on her partner, they did address the issue in kind. they said they would discuss

later in the trial his character. a side of his personality people may not know. they did not especially allege any psychological abuse toward elizabeth holmes. going into this trial, it had been reported they might do that. what the defense might argue was she was not capable of intent to defraud her because she was under the control of someone else. and in this case, her partner denies the allegations. emily: ed ludlow, we are looking at folks making their exit. elizabeth holmes may be leaving at any moment. i want to bring in tim o'brien, who wrote a piece about what he expects to hear from elizabeth holmes. her defense has talked about reality being far more boring than the story you read in "bad blood," or the newspapers. what are you expecting to hear in this case as it plays out? tim: her defense has a steep hill to climb if that is the argument they will make.

what will be a battle in this courtroom is did she know what she was doing or didn't she? the prosecutors, i don't think, would have come this far if they didn't feel they had a preponderance of evidence demonstrating that. perhaps they won't, perhaps it will go another direction. but i will assume they've got evidentiary material that shows exactly what she was thinking at different points in time when theranos and holmes were making claims toward blood testing in while opposition -- that were wildly in opposition toward what it could actually do. it might take the form of email, testimony from advisors of the country, employees, outside investors. that is really where the rubber will meet the road. her defense attorneys will say she was a zealous and passionate advocate for a product she believed in. while she may have exaggerated

things, that she never knowingly misrepresented anything. that is really what both sides have to accomplish, in terms of convincing a jury that she committed a crime that is all about intent. emily: we are looking at live pictures of elizabeth holmes leaving the courthouse at this very moment. of course, we have been waiting for her defense to lay out this argument of her facing psychological abuse from her business partner, her ex-boyfriend. if that happens, she could take the stand herself, which would be a pretty significant moment. the stakes are very high. if elizabeth holmes takes the stand, what does she have to prove? tim: again, she will have to prove she did not act with intent to mislead patients, investors, and business partners, all of whom were severely damaged by what occurred at theranos. elizabeth holmes and her company blew through $6 million of other -- $600 million of other

people's money. people's's health was affected by it. partnerships and business prospects were affected by it. and investors lost money. i think when she takes the stand, her own credibility is going to be at stake. i think the argument she was so psychologically damaged and abused by him, that she did not know right from wrong, is a steep hill for them to climb. how she comports herself on the witness stand, her famous voice that has often entered different registers from time to time, will have an impact on the jury. there will be a risk for her sitting in front of the jury. i'm not convinced her defense attorneys will let her do that. if they do, it will be a pivotal moment. emily: my understanding is that was not elizabeth holmes. it was somebody who looked a lot like her exiting the courthouse. we are still waiting for elizabeth herself to make her exit. what is also interesting is the

journalist who blew the lid off of theranos, he was on our show yesterday, he wrote the original investigation in the wall street journal of theranos in 2015. he is also on the potential witness list. he believes if he is called, part of the defense's argument would be to turn the table on her accusers. to say it was a witchhunt. what do you make of that argument? tim: we have heard witchhunt a lot, in terms of different people defending themselves in the last couple of years. including the former president of the u.s. people can claim about -- claim what they want about the intention, but it will come down to cold, hard evidence in the courtroom. if you put in front of a jury explicit evidence showing elizabeth holmes actively and knowingly misled investors, partners, and ultimately patients, it will be a very daming outcome -- damning outcome. saying it is a witchhunt will -- won't obliviate any of

that. emily: tim o'brien. it will be a long trial. we will talk about it every step of the way. thank you for your insight. coming up, we speak to daniel dine about the latest results and the future of robots post-pandemic. this is bloomberg. ♪

emily: after going public, they reported strong earnings, second revenue earnings beating the highest estimate. joining us is daniel dines.

great to have you with us. since going public, the pandemic has dragged on. that as the pace of automation is accelerating. what are you seeing, and how it is it impacting where you are investing? daniel: thank you for having me again. we have hoped covid would be short-lived. but we have adapted to this new way of doing business. we continue helping our customers. especially in the health care sector and public sector. with the extended threat of covid, we are seeing good momentum for our business across all sectors. i think everything is picking up quite nicely and we are heading into a great h2 and very good next year. emily: one of your taglines is a robot for every person. some folks really fear the rise of the machine.

that sounds terrifying. what is your take on the fear out there? daniel: on the contrary, i believe the robot will be our best friend. i think all of us have a lot of routine, menial tasks we are doing as part of a job every day. the robot will just take these type of tasks. no one has to fear about it. actually, the robots will improve productivity, the well-being of a person, and overall, the robots are really going to improve the prospect of our society for the longer term. emily: talk to us about the tailwinds from the pandemic, and whether or not it will continue when the pandemic is over. do you see companies, do you see customers hitting the brakes on accelerating their technology? does it mean a potential slowdown ahead?

daniel: the pandemic for sure increased the awareness of digital transformation may be 10 times compared to before the pandemic. at the same time, customers may have different urgent priorities this very moment. in the longer term, a few quarters down the road, we are seeing a really big increase in the demand for digital transformation. emily: daniel dines of uipath, appreciate you taking the time to join us. thank you so much for stopping by. still ahead, retail traders rallying support on social media when their investments sink. will it continue to work? it is the most talked about meme stock of all, gamestop falling after hours on its latest earnings report. we will bring that up next, with someone who has been following the company. is the turnaround strategy

delivering? that is next. this is bloomberg. ♪

emily: welcome back to "bloomberg technology." i'm emily chang in san francisco. three words have popped up anytime an asset slums. amc shares and freefall, by the dip. -- "buy the dip." crypto taking a loss, buy the dip. spiraling downward? you get the point. gamestop, one of the original meme stocks, down after the bell. but do people still want to buy the dip? let's go through the meme moves of the day in gamestop. >> we are looking at the

original meme stock. shares are down in after-hours trading after the company reported a wider than expected loss for its second quarter. if you take a big step back, i want to give us perspective. shares for gamestop are up around 900% year to date. that is despite the volatility we have seen from the company and its share performance. and it is true, for a lot of other meme stocks. shares from amc are up. shares for express and other meme stocks up around 400%. compare it to what is happening with the broader stock market. the s&p 500 is up around 20% year-to-date. ask any analyst about that return, they say it has been a great year for the stock market. compare it to the bloomberg index of the 50 stocks robinhood had restricted at the start of the year. that index is up from 70% year-to-date.

handily outperforming the s&p 500. emily: thank you so much. i want to dig deeper on gamestop. shares falling in late trading after a second quarter loss. we are here to discuss with anthony, who has followed the company. sales beating estimates. but these losses we see, ryan cohen coming in with new management. do you see him delivering on the promises he's made? >> no, not at all. to be fair, shares were better than expected. so it was encouraging to see. but they continue to lose money hand over fist. they lost more money than was expected. he is a very smart guy, at least three more zeros in his net worth than i do, he sold chewy for a bunch of money, but i

don't see a shred of evidence he has what it takes to turn the business around. emily: gamestop shares down almost 8% after the close. let's look at the chart. $347 a share at the high. $18 at the start of the year. where do you think gamestop should be trading? >> to correct you, the intraday high, $483. i consider it wildly overvalued. -- gamestop was $10 a share. i said that, people looked at me like i was crazy. that market is a machine -- long-term valuations have to respect the fundamentals. it is not about -- the fundamentals of gamestop do not jeopardize anything close to

this $15 billion valuation. emily: here is my question, whether it is gamestop, amc, or bitcoin over the last 24 hours, whenever a stock slides, you have folks out there, whether it is redditors or retail investors, even the president of el salvador, saying buy the dip. do you think folks will keep buy ing the dip? >> it is kind of hard to say. one of the problems with meme stocks, you don't have institutional investors who are driving the stock price. people who have really done the work and understand these companies and have done the valuation were.

you have a bunch of individual investors who go from one to the next. one day it is gamestop, next it is amc, then bitcoin, then dodge coin. there is no basis around any of it. that is why it continues to come -- it doesn't make sense on the fundamentals. it would not surprise me at some point that a lot of these guys gave up and moved onto the next thing. whether it is gambling on sports or investments at this point. emily: anthony chukumba, thank you for joining us. please excuse some of those audio issues. always appreciate what he has to say. the nfl season kicks off thursday. the super bowl champ tampa bay buccaneers will host the cowboys in florida. it also kicks off a big weekend of sports betting. more than 45 million americans

plan to bet on the sport during the season. the industry has been enjoying a surge in growth since the onset of the pandemic. the president and interim ceo spoke to my colleagues earlier about the upcoming season. >> it is critically important. we are incredibly excited about this nfl season, in particular. fan dual is america's number one sports book. our first year of official partnership with the nfl. there are a couple of cornerstones to the program. we are elevating our game this year. we have partnered with one of the best agencies. we have a national ad campaign called every moment. it is about amplifying those great moments for the sports consumer, the generous pregame offers, showing our live betting product innovated into the broadcast. so it will be one thing we have not seen in the past. we will also have an opportunity

to integrate nfl highlights directly into the app to keep the nfl fan connected to those exciting betting moments. to your point on the media partnerships. this year, we have the opportunity to partner up with many media partners to develop great free to play games. so even if you are in one of the states sports betting has not been legalized, you have an opportunity to play, great games, easy to access, and any fan can win $1 million. so the partnerships with the nfl, the media, and many agencies are important to differentiating. >> a partnership with espn. how strong is that brand in american sports? >> espn is widely recognized in sports. we are always looking at we should be partnered with. we will take a look at it. >> we definitely see the size of the estimates of the potential for this market across the u.s. going higher and higher.

as it gets crowded, how worried are you about the competitive landscape? >> there is no doubt -- it is a very fast-growing market right now. it is an intense competitive landscape. but we have had the benefit of having great scale advantage others don't have. so we are focused on making sure we invest in the best innovative products. we have not just sports betting, but we are also in igaming, fantasy sports, horse racing. continuing to excel in those is important. emily: the president and interim ceo of fanduel speaking about the upcoming nfl season. she kept tightlipped about espn's plans to expand into sports betting. hopefully we find out more thursday. we will speak to the chair of espn and sports content at disney. we will talk about the deals they have struck over the last year as the nfl season kicks off.

you can catch that interview live at 1:30 p.m. wall street time, 10:30 a.m. on the west coast. elizabeth holmes has now officially left the courthouse in san jose. this on day one of her criminal trial. the trial will continue for several months. court will be in session about three days a week. we will cover it live every step of the way. elizabeth holmes leaving court. coming up, green investing. we speak with don lippard on the new venture and how they plan to tackle climate change. this is bloomberg. ♪

emily: investing in climate change is on the rise. with elemental excelerator spinning out a new venture capital fund to support entrepreneurs tackling the toughest climate challenges. joining us now is the founder and ceo of elemental excelerator , our guest in this week citylab segment, dawn lippert. what are you looking for in terms of the top areas that need innovation and investment when

it comes to climate, and really stopping this problem before it turns into a disaster? >> thank you for having me. pleasure to be here. so many areas within climate need investment. we are excited about areas that blend typical's of climate experience with new technology. material science plus artificial intelligence, or software meets science solutions. we have really exciting technologies, and we are seeing an amazing influx in talent from additional technology, like google and facebook, meeting up with people who know energy markets, water markets, mobility, and building fascinating companies. emily: climate investments often take a long time to play out. we have seen some investors get inpatient and move on to other things. how patient are you willing to be?

how long term is your time horizon? >> it is interesting you ask. i think the market has changed so dramatically in climate tech and early-stage climate change in particular. we have seen a lot of momentum and the speed of innovation picking up significantly. i think there are three key trends driving this. we see enormous market trends. thousands of corporations have made net zero pledges and are buying climate technology. that is a huge change in the climate sector. change from the policy space, local, state, national, international alignment around climate. and we see the influx of talent, where people see climate affecting them in their backyard, affecting them where they are. a lot of new talent coming into

this space. all of these factors are accelerating climate change market, it is going to scale, much more so than we have seen in the last decade or so that i have invested in climate technology. emily: some include john doerr, the chief product officer at facebook, emerson collective, the fund started by lorraine powell jobs. what conversations have you had with folks about their priorities? >> we are fortunate to have a dream team of investors in this fund, who have a lot of experience with investing and climate. and also, working at the community level to deploy technologies in ways that are meaningful and can be done at scale. our investors are particularly interested in how we find founders and entrepreneurs who may have been overlooked for doing some really interesting things and may not have had a chance or had access to the same

venture capital markets as others. to something we are really known as is finding folks from interesting communities who really don't get -- have been solving climate in a more equitable way. so investors are more excited about finding entrepreneurs in unexpected places and addressing climate in a way that is more equitable. we see climate change and social equity as completely interlinked and intra-demand --interdependent, part of the same challenge. emily: the u.s. and europe are looking close at esg portfolios. we expect some action from the sec on this. i recently interviewed al gore. he raised a concern about greenwashing. what is your take on greenwashing, when it comes to climate investing? how big of a challenge is it? >> i think al gore is right. greenwashing is a real challenge, especially from companies in the fuel sectors. the best antidote to greenwashing is action, and really good solutions better than the solutions we see out

there now using fossil fuels. solar is a great example. it is a better technology, cleaner, cheaper, it makes more sense than the fossil fuel alternative. electric buses, we have an investor in electric bus and truck companies. these are better than the alternative. greenwashing is definitely a challenge, to the extent we are creating better technologies that actually solve problems and are more enjoyable to drive and better for our communities, we can accelerate even so. emily: you are based in hawaii, honolulu. i'm from hawaii. does being in hawaii give you some sort of edge, or a more unique perspective than investor in the middle of silicon valley? >> yeah, we are here from your hometown, so aloha. being in hawaii gives us two different advantages. one, we actually see the impact of technologies in communities

in real time. elemental started in hawaii, it is now a global investigation. earthshot will be investing across the u.s. and the world. it is unique perspective to what it takes to deploy technology and scale them in the real world. there's also a sense in which hawaii and alaska, where we have another partnership, early markets are seeing the impact of climate change and we can roll out technology and learn things and get ahead of the curve before other geographies. they are wonderful geographies. but we find being in communities, being really close to customers, has an enormous advantage for technology deployment and acceleration. emily: aloha to you. we will keep an eye. on the elemental accelerator.

dawn lippert, thank you for joining us. we will talk about the future of apple's automotive additions as they lose a key executive. that is next. this is bloomberg. ♪

emily: let's take a look at tesla. shipments of its china made cars to the market rebounded, despite the slump in total car sales in the country. domestic china shipments for august doubled from the previous months to almost 1300 units. --13,000 units. bringing the total tesla shipments to more than 44,000. an increase of 34% from july. the demand for ev's expected to rise as battery prices fall. we explain.

>> window electric cars become -- when will electric cars become as cheap as their gas guzzling cousins? â™ >> on average, electric cars should be cheaper than gasoline powered cars in the next five years. that is because the cost of batteries has fallen dramatically over the last decade. in 2010, the department of energy set a goal that batteries needed to fall to $100 per kilowatt hour. down from around $1200. one kilowatt hour the amount of electricity needed to run an iron for half-hour, or a cattle -- or a kettle for an hour. the price reached about $130 in 2020. it is set to fall below the $100 mark within the next five years. while it is a huge sign of progress, these are all average prices that hide a lot of nuance. the average cost of a car varies from region to region.

in north america and europe, electric cars will reach price parity sooner than they will in asia. the type of car also matters. for fleet vehicles, taxis and delivery vans, we have already reached price parity. for small, low performance vehicles, electric versions may never be able to compete with gas guzzlers. in that sense, $100 is not a magic number. the goal is to set the speed of the technology needed to unleash the potential of electric cars. that is certainly highly achieved. every large automaker sees its future to be electric. even though china dominated the market for a few years, 2020 saw more sales of ev's in europe than china. battery prices will continue falling for years to come. the chance you choose an electric car next keeps rising. this is net zero. follow us on your favorite platforms for more.

emily: meantime, the future of apple's automotive ambitions is less clear with the departure of a key executive. he joined in 2018 to head up their car project, but is moving to ford as its chief technology officer. what does it mean for apple? we are joined by mark gurman. what have you learned about his departure? what does it mean? >> doug field was apple's car conscience. he was the chief engineer for elon musk at tesla. he basically spearheaded the development of the model three, the model y, 2 of the most successful ev's in the world. he ran the apple project, a team under him, but he was the head of the project. he had a cloud in the industry. -- he had clout in the industry.

he was the head of the show. he just walked out after three years. it tells you even he, in charge of the project, was not optimistic about after -- apple eventually shifting -- apple eventually shipping a car. imagine the money amount was -- imagine the amount of apple was paying him, the shares, the legacy he would have if he were to launch apple's car. he threw it away to be the number three or 4% out ford. -- three or four person at ford. it doesn't make sense to me unless he thought it was too good to be true. emily: how deep is apple's bench? how many other employees are dedicated to this? >> they have an executive team of about 12 to 15 people running the car project. you have other ex executives from tesla, one from drivetrain, autopilot self-driving software from tesla, one who ran the electric car division many years ago at bmw. a few other apple lifers on the team. others working on self-driving technology. at this point, doug field's departure's significance cannot be overstated. it was supposed to be one of the

grandest future ambitions coming out of cupertino, now you have him walking away for an automaker, moving halfway across the country to do it part-time. it is not a good look for apple or its ambitions, and clearly will not give much credibility to the project, and will not stoke as much excitement as he may have done for the people working on it. we will see what happens to the project, if apple replaces doug field, and what the future of the project holds. the person in charge walking away after three years. you don't have to hear it from me, clearly that is not good news for an apple card. -- an apple car. emily: mark gurman. we will follow that story. thank you for the update. that does it for this edition of "bloomberg technology." join us tomorrow for my interview with jimmy pitaro. we will also be joined by the ceo of girls who code. and dj, music producer, and founder of royal, justin blau.

i'm emily chang, this is bloomberg. ♪

>> the following is a paid program. the views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. >> the followingpaon bht tby rare collectibles tv. >> in a letter dated back to december 27, 1904 to the secretary of the treasury, president theodore roosevelt wrote a short two-sentence letter, in typical theodore roosevelt direct bravado style. "my dear secretary shaw, i think our coinage