>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. ♪ emily: i am emily chang in san francisco. netflix once again surprises, a big beat in global surprises. it has nothing to do with "squid game."

we will break down the results. plus, trading in your pandemic. a designer who ran the runway revealed subscribers are rebounding as the company looks to head to the public markets on a $1.3 billion evaluation. live from l.a., we bring you latest from the milken institute global conference. carol massar later this hour. we will get to all of that in a moment, but first a look at the markets with kriti gupta. a rally in stocks today. kriti: green on the screen. tech the key outperformer, but not tech alone. today, they were up over 3% in the session. you are seeing bitcoin slipping away from its highs today. during the session, very strong reactions to bitcoin despite the news about bitcoin futures. a big concern was with that attract from some of the populism around crypto assets in particular?

that is not the case. looks like it is up about 4% in today's session. i want to bring you back to those big tech stocks. they left the index lower over the last months. they have been leading higher in the last session. i am using apple as a proxy for the big tech names. apple having a pretty good day. widen that out to alphabet or microsoft, it becomes five or six pretty good sessions of gains. facebook or amazon, still some good sessions. very reflective of the broader index. i want to end with netflix. shares were up as high as 3% after hours after they beat their subscriber growth. bloomberg was estimating 4.4 million total subscribers. they came out with 3.7. now projecting 8.5 million. on top of that, you did see they say they will be cash flow

positive next year. that did move shares after hours, up by 3%. disney ticking higher once again. emily: i want to bring in the senior vice president for entertainment and media at trans union. good to have you back on the show. strongest subscriber growth of the year, even as the world continues to reopen. we are getting off our couches and going to work. are you surprised by this? >> no, i'm not at all. contrary, i thought the projected number was quite low. probably their worst quarter ever in the last four or five years. typically when they had a really poor quarter in terms of subscriber acquisition, the following quarter is really substantial. i think this was less of an increase -- [indiscernible] emily: is that because netflix is doing something wrong?

andre: i think it is because netflix is not doing anything different. netflix has been right so many times when people have doubted their strategy. a lot of people thought they were investing too much in international content years ago. although that was not reflected in its numbers, that holds true with the success of "squid game" and other things. the challenge is they are still to diversify their revenue stream. the concern i would have is when you look three or four years out, i don't think anybody doubts disney plus will have a larger subscriber base that netflix. there are others challenging for that previous subscriber base as well. the transition into gaming has

been very slow. the diversification of revenue some merchandising, but that does not compared to what abc universal does. that is the biggest challenge, it is pretty much more of the same. emily: interesting take. "squid game" has been the talk of the last few weeks. netflix says it has been viewed in 142 million households. the devils advocate case is a company like disney cannot put "squid game" on disney plus. it was a risk for netflix and clearly it paid off. what makes you think they won't be able to keep bringing hits like this and beating disney or hbo or others going forward? andre: they say the past was prologue. if you look up about the dollars invested into content over the last six years, they spent more than just about anybody. we still get riled up in the media world whenever there is a huge blockbuster success, and

contrary to that, it is big news when disney flops. when i look at netflix, if netflix's battle is to just out-produce content that is better or more global or more valuable than disney or nbc universal or hbo, i don't think that is necessarily the game they want to play. all of those companies have much more ways to monetize their audience than netflix does. even to stand pat over the next few years, they actually do have to have better content and bigger hits, which is challenging. emily: netflix has been embroiled in a public controversy about its dave chapelle special and comments he made about trans rights.

the co-ceo defended the decision to put this on their platform. netflix employees, some of them really not happy about this. what is your take on how much this impacts the broader netflix story? andre: i have not thought much about what the impact will be to netflix. i think there is a challenge when you look at freedom of speech and artists, a producer's right to be creative or address issues. sometimes you have to be respectful of the different constituencies that consume your content. that is up for netflix to make their own decision. i think people need to be able to face the consequences for any decision they make. whatever the repercussions,

whether that impacts their subscriber base or other things, they need to be prepared for that. emily: thanks for raising some interesting points. the senior vice president at trans union, always good to have you on the show. taking a look at what else we are watching, instacart is acquiring a startup that makes self-check out shopping carts. they use image recognition cameras to automatically detect items placed inside. the $350 cash and stock deal is part of instacart's effort to tap more areas of growth ahead of its anticipated public offering. coming up, a company announces plans to raise over $300 million in an ipo and chip maker global foundries looking for as much as $2.6 billion. we get a roundup of what is ahead for the rest of the year. that is next. this is bloomberg. ♪

[applause] [bell ringing] emily: 2021 has already been a banner year for public listings and there are still more to come. fashion rental company rent the runway is seeking to raise as much as $315 million in its upcoming ipo, which would rate the company at $1.3 billion. rent the runway obviously struggled in the pandemic. people were not leaving home or getting out of pajamas, literally, so how have they recovered since the easing of lockdowns? how is that driving the decision

to go public now? >> it looks like financially we have not seen as much recovery, but the number of subscribers has gone up. in the first half of the year, revenue was mostly flat. we have seen almost a double in active users compared to the beginning of their fiscal year in february of this year. it seems like even though people are not going back to the office just yet, some are coming back. that is giving them an excuse to dress up again. that could have driven their decision to go public now.

the companies that warn that in their risk factor section, how long the pandemic would go on is a concern and what impact their business if it carries on for longer. emily: they are cautioning in the filing that they may not be able to sustain profitability. how do you expect investors to respond to a deal like this? crystal: it is actually pretty simple language, like most companies that have not achieved profitability tend to put that in. it seems like people online have their own thoughts, some saying the company has not really proven that they have any ability to be profitable and that the pandemic did not help. i am sure if they were given that chance, that would have gone public at a different time. it seems like they have showed some recovery, even though not in the financial terms just yet. emily: global foundries planning to raise $2.6 billion in their ipo. curious if they are taking

advantage of the ongoing chip crunch and how that will play into how investors look at this deal. crystal: i am sure the chip shortage is playing into their favor. the majority of this year, we have seen a bunch of consumer facing technology companies. at the tail end of this year, we are seeing global foundries, a lot of these tech hardware companies coming into the back end of the year. at the back end, investors tend to get more risk-on when you have a more substantial business that has risk proven revenue and proven profitability. that could do well at the end of the year. it is a good time for global foundries as well as their investors. they attract a lot of investors for a cornerstone that indicated upwards of $1 billion interest. the deal is $2.6 billion, but they have to sell a lot less than that. emily: we will be looking out for the additional action later this year. our bloomberg news deals

reporter, thanks for that update. thursday, catch a special edition of bloomberg markets focusing on supply chain pain. caroline hyde and romaine bostick will be live from the second busiest container port in the u.s. at long beach as supply chain issues across the globe persist. they will talk to some of the key voices impacted by the supply squeeze. the president and ceo of consumer brands association, and the exact of director of insight. to another story we are watching, the first u.s. bitcoin linked exchange traded fund debuted. a proshares global investment strategist shared his thoughts on bloomberg. >> we think this will allow those waiting for a robust way to do this to now have it in their portfolios.

emily: weighing in on the new etf, the guggenheim global ceo says it is a very exciting development and a way for investors to bypass digital wallets. he spoke to bloomberg television at the milken conference earlier today. >> the coin in and of itself is difficult. we invested in bitcoin for our clients, but you have to be in a tradable vehicle like an etf, so i think that is an interesting development. emily: he does not recommend shorting bitcoin. he thinks the world's most popular cryptocurrency will rise in the coming months. >> you see bitcoin and what it has done over the last few weeks. i can't tell you it's a value, but i won't tell you that you should short it. it is likely to be higher in the coming months. emily: diplomatic as ever.

we will have more from the milken institute global conference. carol massar with speak with park invest. we bring that conversation to you live later this hour. coming up, the american dream, or almost. we talk about the challenges facing immigrants who want to start their own companies in the united states. after the break, we speak with partners of a vc fund aimed at leveling the playing field. this is bloomberg. ♪

emily: the u.s. prides itself on being a nation of immigrants, yet starting a company as an immigrant in this country is not easy, if not impossible for some. my next guests are determined to change that. they are with a fund dedicated to helping immigrant founded companies. thank you so much for joining us. maria, i will start with you. what motivated you to start a fund focused on immigrant

entrepreneurs? >> i myself am an immigrant. i am a refugee that came to the united states from colombia, ever since then have been trying to repay what this country has given me and looking up to the american dream, a high standard to beat for immigrant families like my own. it feels natural to me that the first check would be the first round into immigrant and family entrepreneurs. i want to help them succeed faster. emily: how do you plan to do things differently than traditional venture capital firms? like when it comes to decision time, where do you see yourself making a decision?

>> one of the things maria hinted on is we try to be the first check. what that means is 60% of our commitments happened before the company was incorporated. what that reflects is an idea of being a friends and family type of investor. for us, it comes down to challenging some of the pattern recognition behaviors of silicon valley vc, specifically basing an investment decision entirely on their linkedin profile. rather, we try to understand the distance they traveled and underwrite the people, fully recognizing their ideas might shift, but the people who solve the problem won't. emily: maria, you are a former refugee yourself. you worked for the immigration

lobbying group founded by mark zuckerberg. i'm curious what insight that gave you into others' experiences that might be similar but different than your own? maria: the numbers can speak from themselves. in the u.s., we know that 20% of the self-employed population happen to be foreign-born. when you look at just unicorn companies, those over $1 billion, that gets closer to 50% of them being founded by these. when you look at our economy, whether small businesses, the mom-and-pop shops or the most sophisticated technology companies, google, apple, tesla, all founded by immigrant entrepreneurs. there is a journey and muscle to innovate. when you think about who has a competitive advantage and a global viewpoint to build global companies with massive market caps, it will be immigrant

entrepreneurs. emily: we are nearing a deadline where the green cards of 80,000 people currently working in the u.s. might expire. what are your thoughts on this? what do you think needs to happen? >> we think about the reason for this happening. it is fundamentally because of something no one expected to happen globally. a lot of this backlog and expirations is because of the global pandemic. just like we have done for other categories around the country, specifically around policy, i think we need to take the same approach and give people whose deadlines are coming up or just passed, give them at least six to 12 more months to stay in status and go through the process and get through that backlog. it would be an absolute travesty for this many people who are predominantly tech workers to not be able to know they can still work here when they already pay so much in taxes and giving back to the country.

emily: is your fund going to be helping immigrant founders secure visas? will you help them navigate this process? maria: yeah. a unique part of how we structured from day one is we know it takes a lot of time. time is something entrepreneurs do not have in the early days with all sorts of things they are juggling. we have an in-house immigration counsel which helps each founder figure out the best pathway forward. how do we get you working at your company full-time as soon as possible? when this company is successful, you have figured out a way to stay in this country and make new american jobs. we are one of the few, if not the only fund that has an immigration teams solely focused on providing this support to immigrants day one. emily: manan, you backed a

startup which filed for bankruptcy last week. i know everyone will not be a winner, but what is your take on that, what the company could have done differently? manan: this is one of those situations where, as california passed a.b. 5, some contract worker status is affected that company. certainly the company intends to stay in business. the ceo announced he helped somebody negotiate a record improvement salary of $200,000. think about that. $200,000 higher salary. we think business should be around ceo's. his story is not done. this is the bigger narrative we believe in.

foreign born under for numerous will continue to go big so they don't have to go home. that is what embodies that american dream in the story so well. emily: go big so you don't have to go home. that is something i can get behind. unshackled ventures, thank you both. we will keep following your story. coming up, we bring you live to the milken institute global conference in l.a. carol massar will be sitting down with cathie wood of ark invest. you don't want to miss it. this is bloomberg. ♪

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emily: welcome back to "bloomberg technology." i want to get to my colleague carol massar. carol: my gut is that there was no plan for you to become a fund manager. what was your plan?

cathie: i've been in the financial industry, and after the tech and telecom bust, i begin to see incredible risk aversion, career risk, and everyone was worshiping the almighty index benchmarks. that was not consistent with what we were doing that at all. i described it as an odder and odder duck. i felt this was very bad behavior. i felt like investing in tried and true is not wrong, but investing only in the past i do believe is wrong. there is so much in the way of innovation evolving, and i did not feel like it could be funded appropriately in the public markets. the private markets were screaming, so valuations were crazy there. the same kind of stock was selling for a fraction of the valuation in the public market.

i felt there was an arbitrage opportunity. many people in the public world said those public -- those private evaluations will crash. we did not think that was true. we thought the public market valuations would move up. i thought this focus on innovation had been lost, research lost, investing lost in the public markets. i said we could fulfill a huge unmet need and change this mis-allocation of capital, which is all about the past, especially because of the explosive growth opportunities there are in the future. carol: i know there has been a podcast you have done. what was the "aha" moment where you said i will do this differently?

cathie: we worked in an office. the bonds we created during that time will never leave us. we were on a mission. i never thought we were going to fail. many people thought we were going to fail. i think he's your top etf journalist, and he thought we were destined for failure told us so in a nice way, but i did not believe that. one of the reasons people thought we were going to fail is we chose a wrapper that was dominated by passive portfolios. people thought that was crazy. after 2.5 years of no traction effectively, i began to say, wow, was that a bad move? we started doing separately

managed accounts. it turns out that that was a great decision. so many people thought it was such an awful decision. we had so much visibility that when we started to gain traction, when the inflows started, it was like a head fake. it got us so much more attention than we would have gotten otherwise.

emily: welcome back to "bloomberg technology."

let's get back to carol massar speaking with cathie wood woods of park invest. carol: what were institutional investors saying to you in the early days? cathie: too volatile. that was the response. we could not possibly do that. here we are. we are a volatile strategy. our response was, well, volatility on the upside is not a bad thing. last year was a good example of that. but the other thing we said at the time, and we took our cues from a value investor who said to us "i would never buy one stock in your portfolio, but i like your research and you might be right, so i will just put 5% as a hedge." as did our first institutional investor, which is value-oriented, and kind of thought we were behaving like a value manager. long-term time horizon and

looking for extreme values. well, value investors are using price-to-book and dividend yield and that sort of thing. we are using growth. we are using spectacular growth rates that no one is expecting. tesla was our first proof of concept, a very visible one, where people are saying, what are they talking about? all we had done was use the centerpiece of our research, to try and figure out how quickly costs would decline in battery pack systems. therefore, ho wmuch -- how much prices would fall for electric vehicles and how quick the uptake would be. we saw magnificent things happening.

carol: it was not so easy to be invested in tesla early on. cathie: for us, it was easy. carol: because you believed the story? cathie: the most important call that we made initially was tesla -- with tesla was tesla's battery technology is unlike any other auto manufacturer battery technology. tesla was riding down the cost curve of the consumer electronics industry. so, laptops, cell phones, huge volumes. when you get a scaling like that, costs come down, it is called a learning curve in the tech industry. elon, you had auto manufacturers and auto analysts laughing at him. elon is building his car on top of cell phone batteries, isn't that funny? they did not believe the engineering was possible. they just did not think it was possible, and he did. even today, these cylindrical batteries he has been using lower cost and will remain lower cost for at least three years we think, which means any other

auto manufacturer which wants the same performance in the same range at the same price will have to lose money on every car sold. carol: so it keeps him in a really great position. cathie: that is one of only four barriers. that was the first call we had to make. carol: elon musk and tesla. there is a point you would get at. you put a mark on the stock price. cathie: 3000 at our base case. carol: there is a point where you could say i am moving on. you have gotten out of apple. these are technologies you don't think -- not necessarily?

cathie: they are very well understood. their dynamics are well understood. they are well owned. we just want our clients to be exposed to the next faang. tesla will end up in that grouping at some point. we would sell. our minimal rate of return for a stock is 15% at an annualized rate over five years, so a doubling over five years. tesla is about nearly a quadrupling about five years, so well within our range. we have been taking profits. it has become obvious that electric vehicles are taking massive share from traditional gas powered vehicles. the stock finally is responding to that reality. whereas much of our portfolio has still been in a bit of a weak spot. this is called portfolio

management. that is all this is. carol: let's talk performance. it has been off the charts. this year has been a bit tougher. five of seven ark's returned an average of 47%. you were the top stock picker in 2020. this year, if we look at ark innovation, down from its peak in february. it is up 7% for the year. what is tougher about this year for you guys? cathie: it's not tougher. we expected it and wanted it, not that we, want our stocks to go down but what we did not want was another bubble, which is when the market became more narrowly focused on just one

group. instead, energy is up 50% this year, financials are up 30%. we think those sectors will be the most disruptive of any. what has happened is there has been a rotation into value as fears of inflation and interest rates increasing picked up. therefore, there has been a broadening out of this bull market. we are in a very strong but it -- bull market. all of this tax talk, all of this strife. carol: no worries chasing too many options? cathie: am i worried about inflation? carol: and bubbles in the market. cathie: not bubbles. the way i know that is from the nature of the questioning we get when we go into any meeting,

retail or institutional. it is much more about risk, very little about opportunity. that is not what happens during a bubble. inflation, we have a differentiated point of view there. i have always had to, as part of my portfolio management perspective, have an understanding of the economic backdrop. carol: you debated henry coffin way back when. the original dr. doom. cathie: doctors doom and gloom. no, doctors doom and death. [laughter] that is when i learned about, wow, if everyone is going in that direction -- and back then it was inflation and interest rates are embedded in the system at a double-digit rate.

and someone dares to go the opposite way after those who had gone the opposite way had been bludgeoned with higher interest rates and higher inflation, this was timing. there is a lot of money to be made. that is how i still feel about innovation. so, inflation. we expected inflation. i do these youtube videos. we start talking about the base effect on supply chain issues last year. i did not expect a second round of supply chain issues where now we have people hoarding because of christmas. that i did not expect. we are getting another round of inventory building, but not in businesses, in homes. that car they bought last year is in their driveway or garage. auto sales -- many people don't realize this -- in the u.s.,

peaked in april at 18.5 million units and are now at 12. that is not just chip shortages. that is, i just bought my car last year, i am probably not buying another gas cardigan, i will wait -- gas car again, i will wait for an electric vehicle. that is some of what is going on. there is a lot of double and triple ordering in the system right now. it happens in every cycle. especially when you run out of inventory, toilet paper, clorox. i do believe that after christmas we will see the other side of this. we have already seen it with lumber.

emily: welcome back to "bloomberg technology." more with our conversation with cathie wood. here was carol massar at the

milken institute global conference in l.a. carol: tell me more about bitcoin. we are seeing more legitimization. we are seeing regulators moving forward. what is the long-term play when it comes to something like cryptocurrencies? cathie: bitcoin specifically, we got involved when it was a $6 billion market cap, and here is our laugher. it was a $6 billion cap, and now it is over $1 trillion. this was 2015. we were asking the question, could bitcoin serve the three roles of money? we came to the conclusion it was possible. art laffer tore our original paper up. as we were going through it, he said this is the first, the rules-based monetary system i have been waiting for since we left the gold exchange standards

in 1971. i said to him, oh, how big could this be? he said, well, how big is the u.s. monetary base? this is a $6 billion cap. back then it was a $4.5 trillion monetary base. today we are at $8 trillion. that is just one of its roles. the most fascinating thing is happening in el salvador. have you heard? the president, who tweets every day, deemed bitcoin legal tender. carol: a bloomberg quiz question. [laughter] cathie: and sent a wallet to everyone in the population eligible, so 4 million. 3 million have downloaded it. only 1.2 million in that country have a banking relationship. so this is the new bank, digital

wallets. it will be true in this country and around the world. all-in. carol: china, you have been in and out. so how are we supposed to look at china right now? the clamp downs we have seen on certain sectors that have decimated them in terms of the value of them? what do you expect to be your involvement? cathie: our first move away from china was when china had a very strong move. cathie: our first move away from china was when china had a very strong move. that was that kind of move. the second time we moved -- then we moved in, why? we saw the reaction to covid, and we got more interested. it was the most disciplined country in terms of monetary and fiscal policy during the crisis, and i thought, china has the possibility of becoming the

germany and switzerland of the world in terms of discipline monetary systems. as soon jack ma was banished last november, we started pulling back, and especially during february through may, our strategy, to give you a sense of how volatile it is, our strategy from february to mid may was down 37%, peak to trough, so we have come back, but during that period, we concentrated our portfolio towards our highest conviction names. china was moving away. almost every week or month, there was another regulatory move or crackdown. it was easy to do that.

i am always scrambling, looking for cash and a correction. where is the confidence lower? common prosperity, so what have we done? no china in our flagship. we do own some china and a few of our portfolios -- in a few of our portfolios, those focused on autonomous technology and robotics, but we are very particular. margin is clearly not appreciated by the government anymore. very beneficial to tier three or tier four cities. carol: can it stay this way in china? china, when they make a decision, it is longer-term planning, and president xi seems to be on this mission.

cathie: i think he is very unsettled that the child policy is not working. this is all very for castable. they knew 50 years ago what was going to happen, so i think that is part of it, and there are the haves in the have nots in china. i think china is taking it more seriously because there is more social unrest than we appreciate. they are going after real estate, which is 75% of consumer savings in china. carol: individuals in china. cathie: individual saving. if the prices are going down, which they have been, i think that could hurt consumer

confidence. it already is. last weekend, the national government went after the regulators, regulators who focused on the financial industry. i said, they are playing with fire, and talk about a cyclical risky echo think about that, if we lose china. china has been responsible for a tremendous amount of cyclical growth. carol: it's been an m&a panel, and one analyst brought up geopolitical in terms of military tension. so the future, it's in florida. how come? [laughter] cathie: most people would tell you there are tax considerations. that's part of it, of course. however, we were looking for a city that might be able to evolve into something like

austin the has. if you have not been to saint pete, you must go. i've become saint pete's official ambassador. carol: who has been to st. peter? fair enough. cathie: all my life, i said, i'll never live in florida. i went to saint pete. it's a vibrant town focused on culture, art, music, a lot of tourism, very clean, very lovely, friendly people from all over the place, and i think we could have something like a south by southwest in the saint pete and tampa region. jeff branick and the bill and melinda gates foundation have brought tampa to life. emily: ths

edition of "bloomberg technology." tune in tomorrow. we will dig into earnings of tesla and ibm. i am emily chang in san francisco. this is bloomberg. ♪ this is bloomberg. ♪

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