>> 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. tesla is feeling the supply chain pain, announcing in its third quarter earnings that it will be shifting to new batteries globally. what does the strategy mean for the electric carmaker and the industry at large?

plus, a big potential purchase for paypal. pinterest soars on news that it could be acquired for $45 billion. how this could be a learning moment for paypal's super app ambitions. a report facebook may be getting a facelift. is this social network really changing his name as its name? will it work? we will get to all of that in a moment, but let's get a look at the markets. we saw a record for the s&p almost. >> absolutely, almost. the big takeaway here you really some big tech lead the way. leading the way lower. really weighing on the essence 500. you did see tech underperform the broader benchmark. those chinese adr's have been under a lot of pressure since

the start of the year, but you want to point out they are starting to get a bit of the renewed investor. shares up 1% for the index. we can't go on without talking about crypto, not only the bitcoin rally, but with it it took all of its crypto peers. the biggest story i would probably say in the tech universe, the potential deal between paypal and pinterest. $70 a share. that would give the market value of that company $45 billion. i have to make this comment. pinterest has declined by one third of its value since its last reported its first decline in users over the summer. interesting to see how this deal will shape up. we are still waiting to hear from both companies. lastly, i want to talk about the earnings story. tesla, ibm reporting tesla missing its estimates and

posting a $51 million bitcoin impairment in addition to talking about renewing the battery strategy. shares are down after hours. you have ibm missing its revenue, putting the blame on an i.t. management unit they are planning to spin off anyway november 3. lam research, a marginal miss. the issue was the forecast not really hitting the estimates. emily: thanks for that round up. i want to stick with tesla. lots to digest here. i want to start with the new battery strategy and the switch to lithium-ion phosphate. what does that mean to you? >> my colleague has done a lot of great work on batteries. we think electric vehicle batteries are following a cost decline curve. that means they are getting cheaper, which will help tesla improve margins. what the lithium-ion phosphate

batteries mean is they will be more inexpensive, could potentially offer faster charging. that is the big takeaway, the battery pack could be less expensive, which should help tesla with margins. emily: talk about the supply chain pain. this is something every company is feeling. do you see it reflected in the numbers? tasha: the thing to think about with tesla and these supply chain issues -- yes, they are not immune to them, but they are better set up to be more adaptable and deal with them than traditional automakers, particularly if you think about the chip shortage. tesla has both the hardware and software talent in house that it needs to write the firmware for those new chips. that is not something every automaker can do.

that will help them with this challenge. they will not be immune. longer term, what do we see? with the chip shortage we are seeing, there could be a potential glut in the future as companies try to build inventories of things they need, particularly for the traditional automakers. we see electric vehicles as a percent of global sales only increasing. the amount of vehicles a traditional automaker may expect to bounce back from today's levels if they are producing gas powered cars may be lower than they are expecting. emily: what does this all mean for deliveries in the u.s., china, and beyond? tasha: we already got delivery numbers for the quarter. they were better than expectations, helped by china. that is becoming tesla's biggest

exporter, its largest plant. deliveries in general, they are short-term. longer-term, we are looking at the big picture with electric vehicles. we think there will be 40 million ev's sold by 2025. tesla is the leader in this market. i did not even mention autonomous technology, another area we think tesla is pulling ahead of peers here. we are signing a 50% probability to them successfully creating a fully autonomous car in the next five years. emily: thank you for breaking it down. coming up, pinterest soars after a bloomberg scoop that paypal explored buying the social platform. could a paypal super app be the future? shares of pinterest soaring.

take a look at that. we talk about that story after this break. this is bloomberg. ♪

emily: shares of pinterest soaring after a scoop that paypal is exploring purchasing the platform. would this be a smart expansion into e-commerce for paypal? the deal comes at a complicated time for pinterest. it has been dealing with a number of accusations from former employees involving race and gender discrimination. liona baker broke this story.

why is paypal interested in buying pinterest? is pinterest interested in selling? >> paypal has been pretty acquisitive. they have been doing a couple billion dollar deals a year, but this would be its largest ever, $45 billion. its ceo is looking to make a bold move and try to diversify its income sources. pinterest is a big advertising revenue base. pinterest in terms of why it would want to sell now, it is trading much higher than where it went public, but it has never quite reached the same scale as some of the big internet giants it competes with. this is a way to partner and cash out. its user base is a lot, but certainly not as big as facebook.

emily: david, what do you make of this? pinterest engagement was higher during the pandemic, has dropped since. one might argue that the product has not necessarily evolved much over the last several years or delivered on this promise of being the social e-commerce platform of the future. david: that one would be me. i would totally argue it is one of the most unexploited giant brands on the internet, probably the most under fulfilled giant internet brand. liana's scoop makes a lot of sense. paypal has all this capital capability. they are looking for new areas of growth. if i were an aggressive leader like dan schulman, i would be looking at a company like pinterest and say, there is something a more aggressive managerial style could turn into a much more important property.

i use pinterest. i like it. 400 million of us, that is a lot. emily: i use it too. there are moments i wish it could do more. paypal benefited from the online shopping boom during the pandemic. explain these super app ambitions. liana: paypal wants to be more than just an online bank. they moved into crypto. they are trying to offer more services to build up its user base. getting access to pinterest users, a huge group, 400 million people, this is a way to help paypal fend off competition. paypal has a lot of rivals looking to get in on its turf as ways to pay for things online these days. emily: instagram has been making significant progress on the e-commerce side.

i'm curious what that competition looks like for pinterest as years play out. david: instagram for facebook -- instagram advertising is an incredibly high gross successful business that is one of facebook's real prizes. pinterest really -- i use it a lot. i'm not conscious of seeing ads. may be are doing it really subtly. it seems to me it could be more carefully and meaningfully monetized, because there is a lot of time being spent there. instagram is a proof point to show what kind of thing pinterest could turn into, because instagram is so incredibly effective with it. they are similar in terms of their basic structure, photo based, etc. emily: we are at a time of huge

scrutiny on big tech and tech deals. what are the chances of this deal getting done? liana: regulators will take a close look at this. but paypal and pinterest are not the tech giants we think about washington scrutinizing. that is more facebook, amazon, so maybe it will fly under the radar. i am sure d.c. will closely look at this one. emily: at $45 billion, hard to imagine anything of that size flying under the radar smoothly. liana baker, thank you for your reporting. david, stick around. we will talk about facebook coming up next. could the social network be getting a new name? we are talking about that report. facebook is looking to rebrand to potentially repair its reputation. as we head to break, let's look at netflix. shares falling. the streaming service posted strong subscriber growth, beating estimates thanks to the

popularity of the south korean drama "squid game." one entertainment expert told us netflix should be growing faster. in an earnings call, the ceo said the company saw strong earnings throughout the quarter. >> as the quarter continued into september, we saw acceleration in our growth, which is what we had been hoping for and expecting, but it was good to see as we got into the strength of our schedule. emily: neumann said netflix is turning cash flow positive next year. this is bloomberg. ♪ >> we actually saw a 35%

>> we actually saw a 35% increase in the number of creators generating six-figure income out of youtube in the

last year. that is an example of how the creator economy is continuing to grow. emily: the youtube ceo talking about the future of the creator economy. you can see my interview with her on bloomberg studio 1.0 tonight 6:30 p.m. here on the west coast and at those times listed there in other regions. meantime, facebook could be planning a facelift. the verge reported the social network is considering a new name that focuses on its ambitions in the meta-verse. this as facebook battles an onslaught of negative reporting and revelations of multiple whistleblowers. david kirkpatrick is still with us, along with bloomberg's kurt wagner. david, you wrote the original book on facebook. will facebook rebranding make a difference? david: oh, come on. i heard this and went, oh, please.

not one more image upsets of oriented action on their part. this is like someone is pinned to the ground and everyone is on top of them and they said, no, i changed my name, let me up! it is crazy. what will they call themselves, the circle? emily: we will look at some of those names, circle, meta, horizon. any ideas? >> no, you mentioned the ones. our colleague was astute in noticing that meta.com and meta.org are owned by the zuckerberg initiative. maybe if you are looking for online real estate, they have a leg up there. this is a play to deflect attention from a lot of the stuff they are dealing with, but position facebook as a front runner or leader on this new meta-verse project. you can see clearly why they would like to buy into this new identity.

emily: alphabet did it, but most call the company google. among some of the other names being thrown out there, fakebook, face plant, zuckerverse, the name conveying public sentiment about facebook. what does that tell you? david: i think if i were their pr advisor, i would say this is the worst time to do something like this, but i happened to be someone who thinks they ought to meaningfully respond to some of the legitimate criticism of the way they manage and govern their services, which they don't agree with. i really do think this is about trying to change the narrative. i doubt if it will work. when it comes to the meta-verse, there was a really good interview yesterday that the wall street journal conducted at their conference. he was making fun of the idea of

the matters, saying it was an escapist borderline dystopian thing, and snap is trying to connect you with the real world. that sounded grounded to me. i don't know what facebook means by the meta-verse, and frankly no one else does in the end. emily: that is the question, what is the meta-verse and what is facebook's version of the vision of the meta-verse? is the meta-verse going to be good for society or is it going to be saddled with the same controversies facebook itself is? kurt: it is hard to imagine it will not be saddled with a lot of the same issues. these will have the same content related issues, the same privacy related issues you currently have with the internet, and perhaps more so because it will be more immersive than what we are doing today. what is this, it's still being worked out. my understanding is the vision is not just an internet that you

look at in 2d from your phone screen or computer screen, but one you interact with in 3d via ar goggles or glasses, something you step into versus observe through a screen. that is their vision. a big challenge is, are other companies going to buy into this? it only works if you can go into the meta-verse and use spotify, apple, netflix. if all those companies don't play into this vision facebook has, i don't think the meta-verse is a compelling use case regardless of how secure it might be. emily: another report by politico that the ebay founder is funding a facebook whistleblower, frances haugen. it is important to emphasize there is big money on the others too -- the other side, too.

does this change anything for you? david: we knew that pierre was someone very focused on ethics. facebook, in my opinion, is not very focused on ethics. the idea that pierre might be especially upset about this company is hardly a surprise to me. one thing i would say is a very notable aspect of frances haugen's strategy is the strategic approach. she first came anonymously, gave the wall street journal data, then she did a "60 minutes" interview. it is very methodically thought through, the result of having good advice from professionals who are now according to politico being paid by pierre.

emily: facebook has hinted that more documents could be coming. what is in store for the next week? what more bad news about facebook will we see? talk to us about the company's pr strategy. they are not pulling any punches right now. kurt: i would say this is the most aggressive, combative i have seen facebook pr in the eight years i have covered the company. it seems clear to me that they are worried about what will be coming out, but also feeling not just worried, but actively defensive because they don't feel they are getting a fair shake. a tweet thread their comms team poster this week, accusing journalists of teaming up to conspire against the company. there is tens of thousands of documents that frances haugen brought when she left the company. we have seen a half-dozen stories from the journal.

i think there are a lot of people starting to get their hands on these documents. i think this is the beginning of what will be a long month and news cycle for facebook as people start to parse through this stuff. emily: david, you spoke to mark many times over the last decade and a half. i'm curious what you think is going on inside his head as he thinks about the company's future and is getting attacked on all sides. david: i often say i did not anticipate he would become so beleaguered and so self-righteous when i spent so much time with him back in earlier years. i think what goes through his head is fundamentally that he is absolutely firmly convinced that what he is doing is good for the world and that we don't give him credit, we don't understand it, and it's not his fault, it is our fault for not really getting

it, for realizing all the good -- for not realizing all the good facebook does for the world. because he has so much certitude about that, he is unbending in the face of literally any criticism, despite that so much of it is well-founded. emily: the verge is reporting that this name change could be revealed october 28, the same day as facebook's connect event, which we will be tuning into. kurt wagner and david kirkpatrick, thank you both. meantime, facebook has been fined $70 million by the u.k.'s merger watchdog for failing to update regulators on an acquisition. they say facebook consciously refused to follow u.k. law. the decision on the deal is expected by december 1. coming up, as bitcoin hits an all-time high, traders can jack up their bets with options on a newly minted strategy etf.

we talk about how high bitcoin's price can go, next. this is bloomberg. ♪

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>> it's been quite a rally. >> never say never. a year ago we were probably trading at around $12,000. now it's $66,000. >> i think it is getting the instant adoption that many have been talking about for years. >> it doesn't take much to push the price up another 50%.

emily: those were just some of the guests we have heard from throughout the day talking about the bitcoin price surge, rallying for the first time, starting to see greater mainstream acceptance. kriti gupta walking us through it. >> i want to take a little bit of a walk into history, here is the kicker, it has taken years to recover bitcoin prices. last time it took months to hit a new record high. the crash we saw in 2018 until 2021 to get back to the level that we are. so what is behind it? were talking about potentially a retail bid but some of it is across assets. i want to show a chart of the correlation you're starting to

see show up in bitcoin and bond yields, you're seeing that reflation trade in the bond market. overshadowed a little bit on the bitcoin market as well. it is across asset dynamic rather than bitcoin doing its own thing. the story of the week, one of the big concerns is that if it does rally, does it take some out of the spot bitcoin prices? the spot price rally but will it continue for another day, week, or month? let's see how long that pattern will stay. emily: thank you for breaking that down. sticking with it going, i want to bring in matt hogan, what is the price today in the recovery time from the last high, what does it indicate to you? matt: it indicates what we've been talking about so far in this segment.

we are seeing a whole new class of investors move into crypto. we're seeing institutional and professional investors move into the market and that is moving the prices higher. for the etf launch, there was a big question, will and etf find an audience, you can buy it on coinbase, you can bite on cash app, robinhood. we've learned over the last two days there still a huge class of investors sitting on the sidelines, they put a billion plus into the etf in the first few days. it's going to build over time professional or institutional marketing -- it's an exciting moment. >> it is not the bitcoin etf we all wanted.

it's going to trail up the spot price of bitcoin over time by a reasonable amount, yet people are still buying it. it does have a direct impact on demand for physical bitcoin. that's an important thing to know. for people to sell those bitcoin futures to the fund, they have to hedge it. the way they are hedging it is by buying physical bitcoin. excitement about what an etf means for the crypto market long-term but also a direct impact on markets. billion dollars flowed into this etf the first two days, the fastest growing etf of all time. you have to believe underneath the surface, those arbitrageurs have probably picked up a billion dollars to hedge those futures.

it is impacting the spot bitcoin market. emily: do you think the pace of bitcoin's rise can keep up or are these fits and starts just going to be the name of the game? matt: it certainly going to be a volatile market. bitcoin has been a volatile market since it came into the world a dozen years ago. that's not going away anytime soon. i don't know if the next week or two weeks it will see the kind of price appreciation we've seen, but over the next year or three years, this is going to be a moment that marked the march of institutional investors into this market. i come from and etf background. back in 2004, the last time we were so excited for a new etf is when the gold gtf came into the market.

the important thing about gld to note is that after three years it was at $10 billion. after five years it was up at $75 billion. the assets build over time. i think you will see that in the bitcoin market as well. we are just getting started. emily: what about the regulatory? obviously what is happening china and waiting for the hammer to drop in the u.s., and not knowing what that's going to look like. matt: there is regulatory uncertainty. the regulators overreached and constrain the crypto market too much, that could be a setback for prices. on the other hand, if he gets progressive or fair regulation, and the launch of the futures etf is an indication that is the likely pathway, that will unlock the bull market. so there's two sides to the regulatory story. yes, there is risk of overreach,

but there's also the risk of unlocking the full potential of what crypto can be. investors at least in the past few days are betting that we will be on the progressives side of that and not the restrictive side of it. emily: any chance of coinbase getting into in fts? matt: i think it's going to be a signal moment for the market. nft's, a lot think there's a bubble there. there certainly elements of it. i think will look back in 3-5 years and it will be much bigger market than it is today. it means for nft's about what the launch of a bitcoin futures etf means for bitcoin. it's an important move. emily: a good comparison, matt. always good to have you here. goldman sachs was the first big u.s. bank to enter the crypto

market, back in 2017 when lloyd blankfein was ceo. now it is impressed that he is impressed by its resilience as an asset. his thinking and talks about the need for regulating it. >> a lot of bright people think it has a bright future. i'm telling you, i'm into the old world and it's not something that i gravitate to. i can think of a lot of reasons why won't work, but i remember when they were auctioning off spectrum to cell phones and saying why would anyone need a

cell phone? you just drive in your car and pull up to a phone booth. who would carry that clunky thing? there are a lot of things in this world that have worked out awfully well. >> you sound pretty constructive for someone who used to run a bank. >> you have to separate fact from opinion. nobody knows the future. there's all sorts of things, there's a lot of things that move in different directions that i couldn't and wouldn't have anticipated, and no one else would have, either. so to just come out and say that market that's already or $2 trillion, that's made all this regulatory headway, that a lot of people really don't like in the way of choice been crushed, it doesn't look like it's flourishing every day, but it's not done.

>> do you own any crypto? >> no. emily: see more of that interview on friday. coming up, the pandemic of cybercrime. we'll talk with a digital security firm about their latest funding round and their solutions to proactively protect ourselves. next. this is bloomberg. ♪

emily: we want to bring you on the latest developments on the videogame publisher at the center of the sexual harassment claim. that is activision blizzard. more than 20 employees have left the company and another 20 have been disciplined as part of an internal investigation into allegations of misconduct. it has been facing a cultural reckoning of sorts after it was a ledge it fostered a frat boy culture. the booming cybersecurity industry is adding a new heavyweight to its ranks. aura, a digital security company backed by hollywood mogul jeffrey katzenberg, has just raised $200 million in a new funding round. i want to bring in the ceo to join us for more. thank you so much for joining

us. your company brands itself as an easy to use, all in one, proactive digital security solution. what exactly does that mean? >> our mission is to create a safer internet. we've been focusing on transforming the consumer digital landscape, which hasn't changed all that much, not a lot of innovation in the last decade. a lot of solutions are typically more reactive. a lot of consumers want something simple, all in one, proactive, easy to use and to prevent issues from happening rather than reacting to it. last year for the first time ever, consumers lost more money to cybercrime. the trend has been going up and up. we think this market will be huge and is getting bigger and bigger by the day.

emily: jeffrey katzenberg is an entertainment legend. how often do you speak to him, and what advice is he giving you? >> we spend a lot of time with jeffrey. i talk to him two or three times a day. someone that has been there, done that. a lot of knowledge from different industries. especially around building companies to scale. it's just been a tremendous experience. they've been great partners through this whole journey. emily: that's pretty active for investors. this is a market that is becoming very crowded. you have this sort of outsider status. i wonder if you think of that as an advantage or an inconvenience.

>> i really think of it as an advantage. there's a lot of companies out there they got started at a time when the problems that was very different than the problem set of today. a lot of the solutions were made for desktops. we looked at it and said the problem of today, consumers want to have an all-in-one solution. it can't be too expensive. it's got to be something that almost reads their mind and figures out the right solution. you can only get that from looking through an outsiders lens. we have a slightly different perspective than the rest of the market and it's doing well in terms of innovating the product sector. emily: ransomware is on the rise.

i interviewed a ceo who talked about the rise in cyberattacks as a new pandemic. take a listen to what he had to say. >> somebody described it to me, we have another real pandemic which is cyber. that's going to be there with us. at the same time, i think what is really more a consciousness is the level of attacks have increased, but the need for a response to be top-notch has also increased. emily: in cybersecurity, the next big global threat, is it going to require international cooperation? >> i really think it is. there's a lot of focus on the enterprise side of it today. a lot of it is starting to bleed into the consumer landscape and even from a policy perspective, there's a lot more venture dollars that go into it. the next wave is how it affects consumers and how you come up with solutions that can really help these consumers to make

sure they are kept safe. emily: so what is coming next for you? is there a public offering on the table? >> the market here is massive. the u.s. and global in nature. with think with the right product, the right innovation, the right capital base, this is just a massive opportunity. eventually it does lean toward the public journey, but we want to make sure we are ready for that journey. that we've got great distribution we would sometime in the next few years, but overall we think we are very well positioned for massive success as a lot of forces converge in our favor. emily: the price of the product is really low. do you see that continuing, or will you have to raise prices at some point?

and how do you maintain quality on a long-term basis? >> we've made sure we have all the technology we need so we can bring the price down for the consumer. it may cost you $100 a month, and most families don't want to spend that kind of money. so we've dropped it down to about $15 a month. we think that is about the right price point. we want to keep the pricing consistent for families. emily: we will keep and a are in aura. thank you for joining us. coming up google reveals its latest smartphone. will it be able to beat out its rival, apple? we will see how tesla and ibm

are trading after hours. tesla reporting revenue fell short of all estimates but managed to beat and quarter earnings projections. ibm prepares to spin off its low growth legacy services. this is bloomberg. ♪

emily: more earnings coming up tomorrow when intel comes out with its quarterly report. it will be a big focus for investors. all this as the chip shortage continues to weigh on global supply chain issues. caroline hyde and romaine

bostick will be live from the second-biggest container port in the country, the port of long beach. they will talk to key voices impacted by the supply chain squeeze. that includes jeff freeman and jessica caldwell, executive director of insights at edmunds.com. google's new phone includes custom chips, enhanced camera features and the price point, over $100 less than the iphone. you say that google could have a smartphone hit on its hands for the first time, why? >> i think for the last five years they have been struggling with 1% or 2% market share. this is the first year they've designed their own chips.

they been using the standard, no way to differentiate themselves. now they are saying they can use unique artificial intelligence features to differentiate them. $100 less for the standard model. it's hundreds of dollars cheaper than comparable models from samsung or apple. emily: obviously you've got the holiday season coming up in people wanting to upgrade. how much switching do you think will happen, people switching from apple or samsung? >> i think they can increase market share over the next couple of years. going from 2% to 10% will be huge for them. the vast majority will probably stick with iphone but they could double or quadruple their share.

there's a thing called magic eraser where you double tap on an object or person and you can remove that person from the background. it's like photoshop on your phone in an easy way. there's another thing where you can tap someone's face that is blurry and it will sharpen it for you. there are 48 languages that can do real-time interpretation. so there's all these new features, along with the price, that should let google do so much better this time than they have in the past. emily: supply chain issues are impacting apple. is google going to be grappling with that as well? >> they are so much smaller than everyone else that they will have less issues to double or triple the units they need. i've been watching the website, a lot have already sold out on their website.

the social media buzz is off the charts. i think google will be fine in terms of demand with their smaller share of the market. emily: would you say google is a bigger threat to samsung than apple? >> i think that will take more share away from samsung than from apple, for sure. it's easier for android people to move. emily: as always, thank you for joining us. that does it for this edition of bloomberg technology. tomorrow will be joined by christian klein as well as the inventor of the ipod. and of course the founder of nest. always good to have him on the show in a conversation you don't want to miss. i'm sure he will have a lot to say about the supply chain as well. i'm emily chang here in san francisco. this is bloomberg. ♪

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