♪ >> 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, and this is "bloomberg technology." coming up, time for caution? mark mahaney tells us which way the roller coaster is heading. the u.s. supreme court's

conservative justices president biden's push to get more people vaccinated as omicron continues to spread. how the tech industry's attempt to simplify the process of selling a house created a pipeline for billionaire investors to snatch property away from middle-class owners. the u.s. adding a far fewer than expected jobs. wages rose slightly, which means the economy is getting back to normal, and the focus now is on inflation. >> it is a confusing report. >> i'm not sure if it is an all clear. >> economy has normalized. >> there's nothing that will change what the fed signaled. >> the job market has normalized to a great extent. >> we are still moving around a full employment dynamic. >> that means the fed should

normalize its monetary policy. >> the fed cannot escape the inflation issue. >> it is all about inflation. >> the presumption is a hike. >> they are going to chase this thing and a hike aggressively. >> 3, 4 rate hikes on the table. emily: the reaction on bloomberg television throughout the day. let's see how markets reacted. ed: the reality is the data didn't do anything to change the psychology that rate hikes are coming earlier and faster. the nasdaq 100, having its worst week since february of last year, selling pressure on tech stocks. the main caps did better, down 6/10 of 1% on the new york index. also in crypto, the crypto index down 4%, its lowest level since

september. a big constituent is bitcoin dropping down below the $41,000 per token level. there are two stocks i want to focus in on, alphabet and microsoft. they posed -- they both had their worst week since march of 2020, their worst weeks since the prior -- since prior to the pandemic. these were two stocks that were out performers in the context of mega caps in 2021, but as that narrative has gained traction, it has slipped. another winner, mean. -- mean stocks. the stock, up 7%. amc, which has disclosed its ambitions for activity in the crypto space, and gamestop, the meme stock index, up on the

week. this is a bloomberg index, but the highest profile stock that went public, down 14% on the week. ouch. emily: i want to stick with tech investing with evercore's mark mahaney. he is out with new research saying now is the time for caution and taking a muted stance on the high gross stocks. is this the year the tech bubble pops? mark: at least for the high multiple stake stocks as ed was pointing out, here's the quip on what we've seen -- prices with multiples of 10x have traded off 10% year to date. i'm a we only have five trading days in the year, but you have aggressively rising interest rates. that is the new thing for tech investors this year. that was nothing case the last two or three or four years.

those high multiple stocks will be the hardest to be long with. that is why we -- our topics are ones where we think there is reasonable valuation or there is something specific in terms of a product catalyst or business model catalyst. emily: we saw a rising rates in march and october last year. both times, tech stocks sold off and then picked back up again. is this a mini dip, or is this more long-term? mark: i don't know, emily. we know we are going to have three to four hikes. we have not had any hikes yet. we will have more hikes than we've had the last couple of years, and the reason why it matters is so much of the value is in the out years.

that is the challenge if you have a high multiple stock. usually, those are the same things. the company is generating a lot of earnings this year, they carry a much more reasonable multiple. emily: you mentioned microsoft and google. microsoft and alphabet, having their worst week since the start of the pandemic, but you have a high price targets and outperforms on both. mark: our topics, amazon, facebook and uber. facebook, there are two major fixes. there are two problems i think they can fix. one of the big issues on this stock is not high interest rates. it is the privacy changes. if facebook can fix that and come up with a successor, a daughter of idfa, a solution

that has attributions almost as good as prior to the policy changes, i think you will see advertising money come back. i think they can address this esg discount. if they can address some of that, it can be narrowed. that is one of the reasons why i like facebook this year. emily: what about microsoft and google given that they have had such a rough week? mark: i will touch on microsoft, but google -- [no audio] i think there is less upside. i try to find stocks that are dislocated. i don't find google particularly dislocated. i think there is more upside on names that have had challenges this year. that is where amazon and facebook fall in. google, just less upside after a phenomenal performance.

emily: what about twitter> new leadership, and the stock has not recovered for years. mark: it hasn't, and i think the major problem has been lack of successful product innovation at the company. they've not been able to consistently ship new products to consumers and advertisers, particularly on the advertiser side. maybe that will change under current management, but i think we should be skeptical until we see evidence of that. that's been the issue for twitter for the last five years. i assume it is personnel, the people running the company, and may be having a part-time ceo -- i don't think that is a bad explanation. emily: what does the shape of the covid recovery look like to you? mark: i don't know. emily: hopefully recovery. mark: hopefully, it is a recovery. my guess is as good as yours.

if there is a recovery, the name i like most is the company with the most upside, and that is uber. they are 40% below pre-covid levels. we all need to be commuting once again back to work and need to do these business trips, and that may not happen this year, but if it does, the best recovery name is either travel names or the ridesharing names. the travel names are already trading as if covid is over, whereas you don't have that with the ridesharing names. i call that a trough multiple. i think there is the most upside in a name like uber if we move beyond covid this year. emily: what about regulatory risks for uber and some of these big tech names? obviously, regulation has been looming. does that crescendo this year, or not? mark: one thing very specific on

uber -- in 2020, prop 22 passed in california, a major positive catalyst for uber. that was reversed by a federal or state judge. that decision comes up for review next month. it is possible that reversal will be reversed. it is starting to get complicated, but there is the potential for a positive catalyst. it will be hard for prop 22 not to become the law of the land. in terms of big tech regulation, that is a permanent overhang. you will find one of those growth arrows that these companies need. we should have slightly diminished growth for all the major tech companies because big acquisitions will no longer be allowed. emily: uber, interesting. we will be watching.

always good to have you. the controversial social media app that helped fuel last year's meme stock frenzy, reddit, said to be going public as early as march. sources say it is working with morgan stanley on the ipo, which could value reddit at as much as $15 billion. it was valued as $10 billion last summer. coming up, the fight over vaccine mandates, citibank telling employees, no vaccine, no job. the supreme court is casting doubt on whether 80 million workers are required to get the shot. that's next. this is bloomberg. ♪

♪ emily: welcome back. as the pandemic drags on, a hint of optimism from president biden. president biden: i don't think covid is here to stay, but having covid in the environment here in the world is here to stay. covid as we are dealing with it now is not here to stay. we have so many more tools we are developing. emily: we hope, the comments coming from the president as a new study out of south africa shows that patients infected with the omicron variant, less than 5% died from this current wave compared to 20% during other waves. this month, hospital admissions declined, and fewer people were admitted to the icu. mandates are still being implemented, including a fight going on at the supreme court. cara wetzel is with us now.

what is the supreme court debating, and what signals are begetting about which way the justices are leaning? cara: the supreme court is debating an order by the biden administration and osha that would require employers with at least 100 employees to either be vaccinated or test weekly, either at their own expense or the company tracking that information. various groups have said this was onerous, and they've taken it to the supreme court. based on arguments today, they are indicating they will strike this down, less about the idea that companies can implement vaccine mandates, but is this the responsibility of the federal government? it's an issue of whether they think the biden administration has the right to implement this rule for companies. emily: do these rules being

rejected, does it make it harder for companies to endorse a vaccine mandates? kara: it is really up to the company. they are able to do it. the courts have held up the idea that you can do a broad vaccine mandate. as of now, it looks like a lot of companies are waiting to see how this all plays out. they were supposed to take effect monday, and a lot of companies have been in wait and see mode. about 30% of companies said they will only do a mandate if the osha rules go through. it is better for companies to have the cover that they have to do this because the government is telling us to do this, and they will have to accommodate it on their own. emily: in the meantime, making it a strict requirement that you've got to be vaccinated -- why are we looking at that vaccine mandate in particular? kara: citigroup has one of the strictest mandates on wall street, saying that if you

cannot show proof of vaccination or show an exemption, you are out of a job. few companies have gone that far. some companies have said, you've got to be vaccinated to go back in the office. united has the no vaccine, no job rule. citi, it's got not just bankers in manhattan. it has workers at branches across the country. it has back offices in florida and texas where they may be more vaccine hesitant. it is a broad u.s. companies saying that you have to comply with this rule, and they say over 90% have. their first deadline is approaching next week, so it will be interesting to see what sort of pushback there is. emily: kara wetzel, thank you for those updates. later, we will talk with the cofounder of reach capital about

the school closure debate and what it means for ed tech. taking a look at other news, the biggest annual ever videogame expo in the u.s. has been canceled. e3 called off, five months in advance, ahead of its normal time in june because of covid concerns. gamestop is jumping on the nft bandwagon. bloomberg has learned it plans to launch a marketplace and crypto partnership by the end of the year. over the last few months, gamestop has hired two dozen people to focus on crypto, this as the company looks at digital sales rather than its stores. next up, we will take a look at the home flipping business. as we head to break, i want to take a look at sonos, shares

jumping, this following a ruling by the international trade commission that google must stop importing smart home devices using sonos patented inventions without permission. the case involved a range of google products, including the nest hub and pixel smartphones. this is bloomberg. ♪ ♪

♪ emily: much has been said about zillow shutting down its home flipping operation, but with the company's efforts to sell off its inventory of homes, this has highlighted a truth of the business called ibuying. i want to bring in our guest.

what exactly is ibuying? noah: it is a business model that has cropped up in the last couple of years, and what happens is tech companies like zillow use algorithms to make instant cash offers for people's homes. it has been very popular during the pandemic. it helps people having to avoid holding an open house, gives them certainty of closing, and it grew rapidly this last year. the third quarter, those companies bought 20,000 -- 27,000 homes across the u.s. and had more than $10 billion in inventory on their balance sheets at the end of the third quarter. what i was interested in looking at is what happens next. the ibuyers are flippers. they don't want to hold these

homes on their books for very long. oftentimes, what they are doing is listing them on the market. normal people can buy them. what we found through our research and looking at over 100,000 property records is that we are flipping a staggering number of these to institutional landlords, particularly wall street-backed companies that buy homes and offer them as rentals. emily: what does that mean forever to homebuyers or potential buyers? our prices higher, or can they just not get these homes? noah: it is a little of all of those things. it is a relatively small but fast-growing business. it is concentrated in a couple of sunbelt marketplaces, places like atlanta and charlotte. these are fast-growing cities where there is an inventory,

especially among lower-priced homes that would give people who are buying their first home a chance to get in the market. the worry that researchers and other folks we spoke with told us is that some of these homes are just making it that much harder for people to get into the market. the other thing that is worth noting is that some of these homes that are getting sold to big investors are never even being listed on the mls, which is where most people go to find a home. they are just completely bypassing the market and going from often normal people to the ibuyers, to a big institution. emily: is there a place to lay blame? is it zillow or open or offer pad? noah: i think this is a feature of the business model they have set up. they are trying to provide a convenience to home sellers. home sellers are taking those bids. at the same time, there's an

incredible amount of rental demand for single-family homes. you are seeing the confluence of two business models that are overlapping and pretty dramatic ways in a couple of places. emily: how is the pandemic influencing this? we are seeing trends in the home buying and selling that we've never seen before. noah: look, i think the ibuyer's pitch is more appealing because we are in the middle of a pandemic. it is convenient for home sellers, but as i said, it allows a seller to not have to host open houses. by the same token, these single-family rental companies have record occupancy right now because a lot of us right now want the room that is afforded by having a whole house to yourself rather than having an apartment. emily: really important read,

bloomberg's big take of the day. thank you for sharing that story. t-mobile capped its biggest ever annual gain by beating all street estimates for fourth quarter growth. the second largest u.s. carrier, reporting 1.8 million new customers in the final month of the year. t-mobile predicts an industry slowdown. carriers are moving away from the free phone promotions that lead to a frenzy of sign-ups. coming up, much more on bitcoins volatility, and it is not a new phenomenon. after reaching a record near $69,000 in november, the flagship crystal currency has been struggling since. we will talk about where bitcoin goes from here. this is bloomberg. ♪

♪ emily: welcome back to4." i am emily chang in san francisco. bitcoin has been trending on and off all week and earlier dipped below $41,000. ed ludlow is here with the latest. has the winter already started? ed: bitcoin is under pressure. the first week of trading, we are down at, we dipped below $41,000. what is everyone talking about on twitter?

bring up the video. it is this idea that if you hold bitcoin -- it's ok, it is going to balance back. you have people saying, just hold off. emily: casting a lot of shame on the sellers. ed: we know the volumes are down on the major exchanges, cryptocurrencies. we know transactions are down. are they right? is buying the dipped the right call? emily: is it? ed: come with me inside the bloomberg terminal. it is a really sophisticated community that tracks bitcoin. $40,600 up to $43,000. this is the zone of interest. the lower redline, this is what

we watch for. when we drop to below that line, we continued to see declines. it was said $42,000 was the bottom. that is what we are talking about. thank you. speaking of volatility, what is behind these swings? >> just what makes bitcoin's rally so explosive? when bitcoin goes up, it goes up like a racket. it's rallies are spectacular with prices often rising several thousand percent per year. the crashes are often equally spectacular. what makes bitcoin and cryptocurrencies so prone to

mania? first, the buyer bitcoin has no relationship to the demand. unlike classical goods and services, an increase in demand is not met by an increase in supply -- that is because the algorithm of how bitcoin works is fixed at an increase. the difficulty of mining adjusts upward, but the rate at which bitcoin is mined doesn't increase. for this reason, when bitcoin's demand outstrips supply, the increases drive excitement. newspaper columnists find breathtaking adjectives to describe what is happening. that makes more people aware of the gains, and more money flows in. that makes bitcoin unlike a

normal good. demand rises as their price rises. higher prices beget higher prices. the mania becomes so big that the bubble bursts, rally stops. in the case of bitcoin, every bubble that pops was eventually followed by another bubble. i like to think of it as a rubber bubble, one that inflates and deflates over and over again. this is "decrypted." follow us on your favorite platforms. emily: love some eddie van der walt. is a crypto winter upon us? some investors are betting that interest rates will take a toll on crypto investing. let's ask our next guest, a managing partner at dragonfly capital, a global fund that wants to bring crypto to the masses.

i assume you are holy and rather than not. -- hodeling rather than not. >> everyone was expecting if and when interest rates respond, there will be a response in crypto demand. it's different from saying, where do you think this asset class is going in a long-term? emily: early in for a winter that is going to last a few months, or a few years? haseeb: if anybody knew when winter was going to, or not going to come, they'd be much richer than i am. most people who call these kinds of things end up being wrong. there are lots of things that are overhyped, and there are some narratives that need to prove themselves before they can justify the valuations they have today. it is very clear there have been a lot of trends, most accelerated by covid, that

crypto has really tapped into. the institutional investors who have started to buy crypto over the last few years, most of them will not go away because prices have gone down 15%, 20% from the highs. within growth assets as a category, we've seen a broad pullback. it has happened in traditional equities. overall, when interest rates rise, there is decreased demand for growth assets because people want to move into safer assets because they pay more. that is what we've seen happen in crypto. it is a far cry from saying, it's all over. the price of crypto is naturally associated with the price of other risk assets. emily: we are expecting rates to rise potentially. that is impacting big tech. we are also expecting

regulation. the biden administration might require crypto companies to report customer data to the irs. how do you think that will impact the market? >> the regulation we see coming to crypto is happening as expected. what i am concerned about is not people like, there is a tighter integration between exchanges and the irs, and people need to report their taxes. of course that is going to happen. the real question on my mind is, are we going to see any changes that are unanticipated. at the sec, they've been saying that they feel that crypto as a whole is illegitimate and everything was potentially insecure. people within the administration don't agree with him.

a lot of people in congress will be the determiners of how this stuff gets regulated. if we see a shift in sentiment, whether it is the status of many of these tokens, the way in which protocols will be regulated, the status of coins and whether they can be treated the way they are today, with any address owning the coin, if we see a secular shift in the regulatory approach in the u.s., that is what has been more concerned than the gradual stuff you're talking about, which was bound to happen eventually. emily: there was a huge fundraiser. some of that will go towards crypto. there seems to be an oversupply of funds going into the crypto market. are you seeing it drive real innovation? 30 seconds. haseeb: you are seeing a lot of

funds come into the late stage growth investing. if you are raising a $3 billion plus fund, at dragonfly, that is where we do our bread and butter. that is where we make our best investments. at the early stage, i see so many opportunities. so many problems that need to get solved before the stuff obtains optionality on behalf of the users. i think opportunity is ripe. emily: thank you for joining us. coming up, emotions boiling over in chicago. >> we are standing firm, and we are going to fight to get our kids back and in person learning.

emily: more than 330,000 children are out of school for a third straight day. the issues facing the public school system, not unique to chicago. we will talk to a teacher turned ed tech investor who will weigh in on this raging debate. this is bloomberg. ♪

emily: for a third straight day, classes at the third largest school district in the country are canceled. a battle is ongoing between the teachers union and the city over safety concerns that the number of covid cases continues to rise. it is an issue facing districts

across the country as educators struggle with how to teach while keeping everyone safe. joining me now, jennifer carolyn, a chicago native, cofounder of reach capital that focuses on ed tech at all grade levels. as not just a former teacher but a former teacher in the chicago suburbs, what is your reaction to what is happening in chicago right now? jennifer: thanks for having me on. i think it is really sad all around. it is 330 thousand students who are going to be out of school again across the country. there are 5000 schools closed due to covid issues, and this is at a time when students have suffered a lot already with mental health and unfinished learning and other issues. it is very challenging. emily: everyone wants to lay blame somewhere. teachers might blame the system. do you see someone to blame?

jennifer: i think i don't. i think a lot of people are pointing fingers at the unions right now. i think teachers have an extremely challenging job right now and simply unsustainable, their jobs right now. i feel like the teachers are under so much pressure. 77% are women and are struggling with their own childcare issues. they are having their own challenges, and they are not to blame during this time. what they need is compassion and empathy, not blame. emily: what do we need to address the crisis that involves getting our kids back to in person school? jennifer: teacher shortage existed long before covid.

the system has been stressed, and we are seeing how it is breaking the system. demands on the teachers have grown to levels that just cannot continue. they are expected to communicate with parents 24/7. their jobs are inflexible, so it is hard for them to go to the bathroom, much less a doctors appointment or dentist appointment. substitute teachers make about $13 to $15 per hour. i think there needs to be leadership at the state and federal level to get behind our teachers right now, pay the more to increase their incentives, and better their working conditions. emily: what about the kids and this mental health crisis? it is so scary, and school is a

lifeline for children across the country. would being in the classroom physically solve these problems? jennifer: it is certainly better for the children. we know children's mental health has been suffering for a long time, for years before the pandemic, and the pandemic accelerated the use of teams. the surgeon general came out with the mental health crisis for teens. one in the three high schoolers are experiencing feelings of sadness or persistent hopelessness. it's time we take a closer look at our children and what types of support and services we are providing for them. we know kids need social interaction. some of the research that is coming out about the deleterious impacts of the pandemic on teens, especially high schoolers, is that they suffer

from not being amongst each other, not having time to interact with each other. with sports canceled, activities canceled, that is what has negatively impacted them. it is critical for students who are most vulnerable, from the lowest income neighborhoods. emily: reach capital has been investing a long time. we were grateful for it when the pandemic started, but the skeptics say, virtual learning now is not enough. jennifer: there's no question virtual learning is not where it needs to be. i experienced that with my three kids during the pandemic, and many families were frustrated by the existing solutions out there. i'm encouraged that there is more money, more investment going into venture capital in education technology, and i think that will help to create

better solutions long-term, but there are exciting areas and solutions that ed tech is improving right now for students , and some of the areas i am most excited about our ways in which we can support teachers better and reduce their burdens and offset this labor shortage. emily: where are you placing your bets as we look ahead, and knowing that the pandemic is in some way, shape or form going to drag on? jennifer: we are investing from pre-k through lifelong learning, and some of the areas i am most focused on are things that are aimed at the teacher. the teachers job being so challenging, what are some tools and ways that the teacher does not have to do it all. we can bring a village of

supporters around the teacher and the classroom. we've invested in live online marketplaces which provide on-demand classes for students, and we are looking at issues like mental health, and how can we better support schools to diagnose and understand who the students are that need help. emily: jennifer, thank you for joining us on this and waiting into what has been an emotional debate. coming up, richard branson's orbit taking flight on the nasdaq as the spaceflight operator prepares for new missions in 2022. that is next. this is bloomberg. ♪

♪ emily: virgin orbit heading skyward. the commercial spaceflight company began on the nasdaq. it is one of several companies launching low-level satellites. the company is planning a lot of firsts in 2022. >> for our company, we pierce to the pandemic -- pierced the pandemic and drove a new technology into space launch. we penetrated the market more than we ever have. we saw a deal with ana airlines with 20 launches out of japan. we signed agreements with new space technology companies for hyperspectral imaging of the earth. quantum encryption from space.

boeing, other companies. it is a very exciting time for us. we need to continue to do that, and that is what we plan to do. there is a rocket in the mohave getting ready for launch over the next few days. we have a bunch coming behind it. we have the first launch of the u.k. -- out of the u.k. this year. we can launch from premature near port that can handle a 747. >> one is going to be deeper space exploration like mars. one is lower earth orbit. that is satellites closer to earth. that is where the fundamental moneymaking ability is going to be. how big is that going to be? >> the market for space is growing to be well over a $1

trillion market from about $400 million. lower earth or bert -- orbit, small satellite is the strongest part of that growth. we want to maintain their connectivity to their customers or from a national security point of view, to do their missions. >> is there something to the business model beyond launching? if not, do you see yourself in a different market than spacex? >> we have reached into unique markets. i've mentioned the u.k. we can give countries the capability to launch from their sovereign shores without them doing much except using an existing airport.

there are environmental benefits that crowd launch does not have, as well as flexibility and affordability. there are 80 space agencies across the world. only 10 countries have space launch. that is a huge business opportunity. in national security that is becoming more and more important -- you've read about the russian anti-satellite tests, for example -- we can be available in case a satellite is damaged and put them up in a mode -- a moments notice, and hopefully, that disincentivizes aggression in space. >> it seems like every country is trying to get involved in space. how crowded is it getting up there, and does that limit the addressable market for you? >> what is needed in space

really, or everybody is in agreement on this, is more international collaboration and infrastructure so we can do space traffic management like we do air traffic management today. emily: virgin orbit ceo dan hart. wall street week, coming up next. this is bloomberg. ♪

david: the new year picks up right where last year left off with covid, the fed, and jobs. this is "bloomberg wall street week." i'm david westin. this week, larry summers on the jobs numbers. >> i don't think anybody can look at this labor market and this jobs report and believe that we have a sustainable degree of heat in the labor market. david: the former ca chairman on building bridges to save capitalism. >> communities,