>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. caroline: i'm caroline hyde in new york in for emily chang. in the next hour, jobs report. the labor market coming into defy economist expectations. and a metamorphic week, dropping

the most ever. but not everybody is down on the company. someone says the bet is still on for the metaverse the playoff -- to pay off. and internet 3.0 and other parts of the world. we will have more on bitcoin development in africa and india. first, let's get a look at the markets. treasuries falling, yields rising. and of course, that increases the bet that we will get monetary policy that will raise rates. u.s. stocks managed power through that. there is some sentiment helped by amazon's earnings. >> that is the digest. a green on the screen. the stock market is back. the nasdaq 100 up by 1.3%. adding more jobs than expected. but this is the amazon effect. huge monster move since -- move,

the biggest since april 2019. the most added by a u.s. company in history. he might be thinking, haven't i heard that line earlier in the week? meta-down .3%. facebook spared copy having the biggest one-day loss. we reversed some of those losses following meta's earnings. the crypto index up 12%. that is the basket of all the tokens that we follow. a big part of that weighting is bitcoin. this is a pretty big jump, right? you are seeing it right over there on the left-hand side of your screen. we did not see such dramatic moves in the cryptocurrency like we saw throughout the week. we caught up this friday and we have $40,000 for the first time in around two weeks. like i said, the amazon effect.

you know me. i like context. even that monster move by amazon, this is a stock that has been under pressure. have come through the brutal earnings season. it has concluded with mega caps. where we go from here could be an interesting one to watch. caroline: thank you for the rundown. the day was taken up by u.s. labor markets, really showing unexpected strength last month amid record covid-19 infections. let's hear what our guest has to say about that report. >> every single part of this number was solid. >> it is a huge surprise. >> you don't see the expected omicron impact. >> the economy is shaking office pandemic and moving forward. >> this is the labor market really screaming. that will continue to keep the pressure on the fed.

>> it tells you the fed has fallen further behind the curve. >> there should be no ambiguity. there is tightening policy. >> the market is pricing this acceleration in near-term tightening. caroline: it was a big number, not just from january, but revisions from december as well. >> the year started off on much better footing then we start -- then we thought it did. first job growth last summer then acceleration. what we have seen is this momentum of the u.s. economy adding 500,000 jobs a month since may. so the fact that we were able to get a positive number, economists and analysts are kind

of whispering and talking very loudly, i guess, about a really bad print. it was an entirely different reversal in terms of getting this picture of a jobs market that is strong like dave powell said in his press conference. caroline: tell is where we can pick holes in the data. the adp reading yesterday was ugly. and then every economist blown away by this number. many saying that this wasn't really counted in the payroll. >> there are quite a few holes you can pick. like everyone else, even if this had been a negative number, this is a report that a lot of folks will look through given how many distortions we had from seasonal adjustments, omicron, and what you mentioned in terms of the

way that folks out sick are counted in the payroll number. an interesting thing to keep in mind as the seasonal adjustment. in terms of thinking about the combination of a bigger seasonal add then we typically get. -- than we typically get. some businesses chose not to lay off workers after the holidays given we have such a tight labor market. we have heard of all the challenges the businesses have had. it wasn't really offered to folks a few months ago. caroline: when the yield spikes higher, we worry about the federal reserve getting hawkish. today, that didn't happen. tell us about the monetary policy application of this number. >> absolutely. one key number the market participants were watching in terms of the fed is this wage number. and we did see wages surge much

higher than folks were expecting. and not having as many compositional issues as folks were thinking might happen. you did get averageours worked for the week, you did see that decrease. which had an impact as well. one thing that i thought was quite interesting, is that you also kind of heard some talk while folks were saying they weren't changing their base. but the talk of the 50 basis point hike in march started coming up a little bit more which was really interesting to watch, given where the fed is. caroline: we will see whether or not they go. we have 20 a fed talk this week saying that 50 basis points too much. -- we have plenty of fed talk this week saying that 50 basis points is too much.

what about the inflation amazon uses? they are raising their prices. shares surging on the back of the news yesterday. 14% on friday, adding $191 million in market value. we are joined for more. talk to us about the membership price increase and what you are getting on the year and the month. what will people be swallowing? >> a $20 increase for people that pay yearly. an extra two dollars a month for people that pay monthly. $20 yearly, two dollars a month for monthly. a little more than half of members are on the monthly payment plan in the u.s. that is something they introduced back in 2016. just to try to appeal to low and

moderate income shoppers. at the time it was $99 and that was a big blow. i have to pay $100 just to shop? they introduced a monthly plan to soften the blow a bit and it has really taken off and help them at a lot of members. -- add a lot of members. if $139 is too steep for folks, they can trade down to the $15 a month plan. caroline: we know inflation hits the lower income the most. is there any fear of backlash? is there any point we think that the price isn't there? >> the numbers don't bear that out. the prime attention for monthly subscribers is almost as good as the yearly members. if you pay monthly you can

cherry pick your month into be a member for a couple months over the holidays and then peel the membership back. there has been pushed back social media. we don't know if that's just fleeting twitter rage and if it will translate to people canceling their subscription. caroline: we thank you so much, spencer soper. coming up, what's in store for meta after the historic fall? we have a conversation about why it's time to buy, not sell. up next. this is bloomberg. ♪

caroline: let's talk about meta and the $250 billion wipe out. some are still bullish on the big bet on the metaverse. and the research founder, ceo, why this shift is the right one at the right time. >> look, we think it is an incredible company that is encountering some short-term turbulence. and it might mean that it lasts for a few quarters. we are not making an immediate call. it will temporarily fall out of

favor. i think the long-term economic characteristics were still intact. i think that's the case. caroline: talk to us about long-term growth because that is what everyone is questioning. the sudden jolt. they are still posting 20% revenue growth but they are not posting an increase in daily active users. >> meta is not just facebook which has slowed down dramatically, but instagram and whatsapp are still growing. and you still have the 10% active user growth year-over-year. and the report that was supposedly horrible, the two drivers of the meta revenue growth, there is monetization per user. and in every part of the world, that also rose in the fourth quarter. again, they are making this shift by apple that makes ad

targeting more difficult kind of a one-time downward recess by about $10 billion this year. and they are making a big investment in the metaverse which we think is sort of an interesting free call option that you're not paying for here. caroline: but they just paid $10 billion to invest in the business. >> they did not pay $10 billion, they are investing a cost of $10 billion annually going forward. that haircut last year, 18% lower than they would have been had they not been making this big investment. so we look at the core business and some of the greatest economic characteristics from any business in the world, rivaling alphabet's business. the reset lower earnings estimate, and in fact, i was stunned to see jim tweeted that

meta is cheaper, the stock is cheaper than ibm which is a notorious value trap. i have been warning my readers about it for more than 20 years. the stock has been flat for 20 years. caroline: ibm has actually started to post revenue growth. ibm was starting to see the cloud business takeoff because there is more business spending. but we haven't seen the business spending coming into the advertising part. for example, the whole thing over instagram and facebook. mark zuckerberg warning about competition. >> no question competition is rising and you can buy facebook at 11 times trailing 2021. ibm trades at 15.4 times. and ibm has a bunch of net debt. facebook is drowning in cash.

one of those numbers is wrong. it is absolutely one of the craziest things i have ever seen in the market. when ibm trades at 50 times had a facebook trades at 11 times. one of those numbers is very wrong. i think ibm is overvalued. and facebook meta is undervalued. caroline: you talked about the ibm value trap. and there are traps in the secular parts of the market. >> well over a year ago, the stock bubble -- i sent out a note to my readers calling out the game stock bubble -- the gamestop bubble. gamestop and amc are down an average of 50% in a plus 16 market.

but again, exactly a month ago today, i named my top 10 stocks -- top 12, excuse me. the dirty dozen that i would be shorting if i were still running a hedge fund. the three top stocks are the digital acquisition, the trump stack which is the only one that has gone up in the last month which is an even stronger stock to avoid. the next are gamestop and amc which are down 70% and 80% from their highs when i nailed them a year ago. this is an interesting market. a lot of speculative stuff has held back. creating good opportunities. but there is a lot of overvalued dreck out there. being a long investor like i am, lots of opportunities on both sides. caroline: interesting times and interesting markets. it with thank you so much, whitney tilson.

great to have some time with you. breaking news for our audience coming from dow jones. interest from suitors including amazon, according to dow jones. shares are surging after hours in the report of this interest. they have faced interest from activist investors to replace the ceo of john foley, once again in the spotlight. the dow jones looking at that particular stock. another story we are watching his nike. -- is nike. nike alleges nft services are using nike's trademarks without approval. stockx has yet to respond for request to comment in the lawsuit is the latest litigation over nft's. coming up, we will hear more from emily chang, a conversation

with the california congressman about how technology can benefit all of america. that's next. this is bloomberg. ♪

caroline: now the house has passed a bill that democrats say will increase u.s. chipmaking industries and boost american competitiveness with china. it includes $52 billion in chips, $5 billion to improve the supply chains for critical items. the bill was approved along party lines with republicans complaining it was too weak on china. meta shares lunch -- plunge, and some say this could be the rise and the rise and fall of big tech. there is years of growing scrutiny, but representing

silicon valley and congress, he is out with a new book, "dignity in a digital age." making power and wealth accessible to all workers of the u.s. emily chang spoke with him about this and about how the pandemic affected things across the country. >> the pandemic was a forced experiment in remote work and companies figured out that not everything had to be in an office. they could invest across the heartland and across the south. my book said, we are already doing everything. it was going from impossible to inevitable. i think of intel in ohio putting $20 billion in creating 3000 manufacturing jobs. i talked to pat who said there is so much enthusiasm and

nationalism. aspirations for the future. that's what we need to do around the country. emily: you're calling for mutual responsibility between congress and the tech industry in the economy. what do you want to see from mark zuckerberg, satya nadella, and tim cook? >> on the economic front, i want them to be imaginative about how they can recruit and retain more talent from rural america, hbcu's and hispanic serving institutions. make more investments across the country as intel is doing. he really believes he has a responsibility to build american manufacturing and is excited about that. i would like all the tech ceos to imagine how they create opportunity in places that have been left out. in terms of the public sphere, that's a much harder question because yes, we need regulation on data, on consumer protection.

making sure there is competition. but the government can't be the arbiter of truth. these companies, social media companies, have a responsibility to make sure that the speech they are encouraging is inclusive, that they are being thoughtful in creating spaces for people to exchange ideas and they aren't defaulting to sensationalism that captures attention but isn't really conducive to public discourse. emily: big tech companies say that breaking them up will only make it harder for users to use services that they love and that helps small businesses. what is your response to that? >> there has to be a balance. i'm not for just breaking up all big tech. there are absolutely efficiencies of scale. there are products that help consumers and small businesses advertise. when you have companies acquiring competitors to kill competition, that shouldn't be

allowed. and when companies are privileging their own products and not allowing others onto their platform without any good reason, that shouldn't be allowed. what i propose is a balancing test saying that you shouldn't be able to discriminate against sellers unless you can show it is clearly against consumer welfare. strike a middle ground between break them all up or let them just be and have a balanced, well-crafted regulatory approach. caroline: california representative ro khanna there. what a week it has been yet again. it we will dive into earnings. what they mean and how long big tech can be delivering. and coming up, we talk about the bitcoin blind trust set up by jay-z for development in africa and india. breaking news from the likes of dow jones saying that latonya is -- peleton is looking at

interest from suitors including activist investors wanting to replace john foley as ceo. we will have more on that and the remarkable after hours share prices of peleton. this is bluebird. ♪ -- this is bloomberg. ♪

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carolyn: welcome back to "bloomberg technology." let's get back to what felt like a wild week for the markets. it was really one for the books. we had some star performers and one notable exception. ed: before we get to that, i'm really sorry to say, the wild week continues. we got some breaking news after

the bell. according to a report by "the wall street journal" and dow jones, amazon and others are expressing interest in buying peloton. amazon is already talking to advisors. the stock up 34%. it had been up as much as 40%. this is a company whose stock is down 30% year to date. it is shrinking back since demand has fallen off a cliff. amazon currently valued at $8 billion based on friday's closing price. could you see it happen? we will have to wait and see. we have been all over the place. we sunk with meta and rose with amazon, but the net impact is we have had a good week. the nasdaq also posting

back-to-back gains on a weekly basis, so have we turned a corner as we come out of january into february? there's a change of vibe as we end the week. there are some specific winners and losers. we got to talk about alphabet and amazon. amazon is the story in equity markets. the bucket -- the biggest one-day game in market value for a u.s. company. meta platforms, on the other hand, its worst week ever, and i'm sure you are about to have a robust conversation about that. two of the big surprises of the week -- snap and pinterest. did we see that coming? probably not. caroline: what a week, but it is still down if you have been buying snap, but certainly up if you bought it a couple of days ago. meanwhile, as ed was saying, we

want to stick on an enormous week. tech earnings aplenty. what are the numbers telling us right now? david kirkpatrick joins us. he is our senior industry analyst. you are the perfect voices to speak to this moment. david, first and foremost, the fact that meta ended up being the outlier, what is happening? are they specifically losing their advertising traction? what do you make of the moves? we saw a real outperformance in the likes of alphabet and even amazon outperforming snap. david: it is kind of surprising. facebook and meta has done an extraordinary job over the last number of years creating a reliable advertising platform, and now it seems to be

underperforming its competitors. the only thing i can think of to possibly explain that is that maybe in the months since they shifted and changed their name and they have and asking engineers to reapply for jobs in the metaverse position, etc., they had just taken the eye off the ball of their traditional core business, which is an extraordinary business that really should be still performing. caroline: your views on that? men deep -- mandeep: i think they try to get too much value, and that is why the stock has been underperforming. meta said they would grow 11% on the high-end, and that is telling you about the spending. the scale at which meta

operates, and, you know, snapchat and peloton, they are, like, 2% of meta's scale, and their guidance is telling you digital advertising overall may be decelerating. we may have pushed forward some of the growth during the covid years, but it is probably decelerating. caroline: talk to us about what the other storylines are. interestingly, ar all firing on all cylinders, except youtube. david: what is resilient right now is enterprise software. we continue to see 35%, 40% growth in cloud. amazon numbers look great, but also growth came from cloud, same thing we have seen from other enterprise software names. clearly, it is holding up well, and typically, that cycle is the

last one. ip spending stays drunk and once you start to see economies slow down, that is when companies cut i.t. spending -- i.t. spending slows down, and once you start to see economies slow down, that is when companies cut i.t. spending. those are the type of businesses that continue to do well. caroline: even amazon has pricing power when it comes to the consumer, raising the cost of prime. david, from your perspective, let's talk about the business models you are seeing and the way they have evolved. all of them have been under pressure from a regulatory perspective. it is interesting with meta, for example. they talked up competition, and that is kind of what they tried to tell regulators, lawmakers as

well. david: it is a good point. it is a convenient argument for them to be making for a number of reasons given the assault they are facing from regulators, and tiktok in particular, it is a plausible complaint they are making. they are definitely facing pressure. i do think it is worth mentioning that i think facebook's stock selloff was excessive considering the nature of the news they unveiled in their earnings -- meta, i'm sorry. i keep calling it a's book. -- i keep calling it facebook. it is fascinating to me to hear someone talk about it as a value stock, but if you look at the p/t, it is hard to think it is and undervalued company right now -- if you look at the p/e. even though advertising as part of the business could be softening, their position is so

strong in the global advertising market that they are likely to do well over the long-term. i do not applaud many of the things they have been doing in the last couple of years, even, and i think the market may be punishing them for simply distrusting the company -- or simply distrusting the company more broadly. caroline: do you buy that? what do you make of the fact that no one bought the dip today? mandeep: the fact that they kept emphasizing they are going after tiktok and the pivot to video -- i think they caught the market by surprise, the way they talk about all the competition and the change in strategy and the metaverse expenses. clearly, there are multiple issues going on, but they are the incumbent players when it comes to social media advertising. the small business advantage is a big one.

it is not going away. they can fix things. if apple has to open up the ecosystem with the bill being introduced in the senate, that can change things. if they can introduce a payment platform on the ios, i think that can change things for them. it is still fixedable. it's just the way they laid out the conference call and talked about the transition i just think did not make sense. caroline: who should we be paying attention to for earnings coming next week? mandeep: we know costs are rising for every business out there. that will be a headwind for the margin. that is one thing to keep an ion -- who has the margin power to pass on those costs? uber and lyft have shown they can pass on costs, but these companies are not profitable to

begin with, so if costs start to hit their margins, i think that will be an overall negative them. caroline: we thank you so much, both of you. have a wonderful weekend. techonomy founder david kirkpatrick and bloomberg intelligence's mandeep singh. more on bitcoin's development in africa and india next. this is bloomberg. ♪

>> last year, jack dorsey and rapper jay-z announced they were giving 500 bitcoin to set up an endowment fund. the trust was designed to be blind to fund bitcoin development in africa and india, and it needed new board members. dorsey put out an open application on twitter, and after sifting through thousands of amid -- thousands of applications, they whittled it down to 4. one of them joins us now. what were your conversations like with jack dorsey, and what are the implications of this? >> ask for having me, stern ali -- thanks for having me, sonali. i think the major thing that

stuck out would be the growth potential we have in africa and india. our main focus is to build out the ecosystem in africa primarily and as we build out africa, we expand to other regions like india as well. the main thing we are trying to prioritize is transparency because we recognize this is a novel initiative because -- so we want to be as transparent as possible in terms of her funds are going to. in all honesty, the expectation is that this is all up to the board itself where we are going to be the ones to transpose the space to be completely all in our hands. the expectation is for us to grow the ecosystem, like i

mentioned. that might not be what other people had been thinking, which is venture-capital style equity funding. we are going to stay clear of that. it will be mostly primarily funding through ground space funding through developers working in the space, working on the bitcoin ecosystem, things like working on it coin core. we are so getting things set up, but, you know, we have made quite a lot of progress, and we will continue to communicate that progress to individuals. that is kind of where we are at. sonali: what can you tell us about the kind of projects you are funding and where the money may end up going eventually? what is the goal here? >> the general goal, like i said, will be maturation of the bitcoin ecosystem here in africa. primarily, funding will be going toward ground-based funding

initially, and gradually, we will be expanding. with regards to more generally when that will begin, like i said, we are still setting things up. the expectation is that we will probably be deploying soon, but these things take time in terms of setting up. like i mentioned, we have a lot to do in terms of setting up from scratch. in terms of deployment, i cannot give an actual date, but very, very soon. sonali: you mentioned bitcoin a few times. i wonder how your thinking about bitcoin versus other assets. there is clearly some pressure to go to bitcoin. it is in the name of the trust, after all. what does bitcoin have that other currencies may not be afro -- may not be offering to the nations of africa?

>> that's a good question. bitcoin is an open monetary network. it is more secure and has a lot of attendant benefits. i will just highlight a few. the numbers could actually run to billions, i think. the cost of setting up a bitcoin wallet is relatively cheap, and with regards to the opportunity that it does provide two individuals, we are talking about financial sovereignty, so this allows them to be insulated from government risk in terms of seizure of funds and assets and that kind of stuff. it is also a hedge against inflation. another thing is there are a few other things in terms of benefits, so it comes with benefits we see in terms of bitcoin that other currencies

simply do not have. sonali: you see firms like cash app integrating the lightning network. i wonder how integral that is for companies to be able to make this mission possible. >> it is very, very important. the point would be going more towards the future of what we look at for what we see that the way forward would be a lot of these companies, if it's twitter or some of these other apps, integrating lightning and allowing individuals to access the monetary network. in africa, we managed to integrate lightning and begin

transactions in, like, 10 seconds or so. the future is bitcoin. sonali: thank you so much for your time. much more of "bloomberg technology" after the break. this is bloomberg. ♪

caroline: let's talk about my hometown, u.k., signaling that technology for women is finally starting to be taken seriously by investors. how important are medical devices for women, and has this

changed the way breast pumps are made? >> we are using tech to give women more control over their bodies. >> i never had a plan to work in tech or become an entrepreneur. i was working and became pregnant, and, like many women, i realized so many things were happening to our bodies. >> that was 2013 when the company got going. your first product was a trainer . you had success with the product. that led to the second product, breast pumps. can you talk about the thought process? >> i wish i could say i had this amazing, long-term strategy. it was a pet project for a product i wanted to solve. i could see it was beginning to gain traction, and suddenly finding myself in the tech space

and recognizing that all medical devices, particularly for women, are horrifically designed, particularly the breast pump. if you are familiar with the old architecture, it had a huge motor. had not been -- it had not been innervated for decades. makes this loud noise. -- it had not been innovated for decades. women told us they felt like they were being milked like a cow. it had been so horribly designed that women were having a really negative experience, so having seen that product and seeing it so badly designed, we just sort of ripped up the rulebook and started asking ourselves how the breast pump should be designed.

>> how does your product overall ch txpncwomen?>> even the manua, you have to use your hands. this is our wearable option, so we basically turned the whole category on its hands. we turn both manual and wearable into very discrete propositions. the idea or the vision being what if i could have something that is so discrete, i poppet in my bra -- i pop it in my bra and let go? in order to be very discrete, it needs to be very small, and it needs to also be silent. most pumps use a rotary motor. we use a pump that works

silently. there's not really any attention there, so that is how we are able to redefine categories. caroline: just so smart. the founder and ceo of elvie. newtek regulations come amid a clampdown from u.s. regulators -- deutsche bank tightens its grip on whatsapp amid a clampdown from u.s. regulators. that does it for "bloomberg technology." "wall street week" is up next with my colleague david westin♪

david: the great sapphire art of the 20th century changed a vision of the future with one development -- travel to space. space travel seemed like it was just around the corner. here we are a half-century later and only about 500 human beings have ever left the bounds of earth's atmosphere, but thanks to a set of ambitious private companies betting on the promise of space tourism, that long-awaited future could be here sooner than you think.