>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. ♪ caroline: i am caroline hyde in new york, in for emily chang, and this is "bloomberg technology. one week" a new board member -- one week later, twitter is no longer

getting a new ford member in elon musk. and we will go to the floor the nasdaq for a conversation with the head of revenue to get a look at the current ipo market. we will get to all of that in a moment. but first, look at the market with ritika gupta. ritika: not a great start to the week for u.s. equities. s&p 500 down 1.7%. nasdaq 100 underperforming, down 2.3%. a big part of this has to do with yields surging, both nominal yields and real yields. inflation becoming increasingly less negative. the question really is when that belial does turn positive, what is that going to do to the stock picture. let's drill into some individual movers. it is not all doom and gloom in

the tech space. twitter, what a volatile ride in the last 24 hours. initially slumping on the news that elon musk will not be joining the board after all, but reversing course and shares ending the session higher on the idea that he will increase his activist stake, pushing for bigger changes. i'm looking at the cybersecurity firm that is surging, going to be acquired by a private equity firm. this will buy the company 6.9 billion dollars. a lot of interest in cybersecurity with work from home options and the russia-ukraine war. nvidia pushing some of the chipmakers lower. fighting some weak demand outlook. and stocks moving in sympathy with bitcoin. below the $14,000 threshold. that brings me to my terminal chart. i'm looking at the correlation

between bitcoin and tech stocks can which has reached a record high. you can see on my right the green on your screen is very positive relationship. it pours cold water over this idea that bitcoin is going to be a good diversifier in your portfolio. we have the founder of bit max saying he thinks bitcoin could go down to 30,000 if the stock rout continues. we will have to wait and see for that. caroline: a bit more of risk asset then an inflation hedge right now. amid the war in ukraine raging on, consumers on both sides tightening their belts due to the rising costs, particularly at the gas pump. it is a question many have been talking about, where it the store of value -- gold or digital gold, for example. an mp, wonderful to have you

here, minister. i'm interested in what people have said about the red carpet being rolled out at the dish in the united kingdom to cryptocurrency. them a i think we have to accept that this be a great opportunity. we have gripped it in the u.k. i made a speech last monday and i mentioned a number of interventions. we want to bring the street together with the regulators and government to work out the best steps to take this interesting phenomenon forward. it has major implications for financial services the wider economy. i am pleased we are able to get that engagement with industry here and in london. caroline: let's talk about here in new york. the meetings were having with the sec, federal reserve, this has got to be across atlantic regulation. it's a global asset. >> every jurisdiction has a

sleigh different take. i was here in the autumn and i'm back here now in washington this week talking to regulators and government and industry to ensure that we meet expectations and think creatively about what we need to do to get this into the right place so consumers have certainty that any risks are dealt with and faced up to and we can actually come to terms with the challenges in terms of how we tax, do we tax, and creating a regulatory framework that gives innovators assurance about the future. caroline: what do you make of talent -- i think about the bank of england worried about scams in the crypto space. i think it was the bank of england leading to a crypto job. how do you see the tension between the institutional finance moving into the world? >> in the u.k. we have been a global hub of fintech, and i see

in cryptocurrency and exchanges in the u.k. a great opportunity. it is likely we could get the regulatory framework. we have got to terms with the promotions regime that taxes consumers. but we have got a brace for the opportunities for new phenomena and how that will apply to markets. caroline: let's talk about the sensationalism in many ways of non-fungible tokens, taking a nosedive but still a lot of interest. we have the royal mint looking to create an nft. >> that was part of the announcement last week, and the chancellor wants us to create an nft. it is important that we pick up on the emblems of change in the opportunities that will exist in the future. we have asked the royal mint to

develop and an f sheet -- develop an nft. caroline: in the united kingdom my family day in and day out talks about inflation and electricity and what is happening in terms of the ramifications, antagonized by the invasion of russia into ukraine. talk to us about how the u.k. feels right now. 1.1% growth in the economy being stifled. that is before you factor in the implications of the russia-ukraine invasion. >> these are challenging times that we hope we come out of covid and get a brighter times. that hasn't happened. what has happened in the ukraine has a very difficult impact on the economy. we are seeing that. we also have global pressures in terms of inflationary pressures and that is playing out in the u.s., playing out in the u.k., and across the globe. these are challenging times for british consumers. caroline: challenging times for

british consumers where they are being asked to burden heavier taxes, largest since the 1950's. and at a time when they look to the chancellor of the checker he or she -- chancellor of the aft checker -- chancellor of the exchequer and feeling that he or she is out of touch. i'm wondering how he is dealing with the pressure that is upon him and his family and many are worrying that his own family members have not been paying their taxes as they should've been doing. we look in particular and his wife, who has been super rich in her own right but did not pay u.k. taxes on overseas earnings good how is that being digested? >> i think the chancellor is an absolute professional in the way he has worked the last two years. he was parachuted into this role of the start of the global pandemic and has worked tirelessly to provide interventions to support the british economy. i recognize these are

challenging times for him and his family, but he will come through them. his focus is on doing what it takes to get the british economy through these very difficult times. he has made a number of interventions in the thresholds of when you pay national insurance and tax and support for society. many will say there is more to be done, and he will look to the future fiscal events to address some of those concerns. caroline: how do you feel when as a member of the conservative party, looking at what ethically is being judged by at the moment when we think about the leader of your party in the chancellor of the exchequer doesn't seem to be in touch with reality and many people feel that, holding a green card at the same time. what tethering he has in the longer-term to the country. and then nothing to do -- today

the nc think of -- today the unseating of an mp in a selection and previous misdemeanors when it comes to abuse. >> i have been indisposed for nearly four and half years. i like the chancellor and focused on the task at hand. i have done that with three chancellors and i have always been impressed by the professionalism of the people they work under. he is a first-rate boss and a first-rate chancellor. i have absolute confidence he will come through these difficult moments and we will see what can be done in terms of future fiscal events in the budget. caroline: come back to tell us about the u.k. and how you can embrace change and the world of technology. the u.k. economic secretary to the treasury, that is john glenn. it turns out that the twitter board meetings won't be so lit

after all now that elon musk is not joining the board. this is bloomberg. ♪

caroline: well, a week feels like a month, doesn't it, when elon musk is concerned. look at where things stood one week ago, because last monday it was revealed that musk held a 9.2% stake in twitter. the next day it was announced he would join the twitter board of directors. we then learned he delayed in reporting his new stake in twitter and concerns that

employees had on musk's involvement and the effect he would have on the committee. then he twittered that is that he tweeted that twitter is dying and with jeff bezos turning it into a homeless shelter. we will dive into all of this. the first angle is why m usk might have rejected the offer on the board. joining me is john coffee of columbia law school. what an extraordinary story to be unfolding. i'm interested in what you think is behind all of this. what is initially the rejection about? john: on one level this looks like déjà vu all over again. elon being elon. he did this at tesla when he

thunderously disclosed he had offered to take the company private, which saudi arabia was standing behind. the sec sued and he agreed that he put in the general counsel of the company, the intermediary between him in any public statement about the company. he has never been happy with that and never really obey that. now with twitter he is doing the same thing. it eventually got up to near 10%. think about the people who stole in the interval between 5% and 10%, which could be $100 million or more in terms of shares. those people sold at a much higher price. he disclosed he was buying and going on the board, becoming the largest shareholder of the company, because he is the world's richest men and can buy what he wants. when he didn't disclose, they sold at a lower price than they would've gotten with fair

disclosure, and some of those people may sue and a class action claiming they were treated by effectively insider trading when he bought the stock without disclosing information he was required to disclose. you can debate both sides of that, but it is likely to garner a private lawsuit or the sec suing on behalf of their shareholders. they are concerned about trading activities at tesla when he was in effect paging the shareholders, pulling them, to see if they wanted him to change ownership levels. there is a recurring pattern of over the line with trading violations. caroline: professor, talk to us about fiduciary duty. many felt perhaps it was in many ways defensive of twitter to have brought him onto the board and stop him building up the stakes further than 14%, for

example. however, what limitations would it have put on elon musk to his own communication, his own tweeting? john: of course reason he did not go on the board is that they cannot tolerate the statements he was making. he tweeted that he would like twitter to stop selling advertising for the that must've stunned the ceo. twitter makes 90% of its revenues from advertising. if you are the ceo, you cannot have anyone concluding this richard mann -- richer man come as a director making statements that were not cleared by counsel or anyone. i don't think the ceo could focus on interim planet, but he will get a daily barrage of comments and directions from elon musk. caroline: just to walk us through the legal ramifications can you are expecting the sec

and lawsuits currently -- john: given things can happen. it could be class-action, investors who sold during the period he did not disclose when he was supposed to disclose his greater than 5% ownership, which went up to 10%. the sec could say that these demons amount to a material omission. you did discuss if you own over 5% and we say that could amount to insider trading. or they could just say he made false and reckless statements. caroline: and fines? john: i'm sorry, what? caroline: whether ramifications -- would the ramifications be fined or something worse? john: insider trading can be a criminal offense. the sec cannot charge you with a crime but the department of justice could. they could sue for damages equal

to as much as three times of the gains made or the loss averted when he bluffed the stock. he did not disclose that the outset what he was doing, then the sec could look at begins between the 5% level and the 10% level. he is the richest man in the world. caroline: john coffee, jr., columbia law school professor, fascinating conversation. i want to stick with musk and the issues he was facing with twitter and welcome in dan eyes for another extraordinary story involving elon musk. from your perspective, what happens know if he is not on the board? >> i think him being on the board is almost a cinderella story, to the point that he would be on the board and they would limit his ownership to 15% and strategically he could help the company. now it is a total different situation. i think he ups his stake going

forward. does he team up, and how active does he get. for twitter i think this goes from a cinderella story to potentially "game of thrones ith musk and the twitter board clearly going to lock heads. caroline: great analogy. do you anticipate -- do we see some sort of buyout? does twitter eventually get bought, brought private? dan: before musk was involved twitter was an underperformer. advertising has been disappointing. which is why he was the knight in shining armor for investors in twitter. the next step will be he will be allowed -- i don't expect he will go and reduce his fee. this will be the bright spot of twitter, and for twitter, for

the board, it is their worst nightmare. musk in the boardroom is contained. musk outside the boardroom, this becomes a soap opera, get out the popcorn. caroline: i'm interested into what you think could be damage limitations here. what will be the product innovations that start happening? dan: i think this will end with some sort of strategic initiatives. whether that ends with an ultimate sale, sunsetting products, focus on the subscriber and advertising side because that is the issue right now. musk combat is not necessarily his expertise. but this is over the coming months and you're going to be a very tough situation for twitter if they somehow miss execute

over the coming quarters. caroline: before you go, we have time to think about the world of cybersecurity. it, my intention with your note you put out about southpoint and the deals being done and the purchase. what you make of the focus and where are you putting your moment in terms of -- putting your money at the moment in terms of cybersecurity? dan: it is a golden age of cybersecurity. i look at names like tenable, checkpoint, among others, and i think it really just shows the value of cybersecurity. public investors will sell the stocks. strategic and financials will buy them. caroline: dan ives, great to catch up with you, and all the analogies. this is bloomberg. ♪

caroline: i am caroline hyde in new york. this is "bloomberg technology." other stories we are following -- a company will give the ceo a founder share as long as company shares of shop if i have been under pressure. it is ending the day a little bit higher. sony and the owner of lego group have invested $2 billion in epic games, maker of fortnite. the videogame maker is one of the five most valuable startups in the u.s. it is currently waging a costly legal battle with alphabet. a new batch of the videogame licenses -- bloomberg has

learned that regulators have distributed a list of approved titles. china's far-reaching tech crackdown extended to online gaping. -- online gaming. coming up, as stocks continue to whipsaw, some big-name startups have slowed the rest of the public market. we discuss the health of the ipo pipeline list that is next. we will be discussing amazon it amazon throwing billions of dollars and how the drone program is faring. spoiler alert, not great. amazon was whether the leading decliners -- was one of the leading decliners on the downside. nasdaq off by more than two percentage points. valuators under pressure as receipt bond yields and borrowing costs continue to

rise. the questioning of evaluations that particular space. from new bloomberg. ♪

caroline: this is "bloomberg technology." i'm caroline hyde in for emily chang. with several big names expected to go public, some are accelerating efforts. here to join us is the senior vice president and head of u.s. listings and revenues and the nasdaq. talk to us about the solidity of the pipeline. how are we seeing companies -- are they hunkering down until we see the ease up and volatility, or is it something different?

>> i think companies are preparing to go public. i think this year is going to be a situation where you see windows of opportunity and they want to be able to hit the market when that window opens. you are starting to see signs of life. we are very focused on the vix, the volatility index. when that is between -- below 25 which is where we like to see it, 95% of companies go public when it is below that level. we are very focused on that as a lead indicator as well as the convertible market, which has started to open up. the vix has stayed below 25 the last 18 sessions which is a good sign. yesterday to get inbound calls from companies looking to go public at the -- we are starting to get inbound calls from companies looking to go public. caroline: what kind of

companies? karen: there is a lot of interest from consumer companies from 37% of the pipeline. 19% are health care companies. 10% are financial companies. the remainder are industrial and energy companies. really good depth and representation from the entire economy. caroline: when you are thinking about how it would be taken down by the market. these committees are analyzing -- these companies are analyzing how they can tell that story in some way. karen: i think it is important. valuations have adjusted for that inflation. companies have to address the pipeline situation. all the destruction. they definitely have to have their ducks in a row. i think there is no rush to go to the public markets at the moment. there are ways to raise capital. people want to make sure they

are ready. a very healthy pipeline for committees is greater than it was this time last year. we are very optimistic about that. caroline: talk to us about whether or not there is a disconnect between the public markets and the private markets at the moment. karen: i think we are starting to see that closed. when i would say is that public markets tell you where they think things belong. private markets respond a little bit more slowly to that. i don't think that is a bad thing, but that is one of the key differences between the public and the private markets. companies that are looking to go public understand that. they have gotten their heads around their current valuations and what the market expectations might be. caroline: we have had a fascinating story, whichever way you want to slice it, with what is happening with elon musk and

twitter, and many afflicted a lack of controlling space by founder, or ask shopify is doing a stock split and making sure the founder is maintaining a level of control. when companies are coming to the market, how are they looking at those sorts of narratives? karen: what i would say is that esg has become more topical for private companies coming to the market. we are spending a lot more time with companies on the private side as they are preparing. governance has always been very topical. and it is really up to the company how they want to structure their business. investors will assign a discount or premium based on what they feel is the right structure. caroline: you are an expert on the e and s as well as the g. i'm interested in the social part. now is a time more than anyone we are thinking about humanity

where we are looking at russia-ukraine and where employees wanting to see companies stand for something. how are you seeing that being exercised by businesses looking to list as well? karen: there is a lot more competition around stakeholder capitalism. it is the entire ecosystem that is focused on it. i think companies are recognizing that their customers, their employees, their investors are all focused on these issues and want to make sure that wherever they work and shop, those brands and companies are doing the right thing. whatever that may be. caroline: how about the e, the environmentals? suddenly it feels like a company that was within an administration focused on energy transition, digging, oil, gas, what we depend on for energy,

i'm curious what companies -- you said 10% or thereabouts for energy businesses. what kinds of energy? karen: we are seeing a lot of new energy. we are experiencing a lot of transfers to nasdaq and the utility sector, that whole sector transitions to new energy . we are seeing this for quite some time. i think the current climate has really raised people's awareness as it goods to our dependency -- as it relates to our dependency on carbon. you have the sec with their climate-change proposal. there is a lot going on. this is a lot of bobbing and weaving and threading needles. but i don't think there is any doubt that our economy is transitioning to new energy. caroline: karen snow, great to have time with you. the vix level currently sub-25.

we thank you, karen snow of nasdaq. it's been a while since jeff bezos pledged for blue skies with delivery drones. now it's been a decade since the promise. amazon's drones have technical challenge to show for themselves. there's even a video on linkedin showing a package being delivered in the middle of, well, nowhere. let's talk about more of this with bloomberg's spencer soper and his big take, the key story that dropped on our terminal. what has been the main issue? spencer: the main issue is design, where amazon wanted to combine maneuverability to go up and down with a plane that rides forward. that is difficult to pull off. they wanted for the payload -- they wanted it for the payload it could carry, as well as the

range. they wanted the drones to do a 15-mile round-trip, which they see has been critical to serve a big enough population. that design has been tricky. in the summer they had a bad incident when the drone was transitioning from the up-and-down flight pattern to the pattern where one of the motors failed. one of the motors complete the disabled the think and the safety mechanisms failed as well. you ended up with an 85-pound drone dropping to the ground and the lithium battery that powers it creating a brush fire that spreads 25 acres. that was alarming to federal aviation

of this thing. how safe is it? caroline: and yet despite those issues, there seems to be an area they are committed to. is it because of the supply chain headaches? what makes it so attractive? spencer: 30 minutes, that is a critical window, leaving my house, going to the store, coming back. a lot of other options like two-hour delivery, same-day delivery, so quick to run to the store and back. the instant gratification is where the drones fit in. robotic drones are the ultimate solution to that quick-delivery challenge. caroline: so they continue to deploy capital there. they have also been raising some extra debt to be able to finance general corporate purposes. but i massive bonsall coming from amazon. talk to us about -- but i

massive bonsall coming from amazon. talk to us about it. spencer: they have not given clarity other than the general corporate defenses. they keep expanding -- trying to get closer to customers. we are going to see more of that, the creep of the amazon warehouse is going to get closer and closer to you and the facilities get more specialized to be more efficient. caroline: and from your perspective, the safety concerns using the sade's multiple -- are they surmountable? spencer: potentially. a lot of the workers believe in the technology, they just think there is much haste to bring this to people's homes and when this needs to come back to the r&d cycle and more tinkering and learning before they are trying to prove the airworthiness of these. caroline: spencer soper, great

reporting. i urge everyone to see it online and the bloomberg terminal. thank you for keeping us up to speed with everything going on with amazon drones. the second but other innovations. bitcoin -- let's talk about other innovations. bitcoin dropping to a three-week low. we will discuss why we are coming off recent highs. this is bloomberg. ♪

caroline: time for our crypto

report with crypto contributor sonali basak. bitcoin climbing in the last 24 hours, but it is not the underperformer. sonali: it's interesting, all coins of dropped more with a seven-date decline of 20%, for stable coins and alt coins. these companies are buying each other's reserves. general luna buying not just bitcoin, but avalanches down 20% in the seven-day period. while some are dropping more than others, it is important to make nice how much this entire community is related to each other. if you are buying bitcoin, what happens to the terror price? what else is bitcoin related to his interesting. seeing this intense correlation with the nasdaq 100. it is greater than it has ever been.

nasdaq falls off, so is bitcoin. caroline: how important is that for market participants? many every now and then send out a hopeful tweets saying that the correlation is pulling back a bit. do we want to see a dislocate somewhat from the nasdaq? it is deemed a risk asset. sonali: i had a conversation with a hedge fund manager typically invested in a lot of hedge funds, and asked if this is a diversify. he said he was able to hold generally stable because he had bitcoin rather than a lot of other risk assets. to your point, there are traditional money managers that take a look at this and say, ok can we still want to diversify the asset here. most people who are bitcoin believers don't look at the volatility here. we are down below $40,000 on bitcoin. we're back to asking what is the floor. they are still looking to what the 300,000, 500,000 per bitcoin price target looks like over the

next five years. if this year is a dud, how quickly do we get to $500,000? caroline: and the nascent interest from institutional clients. sonali: what is it correlated to, they will still have that question. there are others doing the math on this, but beyond the nasdaq, you and i spoke to somebody earlier making the correlation to the dollar. if the dollar weakens, that makes the case for bitcoin as an alternative currency, doesn't it. if inflation rises, that is another correlation that used to be there and is breaking down dramatically. the thing for wall street strategies to do is figure out what it is related to. caroline: geographical demands, do we have a breakdown of that? sonali: there is a lot of questions about what it means to have one buyer being such a big base for the asset. beyond that, unclear as to how

much more after bitcoin 2022 and how much interest is being drummed up among new investors. caroline: brace ourselves for a whole load of headlines as we digest what was a lot of aspersions being cast towards older participants on wall street from one peter thiel, the overall bitcoin 2022 in miami. sonali basak, thank you for your breakdown. coming up, using wigs to solve the problem of bias in ai. fascinating conversation with the cofounders of parfait on how they are looking at data sets to improve for people of color. this is bloomberg. ♪

caroline: disrupting ai. the ultimate goal of parfait, a company founded by two sisters, getting into the rapidly growing wi g market-- wig market. they have pretty big names including serena ventures, backed by serena williams. it is good to have time with both of you. first and foremost, talk to us about what inspired you to take a rapidly growing market. >> yeah, the origins of parfait started with a problem experienced by many women,

managing and caring for our textured hair. the journey for me started at 10 years old when i had a terrible experience with a chemical actor that made my natural hair fall out. i was using here with an extension to give my hair break and a chance to grow. i spent the last 20 years navigating the market of extensions. from our collective experience involving technical challenges during our time with the largest tech companies in the world, we were inspired to leverage ai to improve the lives of people with black hair at the top of our list of problems that needed real investment for a better solution. parfait was born with a mission to develop product and services with technology that prioritize all people, starting with people of color. caroline: talk to us about how you will be using facial ignition skin killing to match people to the correct wig -- facial recognition skin technology to match people to

the correct wig. what was missing in the open source data already? >> our world continues to be more informed and shaped by artificial intelligence. finding solutions to make it much more equitable, the training get uses facial recognition currently and it often relies on data that is similar to makeup, and that is the visual makeup of those spaces. it is important for people of color who don't fit into that data set. the impact can be seen in innovations in ai that cause negative experiences for people of color. they have more difficulty detecting pedestrians with darker skin. another study showed nonwhite testtakers had issues with verifying their identity.

at parfait we are trying to tackle these problems and make progress for marginalized communities starting with facial-recognition technology for women of color. caroline: $5 million already raise. you have a list of 10,000 people that signed up to be starting to buy their wigs by you because of you are looking at including manufacturing, but also building up a data set and making ai less bias. tell us how you go about doing that from the ground up. apologies -- this was aimed at you. >> yeah, so right now manufacturing industry has not seen innovation and quite some time. there is the raw hair products that require significant time and manual intervention, which is a large reason for the exorbitant price tag. our goal is to fundamentally change the way these products are produced, making them

cheaper to produce and customized wigs at scale. caroline: ok, and i'm interested in when you are looking at the manufacturing revolution coming getting a more consumer-sensitive price point in particular on something that would cost thousands down to the hundreds, i'm interested in what you need to do in terms of bringing the data you are using -- how are you ensuring that you are making it better and more efficient ai? >> we can't ever say that it is going to be perfect, and while we take the precautions, no, we are not collecting raw data ourselves. we also have a very human-focused pipeline in that our stylists and live team members are taking data. caroline: briefly, your product is for people of all colors, and

therefore very much you can see that from your marketing and the way you are focused. talk to us about how big a market this is, that this is sizable, this is scaling. >> yeah, this is a $13 billion market. it is expected to grow 13% to $13.2 billion in 2026. we may been largely underserved, and the core pieces of -- women have been largely underserved. that is true customization. we are creating a way for these women to be able to customize their wigs and extensions without the manual friction, and quite frankly, what we found is because of the way the manufacturing process is today, it is going to be required to be scaled to a $13 billion market that needs it, we would require ai and technical intervention. caroline: well, we thank you so

much for coming on this program. the cofounders of parfait, a fascinating story. that does it for this edition of "bloomberg technology." we will be joined tomorrow by someone from pimco. this is bloomberg. ♪

>> good morning and welcome to "bloomberg daybreak: autralia." we are counting down to asia's major market opens. shery: good evening. the top stories. u.s.