>> from the heart of where innovation, money, and power collide, this is "bloomberg technology," with emily chang. caroline: i'm caroline hyde in new york in four emily chang. coming up, you guessed it, elon musk, we are covering it. he offered $43 billion in cash to take twitter private.

will shareholders ever have the option to vote? we discussed. the sec might have a few thoughts. he vented his frustrations with the agency including his infamous settlement where he was forced to step down. and the online sneaker marketplace that is making its foray into europe with a multiyear deal with the french soccer club of the goat co-founder ceo. first of all, let's get to the biggest story in tech today, the elon musk bid for $43 billion, what he wants to spend to take twitter private. ed ludlow breaks it all down for us. take it away. ed: everyone trying to make sense of what this means, going back to basics, it's an all cash offer, $54.24 per share.

in the regulatory filing he said that part of the offer was conditional on the anticipated financing, one of the big questions, how does he pay for this? huge interest. come with me to my bloomberg terminal. look at the volume. the line on the right hand side mimics what we saw on april 4, when the stake that he held on twitter was first disclosed. shares changing hand over a holiday weekend with the retail investor also being a big part of the story. it will be interesting to see that on the right-hand side of the screen. how is he going to pay for this? he said he did have the financial assets to make it happen and had reservations about whether it would ultimately happen. tesla is down almost 4%. this is just one of the hypothesis out there, that he might sell some of his shares to

fund the offer but another hypothesis is that he borrows against the value of the shares because he only has $300 in liquid assets, right? breaking news after the bell, according to "the new york post ," thomas bravo is working on a possible bid. it won't go away and you wonder about the flexibility he has to do this as a consortium and whether it goes through in the long run. caroline: ed ludlow, all across the ins and outs, the curiosities surrounding elon musk and his interest in twitter . we want to unpack that story a little bit more, starting with his surprise ted talk streamed for the world. >> civilizational risk is decreased if we can increased the trust in twitter as a

platform. i think it will be somewhat painful and i'm not sure i will actually be able to acquire it. caroline: it was quite the moment for ted in the middle of its canada-based event that they held today. suddenly came elon musk with his big important thoughts. how serious do we think the bid is? >> elon musk says that of course he has the financial wherewithal to do this. as he mentioned, if he sells some shares or gets some financing. his heart is in changing the platforms content moderation policy and he spoke a bit about that, saying he wants to make sure that twitter doesn't take down accounts unless it has to absolutely and that people are allowed to edit tweets. a bunch of things as a power user. remember, he has more than 80

million followers. as a power user he sees things he wants to fix and make sure that twitter is more in line with his free teeth out. but a lot of the things he mentioned, if you asked twitter what they thought, they would say that he was -- they were doing them already. adhering to the rules in the country where twitter exists. of course twitter does that. i think that it is sort of fuzzy, here, what exactly he plans to change concretely if you were to take over and how it would be led. i think that's a queen -- a key question. we presume and understand from certain other recordings that the board isn't particularly happy about this but for example we know that jack dorsey is still on the board and he and elon musk have a relatively stable relationship with a respect each other but it must be incredibly high pressure stakes for the new ceo.

it's -- sarah: it's an incredibly high pressure moment but twitter is a company that has had highly volatile times with their board. a company that doesn't have majority founder control and it is vulnerable to activist interests. to ceo change decisions of that nature of activity. i don't think that this is the end of the elon musk story. having heard retail investors get excited about backing him on the plan and then the others running away from the idea that elon musk could shakeup twitter. it's a time of volatility. it was supposed to be a week for twitter employees to be heads down focusing on their work that they are of course very distracted by everything that has happened here. caroline: there was of course talk that they had a meeting to discuss the bid at 5 p.m. today and we wonder of course how the

conversation is currently faring. sarah, great to catch up with you and get a little bit more of the devil in the details of all of this story as it continues to evolve. let's get some outside perspective now. two key analysts now, mark and jasmine. great to have some time with you. first and foremost, talk to us about what you think elon musk wants out of this. is it to exercise change as he said? from a product perspective? >> it's not totally surprising that this has happened. we all expected there to be turbulent times ahead and twitter is a social platform that thrives on big news and uncertainty. nothing that appeals to elon musk. in terms of what he would change, he would likely make it a free-speech haven, reversing probably many of the guardrails

twitter has put forth recently to protect the health of the platform, users, and to make advertisers feel comfortable advertising there. he would probably also likely transform it into a subscription only service that doesn't rely on advertising to bring in revenue. i don't think that this would happen overnight. i don't think that he is 100% happy with the existing subscription model and he would want to improve it before implementing those changes but that would likely come of the deal materializes. caroline: to that point, would any change be a positive change? how do you view the discussion around the evolution of the product and whether it could inherently add value. what i took from the ted talk was that this ended up sort of being a not-for-profit endeavor he's taking on. >> i think you just pointed out what's going on here. i don't necessarily hear a

public market strategy from him. i hear a public good strategy. i've been on the sidelines on twitter and skeptical about the asset for a couple of years because of the slow pace of product innovation on the user and advertiser side. i don't hear him addressing those issues. his goods -- his goals are different. he wants to turn it into an absolutist free-speech platform and he's not on the side of the angels as far as that goes, but that is not what shareholders are focused on. what are you doing for shareholders to make the site more intuitive or more for consumers and i'm not sure that a subscription business will really add a lot read running through the numbers on this, only 10% of users want to pay for a service. even putting up the kind of numbers of two dollars, three dollars a month, right now the company is generating $3 billion in revenue, advertising is a great model and has been just

fine for twitter to stick with. they need to improve the tools and i don't hear that coming from him but i don't think that is his strategy. he's coming out of a public goods strategy, as you pointed out. caroline: to that end, that is not music to the ears of investors. the music is growth, getting more people on board. in a weird way this is a wonderful advertising free pr fund going on for the use of the social media platform but inherently do you think it would spell demise in terms of users and growth? >> interestingly his comments come at a time when twitter had a rebound in add growth. last year the revenues were up 41% to nearly $4.5 billion in 2020 with revenues growing only by 7.4% and a you are absolutely right, at the very least it drive a lot of user engagement on twitter.

controversy tends to have people lead -- lean into the platform, making a lot of advertisers really wary. twitter has done a lot of work to make itself brand safe and muska takes a very different view on speech and will probably push for less and not more content moderation, making risk-averse advertisers think twice about advertising there. caroline: mark, as you said, you have been on the sidelines questioning the overall business model. when we saw jack dorsey handing things over, did you think that was a net positive? how are we thinking about this relatively new 10-year ceo having to navigate a complete storm, perfect or not? >> as you said, it's a really strong net neutral. i don't thing we have heard a really clear strategy going

forward. i will give him a few months, we all should, but he has been with the company for eight or 10 years running product. by the way, that has been the product -- problem at the company. a slow pace of innovation and they have come out to acknowledge that. i'm not sure this was the radical change they really needed in order to speed up the development cycle, create these development tools. just make the service increasingly more intuitive. some of this content moderation has been absolutely necessary. a few years ago there was too much vitriol on twitter. they needed to take it out. i think that musk is really focusing on political content moderation. he may be right about that, but i don't think advertisers or users are really, i think most users probably aren't all that in the weeds and don't care much about the political moderation going on there, there are so many broad sets of interests.

i look at this and i think what's going to continue the growth profile? we had a good last year but versus the other assets in the space, snap hasn't even touched the scale of google or facebook. caroline: so, a one answer question for you both heading towards the end of this conversation. $54. $54.20. do you think it will go, will we potentially see a deal? is it worth it? . -- >> you know, it is so hard to say. i do believe that because of his character there is a very large chance that this deal does not materialize and that he changes his mind. caroline: mark? >> i think he will get his offer rejected, he will sell his stock. it will give up the $.24 gains.

is it worth it under those series of product improvements? absolutely. but we have to see the improvements first. today it's not worth that. and i don't appreciate his hot analogy. he didn't have to put that as a part of the bid. it undermines the credibility of the offer a little bit. caroline: not much optimism there. great to have both of you here. thank you. coming up, elon musk, still a bit perturbed over the sec and tesla and hear what he has to say and what he thinks about taking over twitter. this is bloomberg. ♪

ed: -- caroline: twitter wasn't the only thing on the mind of elon musk today. he had something to get off his chest about whether he could take tesla private. we remember the tweet that kicked it all off. he said funding was secured, leading to the investigation by the sec. take a listen to his version of events. >> the sec need -- new that the funding was secured but they pursued active public investigation nonetheless. i told them that if we didn't agree to settle the banks would cease providing working capital and tesla would go bankrupt immediately. it's like having a gun to your child's head. i was forced to go in there and lay seizure, unlawfully, those

pastors -- basta i was forced to admitrds. thati lied to save the life of tesla. ed: -- caroline: perhaps some strong language there. he was then asked if he was glad that he didn't take tesla private and he admitted he was. joining me now, tom goldman. no, apologies, harvey. i don't know what's going on with -- i'm pleased to say that it is you and your expertise when it comes to the sec. chairman, i'm interested of course, as a man who, you know, has helped lead the sec and understands the way the organization works, has had to suffer some of the abuse it seems being leveled at you from the likes of elon musk, how do you think about the settlement that was made for years ago and

the controversy it stirred and anger that there still seems to be within elon musk himself. >> think it is basically his fiction. if he didn't want to litigate with the sec or couldn't afford it, all he had to do was say i'm not going to litigate. i will default and let the sec get a judgment and let's see what a court order. but he spent probably hundreds of thousands of dollars on legal fees to execute a settlement that went back and forth. having done that, he should live up to his agreement. he agreed to do it. if he didn't want to do it, no one held a gun to his head. the proverbial -- caroline: the proverbial one, he said it was a

difficult and precarious position for tesla at the time. you were the 26th chairman of the sec back then. it's a different beast now but it is currently being analyzed. but with the taking private of twitter look like by elon musk? the way that he conducted it, the amount he stated with the all important to 20 number in it , is it something the sec will take seriously? harvey: i think it's very hard to take anything he does seriously. he always has old cheerier motives and there are serious questions about what he's really about. he has said that if his offer isn't accepted, he will have to reconsider his position. so, he has already created an overhang on the market. and i think it's a safe bet that

twitter, though they said they would review the offer, will ultimately reject it. that is not to say they should reject it, but it is to say that they will. they will have all sorts of reasons they concoct to refuse to accept his offer. then the market price of the stock will plummet. so, he's playing a game with twitter and with the investors in twitter and with the market for twitter securities. ed: and it's a game or maneuver or way in which he conducts himself through the medium of social media, fascinating in this current day and age and we shouldn't be shocked by it, given that we have had the head of the united states, a president himself that used to give a lot of news through

social media but how do you think the sec can look at the announcement of taking a certain amount of shares and wanting to do a bid to? how do you think regulation can adapt to the new age of the new environment? harvey: i think it's very difficult because the sec rules didn't really contemplate social media. while there have been very good attempts by the sec to try to modernize their positions, it's still very difficult for them. the fact that somebody can simply tweet out to 85 million people market influencing information is not something the sec has yet come up with a solution for and i think that is going to have to be something that takes a very close look at.

caroline: if you were chairman, one word of advice for the sec? harvey: what would i do if i were chair? caroline: yeah. harvey: well, first of all i would say that former sec chairs should be seen but not heard. caroline: nicely said. [laughter] harvey: but i would be investigating the origins of this offer. why file the wrong form on the 5% threshold? i would be looking into a variety of his potential infractions. i would want to consider whether any of those infractions should or could impede the progress of his offer and whether the investors have been harmed.

i think he has done a lot of serious damage to the way the markets are supposed to function. caroline: chairman, thank you so much for your expertise and insights there. we wonder if the sec was listening. from new york, this is bloomberg. ♪

caroline:caroline: outside the world of elon musk, other stories we are following. peloton, slashing prices for major hardware products. the treadmill has been reduced by $150. meanwhile, they are rising of course, the price of their monthly subscription as a part of their comeback plan aimed at generating more recurring revenue. coming up, back to the tech story of the day, the elon musk

attempts to take twitter private. sounds familiar, doesn't it? that's next. this is bloomberg. ♪

caroline: welcome back. let's get back to the top story. elon musk 43 della -- $43 billion bid to buy twitter. take us back to basics. what is he want to change about the platform? >> i have breaking news first. according to sources inside the room, twitter ceo is speaking to staff telling them the board is

going through a rigorous process of evaluating elon musk's bid. what we can get that -- from that, at least the idea of the bid is still alive at this stage. it is being considered by the board. there are four key points. first, open source the algorithm. that's nothing new. during a ted talk, he said there are too many bots on the platform. i have experienced that on a day-to-day basis. then, the edit button. he says it has to be time-limited from the time you post. finally, no bands. -- no bans. maybe a timeout. look at the chart. this goes back to november.

this is the first time we have had activist action. jack dorsey stepped down here after elliott management gets involved. then elon musk discloses his status at the beginning of april. we're still not at the same level of a year ago. we are lingering around $45 per share. one of the questions put forward today amid high volumes of trading was did this bid lowball them and will they come back with a further bid? i wonder if that is possible. finally, the retail investor. how influential is the retail investor with tesla and twitter? these are the top two stocks on the fidelity platform. elon musk puts a lot of faith in retail investors. caroline: thank you.

there have been previous pushes for change at twitter by the likes of management. activist investors are not new to this platform. what on the platform could be changed? what are the concerns about elon musk perhaps taking over? today he mentioned the idea of free speech. that it would be the ultimate goal. >> it's important that it be an inclusive arena for free speech. twitter has become the fecteau -- fecteau townsquare. it's important that people have both the reality and perception that they are able to speak freely within the bounds of the

law. >> defacto townsquare. we're going to break that down. i am joined by a social media expert. your perspective on what he wants to achieve by doing this? >> he put a big performance on today, but i decided to make a sandwich instead. i was hungry. even seeing that clip, the last person we want owning a is elon musk. we see other platforms being owned like with mark zuckerberg. this is not a company will re-want to see that happen at this point. caroline: there was discussion

of more than 2000 people or up to 2000 people potentially owning twitter with him and perhaps it being a not-for-profit. would that be a direction of trouble? does it need to be publicly held? >> it really should be owned more by those who need a real stake in the public square and speech. retail investors, he is not going to take this over with retail investors. he needs institutional investors. he needs the big corporate to have big box. he needs people like the saudi prince who was an early investor. he doesn't have the friends to help him take it over at this point. i don't see the retail investors -- concerned about public speech and that is represented with those who do retail investing. but it's not going to happen elon musk that way.

maybe he has another plan. there's a lot of people who have a stake in this and they want the power associated with. they are just interested in making money, they care about the social aspect of blip -- big platforms like twitter. caroline: it must be incredibly torrid you are currently the ceo of twitter. what is some advice to change what is occurring and are people feeling the denial of free speech or too much? >> we have to remember this ceo is new. he is essentially company guy at this point. he is steering the boat for the current investors. free speech has not ever been

the case with a company like twitter. it is a public company and its about the speech of those who own and run it and that's what he is interested in. elon musk is interested in expanding his speech and power and what he wants to use it for. caroline: is it a regulatory tape that we need? is there involvement necessary? >> i saw on the list of things being discussed employees and nowhere did i see how to regulate government. including our own in the united states on these platforms. we still don't talk enough about how much the federal government pushes out federal propaganda on these platforms. that is probably something he doesn't want to draw attention to. it's less about the edit button. this is able -- this is about able to assert some control over

our government being able to push back when he doesn't like what the sec is doing. what if he ends up putting a bunch of federal accounts in a quarantine? i don't think the government would like that. there's a lot of power here. it's not about trump coming on the platform. just because he is on, doesn't mean he has reached like he used to. it can limit how much ability he gets in the algorithm also. again, transparency. if it's totally transparent, it will be gained by bad actors in our government by the power players. they be independent audits are needed to make sure the system is not abused. these ideas that he is floating, they don't make a ton of sense. caroline: you are always thought-provoking. thank you. coming up, as elon musk has offered to buy twitter and open-source it, what does

decentralized social media look like? we are talking with a guy who is trying to do that. that's next. this is bloomberg. ♪

caroline: we continue to discuss elon musk's bed for twitter. he is currently saying the twitter board has a liability if acting against shareholder interest. the duty is breached if the act against shareholder interest. he is commenting on a possibility that the board could

use a method known as the poison pill to expunge control such as someone what elon musk. currently he is using the platform saying if the current board takes action contrary to shareholder interest, they would be breaching their fiduciary duty. the board previously has been evaluating. we understand the ceo is having a meeting with the staff evaluating the offer coming from elon musk. we are going to weave all of this into our crypto report. we keep on discussing how and when platform could evolve if elon musk's intervention could add crypto influence in the space and take it open-source in terms of algorithm. what would that look like?

let's bring in our next guest. he is the korean are -- creator of deso, built for the purpose of scaling decentralized applications. your take on open sourcing of the twitter algorithm? would that make it more decentralized in nature? >> that's a great question. to take it back a bit, it's funny because i think twitter is distracting people from a lot of the real innovation that is happening in social media. imagine if the iphone came out yet all anyone wanted to talk about was the blackberry. most people don't remember what a blackberry is because it's no longer relevant. right now twitter and other platforms are the blackberry and deso is the iphone. why? because it's better in every

way. now to go to your question about open sourcing, when you make a post on twitter a corporation owns it. they control who gets to see it and they make all the money. all of that is opaque. in contrast, when you make a comment on deso, it stored on the blockchain and you own it the same way you own bitcoin. it shows up in hundreds of apps that all have their own approach to moderation most of which are completely open sourced. right now, we're talking about which billionaire should control the internet. elon musk or the saudi prince to control twitter and the answer is we want nobody to control it. deso is to social what bitcoin is to money. you can own it for the first time and it's extremely exciting. caroline: what's interesting is on the centralized website of twitter, you had the likes of spf, talking about what he

thought decentralized twitter could look like. talk to us about is there anyway you can reverse engineer this? he was talking about tweets going on, sent to choosers who have access to them. you can monetize it by having a protocol charging something per message or being about the user interface. is there anyway you could reverse engineer twitter in an of itself? >> of course and actually everything but what he describes in his tweet already exists on deso. including end-to-end encoded group messaging. if you want to see it for yourself, there are many apps listed on deso.org.

you can use the enemy of decentralized social media and it's happening before our eyes. deso already has 1.5 million accounts. hundreds of applications are being built on it. a lot of impactful people are looking at this and it's just a matter of time before the heat gets on it. caroline: let's talk about this as if twitter did embrace web three little bit more than web to and aided the gateway drug to jumping onto one of apps on deso, what would that look like? how can you help me, others who

are use to web two getting to grips with a deso decentralized platform looks like. it looks scary. it can sound intimidating. demystify it for us. >> if you go to an applicant diamond app. calm, it's similar to twitter. you can make posts, but when you follow someone that is stored on a public blockchain and when you make a post, it shows up on all of the apps built on the deso blockchain not just the one at. all of these different moderation policies that are totally open impact your post and you get more reach. then because you are on a walk chain, it you have access to bitcoin.

your post can become an nft automatically because it is stored on the blockchain. then u.s. what is the future of twitter, no matter how you slice elon musk taking control twitter or not, deso is inevitable because either the apps outcompete twitter or twitter ends up embracing it storing its content on there so we can access things like nft's, micro transactions and the coins associated with it. either way, it's the future. that's why it is so exciting. caroline: what about content moderation? >> this is the unintuitive thing. when you have an open platform like deso, there's a lot more transparency into what is going viral and why. the reputation of the people who are posting. you can have the best machine learning resources in the world

analyzing the content, identifying box -- bots. in long-term, moderation could be something that a lot of people take part in by analyzing the chain, identifying things they believe are harmful. all of this can be done by smaller players with higher fidelity and accuracy than the platform monopolies today because everyone in the economy has the incentive to build a piece that they are good at. we are good at building the blockchain. we might not be the best at content moderation, but the best people in the world can do their part and we can utilize that service from them to create so much more efficiency around everything currently being done by a stag platform monopoly today. >> great to catch up with you. the creator of deso. coming up, let's get away from twitter and talk about soccer and e-commerce.

we're are going to be talking to our guest about a partnership with psg. our exclusive interview is next. this is bloomberg. ♪

caroline: paris saint-germain is getting into e-commerce with goat group. this as it moves into team sponsorship. the cofounder ceo talk to us about why psg. >> great to be here. goat is continuing its international expansion through a strategic partnership with one of the most iconic football clubs. we are a principal partner which means being on the sleeve of the jerseys, all across the arena.

and in the app, a dedicated psg experience. >> talk to us about the exclusive products. if you go onto the goat website, you now see players with the logo on the sleeve. what other offerings are you looking at? >> with psg, the great thing about it is they are not just a football club, they are building a brand. a lifestyle and fashion brand similar to what goat is doing. have built our own fashion and lifestyle brand full of accessories, fashion, sneakers and more. looking at the psg partnership which is so natural because our visions are very much aligned, we were thinking about expanding and increasing brand awareness through europe and beyond, they were such a natural partner. caroline: what about the players? how do you team up with sports

stars and the brand of them as well? >> it's great that they have some of the goats of football. aligning them with goat the brand, there will be so many fun activations and experiences with the club and the players. caroline: what about overall europe as a marketplace to expand in? how big is the sneaker resale market? >> goat started in 2015 and we have become the leading and most trusted sneaker and fashion marketplace in the united states. we have seen the fashion just like football, it's not just a domestic market, it is global. we are seeing so much growth in europe and beyond. we are great in the u.s., we want to continue to provide that experience for the rest of the world. the partnership is key in helping us expand to your. >> i love that you just called it football.

talk to us about the world of nft's. is it something you will look at in your space? >> nft's are of course something we're looking at. there is so much value in bringing products to consumers in the real world. that's what we're focused on now, but we are always keeping an eye on it. caroline: i wish we had more time. it's fantastic to catch up with you. tell us how the expansion into europe goes. that does it for this edition of bloomberg technology. don't forget to check out our new podcast. you can check it out on the terminal or wherever you choose to get your fix of podcasting. we wish you a wonderful break and celebration.

we will keep you posted on whatever happens with elon musk and his bid to take over twitter. this is bloomberg. ♪

>> when jack hartung joinedipos far from the powerhouse it is today. >> chipotle was a special brand. it was an unknown brand. it was very small. >> founded in 1993, the company stood on the brink of the growth spurt that would create a category, fast casual dining. >> why is fast food crappy? why can't great food be done fast? >> i was there when there were a couple dozen restaurants. i would visit restaurants like this where steve would go behind the lawn and see somebody cutting an onion and he would say, let me show you how