>> from the heart of where innovation, money, and power collide. in silicon valley and beyond. this is "bloomberg technology" with emily chang. caroline: i caroline hyde in for emily chang and this is bloomberg technology. elon musk wants to take twitter private and is offering $43 billion in cash to do so.

plus, the sec might have thoughts on mosques interest in twitter. he vented his frustrations, including the settlement where he was forced to step down as tesla's chair. the gold group is moving into team, -- sponsorships and making a deal with a french soccer club. first, let's get to the biggest story in tech today. it is elon musk's bid to take twitter private. ed ludlow breaks it all down for us. ed: to say it was a choppy day per trading in twitter is an understatement. this is a $43 billion all-cash offer, $53 per share from

moscow. he said it is conditional on quote, anticipated financing which is one of the big questions. huge interest in terms of shares traded. let's look at the volumes. the line on the right-hand side of this chart mimics what we saw april 4, when the state elon musk held in twitter was first disclosed, 250 million shares changing hands ahead of the holiday weekend. retail investors also a big part of this story, interesting to see that on the right-hand side of your screen. i mentioned how was he going to pay for this, during that ted talk he said he had the financial assets to make it happen. he said he had reservations about whether it would ultimately happen. tesla down almost 4%, just one of the hypotheses is that mosques might style -- musk

might sell some of his tesla shares keep on this. the other theory is he borrows against his shares. some breaking news, according to the new york post, thomas brought both is working on a possible bid for twitter. you do wonder the flexibility elon musk has to do this. and if this actually does go through in the long run. caroline: tom bravo coming into the mix according to the new york post. the curiosities surrounding elon musk's interest in twitter. we want to unpack that story more, starting with a surprise ted talk streamed to the world. >> civilizational risk is decreased the more we can increase the trust of twitter as a public platform. i think this will be somewhat

painful. caroline: it was quite the moment at the canada-based event and suddenly in came flying elon musk. talked was how serious in nature we think this bid is. >> elon musk, of course he has the financial wherewithal to do this. he can sell some shares or get some debt financing. his heart is in changing their platform's content moderation policy and he spoke about that at ted. he said he wants to make sure twitter doesn't take down accounts unless they absolutely have to, that people are allowed to edit their tweets. remember, he has more than 80 million followers, as a power

user he has seen things he wants to fix. he wants to make sure that twitter is more in line with his priest bg thousand. the things he mentioned -- free speech ethos. but a lot of the things he mentioned, they are doing them already, such as adhere to the rules in which twitter exists. it is buzzy here what exit -- fuzzy here what exactly he would change at twitter. caroline: we understand from certain other reporting that the board isn't particularly happy about this. we know that jack dorsey is still on the board, he and elon musk have a relatively favorable relationship. but this must be incredibly high-pressure stakes but for the new ceo. >> it is just an incredibly

highly pressured moment for ag rawal. twitter is a company that has had a highly volatile time with outside investors. this is a company that does not have majority found her control so it is vulnerable to activist interest, and that nature of activity. i don't think this is the end of the elon musk story. we have even heard retail investors get very excited, and others who are running away from the idea that he could shakeup twitter. it was supposed to be a week where twitter employees would be heads down focusing on their work, but they are very distracted by everything that has happened here. caroline: there was talk of having a meeting to discuss this very bed at 5 p.m. today. we wonder how this conversation

is bearing. we will get you some outside perspective, mark and jasmine, great to have some time with you. jasmine, just talk to us about what you think elon musk wants out of this. is it to exercise change, what change could be a foot? >> it's not totally surprising this is happening. we expected there to be turbulent times ahead. musk is one of twitter's most prolific users. twitter is a social platform that drives on big news and uncertainty. in terms of what he will change, i think musk would make twitter a free-speech haven. probably reversing a lot of the

guardrails twitter has put forth recently to protect the health of the platform, its users and to make advertisers feel comfortable there. he probably will likely transform into a subscription only service that does not rely on rapid type -- on advertising to bring in revenue. i don't think musk is 100% happy with the existing subscription model. that is something that would, if this deal materializes. caroline: mark, if you see that the product could change, would it be a positive change, how do you view any of the discussion around the you pollution of the product and whether it could add value? what i took from the ted talk, this ended up being a sort of nonprofit endeavor he is taking on. >> you just pointed out what is going on here. i don't hear a public market strategy from moscow, i hear a

public good strategy. i've been on the sidelines, i've been skeptical about the asset because of the slow pace of product innovation on both the user and advertising side. i don't hear musk addressing those issues. he was to turn it into an absolutist free-speech platform. but that's not what shareholders are necessarily focused on. what are you doing to make the site more intuitive for more consumers? i'm not sure a subscription business is going to out a lot. we have run the numbers, it is only about 10% of twitter users who want to pay for a subscription service. even putting up two or three dollars a month, baby you got half a billion in revenue. this company is generating a lot of advertising revenue.

it is fine for them to stick with that. i don't think that is the strategy, he is coming out with a public good strategy which is what you pointed out. caroline: to that end, jasmine, that is not music to investors' ears, it is growth, getting people on board. in a way, this is wonderful advertising, a good pr stunt for the use of the platform. >> the interesting thing here is that musk's, at a time that twitter has had a rebound in add growth. ad revenues were up to nearly $4.5 million in 2020, they only grew by 7.4%. but you are right, this will drive a lot of user engagement on twitter. controversy tends to have people

lean into the platform. at the same time, that makes advertisers really wary. twitter has been used for a long time as a brand advertising platform, and the company has done a lot to make it brand safe. musk has a different view, and is probably going to push for less not more content moderation and that is going to make advertisers think twice. caroline: you've said you've been on the sidelines questioning the business model. when we saw jack dorsey handing over to agrawal, how are we feeling about this ceo navigating a complete storm, perfect or not? >> it is a really strong net-neutral. i don't think we have heard a clear strategy. i will give him a few months, i think we all should. he has been with the company for

eight or 10 years, running product. that's been the problem at the company. i want to be respectful here, but it has been a slow pace of innovation. so i'm not sure this was the radical change twitter needed in order to sweeten up the product development side, create new tools, and make the service increasingly intuitive for users. a few years ago, there was too much of the vitriolic and too many of these f-bombs on twitter. i think musk is focusing on the political content moderation. he may be right about that, but i don't think advertisers are users, most users are in the weeds and don't really care about the political moderation or lack thereof. i think politics is just a small

part of twitter's appeal. what's the growth profile, versus the other assets in the space, snap has much better profit, innovation and growth. and this is not even touch the scale of google, amazon or facebook. caroline: i am looking at $54.20 in terms of taking it private, do you think we will potentially see a deal, is it worth $54.20? >> it's so hard to say. i do believe because of musk's character there is a chance that this deal does not materialize and he changes his mind. caroline: mark? >> i think he is going to get his offer rejected. i think he is going to sell his stock. i think the stock is going to give up its 20% gains. is it worth $54.20 under a

series of product gains, absolutely. but right now, it is not worth that. he doesn't have to put that as part of his bid, i just think it undermines the credibility to a little bit of the offer. caroline: great to have both of you on. coming up, elon musk is still a bit perturbed about the sec settlement involving tesla four years ago. and why you still thinking about wanting to take over twitter. this is bloomberg. ♪

caroline: welcome back.

twitter was not the only thing on the mind of elon musk. at the ted talk he felt the need to get things off of his chest as to whether he had the money to take tesla private. we all remember this tweet which led to an investigation by the sec. take a listen to musk's version of events. >> the sec new funding was procured, at the time tesla was in a precarious financial situation and i was told by the banks that if i did not settle with the sec they would stop providing capital. that is like having a gun to a child's head. i was forced to concede to the sec unlawfully.

those bastards. [laughter] i was forced to admit that i lied to save tesla's life. caroline: he admitted that he was. joining me now, tom goldman, not tom goldman, harvey pitt, we had a prior to you. i am interested, as a man who has helped lead the sec and expanded the way this organization works and has had to suffer some of the abuse it would seem being leveled from the likes of elon musk, how do you think about the settlement

and the ongoing anger that seems to still be within elon musk himself? >> i think it is basically musk 's fiction. if he didn't want to litigate with the sec or couldn't afford it, all he had to do was say i will default and let the sec get a judgment and let's see what a court will 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 this agreement. he agreed to do it. nobody held a gun to his head. caroline: the proverbial one, he saying he was in a precarious

situation for tesla, you are the 26th chairman of the sec. it is a different beast now, having to analyze what perhaps a taking private have twitter looks like. is that something the sec is going to be taking seriously? >> i think it's very hard to take anything mr. musk doesn't seriously. he always has ulterior motives, and there are serious questions about what he is really about. he has said that if his offer isn't accepted, he will have to reconsider his position. so he's already created an overhang on the market. and i think it is a safe bet

that twitter although it has said it will review the offer, will ultimately rejected. that's not to say it should, but it is to say that they will. they will have all sorts of reasons that they concoct to reviews to accept musk's offer. and then the market price of the stock will plummet. so he is playing a game with twitter and with the investors, and with the market. caroline: and it's a game, or indeed a maneuver, through which he conducts himself through the medium of social media. we have had the head of the united states, a president himself who was via the social

media platform. but how do we think about an announcement of wanting to do a bid, how do we think sec regulation can adapt this new age of the news environment? harvey: i think it's difficult because the sec's rules did not really contemplate social media. while there have been very good attempts by the sec to modernize their positions, it still very difficult for them. the fact that some body can simply tweet out to 85 million people, market and influence 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 it takes a very close look at.

caroline: one word of advice right here, right now for the sec? harvey: if i were chair? caroline: yeah. harvey: i would first of all say former sec chairs should be seen, not heard. i would be investigating the origins of this offer. i would want to investigate why musk filed the wrong form when he went past the 5% threshold. and i would be looking into a variety of musk potential contractions. i want to consider whether any of those infractions should or could impede the progress of this offer, and whether investors have been --

i believe he has done a lot of serious damage to the way the markets are supposed to function. caroline: chairman harvey pitt, thank you for the expertise, we wonder if the sec was listening. from new york, this is bloomberg. ♪

caroline: aside from elon musk, here are some other stories we are following. peloton is slashing prices for its hardware products read the treadmill is being reduced by $150. the bike is being reduced by $500. it is raising the price of its monthly subscriptions, all part of eight comeback plan. coming up, back to the story of elong musk's attempts to take

twitter private. this is bloomberg. ♪

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caroline: welcome back. i am caroline hyde in new york. let's get back to the top story. elon musk's $43 billion bid to take twitter private. ed ludlow, take us back to basics. what does musk want to change about the platform? ed: i have breaking news first crossing the bloomberg. according to sources inside the virtual room, the 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 from that, at least the idea of the bid is still alive at this stage. it is being considered by twitter's board. back to basics. he basically had four key points. the first of which is algorithm. -- the first is open source the algorithm. that's nothing new. during a ted talk, he said there are too many bots on the platform. get rid of the bots, he said. it is something i have experienced on twitter on a day-to-day basis. then, the edit button. he says it has to be time-limited from the time you post it. finally, no bans. he did not get asked about president trump, but he said maybe a timeout from the platform instead of a ban. this is been a wild ride for the stock. look at the chart. it goes all the way back to november.

this is the first time we have had activist action. you look at november on the right-hand, jack dorsey stepped down after elliott management gets involved. then musk discloses his stake at the beginning of april. the stock has kind of changed fortunes. we're still not at the same level of a year ago where the shares were trading around $25 a share. 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 we come back with a further bid? i wonder if an upped bid is possible. finally, the retail investor. how influential is the retail investor with tesla and twitter? these are the top two stocks on thursday on the fidelity platform in terms of buy orders from retail traders. elon musk puts a lot of faith in retail investors with tesla, maybe he does it with twitter too. caroline: interesting take, ed.

thank you for reminding us that there have been previous pushes for change at twitter by the likes of elliott management. activist investors are not new to this platform. let's discuss what on the platform of twitter can be changed and what are the concerns about elon musk perhaps taking over that company. during his ted talk today he talked about free speech, that him buying tutor would be the ultimate goal. elon: i think it is very important that there be an inclusive arena for free speech. [applause] so, yeah. twitter has become the de facto town square. it is really important that people have both the reality and perception that they are able to speak freely within the bounds of the law. caroline: a defacto town square.

we are going to dig into that thought. i am joined by an associate professor of communications and expert on social media, including content moderation. your perspective on what elon wants to achieve by doing this. >> i know he put a big performance on at ted today but i decided to make a sandwich instead because it was time better spent. i was hungry. even seeing that clip, the last person we won owning a town square is -- the last person we want owning a town square is elon musk. we see other platforms being owned like with mark zuckerberg. this is not something that we want to see happen at this point. caroline: while you are making a sandwich, and potentially still listening in, there was

discussion of more than 2000 people or up to 2000 people potentially owning twitter with him and perhaps it being a non-for profit. would that be a direction of trouble? does it need to be a publicly held business? >> 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's who have these big bucks. 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 -- even though i concerned about am public speech and that is represented with those who do retail investing. it is not going to happen with elon that way.

there's a lot of people who have a stake in this and they want the power associated with it. elliott management company, these people are not just interested in making money, they care about the social aspect of big platforms like twitter. caroline: and one hopes the people who work at twitter are as well. it must be incredibly torrid if you are currently the ceo of twitter. he is ending the meeting with staff over evaluating the offer. what is advice to change what is occurring in the frustration people feel in terms of denial of free speech or too much? >> we have to remember this ceo is new. he was put in after elliott and others had influence at the company. he is essentially a 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 is what elon musk 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 with 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 not about the typos. this is about being able to assert some control over our

government, to push back, maybe when he does not like what the sec is doing. what if he ends up putting a bunch of federal accounts in a quarantine and not boosting them in the algorithm anymore? 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 or not. just because he is on does not mean like he has any reach like he used to. it can limit how much ability he gets in the algorithm too. if it's totally transparent, it will be gamed by bad actors in our government by the power players. maybe 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: always thought-provoking. thank you. associate professor of communications at syracuse. coming up, as elon musk has offers to buy twitter and open-source it, what does decentralized social media look like?

we are talking with a guy who is trying to build that. the founder of a decentralized blockchain. that's next. this is bloomberg.

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

possibility that the board could use a method known as the poison pill took expunged -- pill to expunge control such as 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 and the liability they assume would thereby be titanic in scale. the board previously has been evaluating the offeror. we understand the twitter ceo is having a meeting with the staff , saying they are 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 the platform could evolve if elon musk's intervention could add more cryptocurrency impact within twitter's space and take it open-source in terms of its algorithm. what would that look like? let's bring in our next guest. nader al-naji is with us, the

creator of the deso foundation, a layer one blockchain built for the purpose of scaling decentralized applications. your take on open sourcing of the twitter algorithm? would that in any way make it more decentralized in nature? nader: 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 and yet all anyone wanted to talk about was their blackberry. most people don't remember what a blackberry is because it's no longer relevant. right now twitter and centralized social media platforms are blackberry and deso is the iphone. why is that? it is better in every way than centralized social media

platforms like twitter. 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 off it. all of that is opaque. in contrast, when you make a comment on deso, it stored on the deso blockchain and you own it the same way you own bitcoin. it goes on a public ledger and shows up in hundreds of apps that all have their own approach to moderation, most of which are completely open sourced. you can look into how they work. right now, we're talking about which billionaire should control the internet. two we want elon musk -- do we want 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 your content for the first time and it's extremely exciting. caroline: what was interesting on the currently centralized website that is twitter, you had the like of the ceo of spx, the

crypto exchange, 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 send direct messages as tweets and 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 and of itself? nader: of course, and actually everything he described in his tweet already exists on deso. like i said, all anyone is talking about is blackberry and yet the iphone is right here, including end to end encrypted group messaging. if you want to see it for yourself, there are many apps listed on deso.org. you can use what he described as

the epitome of decentralized social media and it's happening before our eyes. it has been a gradual, sudden phenomenon. deso already has 1.5 million accounts. hundreds of applications are being built on it. sam bateman freed a long time ago made an account on the deso app and probably forgot about it but is probably looking at it again. 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 3 a little bit more than web 2 and aided the gateway drug to jumping onto one of the apps build on deso, what would that look like? how can you help me, others who

are used to web 2 getting to grips with what a decentralized platform looks like. it looks scary. it looks like you are charging for certain beds. it consent terribly intimidating. demystify it for us. nader: if you go to an app like diamondapp.com it's similar to twitter. you can follow people, 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 that one app. all of these different moderation policies that are totally open impact your post and you get more reach. then because you are on a blockchain, you have access to micro transactions. right next to the like button is a diamond button where you can give a penny or hundreds of dollars. curators have earned $400 million across the deso

ecosystem. your post can become an nft automatically because it is stored on the blockchain. then you ask what is the future of twitter, no matter how you slice elon musk taking control of twitter or not, deso is inevitable because either deso apps outcompete twitter or twitter ends up in the long run embracing deso, storing its content on there so we can access things like nft's, micro transactions and the coins associated with it. either way, deso i think is the future. that's why it is so exciting. caroline: how about content moderation? nader: this is the unintuitive thing that a lot of people take for granted. 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. is it a bot or not? you can have the best machine learning resources in the world

analyzing the content, identifying bots. bot farms, bot armies. and in the long term, moderation could be something that a lot of people take part in by analyzing the chain, producing lists of things they believe are harmful that other apps consume. 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 stagnant platform monopoly today. caroline: always great to catch up with you. nader al-naji, the creator of deso. meanwhile, coming up, let's get away from the whole twitter thing and talk about soccer and e-commerce.

they are joining forces. we will be talking about a partnership with france's psg. what it means to expand into the market there in europe. our exclusive interview is next. this is bloomberg. ♪

caroline: let's talk soccer. paris saint-germain is getting into e-commerce with a deal with goat group. the online sneaker marketplace moves into team sponsorship and looks to go outside the united states. the cofounder eddy lu for more on this deal. talk to us about why psg. eddy: great to be here. goat is continuing its international expansion through a strategic partnership with one of the most iconic football clubs in all the land, paris st. germain. we are a principal partner, meaning the goat brand has

jerseys all across the arena. and in the app, a dedicated psg experience with content and more. caroline: talk to us about the exclusive products. if you go onto the goat website, you see lionel messi with goat on his sleeve. you are getting into other products. you are a sneaker exchange and marketplace, but what other offerings are you looking at? eddy: 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. we are not just a sneaker marketplace anymore. we 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, when we were thinking about expanding and increasing brand awareness through europe and beyond, they were such a natural partner for us. caroline: what about lionel messi? what about some of the players? how do you team up with sports

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

even say it, sports people around the world are embracing nft's. is it something you will look at in your space? eddy: nft's are of course something we're looking at. we know 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. the visual experience will be something in the future. caroline: i wish we had more time. it's fantastic to catch up with you. congratulations. interesting deal. tell us how the expansion into europe goes. eddy lu, spent time with him and an exclusive conversation. that does it for this edition of bloomberg technology. don't forget to check out our new podcast. you can find it on the terminal as well is online at apple, spotify, wherever you choose to get your fix of podcasting. meanwhile, it is a short week. we wish you a wonderful break and celebration must some time off. we digest what comes out next from elon musk and the potential

to take twitter private. tune in online and check out the terminal and out dotcom for any breaking news on the takeover by elon musk. this is bloomberg. ♪

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