announcer: from the heart of where innovation, power and money collide in silicon valley and beyond, this is bloomberg technology with emily chang. emily: i'm emily chang in san francisco. this is bloomberg technology. the ads business took a hit after suspending advertising in

russia and advertisers pulled back more broadly in europe. plus free speech and how will elon musk change twitter? we will debate it. and tracking your waking and not waking moments. wearables with giants like apple, later this hour. we will get to all that at the moment but first, stocks sinking. we are watching microsoft and apple in the back of earnings and tesla and twitter closely. ed ludlow is here with the rundown. ed: alphabet parent company, google down. a rare miss on the top line. below estimates -- i know and we told you about macro headwinds, particularly in advertising that you are going to dig into. also announcing a share buyback

program. signs already this is feeding through to the broader market, so we are interested in how the psychology and big tech is going to feed off of these earnings. microsoft beating expectations on the top and bottom line. the strength in hardware on the gaming side, taking share with xbox. going into their earnings week, a lot of anxiety. look where we are in the month of april -- the declines we've seen in mega cap stocks. that's why we are so zero in on what we are seeing in the after hours. where do we stand with the market this coming tuesday, wednesday, thursday? you see across big tech -- now we have google, earnings after hours, disappointing investors. this is where we finish the

session -- the nasdaq 100 down 3.9%, biggest drop since february 3. this tech heavy index at its lowest level since may of last year. the benchmark u.s. 10 year down 10 basis points. that did not help tech stocks at all. surrendering some of the gains around elon musk's successful bid to take the company private. romaine: we are going to talk more about twitter later this hour. first i want to talk more about microsoft and alphabets earnings. let's talk about alphabet -- the biggest impact in terms of revenue and contribution to this was the suspension of activity in russia. she said there was a bit of back on ad spend in europe and we cite back at snap when it came

to advertisers and the invasion of ukraine. what is your take on this? >> i think the advertising market is starting to bring some questions. you have these market forces and geopolitical forces in russia, ukraine and europe. we have a lot of macroeconomic conditions looking like we may see a recession. we are definitely seeing a pullback and tech as a whole is going negative. if alphabet missed, i can only imagine what meta and twitter might be in for this week. i thought alphabets numbers were pretty good. they were close. the growth was good and this is a company that is performing very well and that stock buyback is an indicator they believe their value is still there and they are going to spend money to repurchase their shares. romaine: the cloud is 8 --

emily: she was asked on the call whether netflix and the pullback there is a concern. she brought up youtube and how well youtube's ad business is doing. we know netflix is not an ad supported business. she said we continue to be pleased with the innovation at youtube. time spent there continues to grow. we are continuing to innovate there across the board. i tried to get her thoughts on elon musk buying twitter and twitter getting out of the ad business but are you seeing a broader reshuffling in the ad business given what's happening at twitter? the apple ad changes that seem to be disproportionately impacting meta and snap? daniel: i think alphabet is going to be in pre-good shape and will be able to sustain growth. the changes and modifications to

youtube have been largely well-received. i think tiktok has been its biggest challenge and had to do with the near miss versus what analysts expected. but i think the youtube business has been growing. there is a lot of positive tailwinds for that particular business and the market is largely appreciating what google and youtube are doing. i'm still positive on the company. the numbers weren't that bad, the sentiment is just really low right now. emily: google is still trying to close its acquisition -- we know that doj has asked google and mandy and for more information. i asked about the likelihood of the deal closing and she talked about how she believes this will increase competition and help google cloud compete more effectively. let's talk about the cloud and

microsoft. how is google cloud doing with respect to microsoft? i know it is still in third place. daniel: google has been competing in we've seen oracle with the uptick. they still came in over 40%. the concern is that it still not profitable. they did narrow losses in the most recent quarter. i feel the company is willing to make those capex investments and they understand their ambitions are be in third place, but to be on par or above the competition, so they are going to have to spend big. the market has to realize it's going to take some time to get there. they are all indicators and 40% growth. azure is still growing at 40%, so that spending is not necessarily accelerating their achievement of pairing and we will see what that does later this week. emily: which brings us to

microsoft earnings and it is a beat. i wonder if you think they are better insulated from this uncertainty we are seeing right now? daniel: i like the enterprise play. companies are going to spend on data analytics and software that are going to create more scale. you have high cost in regard to finding employees and cost going through inflation. microsoft is really well-positioned there and we saw ibm do well this quarter. some of these companies with more consumer-oriented businesses are going to have to deal with some of the discretionary spending going down as the economic climate gets tighter. i think microsoft is more insulated, more diversified. it has the commercial business and i think it puts them in a good position to not be hurt

quite as much by all the things going on outside the company's control. emily: dan newman, we will continue to follow the calls. thank you as always for joining us. coming up, what exactly does elon musk mean by free speech? he tries to clarify on twitter his intentions for twitter, next. this is bloomberg. ♪

emily: as the deal is being sealed for elon musk to buy twitter, he tweeted that he wished even his worst could ask would remain on the service because that is what free speech means. but what changes will he make? does he even know yet? i'm joined by that coast of the all in podcast, tim o'brien. looking forward to a spirited conversation. what does free-speech mean to you? >> what it means to me as we don't have arbitrary censorship rules on the platform that twitter will act as an open town square, be an honest referee of the debate but will not try to choose winners and losers. what we've seen over the past few years is a growing movement

toward censorship. it started with individuals who are unpopular provocateurs like alex jones, then a sitting president of the united states being platform. then during covid, we saw entire categories of thought being deplatformed. you could not criticize where the virus came from or mask mandates and now we are seeing that same sort of idea of banning entire categories of thought thing applied to more and more platforms. a dissenting opinion on climate change. censorship has gone way too far and elon wants to roll it back. that tweet you showed on the screen indicates pretty well where i think he wants to take it. he does not want to go far beyond what the law allows. these not saying anything goes, the first amendment does not protect many kinds of speech and he doesn't want to go far beyond that in terms of restricting speech and i think that's a healthy question that is long

overdue. emily: we are getting headlines from twitter hk. the first headline -- twitter required to pay a parent termination fee of $1 billion if the deal does not go through. that's the same as a reverse termination fee. do you think elon musk can and will protect free speech? tim: i think free-speech is being used as a proxy for unfettered speech and i'm not a fan of unfettered speech. i don't think propaganda should be allowed to run rampant and misinformation be allowed to run rampant on social media platform and it has i don't think calling someone like alex jones a provocateur really captures the totality of how he has used media platforms. i.e. don't think -- they're all

-- there are already a lot of categories of speech that are not permitted on twitter. would david be comfortable with pornography being on twitter or snuff films for russian propaganda or chinese propaganda? i think the idea of conflating the notion of free speech with political arguments about, right censorship is a straw man used to describe a problem that doesn't exist to the same extent misinformation does and i don't think elon musk has much of an interest at all in solving the misinformation problem on twitter and putting things in place that would allow for responsible vetting, not censoring the left or the right, but actually monitoring the platform so it is a better form for factual exchanges. emily: david, you tweeted the

berlin wall of censorship fell, but are you ok with some of the examples tim outlined? david: no. i'm not ok with bots being on the platform. the platform was rife with bots and elon has promised he's going to crack down on bots. he has premier engineers he can force to crack down on that. emily: that isn't anonymous speech free-speech? david: not if it is fake speech. the biggest mace characterization about free speech in general is that it means anything goes. it doesn't. the supreme court has defined nine major categories of speech not protected by the first amendment because they are observed to be harmful speech. it's not a defense of fraud. if you want to defraud some buddy, you cannot say your speech is protected by the first

amendment. when you violate the authenticity requirement, you are perpetrating a kind of fraud. it is perfectly fair game under any kind of free-speech policy to take down those kinds of bots and i fully expect elon will be far more effective at doing that than the current manager -- management of twitter. tim: tell me what is the mechanism for achieving that? what is the mechanism for making sure categories of expression you think are problematic don't surface on twitter? david: it's not about what i think is problematic -- tim: what's the methodology for going after any category of expression on the platform that may be problematic? david: we have two hundred 30 years of supreme court case law in which the supreme court has wrestled with these issues over

the decades, not like some content moderation employees at twitter who are just figuring this out right now. the supreme court has been wrestling with this for hundreds of years and they have identified nine categories of speech -- for example, fighting words. any ethnic or racial slur -- [crosstalk] i understand -- tim: we are talking about a private platform. so you will take categories of speech to the government monitors and graph those on to a private model? david: categories of speech the supreme court has said are not protected because in their opinion those categories of speech can be dangerous, i would apply rules to content moderation. i think that is what elon is hinting at when he says he will not go far beyond what the lauper habits. the supreme court already prohibits fighting words were does not protect them. if you are worried about twitter

being a cesspool of ethnic or racial slurs, those can clearly be prohibited. if you are worried about harassment or stalking, that can clearly be per habit. fraud can be per habit. if you are worried about incitement to commit a crime, that can be prohibited. why? the first amendment does not protect those categories of speech. tim: what about chinese or russian propaganda? emily: and before you answer, jeff bezos tweeted suppose the chinese government gains leverage over the global town square even the strong relationship between tesla and china. what do you think of that? david: twitter has already been allowing the wolf warrior of beijing and the ayatollah to post on twitter. they don't seem to have a problem with various governments around the world posting what they think. the problem is when those governments pretend to be someone else. if the asset -- of the fsb has

created a bunch of phony accounts, that is a form of fraud. tim: that's not the only problem that exists with government-sponsored disinformation and propaganda. let's get back to the idea -- [crosstalk] are you comfortable with chinese or russian propaganda flourishing on social media platforms. david: twitter already allows it. tim: -- david: if a foreign government once an account, is it up to david sacks -- [] [crosstalk] david: let me finish my point.

it matters a lot who people purport to be on these platforms. if the russian government wants to post a tweet or the chinese government or the ayatollah, if they want to publish a tweet, i probably don't agree with that, it's probably part of their government propaganda, sure. but as long as it is correctly labeled, i don't think anyone's going to be fooled by it. where you actually have a problem is where you have a disinformation operation conducted by a foreign government where they are posting things under accounts from people who appear to be in iowa and they are signal boosting with a bunch of bots. elon will do a better job wiping that out. he will get rid of those spots better than the current management. tim: it's not just a button signal boosting problem. you are over simple find the nature of the problem. david: i'm sorry there are people in the world who post things disagree with. emily: let's talk about donald

trump before we reach the end of the segment. you wrote the book on trump. you -- he has said he's not going to come back to the platform even if he is allowed, but how significant would it be if elon musk and his management team decide to un-ban the president? tim: i think we have to say what are we doing when anyone is banned and anyone who is banned is brought back in? what are the standards around that? that has to be clarified. i don't think facebook, youtube or twitter has done a very good job of that. historically, newspapers have tried to address that problem and have found mechanisms for doing that in a real-time basis around categories of expression that involve lying and propaganda and manipulation. it's never going to be perfect but something has to be in place. it's ridiculous to think this is a left versus right argument.

this is an argument about preserving high-quality information in the service of media platforms doing a better job of informing the public. emily: do you think president trump should be un-banned even if he is spreading misinformation? david: here's the basic problem. there's no such thing as a truth api. i know you would like to say that tweet in my opinion is false and therefore we should and it. the problem is when you do that, you empower a special class of people, these mandarins and the concept of moderation to decide what are the boundaries of free-speech for all of us. if someone is willing to sign their name to a tweet and they are who they portray themselves to be and it's not a category of speech the supreme court has not ruled to be harmful, they should be allowed to say it. emily: i want to continue this

conversation but we are running into a hard break. i'm going to let you guys continue this bait offline. david sacks, always good to have you. tim o'brien of bloomberg opinion. so much to continue to talk about. which startup is being sued for failure to deliver and overstating customer numbers? that's next. this is bloomberg. ♪

emily: being sued by authentic brand group which owns forever 21 says they failed to not allay deliver promised technology but during its integration, the company lost out on more than 150 million dollars in online sales. they say they consistently overstated the nature of an

integration. bolt saying the claims are without merit. coming up, roger mac me here to talk all things twitter and elon musk and how jack dorsey fits into this dramatic takeover. that's next. this is bloomberg. ♪

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emily: welcome back to bloomberg technology. i'm emily chang in san francisco. we are getting new details on elon musk's agreement to buy twitter. ed ludlow has been pouring through the numbers. ed: the stand is there is a termination fee. if elon musk walks away from this deal, he has to pay twitter $1 billion. if twitter walks away from the deal, they have to pay elon musk and the incorporated company he set up for the deal $1 billion.

the structure of the business, twitter becomes a subsidiary of x holdings incorporating -- incorporated. what it doesn't say is it talks about the $21 billion in financing elon musk has to come up with and that debt financing which we have plenty of details on. tesla is down 12% during tuesday's session, the biggest drop since september, 2020. lots of theories out there. one is is elon musk distracted? how is he going to fund that? will he sell down some tesla shares or some of the assets he owned to finance it? let's look at his net wealth. he's the world's richest man, but only on paper. he's only got $3 billion in cash equivalent. most of his wealth is here, tesla stocks and options that he

does not have liquid access to. that is one theory. he will either sell down tesla shares or borrow against them. a lot of questions remain, could he bring in partners? according to sources, he was vetting potential art nurse as recently as this weekend. either way, you bring up the relationship between twitter and tesla shares. twitter rising optimistically toward the 50 doll -- $54 and $.20 a share offer price with tesla dropping off at that concern. emily: let's dig into this further with roger mac me. he's the opportunity of waking up to the face but catastrophe. i know you were listening to our conversation with tim o'brien and david sacks. you don't think this is about free speech at all. why? >> i think the free-speech

conversation is off target. when you introduce algorithms in the amplification of content for attention as twitter does, what happens is the algorithms are going to seek out the content that produces the biggest reaction, which is going to be the most extreme content. not just political content but all content. it's going to get that disproportionate weight. the real conversation we need to be having in my opinion, everybody should be allowed on the platform, but no one should have the benefit of being able to have themselves amplified disproportionately to crowd out other voices. emily: let's use the example of donald trump. should donald trump be kept on twitter even if he is spreading lies and misinformation? roger: to be clear, i think twitter has a responsibility, all these platforms have a responsibility to democracy, something they've done a truly horrific job at. as twitter is structured, is not

just trump, it's all kinds of extreme voices across the entire spectrum drowning out the thoughtful and factual things that might also be there. at the end of the day, by framing it in political terms, we do a disservice to this conversation. emily: but it is a concrete example that i think helps to understand a broader point. roger: i would not allow him back on. i would not allow on many of the incredibly powerful people that are there the problem with twitter -- there are two core problems and they both represent opportunities. the first is even though it started with one of the best ideas ever in the history of the internet, twitter has never successfully monetized itself. the company still has a huge net loss acumen to flee since it was started and given its influence with politicians, celebrities

and journalists, twitter should have been able to find a path. it's so influential. the second part of the problem is they have a set of terms of service designed to protect people on the platform and they have done a horrible job of moderation and enforcing the terms. i give them credit for trying, particulate in 2020 to do a better job of that. but i think they have not done a good job. covid this information is a great example of something that ran rampant. but there is also enormous amount of abuse of groups that are shall we say out of power. particular people of color, women, and others who use twitter in order to have a voice. it's one of the great things twitter does is it gives those who are out of power a voice. the problem is the algorithms allowed those who would suppress those voices to do that very

effectively. emily: there's a lot we don't know about elon musk's intentions all top he may not know exactly what he wants to change. i would love to hear your prediction. how does twitter look different under elon musk in let's say two years? roger: i don't honestly know because here's what's really weird about this deal -- musk came to twitter's board a little more than a week ago with a proposal to buy the company. yet he had no financing, no plan and he had not filed the proper paperwork with the securities and exchange commission. so the board reacted as one would expect -- it engaged a poison pill and said slowdown. a few days later, all of that gets reversed and the deal is suddenly accepted and there's financing now, but as far as i know, no plan has been shared with shareholders.

the filing with the sec has not been resolved to my knowledge. so you have a situation where a serial violator of securities laws is being allowed to do one of the largest no private transactions in history without any scrutiny, which is disappointing but not surprising in this environment and i think of this as shareholders -- the problem of going private transactions is the people doing the buying know what they are going to do and they have a plan to create wealth. the people doing the selling are not party to that and there is something fundamentally unfair. i believe there's a lot of opportunity at twitter to create value and i believe the public shareholders would go along with it if somebody told them what the plan was and did so in a convincing way, the same way jeff bezos is done and in the way reed hastings did repeatedly at netflix.

emily: this could never have happened at facebook this way given the share structure and the power mark zuckerberg still wields there. i wonder if you think that is a good or bad thing given how much you have critiqued facebook. roger: to be clear, i think dual class equity is a terrible idea and should not be permitted. i think is totally contrary to shareholder interest. in that case of twitter, i believe the company was very badly managed. this board allowed the company to operate with a ceo with a full-time job at another company. it's now accepting a transaction with summit who i think is the ceo of four other companies? i look at this as a massive policy failure at every level and this is nothing to deprecate elon musk. he may have a great plan. in fact, i hope he makes twitter a lot better. but at the same time, the things he talks about most are the

areas in which twitter is most flawed and the proposal he has offered for fixing those things are not obviously fixes in a world where twitter monetizes through advertising using algorithms to amplified the most extreme speech. emily: interesting you mention jack dorsey in his role. he tweeted thanking elon for taking twitter out of an impossible situation, which is an interesting commentary given that he was the one in charge for so many years. always great to have you, roger. we could continue this conversation for hours. coming up, how silver gate bank is betting on digital finance. we will talk about microstrategy and facebook, next. this is bloomberg. ♪

emily: time now for our crypto report. microstrategy recently turned to a bank to borrow against its own bitcoin to buy more bitcoin and the bank it turned to was silver gate. sonali: i want to bring in the silver gate ceo because he's been facilitating this and a lot more in the cryptocurrency space when it comes to loans. thank you for joining us. why are you comfortable lending against bitcoin to this degree and how have regulators become comfortable with that? >> i appreciate the question and

the opportunity to talk about silver gate and what we do. we have been banking bitcoin and broader cryptocurrency system since early 2014. we've been doing this for several years. when we first started, it was that coin only. as you are aware, bitcoin is a digital bearer asset and it trades 24 hours a day seven days a week around the world. that gets to the heart of your question, which is when we are lending against bitcoin, we take the collateral for the loan, we have the ability if the borrower does not pay us back or if we need to satisfy a deficiency, we can look at bitcoin and sell it 24 hours a day, seven days a week. emily: bitcoin is so volatile.

how does that work when one day it's $46,000 in the next day it's $38,000 in such a short time come within weeks? does that create complications in terms of taking it as collateral? alan: it certainly could and that gets to some of the design features of our leverage products. the silver gate exchange network is the 24/7 access to fiat banking rails we provide to the digital currency industry and we bank complete like coinbase, square, gemini and etc. we enable them to move 24 hours a day, seven days a week and that gets to the heart of our ability to sell bitcoin quickly if we need to. so far, we've been doing this lending for a little over two

years and have not had to liquidate anybody's bitcoin because of the fact we started in a very over collateralized position, so someone had to pledge more bitcoin to us than we were willing to lend to them. emily: let's switch gears and talk about dm. you bought the assets when the project started when facebook looked to sell. what does this mean when you are pushing stable coin and does it mean you will be a much bigger player moving forward with more regulators? alan: as to how big we will be, that is to be determined. our goal is not to be a specific side but help our customers solve the problems they are trying to solve in this ecosystem. stable coin, as you know, is tokenized dollars. different from bitcoin, which we were just discussing, which can be very volatile, because its

price is set by market factors. it's really just supply and demand. with stable coin, we are trying to keep the value of that token at a stable price. in the case of a dollar-backed stable coin, one dollar would equal one silver gate issued stable coin token. we currently bank all the existing regulated stable coin issuers in the united states. that would be circle and the gemini dollar and the patch dollar. they all use our platform and our ati's to facilitate minting and burning of their stable coins. what we are trying to do -- those stable coins, by the way, are primarily used for cryptocurrency trading. what we are trying to do is bring a stable coin into the market that would primarily be

used for commerce and cross-border remittance. the protocol was purpose built for payments and that is why it was attractive for us and we are excited to own that technology and bring stable coin to the market, hopefully by the end of this year. emily: we will have to have you back as regulars put more guardrails on this industry. emily: coming up, it's not the ring that rules them all, but it can track your heart rate and even your body temperature. we will see how it will fare in the crowded field of wearables in an exclusive interview with ora, next. this is bloomberg. ♪

emily: ora, the finish wearable start up is getting a new leader. the fitness ring that tracks sleep and body temperature. let's talk about it with the managing partner. tom, i want to start with you. how will it stand out against giants like apple? tom: it is a smart ring that delivers health guidance and fosters healthy habits. we started with sleep because it's the foundation of health. 99% of us will sleep every night and 10% to 15% will exercise regularly or say we will. sleep is the universal solvent. it helps improve your mood and complexion and reduces inflammation. it's a nightly habit and most of

us don't do it well. the ring is differentiated because of the location on the body and gives you a more accurate signal. it's about accuracy, relevancy of a battery life and wearability. it addresses this head on and is ike a powerful computer on your finger, 100 times stronger than on your rest. emily: the former ceo steps down. why do you think tom is the person for the job? >> sorry -- we are grateful for the contributions he made to the company and this is indicative of where the company is in scale and stage of growth and tom is the leader we need right now. we've been looking for a nuanced combination of technical and product expertise with an

authentic cultural fit with our international team. it was a tall order and tom immediately rose to the top. he brings decades of technology leadership, he has knowledge of the subscription business model and driving international expansion. he's got -- all of this is critical in its next stage of growth. emily: you have some interesting sports partnerships. how do you think these kinds of relationships can help drive growth? tom: everybody expires to be a superhuman but not everybody can be chris boss. exercises only one portion. sleep is the other part. when we start to hear about the trouble some of our ambassadors are facing learning to sleep

better, it is inspiring to everybody. we all want to be like lindsey vann but we can relate to her. that's one of the powers of oura . it's available to everyone. the fall of this year was pretty stressful and my sleep was really hammered. i ordered a ring over the holidays to improve my sleep and it improved my health in a matter of weeks. when i saw that power and behavior, it made it clear this was an opportunity i had to jump on. emily: oura is now valued at 2.55 million dollars. is an ipo coming soon? >> we are just getting started. we are going to build out our membership experience and enterprise partners. when we originally invested in 2019, we believed in the big vision of changing population level health. with each ring, each night of sleep, that would guide insight

that can save people's lives. we are beginning to deliver on those aspirations and as we scale, we will consider the best financing path, including going public and being available for all to take part in our success. but for now, we have our heads down and will deliver the best experience for our members. emily: how are you thinking about the macroeconomic environment? markets are in turmoil and we are starting to see it bleed into the private markets. inflation is big concern for all consumers. emily: interstate -- tom: interestingly enough, stress is good for our business. so we might see some benefits from that. but the macro market is when we have to pay attention to when we are here for the long to build value for our customers. emily: women hold just 6.7% of ford chair rolls globally. the fact you are in that seat

means a lot. what more can we do to move the needle? eurie: it's a stat i recently learned myself. i didn't know it was a rarity to be a chairperson at the board. i've been honored to serve on the board since 2019 and i took over because the team asked me to. they felt like i had a collaborative leadership style that could work around the table and strong medication and listening skills are two of the most helpful skills to have leading a board. i know companies are working hard to add women to their board. it's about 20% of women now globally, which is good, but not great. further elevating women to board chair positions not only adds diverse voices to the decision-making but fundamental changes to the way boards are run. emily: amen to that. the chair of the oura and ceo.

we will keep watching. that does it for this edition of bloomberg technology. a big day tomorrow again -- earnings from meta-, paypal and pinterest. i'm emily chang in san francisco. this is bloomberg. ♪

♪ haidi: good morning and welcome toaster there." i am haidi stroud-watts in sydney. sheri: good evening from new york, i am shery ahn. the top stories. tech stocks tumble on lackluster results. alphabet posting a rare earnings miss while announcing a share buyback. haidi: u.s. doxxing