announcer: from the heart of where innovation, power and money collide in silicon valley and beyond, this is bloomberg technology with emily chang.

emily: tony fedele's unorthodox advice in these times of turmoil. the cofounder talks about the least exciting inventions coming out of silicon valley today. all that in just a moment, but first let's get a look at the markets. tech companies driving a rebound in stocks as traders try to read more clues about what the fed is going to do next. ed ludlow is here with the latest. ed: some relief in the rebound but the inflation outlook, a key cpi print coming wednesday and hopefully those price gains moderated somewhat in the month of april. then you have all the fed speak but technology, 1.3 on the nasdaq, clearly outperforming

the s&p 500 and yields are a little softer, still at the 3% mark on yields. bitcoin trading sideways all day long. but we are coming off the back of a three day selloff off the nasdaq 100, a very tech heavy index. let's bring up this chart and ask where we go next. is this just a temporary pause in the selloff or do we see a real rebound? you know i like to get technical. let's get technical. only 10% of the nasdaq 100 trading above the 50 day moving average. normally that would not be a good sign. you have such a pullback and so many prices of companies on that index, could we see some dip buyers come in? rfi, the relative strength index, below 30, oversold territory. so we are waiting to see what happens next and we will open

that inflation print that comes wednesday morning. look at the movers that come on the tuesday sessions. twitter, we are going to talk about this later in the show, down 1.5% after elon musk says if he is successful, he would reverse the ban on donald trump. a mover in after hours coinbase -- the problem with coinbase is you are looking at transaction volume depressed even further, down 10% in after-hours trading. we had been down more than that. this is a company that does well with volatility. we saw a lot of selling in the first quarter, but sales and earnings did not meet expectations. emily: also cryptocurrencies falling. i want to dive into the ongoing volatility in the tech sector where we've seen a big selloff since the start of the year.

i'm joined by the chief market strategist at putnam investment. thank you for joining us. what do you make of this selloff when it comes to tech? have we hit bottom or is there more to come? >> there's probably more to come. it makes sense tech stocks have pulled back so far because we have seen tech stocks do so well in the last three years, particulate with all the stay-at-home names, but that was exacerbated by the easy money policies the federal reserve was pursuing. as the fed begins to pull back, a lot of tech is dominated as you and your viewers know by those companies that have very little cash flow now and the market has been betting on cash flows pretty far out into the future. the tech sector is bifurcated between those companies that have dominant market positions, strong run for growth and cash flow now and those that were

hopes and dreams. that latter group may not come back for a long time, if at all. at the former group has come in quite a bit and we think those are where the activities are. emily: inflation numbers coming out in 24 hours. how is that going to affect this broader story? ellen: if inflation remains high and we think it will peak in the second quarter, but if we see a high inflation print, that's bad for long-duration tech stocks. that will give the federal reserve license to raise rates faster. real rates will increase and that hurts the cash flow you are discounting. emily: when you say there is more to come, how low can we go? ellen: it depends on the company, of course, but we would not be surprised to see another 5% or 10% down in a lot of the larger names and some of the smaller names, it's hard to say where they could go, particularly those that are less

profitable. a lot of excess has been wrung out of the bigger names. if you look at some of the largest tech names and the outperformance they had going into 2022, a lot of that outperformance has been given back. we think the larger names are close to bottoming out here. of course one can never say never and it's hard to predict day today but they are getting to be pretty attractively valued. at some of the smaller and less profitable companies, it could be a while. emily: let's talk about big tech earnings. we've seen a number of companies missed. do you see that happening in the current quarter and next quarter? ellen: a lot of that depends on what happens with underlying electric -- underline growth. it does come back to consumer and corporate strength. the consumer remains strong. we still have 2.5 trillion on consumer balance sheets. consumers have pretty good wage growth and they all have jobs. we saw unemployment come in at a

very low rate .6. as long as the consumer keeps spending and the economy keeps growing, we think companies top lines will be ok. the biggest question is whether that goes down materially from here and the second question is whether or not wage pressures are going to catch up and cause big tech to have to pay more to their workers. if we see inflation take hold in wages across the board, that could slow the economy down and keep inflation high and because the fed to move faster and harder than they were before. if the fed is able to engineer a soft landing, large-cap companies will remain more or less ok. but it does depend on the pull forward that has been seen and that's followed emily: by company valuations. emily:there are a lot of factors out of their control like china's covid policy continuing

to keep shanghai on lockdown. the tesla factory has experienced a lot of obstruction and apple has warnings about supply constraints and the impact it will have on their quarter to the tune of billions of dollars. how much of an impact do you think china's covid policy specifically is having on this broader slowdown? ellen: it is clearly a factor, particularly on the hardware side because so much hardware including semi's and other assemblies take place in china, so the euro protocol is having an effect. the question becomes not what effect isn't having today but what effect is it going to have in one or two more quarters and does the government have the wherewithal and plan to continue with this type of very sharp lockdown for an indefinite time? if they ease up on it either because numbers get better or it becomes untenable, we could see

a lot of those tech products begin to flow again. a lot of it is going to depend on the policy itself, but if case numbers get better or if the zero covid policy is effective at keeping it contained in certain areas, i think there will be a relief rally as we see a lot of exports begin to come back online. emily: we need to see how committed china is to the zero covid policy. what is your advice for tech investors right now? are there any safe havens? ellen: have a shopping list and come up with the names you want. for us, that is the large cap tech companies like microsoft, google, apple. stay away from companies whose modes are being eroded by covid and stay-at-home endings and find companies generating cash

flow now. i do not think the very low cash flow or negative cash flow companies are likely to come back and that could be a losing trade going forward to try to buy some of those even though they are down 50% to 80%, it's not a good idea to take those because unless the fed comes back with easy money, we are not going to see those valuations again. emily: have a shopping list. thank you, ellen for joining us. coming up, elon musk says he will reverse the permanent ban a former president trump if his deal to buy's -- to buy twitter goes through. why muska still casting doubt on his ability to buy the platform, next. this is bloomberg. ♪ >> i would reverse the from a band. i don't own twitter yet, so this is not a thing that will definitely happen. ♪

>> he has stated he would not be coming back to twitter and he would only be on true social. this is the point i'm trying to make is how it is not getting across is that banning trump from twitter did not end trump's voice. it will amplify it will amplified among the right and this is why it is morally wrong and flat-out stupid. emily: elon musk speaking at the financial times future of the car summit. his thoughts on the permanent ban of former president trump on twitter following the deadly attack at the u.s. capitol on january 6, 2021. musk thing he will reverse the ban if his bid to buy twitter goes through.

for more, i'm joined by ed ludlow and sarah frier who covers big tech. not only did he say he reversed that she would reverse the ban, he repeatedly said if the deal goes through, casting some doubt on it going through at all. what did you make of that? ed: he was couching or caveat in the deal, he did reference the idea that might not go through. investors have speculated he could walk away potentially and there would be some kind of challenge, as there has been. the ftc is investigating it. but it wasn't about reversing the band for trump. he said manning doesn't work and cited trump setting up true social, his own platform where it is a very right leading -- right-leaning platform and use that as the basis for his argument that a that -- an

outright ban does not work. emily: musk confirming what he has hinted at before, saying twitter should be cautious about permanent bands. that said, he said he would be ok censoring some content and potentially banning some individuals. aside from the case of president trump, what would be different when it comes to content moderation under elon musk? sarah: it's unclear because he says he is a free speech absolutist but when it comes down to it, when you drill into the details, he's open with some content moderation and says he wants to get rid of the spam bots and bit going spam happening on twitter right now. there's some kinds of content he is ok with getting rid of and he was speaking with the european union commissioner yesterday about this very problem and we expected there to be a lot of clashing there because the eu wants strict content policies

and elon says we are not in disagreement here, i'm on board with what you are saying. so it is unclear when he comes and what would be different to stash aside a little more friendliness to the right. emily: explain the line of argument that by removing trump from twitter you amplify his voice elsewhere. ed: it is a bit of a head scratcher. he put it in very simple terms, that it was foolish to remove trump from the platform. trump set up his own social media platform, true social. true social does not have as broad a debate in conversation as twitter does. it is very right leaning and amplifies trump's voice with that sector of american society and politics, not stifle it. he did display some frustration because the moderator of that conference said what is your position on reversing trump's

van -- trumps ban? had we done that, he would have never set up true social and there would be more moderated or bipartisan conversation in what musk describes as the public town square. emily: he also goes so far to endorse jack dorsey and says dorsey also supports the un-banning of trump. >> in my opinion, and jack dorsey shares this opinion, we should not have permanent bands. that doesn't mean some but he gets to say. if they say something illegal or destructive to the world, there should be a timeout, a temporary suspension or that tweet should be made invisible or have

limited traction. emily: to be clear, trump was banned under jack dorsey's leadership. he responded to that effect saying he does agree there shouldn't be permanent bands. there are exceptions but generally, permanent bands are a failure and don't work. what do you make of elon musk invoking jack dorsey here? if elon musk is going to take over twitter, is jack dorsey going to be the copilot? sarah: we know they are friends. they have a friendship that goes way back. what is strange is who was the ceo of twitter when trump was banned? it with the ceo when they were making these policies about who they needed to moderate on the platform? it was jack and he has made some strange comments like this lately where he talks about how

twitter's board has been a function of twitter, the fact it's a public company and these are all big problems. he was running the thing, so he could have changed these things while he was in charge. i would love to hear more from jack about why he feels that was impossible but if he feels twitter is a private company, they might have more latitude to make certain changes he would not feel comfortable changing as a public business and elon musk could make that possible. emily: elon musk said he would be ceo at least for a time, but is it at all possible jack dorsey comes back as ceo as well? sarah: i think that's definitely possible. it's one of the top names that have been speculated. elon musk running it for a few months is may be something to try to get investors on board with the plan.

he has a bit of a midas touch when it comes to the things he says are going to work out. he has some lofty plans he has put forth for twitter, but he has this cult of personality that when he takes charge of something, people listen and come on board. maybe he could convince jack to come back and run twitter or baby has someone else in mind. emily: what do you make of that thought, given how elon musk runs his other companies? ed: he's not afraid of talent sharing. you look at the talent sharing that goes on between tesla and spacex. he has commented a lot that tesla is essentially a software company. he's talked about open source and the algorithm and talks about twitters hardware, basically fixing their computers to make the process better. the on that, his suggestions are

straightforward. he accused twitter of being slightly left-leaning or liberal because it is based in san francisco. perhaps he feels he wants to drag twitter back into the center from a content moderation standpoint. but beyond that, what today made clear is he's not in favor of outright bands. a timeout, perhaps, making invisible tweets that are dangerous perhaps, but not outright bands. emily: so much tbd. thank you. coming up, peloton hits the skids. can the bike maker turn it around? that's next. this is bloomberg. ♪

emily: a rough ride for peloton. the company tumbling to a record low after deeper than expected losses and an inflated earnings report. mark gurman covers peloton for us. how quickly is this bike maker going downhill? mark: as quickly as you can ride a peloton bike with all your energy. this company is an unmitigated disaster. i quite frankly don't know why they went public in 2019. they went public a few months before the pandemic started and that kicked off their sales. all their success has been in this pandemic time. they've generated between $3 billion and $4 billion a year. it's not a company like apple that generates $3 billion or $4 billion every week and a half, so i'm not sure why they see a point in being public.

their numbers are disastrous. they missed on revenue numbers for q3 and in addition to last quarter, they are projecting to miss on next quarter and fiscal 22. so things are not going well for the new ceo. he came into the job on february 9, just about three months ago. at this point, they stock is down 60% since he took over. if you compare that to the s&p 500, the peloton stock is down four or five times x. balaton, investor belief and in some cases customer belief as well. emily: i'm sure peloton would argue that their only success came during the pandemic. it had a strong brand going into the pandemic but now that we are out of it, what is the turnaround plan? sarah: the former -- mark: the former ceo talked about selling the numbers and the numbers

continuing. they completely failed predicting going out of the pandemic. in about three weeks from now, we will see the effect that has on some scripture revenue. he's cut the prices of the treadmill and there are two major bikes from between $100 and $500 that's going to lower margins and revenue. they are hoping over the long-term that they will have continuous revenue coming from these monthly plans and maybe annual plans in the future. there's a plan in place but it has not resulted in positive momentum. emily: we will see how pot on tries to retake control. thank you. coming up, in these times of market turmoil, what can investors and founders learn

from tony vidal? he's cut some unorthodox advice, coming up. this is bloomberg. ♪

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emily: welcome back to bloomberg technology. i'm emily chang in san francisco. the recent tech selloff is leading to massive valuation haircuts. in uncertain times, how do founders keep building? tony fadell, one of the key players behind the ipad and ipod is out with a new book. it's an unorthodox guide to making things worth making. he joins us with some advice today.

always great to have you back here on the show and always appreciate your unorthodox advice. in times like this, what advice would you give entrepreneurs? tony: batten down the hatches. hopefully you didn't go into some craziness and overspend yourself. i hope you didn't take a valuation you shouldn't have because it looked great on paper. but if you did, you're going to have to write the ship and the biggest thing is reminding your team those numbers were fabricated. those were all made up and go back to the business of working on your mission and achieving that. also trimming the sales. you have to go back to first principles and stop thinking about this overinflated market. has changed. has it changed dramatically? it will level out again. the pendulum will swing one way and swing the other way but stay

focused on the work. make your mission happen but don't worry about all the craziness around it. the biggest thing is taking care of your team. emily: i'm sure we can talk about this next question for hours but what are some lessons you learned the hard way? tony: geez -- let me count. the biggest one was understanding timing. you can have great technology, but the market has to be ready to listen to the innovation you have. the second thing is understanding how you are telling your story. you have to tell the story of why, why, why. it's all about the why. to me times tech founders and engineers and people in the tech world worry about the what. it starts with the why. why do customers need it, what do you need to do to get that message across and make sure your product delivers. start working on the story and

making sure the story is a painkiller. emily: google bought one of the things you built and that was nest. it did not necessarily go as planned. what is your take on what went wrong there? tony: it's in the book but i will put it this way. we spent six months to figure out how to work together and whether the marriage was going to work out. it was working ok for the first time for two or three quarters and then it was like the tender swindler. the bill of goods turned to be blown up and it boils down to i thought something they would purchase for $3.2 billion would be something they would take and cherish and understand they have to nurture and take care of it. they were making so much money and continue to make so much money that they went on to under

-- two other and different things and we were another toy. for us, what we thought was going to be a great marriage turned out to be a fling for them and for us, we were left hanging while they went and did other things. it was really about focus and leadership. that is what i think happened at the end of the day and why it did not work out. emily: speaking of another unorthodox marriage that could happen between elon musk and twitter. it might not go through but what do you make of that deal? tony: elon is an innovator and a brash one at that. you have to congratulate him on how he shamed the auto industry. we look back at the days of the oil barons and they bought media to shape the message. i think there are some echoes of

that in elon trying to purchase twitter but there are things twitter needs to sell and hasn't sold for many years in terms of the algorithm. some of the innovations in terms of editing tweets and deleting tweets, content moderation. that said, you can go all the way the other way where there is no control and you remove everything and become something reminiscent of for chan or whatever the latest toxic social media network or platform is. i hope elon is able to look at this and say i'm going to divorce the world of the algorithm and revenue from the tweet stream and amplify messages that have ugly information, things that cause genocide. we need to separate the capital

and revenue from the messages amplified by the algorithm. that is when you have the toxicity that happens because if it bleeds it leads, you know. i hope elon is going to be doing the right, even if he brings trump back on, trump should not be amplified for revenue gain. emily: let's talk about that moment. i want you to take a listen to what elon had to say about the banning of president trump today. >> i don't own twitter yet, so this is not a thing that will definitely happen because what if i don't own twitter? emily: is bringing trump back on twitter the right call? tony: it depends on the algorithm, it depends on the environment he's brought back into. if he can amplify and continue misinformation he had been doing , and that is for revenue purposes, then it is wrong.

everyone can have freedom of speech, but it has to come with consequences and it cannot be tied to revenue. the more toxic it is or entertainment value it is, you make more revenue, if that is the case, he should not be allowed back onto the platform. everyone should have a level playing field and it should not be tied to revenue dollars. emily: apple today, just in time for you to join us discontinued its last ipod model. obviously the ipod led to the innovation with apple and led to the iphone, how do you reflect on the end of an era? and a thing you are the father of? tony: at the end of the day, technology marches on. the beat never stops. i remember i lamented the day

when the apple ii was dead. the apple ii died in the 90's, well past the dayton when the mac took over. then again, when we look at it, the ipod was already starting to get cannibalized or die around the time of the iphone. it was always understood that at some time, the cannibalization of the ipod would be complete. i can't believe it has lasted this long to tell you the truth. it is the end of an era, but it is a cornerstone. it's an indelible piece of apple history and technology in general just like the apple ii was and the mac is and those things are going to live on well beyond end if it wasn't for the ipod, we would not have the iphone. all of these things are stepping stones and that's how technology works. i can speak fondly of those days and those incredible times in the apple we know today would not have existed without that

development and that crazy fun time that was the ipod. emily: how would you rate the innovation and building happening at apple today? especially how they are navigating the supply chain issue. tony: if you look at innovation in general, i think they are doing a great job on the supply chain given what we are hearing from other companies. look at the quarterly results that just came out. managing the supply chain given the macro environment is really difficult and they are doing a good job. but when you look at innovation at apple today, it is very strong. it's not the same kind of information the consumer thinks of what the iphone or airpods or what have you. when you look at the innovation, it's happening at the lowest levels -- touch id, things like the m1 processor, that has been an innovation born out of the 2008 timeframe.

when i was there, bob mansfield and i created the mac silicon -- apple silicon for the iphone. it took a long time to get there but those kinds of innovations cement apple into the future for more and more transformation and innovation. we are seeing the hints of that happening at the lowest levels but it will come out and other products over time. emily: tony fadell, future shape now, your investment arm. always great to have you on the show. inky for joining us and by the book. coming up, stable coin used to be the face stay been >> crypto. stable coins serve a huge purpose and they are here to stay. it will also help out all

activity on various chains, so i hope the regulators recognize that as well. ♪

emily: time now for our crypto report. let's check what came out of coinbase's latest report. >> we have coinbase down almost 14% after reporting earnings that missed analyst estimates on wall street. you have them falling short on monthly transacting users, falling by about 2 million from the prior quarter. first quarter revenue also below

analyst estimates. this is a stock down 70% this year, more than 75% if you look at the 12 months. there was an expectation growth was slow and they say growth was slow in the second quarter of this year as well. brian armstrong addressing analyst at this moment, saying they will eventually be profitable but they will be unprofitable for this year. the question is will investors be patient as they make it through a volatile time? as they seek to diversify away from trading revenues into new product like the nft marketplace ? emily: i want to turn now to stable coins. this came up recently in a discussion with janet yellen. dollar backed stable coins are supposed to provide calm and the

stable coin called terra plunged sick to eat -- to $.60 instead of trading at a dollar as designed. it is now background $.90 but is this a sign of trouble for stable coin more broadly? i went to bring in the head of coverage for her take on all this. let us zoom in on tara. what does this mean? >> there are a couple of things at play. there's a difference between an algorithmic stable coin versus based -- versus a stable coin backed one to one with the u.s. dollar. if you look at heather, usd is a blend of luna and ust which is minted and burned to maintain the one to one peg. what happened at the end as you sigh large motivated seller go into the market and depress the price and d peg the algorithmic stable coin, causing an initial

drop down to point eight cents on the dollar. why is that concerning? because the luna foundation guard which manages these foundations on top manages a yield pool called anchor. anchor has been generating over 20% yield. anywhere between retail to institutional, so what happens is you had roughly 17 billion of total value lost in anchor drop significantly because people were getting liquidated. it was no longer one to one and you saw the luna foundation has to engage to re-peg that stable coin. yesterday you thought drop all the way down to $.60 on the dollar. emily: in the meantime, treasury secretary janet yellen brought up tara recently and talked about stable coin where probably as a risk to financial civility.

take a listen to what she had to say. >> tara usb experienced a run and declined in value and i think that simply illustrates this is a rapidly growing product and there are risks to financial stability and we need a framework that is appropriate. emily: what is your response to that? aya: we need a framework that is far more than stable coin. this strengthens the approach toward stable coins like u.s. bc which is now 40 billion in market cap. you have seen other algorithmic stable coins gain in traction. the largest question here is whether or not it is algorithmic or a one to one peg and whether

investors have space in the algorithmic stable coin. going back to anchor, if you look at where that 17 billion fits, it was roughly $7 billion decreasing, really reflecting -- i don't think the retail and institutional investors have much faith that price can maintain in a centralized fashion. emily: you do see ust dropping, removing the peg even further at $.79 according to coinbase prices. you see that volatility even when you see bitcoin recovering a little bit. i'm wondering what broader ramification is there, especially for d5 as the market starts to move forward here? aya: if you take maker and die, a number of these runs happen historically but the market has corrected and shown resilience through the market volatility

turns. overall, crypto, that coin we have stayed relatively range bound and will continue to be range bound had it not been this anchor run for the money. what we will likely see is that capital go into other forms generating assets. right now, it's all institutional clients that want some level of yield and flat is the new up. if you can maintain a flat return relative to what is happening in public markets and crypto, that is what they are looking for. swaps, derivatives and structured products, that is where we are focused. emily: thank you. now to a quick update on elon musk's bid for twitter. apollo plans to lead a billion dollars in financing for the bid . this adds to the long list of unusual investors musk has

secured in his deal to buy twitter ranging from larry ellison to andreessen horowitz to finance. coming up, what do drake, lebron james and bono have in common? in addition to all being superstars, they are backing a home solar energy company. we will have more on that business, next. this is bloomberg. ♪

emily: time now for this week's technomic's statement. rooftop solar is a surging sector but only 4% of homes feature solar panels. however, investors from lebron james to arnold schwarzenegger believe palmetto can turn that

around. i want to bring in palmetto founder and ceo, chris kemper. how have you gotten folks like drake, bono and arnold schwarzenegger on board? chris: thank you for having me. these type of investors see what we have been working on since 2009, which is climate change and energy independence is a big problem. for palmetto, unlike peers in our space come up those firms are in construction and we are focused on tech platforms, solvinr delivery. we can lay that out in three simple steps. one is whether it's an individual entrepreneur. we provide them with the tools to enable them to sell to consumers. two, we provide a seamless experience to consumers which helps build our brand experience. thirdly, we provide full supply chain management to our build partners and that delivers.

emily: you've pitched a $3 trillion investment by the u.s. government to fund solar for the entire country. how would this work and have you gotten any feedback from the white house? chris: we have not gotten feedback from the white house. we believe ultimately, if you look at benefits out there that -- the only point trying to be made is what is the quantum of capital. how does that impact lime it change mitigation and energy independence if we were able to allocate that capital to renewables, specifically solar. emily: otherwise, how do you scale rooftop solar? how are we going to get there or is that the only way? chris: through three main things -- best product, best price and

great service to the customer. back to our model, we focus on distribution channels and provide them with tools to acquire consumers. we automate the end to end delivery of solar to the customer so meant turnkey it and service it. the goal is you have such a great experience and you are saving money on a monthly basis that then you want to tell your friends and drive the flywheel from there. we have been doing this for about 14 years, so we are starting to see the momentum in the price drop. emily: palmetto ceo, chris kemper. we will keep our eye on you and your investors. that does it for this edition of bloomberg technology. tomorrow, we will be joined by the alphabet senior vice president of hardware and patrick spence, ceo of sonos. we are watching earnings from disney and a big announcement from airbnb. don't forget to check out our new podcast.

find it anywhere you get your podcasts. i'm emily chang in san francisco. this is bloomberg. ♪

♪ >> a very good morning. welcome to "daybreak: australia." we are counting down to asia's major market open. >> the top stories this hour -- u.s. stocks bounced back after another while session as investors count down to key u.s. inflation data, which may show price pressures moderating. >> the cleveland fed president, backing half-point rate hikes bu