announcer: from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. ♪ emily: i am emily chang in san francisco, and this is "bloomberg technology." saudi aramco, taking over apple as the world's most valuable company. how it is upending the order of the biggest forces in the global economy. plus, two top executives out of twitter as the company is cutting costs and freezing hires , as elon musk is looking for

new funding as he cuts his tesla margin loan. we will hear from brian chesky to talk about airbnb and its biggest change in a decade and how travelers will be hit by inflation. we will hear from the ceo of arm. all of that in a moment. first, the markets, stocks rebounding in the last hour, flap after a dramatic day. ed ludlow has the latest moves. ed: we love that drama. volatility the buzz word. down .2% on the nasdaq 100, basically flat on a date when it fell 2.5% at one point. the market is concerned about the federal reserve's ability to bring inflation under control without carrying the economy into recession. breaking news the market closed, federal reserve chair jerome powell reiterating a previously stated stance that a 50 basis

point hike at the each of the coming two meetings is the appropriate course of policy at this point. we will see how the market reacts to that on friday. the philadelphia semiconductor index of .5%, but broadly risk off sentiment, u.s. 10 year yield down, as we solve people move into haven assets, including treasuries and bitcoin. at one point down $26,000, came back, then down a thousand dollars a token. there is a single name we been paying attention to. apple. look at this chart. it is caught up in the selling. on the right-hand side of your screen, apple has dropped more than 20% from the january peak, the drawdown is 21%. what that means now, the snapshot in time, it is no longer the world's most valuable publicly traded company on the losing that to saudi aramco, energy and technology moving in different directions.

earnings season, look at this board, rivian, 18%, relief rally , reinstating or reaffirming guidance to build 25,000 ev's this year. the other big piece of news, who else? elon musk. he is trying to line up even more equity financing so he can do away with the entirety of the margin loan portion of the deal to buy twitter. there could be some relief on paper for tesla but still down .8%. emily: another date, another twist to the elon musk story. i want to talk about apple falling again, behind saudi aramco as the world's most viable company. our guest heads-up a team, so is this a changing of the guard or a momentary blip? >> will, not much is happening if you take a step back and look at it in the perspective of the

world i'd look at on a daily basis. it is down 20% from the highs, 17% from the average value of the last 18 months. look at tesla, down. amazon, down 30%. google down 30%. apple on the relative basis is doing quite all right. and there are a lot of reasons for that. they have done very well. they have grown to the last five years, earnings, more than 20%, and they have been very well in the recent context through the pandemic, through inflationary pressure. they have had strong demand, and then when investors look at apple today, in this massive selloff, that is more of a quality name like a safe haven for them, because they tend to

consider apple has a pretty nice outlook, that revenue growth will continue, new products, new opportunities in ar, and automobiles, so the longer term outlook for apple still looks fairly attractive to investors. that is a reason why the stock did not do that bad. emily: so you are still confident in the fundamentals. what about the broader tech sector? saudi aramco is above all of them. the top six companies by market cap, apple, microsoft, amazon, all behind and oil company? pierre: yes. that is a good question. that is what i have been working on, are there opportunities or names to buy in this text selloff? the way i'd like to think about it is, what triggered the selloff initially was inflation and the concern that interest

rates going up. when you look at it, growth has an effect on the valuation. now here is a way of thinking about it. a lot of these companies are inflation-proof, so apple, microsoft, amazon, and their ability to pass on costs is not too bad, so in an inflationary environment, they should grow faster, because they can increase their prices with inflation. emily: so do you think investors are overreacting? pierre: yes, investors reaction is creating opportunities. you need to look at these companies with good pricing power with strong market position and who have been battered down in recent weeks and in recent months, in the last six months, and you can find very interesting opportunities, like three or

four, tesla, of course, down from six months ago, and it is still going to grow earnings 40% to 50% year, and the other is tsmc, trading on 15 times earnings, and it has a better growth potential in my view than apple, and the other was interesting with mentioning is nvidia, down with 70% from the peak, and here again a company that has a lot of pricing power, very strong leadership in the market, everybody needs that, and it should do very well in the next few years, so i see opportunities in that selloff. emily: even in the midst of a supply chain shortage in the lockdown in china? nvidia, obviously apple, nvidia is exposed to that.

pierre: yeah, so, it is a good point. the next few months or the next couple of quarters could be slightly challenging for these players, but i do not think you have any like incremental negative news flow coming through on that front, so we are in the deep of the supply constraint, and supply is now coming back and it will take time to get supply back, but it is already on the way. i think the situation in china, as much as it is a dramatic disruption for a lot of these businesses, it is well understood, mike apple talked about it on the earnings call, and investors are putting their heads around that situation so i tend to observe that and think, these names with this

great outlook and have been taken, have pulled back so much, and that is where i see the opportunities. but of course you have to look to the next couple of quarters, maybe. emily: thanks for helping us try to make sense of it all. always good to have you. thank you. meantime, twitter making changes , as it awaits elon musk's 44 billion dollar takeover, including cutting costs. kurt wagner covers twitter and joins us now. two big executives leaving, is this because of elon musk or twitter own business problems? kurt: that is the answer i'm trying to get to. we have a new ceo, who took over last november, and it is always natural for a new ceo to want to leave their imprint on the company and make some big changes in get their executive team in there.

everyone is in a limbo, right? they are waiting for elon musk to take over, so it was interesting for him to make two big moves, although i have been told it has been in the works for weeks, so it was unclear if it was a planet elon musk or something he wanted to do with elon musk's blessing, probably the latter. emily: let's talk about who is leaving in the reaction. there were some not happy tweets , as one might expect, when people get fired. kurt: these are two long-time product executives. one of them has been running product for years at twitter, and the other has been running revenue product was so two people who had been there a long time and a lot of people liked, and when you're in the situation where employees are wondering, what comes next? will my job be secure? will my team be around?

then you see people that people like and have been there a long time get booted unexpectedly, that creates a lot of, you know, concern, so that is what i've been hearing today, a lot of people scratching their head, wondering what this means and what happens next for the rest of us. emily: meantime, elon musk is still trying to get financing, scrapping part of his tesla margin loan. are these two things related? kurt: in the sense that everything elon musk does makes the deal seem more or less likely. the fact that he is perhaps going to get rid of this margin loan because he is able to secure more equity financing, i think that makes the deal more likely to go through, so if you were sitting there as the ceo twitter, you would kind of have to prepare for two scenarios. one, the deal does not happen and you are still in charge, what have you been doing over the past six months to make that

happen? the other, elon musk comes in and you're wondering whether i will have a job under this new guy. he is probably trying to navigate that. elon musk is closer to getting the deal funded, and that probably dictates the timing of some of these things. emily: interesting. more twists and turns to come. kurt wagner, thanks. coming up, fresh off big changes to search, my conversation with brian chesky of airbnb m inflation, market turmoil, and layoffs also present upon valley. that is next. @bloombergtechtv. this is bloomberg. ♪ . ♪

emily: -- >> i am not going to

do that. do i want the company to become a public company? of course. i want to make sure it reflects this new, bolder vision. emily: that is the ceo of instacart last month when i asked her when the company might go public. well, it appears now is the time. the company has filed confidential paperwork to start the process. the upstart was one of the most highly valued companies, and grew exponentially to the pandemic, but will now navigate a volatile market. it slashed its private market valuation by 40% in march, as orders have slipped in the post-pandemic world. well , it was airbnb's biggest change in a decade, the company rolling out a number of new features, including categories like castles, amazing pools, and homes that make you go, omg,

including air cover, consumer protections. i spoke with brian chesky about the changes and concerns about rising prices, inflation, and how that will affect customers. brian: well, first of all, the reason the price per night was up was because people were booking more expensive airbnbs. a lot of people were traveling by themselves booking one-bedroom or two-bedroom homes. now they are booking bigger homes, and there has been a shift from asia to north america and europe. that is the primary contribution for the increase of price. you are correct, a lot of people will not be able to afford to travel. airbnb was started during the great recession in 2008, and people used it because it was a more affordable way to travel. after two years of people not being able to leave their home, they want to get out and this is

a travel rebound unlike anything we have seen before. emily: still, you have airbnb shares down to new lows. i am curious how you're watching this broader market turmoil. what is your take? brian: i am not watching the broader market turmoil. i am obsessed with the inputs to the stock price, not the stock price. that is the best thing for shareholders. my job is to make sure we have the best service. that is what we worry about. we are going to play a long-term game. shareholders will benefit from that. emily: i wonder how this affects retention and recruiting. a lot of companies that sword in the pandemic -- soared during the pandemic. could this impact hiring or the mood in silicon valley? brian: we are completely overwhelmed with hiring. two weeks ago, we announce that

airbnb employees can live and work anywhere in the world. wherever you are in the country, we will not lower your pay. more than one million people visit our jobs and careers page since that announcement. we only have 6000 people at the company. i think there might be some broader considerations, but we have quite a lot of interest, and i do not think that will change. emily: twitter announced the hiring freeze and cutting costs, rescinding offers for different reason. i wonder with this on top of other companies pausing hiring, if this could be a moment of opportunity for you, a chance to attracting new talent? brian: other people reaching out to us because maybe they're not hiring as many, but airbnb is stepping on the gas the summer. emily: how are you stepping on the gas in china? we are seeing on ongoing covid lockdowns?

when do you expect to recover? brian: our china business has been people in china leaving china, crossing a border, cross-border travel, going to other countries. japan was popular, south korea, europe, other places, because of the situation in china and covid, there is not a huge amount of outbound business now, so our business in china is not robust, and it will really be a while and will track with the health crisis. emily: the airbnb ceo brian chesky. you can capture full interview at bloomberg.com. coming up, patrick spence, sonos ceo, and why it is being compared to amazon and apple. he is next. this is bloomberg. ♪

emily: the same day that sonos released second-quarter results, it announced new products, including a voice activated assistant, sonos voice control, its first step into the world of digital systems dominated by amazon and apple. joining me now is the sonos ceo, patrick spence. how is yours different? patrick: it is very different, and the fact that all the processing is done locally. it is very private, privacy-focused, something customers have been looking for. we focused it on the sonos user experience, so music, audio needs, moving music from one room to another, so it is one inch wide and a mile deep, where as our partners at amazon and google offer you one which is one mile wide and one inch deep.

of course we want to provide customers choice, so you can use alexa simultaneously with sonos voice control. emily: what is the long-term goal with voice control. tell us more what you mean using that mile-wide inch-apart metaphor. patrick: we have seen the first wave, the excitement that comes from that initial wave of the first part of the technology curve, and we saw that with alexa and google assistant. now what you will see is more purpose built assistance, built and focused on a particular product or brand, so we have done work to make sure you can get the music faster, recalling what music you have been listening to, specific to the sonos use case. again, private and local, because customers have said that is important. we are trying to drive

engagement. the more customers engaged, the more lifetime value, the more chance to add another sonos product of the system. emily: we saw strong demand your products in the last quarter, but inflation going up. sonos products are discretionary products. how will inflation impact sales this quarter and the rest of this year? patrick: we continue to see strong consumer demand. last year, we had 30% top line sales growth. this year, we planned for 15%. we reaffirmed that yesterday. we have taken into account the fact we have some tailwind obviously from people being at home, and we feel very good about our business model and the supply wheel of existing customers telling friends and family they should get sonos here the number one reason people come to sonos's from family and friends telling them, then they come back and buy new products, so with the new products we announced yesterday,

the great portfolio and backlog, we feel really good about where we are today despite the macro challenges out there. emily: you raise concerns about supply chain issues and rising component prices. just how come it you know, difficult with those be to navigate over the next several months? patrick: it has been something we have been dealing with for eight quarters. we in the industry hope that by the second half of 2022 that most of those would have dissipated. that is not the case. nobody anticipated china going back into a covid zero situation in shanghai, so that has impacted things. so now we have been planning for the rest of 2022 to really be challenged in terms of logistics, shipping, and component costs. we have built that into our model, as we think about delivering the year, but at this point, expected the supply chain challenges to continue for the industry for the rest of 2022. emily: all right, patrick spence

, ceo sonos. thank you. coming out, watch out. this is bloomberg. ♪

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emily: welcome back.

let's get back to the markets. robinhood is soaring in late trading after filings showed a new stakeholder. >> it is the cofounder and ceo of ftx. his stake is valued at $567 million u.s.. you can see the reaction after hours. we were up even higher a few moments ago. we are trying to work out what this means for the future of robinhood. 2021 was such a big year for the platform. then transactions started to drop off, volatility, volume not what investors thought it would be. another interesting name in the world of markets, off bank. -- softbank.

reporting an annual list -- lost. these are the u.s. listed shares. you are so familiar with this unit. an annual loss having just closed out the fiscal year of $25 billion. this company invest primarily in private sector, but it was the public bets that underperformed. this is a lot of the color red. failing and the investment approach has ultimately failed the fund. they really cut back division fund -- the funds that division fund is deploying. january through march, they only authorized $2.5 billion to put

into their portfolio for new startups. times have changed. emily: thank you. one area where softbank was more bullish was arm. the chip design unit preparing for an ipo. our next guest about how it could become the most valuable asset in the portfolio. the ceo of arm is with us. let's talk about how arm is moving into more markets and more valuable markets. what opportunity is that unlocking for you? >> we've had a great year. we just announced results earlier yesterday. record revenue, record profits, record royalties and licensing. we are seeing the demand for on technology across all sectors. particularly in automotive,

infrastructure, and iot. we have had huge demand in those areas. emily: where do you see specific opportunities for growth? is it computing? automotive? >> one of the areas we have been known for historically is power and power efficiency. think about smartphone were we have had great success, it is the ultimate device. it's all about power and power efficiency. now, think about the data center or an electronic vehicle. both of those have the same type of requirements. they need to be very power efficient, mindful of performance, and they have to built to scale. those are places where we have seen huge growth in the last year. to your point, it could be huge growth area for arm going forward. emily: investors are bailing out of chip stocks.

what aren't investors getting? >> i can't comment on the valuations. the supply issues i think you're going to stay with us for a while. everything involved with semi conductors is complex. we have more and more complex packages. layer on top of automobiles for example that require not only significant semi conductor content but other areas that need to be shipped into the car. the supply chain is been stretched in ways that we have not seen before. it's going to make the real world complex for the years to come. emily: how long does this go on for? >> if i had a crystal ball, i

would be in a different industry. when you think about the investments required for semi conductors, there is a huge lead time to build a factory. predictability gets harder. increasingly in some of these products, you have more more content. it's not just one chip that isn't available. if you have one product and you don't have a diode that can go into the car, the car can't shift. going forward, we have to get our arms around with this new world is teaching us relative to supply. ethic it's going to take a little while. emily: there's a report softbank plans to keep the majority stake in arm. how big of a stake or we talking about? what conversations have you had about this? >> i can't say too much specifically. they have said publicly that

they intend to have a controlling interest going forward. what that says is they think the long-term prospects for holding a really good. i think that says a lot about the confidence going forward. emily: how soon could an ipo happen? >> i can't say. as we have said before, we are prepared to make that happen. emily: how do you avoid market turmoil and could that delay or influence your plans? >> market timing is when to dictate a lot of things. we're just doing the things we need to do to prepare for an ipo. emily: let's talk about another part of our business. -- the arm business. are you fully in control of the joint venture right now? how is it doing financially and what can you tell us about the future? >> 90 days ago, you and i were

talking about that. that chapter is now behind us. we have resolved the issue. we have a management structure in place. we have worked with the board of directors, the chinese government, the new management is in place and we are operating normally. we have been able to complete customer contracts, sign licenses. we do have operational control back and we are name -- now moving forward. emily: thank you for joining us. coming up, crypto goes down and down some more. how it is giving fodder to crypto skeptics and how low can i go? >> i wouldn't characterize it at this scale as a real threat to financial stability, but they are growing very rapidly. they present the same kind of risks that we have known for centuries in connection with

bank runs. ♪

crypto. first, the collapse of an algorithmic stable point. now, it's cousin fueling concern over its status as a place to hide. let's talk about what it all

means. it's fair to say we are in crypto winter. how was this different than what has come before? parks it's pretty clear we are in crypto winter. we had one in 2018. today, what we have that's different is a lot more institutional investors. that's why crypto is behaving more like a risk asset that is moving in line with the rest of the market. >> remind us how the last crypto winter played out and how you expect this one to play out given that there are more people with skin in the game? >> definitely more people. what happened was in 2018, thousands of coins basically died. lots of projects when under. lots of new projects were hatched. i think we will see the same thing happened now. this crypto winter is prolonged, a lot of those projects and coins will die and we will see a clearing of the plate and what the strong players are who are the survivors. emily: let's talk about

coinbase. there valuation dropped precipitously. just over the last few days. i'm curious what you think this means? coinbase has been in some ways a measure of what is happening in the broader crypto space. >> they are obviously the biggest exchange of crypto in the u.s.. their value dropped by more than 50% in the last week. basically, it's a strange situation because several months ago, much smaller competitors raised money at very high valuations. now, all we see is looking to fund currencies that coinbase is valuations and seeing may be the companies in our portfolios and the companies coming to us or

overvalued so this could have a ripple effect on venture capital activity in crypto. emily: lots to continue to watch and digest. thank you for giving us the temperature of this particular brand of winter. i want to continue the conversation with the ceo of an nft free to play sports game. -- fantasy sports game. we're going to get to baseball, but i want to ask you first about the markets. we are in the middle of a cold spell. what is your take. >> for us, we are using nft-based technology. we are growing independently of

the cryptocurrency market. >> does this impact sentiment about the future of web 3.0? the future of nft's and the growth of this new frontier? >> as with any innovation, you have cycles. sorare has been funded during one of the biggest investing winters. the sentiment may be less good right now, but the lead offer tomorrow will be built by now. emily: there has been some

controversy about what is happening in the nft market. the number of traders is growing, but nft prices are declining. i'm curious what you are seeing in terms of your own fails in the business you are driving? >> what sets us apart is the usage value of nft's. we have seen a lot of projects growing around the collectible value of the nft's. for us, it's all about what you can do with nft's. we have this fantasy game. we have been growing consistently in terms of sales. we expect to do $700 million this year. i think that makes all the difference. what you can do and you can engage and retain the funds because of the experience you have. emily: now, you just announced a partnership with mlb and the

players who don't necessarily always agree. how did you convince them to get on board and why baseball? >> they asked us three big questions. the first one is are you the best to help us grow into fantasy? we have proven where the best place to build up. question number two was are the best to help us grow the audience. we are sitting in 180 countries. we are going to help the mlb to grow their reach again overseas. the third question was are you the best to provide the best experience? we are building in the u.s. with people coming from companies, so

we are confident that we will be also. emily: you recently welcomed serena williams as a board advisor. she might be the greatest athlete of all time. she is also going full speed ahead in venture capital and tilting out her own portfolio. >> for us, the players are the center of what to do. we're likely to have many players investing in the company. with regard to serena, we're going to go big obviously. she is helping us to connect with the unions and athletes and help us to develop a revenue stream for them. we are also big in diversity of

the fans we want to have. she is advising us on this market. emily: exciting to watch. thank you. coming up, lockdowns in china. what implications could they have none on the for the chinese economy, but for the global economic recovery? we will talk about that in a lab report from shanghai next. this is bloomberg. ♪

emily: let's take a look at china still battling a wave of covid infections with strict lockdowns threatening the economy. one of the top statistics officials says the outbreak has caused a huge shock to the

economy. a rare recognition of the cost of the governments covid zero policy. our guest is joining us live from shanghai. we have seen your reporting. in the middle of the lockdown, we saw your refrigerator getting low. you talked about your inability to get more food. tell us about how you are doing and what you can and can't do in the midst of the lockdown? >> i am on day 43 of my four day lockdown. joking aside, it has been very frustrating. there are millions of people like me in the situation. it right now, i can walk downstairs and pick up food that is delivered to me. not that many shops are open. i am sort of stuck to what is available.

i think it's kentucky fried chicken. there is concern about these quarantined facilities. people are being coerced into going into these facilities. if you test positive. before, if you lived in the building where there are positive cases, as long as you don't have close contacts, then you wouldn't have to go. now, even if you test negative and someone in the building is positive, the likelihood is that you could be sent into these facilities. these images look grim. emily: we have seen the frustration and social media posts, people who can't get food. how would you describe the mood? how are people in shanghai taking this? >> there are a lot of people like me. there is a book called death and

dying where we have news about needing help for something, you going to shock and anger. it moves through several stages of despair than the final stage is acceptance. a lot of us are at that stage of acceptance. we are waiting around hoping that this lockdown will end sooner later. right now, the most important metric is one called community spread. it's basically the number of cases outside of these facilities. with three consecutive days of no community spread, theoretically we should be able to be released from lockdown. last month, we were ok for two days, then after a third day another case sprung up so we were back to day one. spread has been persistent, so we are hoping that at some point, we're going to be released.

it's very stressed sitting -- frustrating. we have to wait and see. >> there is a question about how this impacts not just the local economy, but the global economy. now we're hearing about a lockdown in beijing. the government has denied that. what can you tell us? >> the impact on the economy and beijing. the number of cases in beijing, there have not been that many. roughly in the teens. the problem is that it is still there. the government has said there is definitely a lockdown. that's what we were told as well. it seems that they are moving in an opposite direction. i have to tell some of my friends, stock up. especially coca-cola because

that's a valuable commodity. you're right, there has been a big impact on the whole economy. the data coming out of china is ugly. manufacture is contracting. consumption is weak. inflation is surging just like the rest of the world. what does that mean for china? basically, it's not going to meet its aggressive growth targets for this year, at least i don't think so. emily: thank you so much for joining us. we appreciate you giving us the view from china.