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

taylor: i am taylor riggs in new york in for emily chang. this is "bloomberg technology." coming up, getting a better deal. elon musk now saying he might try and renegotiate the sale price for twitter, causing the stock to fall even further as many questions remain over how viable this takeover actually is. plus, billions wiped out in terra usd in that crash. what can we learn from and what does it mean for the future of stable coins? we will discuss all this and more with johnny wu. and while dr. strange in the multi-verse of madness top the box office for the second straight week, are we theaters -- movie theaters back? but before you go to the movie theaters, we have to go right here in this moment when we take a look at these markets with our very own kriti gupta joining us with more. kriti: take-two reporting earnings after the bell. they did top their earnings

estimates but they gave a tepid forecast. this is a theme we have seen across industries, this idea they are preparing for the worse when it comes to the economic slowdown and potentially even a recession. nevertheless you see shares up 3% after hours. this is important as we talk about the pressure tech has been under. right now it seems like the earnings beat is powering the shares. when you look at big tech broadly, some names that have moved intraday, twitter, amazon, google, they weighed the market down. this is a really important story. you are going to talk about twitter and a second would look at these other heavyweights. tesla, amazon, alphabet. once again it becomes a story as , to whether or not these big companies still remain that defensive play, still rem that inflation hedge, or whether this is more of a story of valuations, getting back to those levels and releasing some of that monstrous rally that has been built up over the last two years. i'm going to end with the nasdaq versus the s&p 500.

we end zooming out. i want to show you the year-to-date pain because the nasdaq 100 clearly performing -- underperforming the s&p 500 which tells you the value trade is still in play which is a complete reversal from what we saw two years ago. taylor: really appreciate the size and scope and perspective from our very own kriti gupta. thank you. and we cannot go on for at least two minutes into this show without talking about the latest drama between elon musk and his takeover, the proposed takeover of twitter. really interesting comments out of elon musk today, and think he might want to renegotiate the deal at a lower price, saying, quote, it would not be out of the question. these came from a video conference a summit in miami, and was hosted by a podcast called all in. for more on these comments and where the deal stands, so pleased to be joined by mandeep singh from bloomberg intelligence, and kurt wagner joining us from bloomberg news.

kurt, from someone who has been following and covering this company can elon musk himself, how do you think the way this has played out and the drama it is putting on the company? kurt: doesn't this just feel at the most twitter thing of all time to happen? it is this deal that continues to be a roller coaster. and the fact that we now have elon coming out and suggesting i might be interested in negotiating a lower price for this deal even though i just offered something else a few weeks ago. it just all feels like this is kind of cascading in a negative way for twitter. i always have said that the worst case scenario for them would be if this deal falls apart and they are left standing there without anyone to come acquire them, and it feels like that is becoming more likely every day. taylor: mandeep, similar to what we heard from kurt, i was hearing from dan ives saying earlier, this worst-case

scenario, they are going to be left at the altar alone. how do you think about the lack of no bidders, and is this elon's way of negotiating down in price? mandeep: i do think he does not have a way out of paying that $1 billion in breakup termination fee in case he wants to walk away. but at the same time, the odds of the deal happening are higher than they were probably three weeks back when the deal was announced. the reason i say that is because at least he has 6.5 billion dollars in commitments from core partners. and what he really wants to do here is to move away from that margin loan. so right now he does not have about $12 billion $13 billion in financing. he has already sold a bunch of stocks. that is about $11 billion. he has a $6.5 billion in commitments. so he really wants to move away from that $12.5 million margin loan. that is what i think he is

looking to renegotiate here to bring that price lower. taylor: very interesting. kurt, i think at the heart of this issue comes down to the percent of users that are represented by bots. when you think about twitter, whether that number is 5% or 20%, relative to meta, snap, tiktok, the other social media companies you cover, how does that bot relationship fit into this narrative? kurt: yeah, he talked a lot about that today. he was at a conference in miami. our bloomberg reporters were not at the conference but were able to listen in as it was happening. and he brought this up. he was saying this is an issue. i don't believe that bots are less than 5% of the twitter user base, which is what twitter says. and facebook says something similar, to be clear. this is not a unique situation for twitter. but elon has had an issue with bots. he has made it part of his campaign of how he is going to clean up the service and what he

will do to clean up twitter. he says he believes it is higher and we have seen the twitter ceo going back and forth with elon today trying to explain here is how we measure bots, and elon replied with a poop emoji. he clearly was not interested in the explanation, and i think that is a big sign as to why he is saying this is on hold. he wants more answers. taylor: you are not allowed to use that emoji with me. kurt: i would never. taylor: mandeep, you have been commenting on this similarly. you take a look at the bottom up analysis of these companies, actual fundamentals, revenue growth, profitability. how do you think about the percentage of bots, the impact on the health of this company? mandeep: clearly it is a bigger problem with twitter. you take out, let's say, 5% of the users are bots. so the amount he pays per user goes up. you look at a comparable like snapchat or pinterest, right now

it is close to $100. the $44 billion deal comes down to around $200 for twitter. twitter had this problem of basically exaggerating their user numbers and they had to kind of come out and say the actual user numbers are lower. it is not a new problem but clearly if you are valuing a company based on the total number of users, you have to think about revising the price lower because the actual number of users are lower. taylor: just a follow on this, i think we are having a broader discussion in this broader discussion is underway about if that price target set a floor for how we think about valuing these companies, and the broader market is telling you at least today and the last few weeks, we're rethinking valuations on every level, not just because yields are higher and the discount rate falls, but the big valuations of growth at any cost. how then is this played out, and also thinking about the way we are valuing these companies and these tech companies?

mandeep: clearly, social media companies aren't really growth companies anymore. if you have to think about growth, really, the next leg of social media would be more on the metaverse side. right now valuations have gone down everywhere. but i think twitter is not a high-growth company anymore. yes, it can sustain its ebita, but we are not talking about 40%, 50% growth even if it goes private. so that is there. we have to think about which is actual growth going forward as opposed to what can generate free cash flow to pay off the interest payment. taylor: kurt, come back in here. i think as we think about pushing this story forward, what do you want to see next? what can we do private that we could not do public? what do you want to see in terms of leadership? what are you really looking for to understand if this company can really turn it around? kurt: i think the best way to grow the business is not going to be to abandon advertising

altogether, which is what feels like elon kind of wants to do. he's talked about a subscription product, i think that is fine. but really what you need to do if you are twitter is you need to figure out how to get the kind of user data that works with targeted ads, that works with direct response ads. that is what facebook and google do really well, it is something twitter has always struggled with. they already have an ad business, they have advertisers who are interested, they just need more granular data to do that type of stuff. it is easier said than done, but i think that is the one thing if they can figure that out, i think the business can really benefit from that. taylor: mandeep, do you agree? mandeep: clearly thinks of subscriptions is part of the story here. we have seen, subscription businesses are not easy. look at netflix. you really need a combination of ads and subscriptions. moving completely away from such pins would be a mistake.

taylor: great insight, fundamental analysis, so appreciate the conversation. mandeep singh and kurt wagner out there in our beautiful san francisco office. coming up, texas social media mayhem. that is going to be up next. i will be speaking with david kirkpatrick of course about what that new texas law, what could it really mean for social media platforms all in the name of censorship. that is next. this is bloomberg. ♪

taylor: we want to talk now about a new social media law out of texas that has many in the tech world fearful of what might be allowed flow on your feed, all in the name of censorship. groups representing twitter, facebook, and youtube warned the supreme court that unless this texas law is blocked, anything, from russia propaganda, as well as neo-nazi posts denying the holocaust, could show up. insiders warning these extremist views could cause a social media companies to lose millions in advertising. for more i am joined by david kirkpatrick, who thankfully, you have been all over this.

i am curious, i believe the supreme court can decide which cases they want to hear and which cases they want to rule on. what, at the heart of this issue, is really going on for some of these tech companies? david: thanks, taylor. basically what the tech industry is asking the supreme court to rule that a federal appeals court's ruling last week which allowed this law to take effect, must be removed and vacated. because the impact that it would have on tech companies is so extreme, that it would almost make it impossible to operate any kind of website where there is conversation, if that site has more than 50 million users. it is a truly inane, idiotic, and illogical, and crazy effort to change the rules for what seems to be just partisan advantage. taylor: talk to us about the advertising of course that we mentioned in the introduction, that companies of course benefit from the advertising. what would stop that flow of advertising, in your opinion? david: that is a great question, because obviously advertisers only want to appear in an environment that is rational and makes their products look good in context. if websites are prevented from taking down any kind of extreme

statement by any user, it could really make these sites much less, kind of, comfortable for advertising. and i can see it having an effect. although the problem is even more basic than that. essentially, the companies are being told by this texas law, if it were to really take effect, that they cannot make any real decision about what kind of content flows across their own networks. but these are commercial companies who built these commercial websites for commercial reasons. they have every right under the constitution to operate their sites as they see fit, and this law attempts to remove that right from them, which is just plain wrong, and unconstitutional, clearly. taylor: let's talk abo something else i'm reading here in your notes that speaks out to me, it allows people to also sue these companies as well if they are censored for their viewpoints. i know that we are not lawyers here, but how does this open up the floodgates for these potential lawsuits as well, and

the impact this has for businesses and consumers? david: there are so many crazy aspects to this law, but one way to think about it is that companies would not be able to do well no matter what they did. they would be damned if they did and damned if they don't. because the law allows anyone whose viewpoint, which is the term they use, as a basis to be removing their content to sue the company. however, if those viewpoints are hateful, racist, show some kind of libel or whatever -- but they are prohibited from taking them down, remember. people who are affected by those posts who will almost certainly then sue the sites because they are being affected by these posts that have not been removed. so in effect, besides cannot win either way. it just underscores yet again how fundamentally illogical the law is. but it is worth remembering, it seems like the whole point of

these laws, and there was an attempt in a similar law in florida, is to get back at the websites, particularly facebook, youtube, twitter, etc., because they are perceived to have an anti-conservative bias, and the conservative majority in the texas legislature has passed this law, and the conservative texas governor has signed it. but the fact is, it simply cannot work, and it is being done for pure political partisanship. and without enough thought. taylor: david, it is interesting, you mentioned meta, formerly we knew that is facebook, you mentioned youtube, we are talking a lot about twitter right now in the zeitgeist with elon musk of course stepping in and giving a price potentially to take private. of all the companies you have been studying for decades over the years, who would be most impacted, and who is most susceptible to getting it hit from this? david: the law is meant to apply to any company that has 50

million or more users, but it really is aimed at facebook and twitter, primarily, and youtube, because those are the sites where speech, so to speak, is most frequently taken place, and they do frequently make judgments when hate speech or political incitement or violence is endorsed, or whatever, to remove posts. but it could affect any site that has over 50 million users, which could be, for example, netflix or disney+. if there's any kind of conversation -- well, those are probably not good examples, but any site that has any kind of dialogue, say, the new york times, or bloomberg for that matter. if the number of users is big enough, they would be no allowance for moderation, in effect. so it's taking away a fundamental right for any company that is attempting to foster a safe and rational

conversation online. taylor: david, what do you think, as you think about the next step pushing this forward, do you want to see changes to the fundamental businesses so that this isn't an issue. we talked about twitter having its crisis it is going through right now. what are you really looking for as you look to these companies? david: there are really big questions, and the reason this situation has arisen does flow, in part, from the failure of management from these companies. i don't think facebook in particular or any of the social media companies for the most part -- although to some extent i would leave snap and maybe even tiktok out of this, but certainly facebook and twitter have not done as good a job as they should have of articulating what is allowed and what is not allowed, and sticking to very clear standards from the beginning. they let themselves get into a place where there is a sense of chaos. and i think part of it was they were trying to placate the trump

administration and did not want to seem to be anti-conservative, and they really allowed, i think, they allowed a lot of inappropriate content that was supposedly conservative, but was really inciting. but now, because they took down enough of it that it got the right angry, there are legislators all over the country trying to take these rash moves against them, really, out of partisan dislike. but i think long-term issue is the companies have to establish clear standards for what is and is not allowed, and communicate it clearly and stick to it. it is very, very hard. i don't think much of these companies anticipated when they got into this business how complicated these decisions would become, but that is just the fact. taylor: a complicated issue. we are grateful you are here to give your expert analysis and insights. stephen kirkpatrick, really appreciate it. we have more to come, including

the china lockdowns, what that means for us. this is bloomberg. ♪

taylor: china's economy is paying the price for the government's covid zero policy, with industrial output and consumer spending sliding to the worst level since the pandemic began. our very own stephen engle has more. stephen: clear sign china's economy contracted sharply in april, as continued covid zero lockdowns hammered industrial and consumer activity nationwide. with its two wealthiest cities though, shanghai and beijing,

under covid restrictions, retail sales nationwide plummeted a worse than expected 11.1% last month, as tens of millions of people were confined to their homes. factory output, too, tanked, the largest and only second year-over-year monthly contraction of industrial production in 32 years. yes, since 1990. now, the consensus estimate was for a modest rise, but clearly, china's industrial might was slowed by the lockdowns and supply chain issues. china's nationwide jobless rate also ticking up to 6.1%. now, shanghai has been in lockdown for nearly two months, but this week it is starting to relax some of the most strict curbs, as covid caseloads and intercommunity infections start to fall. beijing has signaled policymakers will step up support for the economy, as evidenced by the pboc on sunday cutting mortgage rates for first-time homebuyers. china's national bureau of statistics also admitting that

covid outbreaks in april had a big impact on the economy, but claims that the negative effect will be short-term, and that economic activity should start recovering gradually. still, the economic shocks from xi jinping's zero-tolerance approach to virus containment are obvious, pushing china's ambitious full-year growth target of around 5.5% further out of reach. stephen engle, bloomberg news, hong kong. taylor: our very own stephen engle. now of course talking about those supply chains ahead of the port of los angeles appears consistent despite the ongoing pandemic. here is some of what jean is telling bloomberg. gene: this is going to take some time. there's an episode just about every day that impacts us in the supply chain, whether it is on the ground, the atrocities in ukraine, impacting energy and agriculture goods flow, the

lockdowns in shanghai, 8.3% inflation, producer prices going up 11%. all of this is in the supply chain equation. taylor: seroka says there are no imminent signs of a slow down in and demand for american consumers based on the number of full shipping containers they are seeing arrive in the port. coming up, we are still on that theme, inflation still on the rise, interest rates climbing, tech stocks falling. what is next on the horizon? we have all of that and more, next. this is bloomberg. ♪

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taylor: this is "bloomberg technology." the selloff continues. we are looking at tech, the

nasdaq 100 off 1%. hard to catch a break. >> absolutely. the friday bounce came and went quickly. the s&p 500 ending 0.4% lower big tech fell even bigger, the , nasdaq finishing 1.2% lower, that was even as some of the steam came out of treasury yields. the 10 year treasury yields falling four basis points on the day. bitcoin is rallying a little bit, but yesterday or this current day it fell over 3%. it is below that $30,000 per coin mark. what caught my eye is you saw the volatility index fall little bit today, back below 30. that is still above its one-year average, about 21 but still a , little bit of a breather even as you did see the selloff resume. how much can volatility fall as stocks continue to fall?

dear to date, the nasdaq 100 down .5% -- when he 5%. the nasdaq down 25%. big tech growth names taking the brunt. the s&p 500 continues to flirt with the bear market, 20%, getting closer at 16%. taylor: we are so excited to have you tomorrow. katie: i can't wait. taylor: really appreciate it. it leads us into our next conversation. we talked about the selloff, what does it mean for fundraising? belt-tightening around the corner -- does that cascade into another problem? does it mean a slowdown? does it drive down the industry earnings outlook? if you have earnings, that is the first problem. that is -- with some of these companies. can we start big picture?

the pressure broad-based on these valuations, maybe it's risk of recession, rising yields, how are you thinking about portfolios? of some of these you -- companies? >> it is the question everyone is asking. what are your company's worth? you may have paid something six or 12 months ago, but i think where the market is going is very healthy. we are resetting to valuations that make more sense and will help us build better companies. while there will be some short-term pain i think , eventually you will see some sectors like health care bounce back first, but we will have to go through a bit of pain and the path to profitability will be one of the most important discussions. taylor: talk to me about that. i was in san francisco in 2019,

talking about we work, growth at any cost. growth at any cost no longer works. that has to be reevaluated because we need to see some free cash flow sooner rather than later. is that the same conversation now? raj: you are exactly right. growth at any cost has never worked. i don't think we are dramatically shifting to survival at any cost. you still want growth, but at a reasonable cost. what that means is, looking at things like the burn rate of the business are really important. if you are not a profitable business, you have to manage burn during times like this. if you are a late stage business that was hoping to ipo, you better have at least 18 months of runway because ipo markets could take a while to come back. taylor: i have been reading market analysis about how to prepare for a recession, conserving capital, how do you plan and think about that balance sheet?

the employees, the culture making sure the people around , you are appropriate. what should some of these big founders be thinking about? when you're trying to manage a business through these bald -- volatility. raj: these big founders -- they are great leaders. over the next 18 months, you're going to see who amongst this group really knows how to manage, and managing morale is going to be difficult when some morale was built around stocks and stock options, and if you are private, your shares and valuations. you are going to have to motivate employees who were being paid through stocks, and motivate them to work harder than they potentially have ever worked before and a more challenging environment. i think the great leaders are the ones who will do it by telling people to stay focused on purpose and mission and we will make it through it together.

and we will come out the better side a better company. taylor: we have often talked about if you want to use the word bubble, a lot of that inflation of valuations came from too much capital, too much cash, chasing too few companies. how do you think about the deployment of cash? in the best use of cash at this moment. raj: since you already went there and use the word, i will say cash is going to be for core activities. you have seen it go into a lot of non-core activities. i think you will see a re-entrenchment to the core. companies focus on regions that make sense and are profitable or have a shorter path to profitability. you will see more add on businesses that can be launched for lower cost, things far from the core.

for us, we think health care is probably one of the most resilient sectors. we will continue to invest there. frankly for some of our , businesses that have capital, this is the time to play offense and look at how you can acquire companies for lower valuations. you will see corporate through that, too. over the next 12 months. taylor: appreciate your knowledge and insight. b capital co-founder. thank you as always. met went to private companies microsoft is said to boost , employee paychecks in an effort to combat inflation. the company announced its plans to nearly double its budget for employee salaries and boost stock compensation by at least 25%. this is in an effort to retain staff. it is said to mainly affect early to mid career employees at the software giant.

coming up, what is the future of stable coins after the debacle last week? we will discuss. this is bloomberg. ♪ >> stable coins or something regulators are looking at. most uses for speculative trading, to go in and out of cryptocurrencies, and people wonder, will it one day be used for consumer payments? many are thinking, it is not ready yet. ♪

taylor: time now for the crypto report. we have to get back to the meltdown. that followed the algorithmic stable coin collapse.

investors may have lost $42 billion according to elliptic. our crypto contributor is here with more. my favorite line on twitter was ust no longer means u.s. treasury. how is this about crypto? reporter: especially because there are stable coins to keep an eye on. ust is the one we are talking about because it led to a lot of losses among terra ecosystem investors, you have terra talking about restructuring the plan so people can recoup some funds. potentially or at least try to build on the network in a broader way. since the initial de-pegging, almost 91% of the decline and ripple effects across the d5 ecosystem. let's take a look at bitcoin itself. bitcoin is the largest cryptocurrency, we have seen it bounce back quite a bit since

initial fears, and now only down about 15% over the nine day period. 10 days of gains 3% worth of , losses over 24 hour period, coming off that low. still, hovering around $30,000. taylor: you have been all over it. i want you to stick with me here. i want to bring in the lead developer of the avalanche blockchain. big picture to kick us off, i think some of the they questions is if it's a stable going and , it's not stable, what is it? how do you think about that? guest: there are a couple of types of stable coins. ones that are backed by u.s. dollar reserves, and then there is algorithmic stable coins like terra. it was an innovative experiment -- unfortunate we can say it did not work out. in the back of our minds, every

web person has the hope that three someone can figure out a monetary system that does not rely on existing things that are traditionally out there as reserves. we all rooted for it, unfortunately it did not work out. it's very early in the space and i'm sure there will be more experiments. in terms of the latest restructuring plan, i understand they are trying to figure out who are the smallholders and use whatever is left in reserves to basically give back. two though smallholders -- to those small holders. that be my number one thing. it is what it is. use reserves to give back to the retail people left holding the bag. taylor: i want to ask more, because what does it say about the restructuring of the crypto ecosystem? who should get paid, who has claim on the assets, and what does the protocol owed to its investors? how does this play out?

john: that needs more clarity over time. to me, at least from a common sense perspective, this is the one industry where the retail investor, called front run investigations. -- investing. for years, it's been retail investors globally that supporthis ecosystem until recently. philosophically, i think the right move is to use whatever is left to figure out who are the small bag or wallet holders and try to make them whole is much as possible. sonali: what about the idea that other stable coins can be made? with new models you talked about , experimentation. to what extent does the industry need something like an algorithmic stable coin or partial algorithmic stable coin in order to scale? john: the industry does not need it. with going to come out of this

is the usdc will gain market share. u.s. dt was tested a little bit, but they need to cannot with -- come out with better transparency. then you have other stable coins that have all held up. it would be nice to have an algorithmic stable coin, but just like any economy, economy needs a unit of account for a medium of exchange that is stable. and not as volatile. for now, maybe one that is tied to the u.s. dollar is the best thing. taylor: we know regulation lags, then it over compensates. does that worry you when you think about a potential regulatory landscape? john: i have been saying this for a while. sensible regulation protecting the consumers were most operators want.

especially for companies in the u.s.. if you take a positive out of this, it's accelerated the conversation. even today, we heard gansler come out saying qe working with the ftc, -- every cryptocurrency has a different type of construct. some deserve to be regulator-protected using different rules, and having different bodies or agencies helping out is probably the best thing, and accelerates a certainty for the whole space. once there is certainty, adoption becomes better. >> i am curious in other ways. the technology itself, hacks, chains, de-pegging. i am wondering about your thoughts on layer one in general and investor appetite after some mishaps we have seen. john: great question. if you look at the space, let's not confuse cyclical issues with secular growth.

in times like this, quality companies or protocols or applications gain market share and have even more innovation and build better. my opinion is, it's unfortunate, no one likes to see crypto asset prices go down, but the benefit is, the people with quality products that have better utility and are building something real will take market share, and come out stronger and provide more utility in the end. >> when it comes to utility in , our weekly crypto show we're going to be talking about ethereum and gas fees and whether they can come down. in light of new projects. i am wondering how this pertains to you and avalanche, the ability to bring down gas fees. >> great show i dvr'd that.

,i watched all the time. in terms of what the merge will be doing ethereum will get to , where avalanches. -- avalanche is. it will come in stages, the first part for them will be going to proof of stake. it is going to miss out on the instant settlement that avalanche has or scalability that avalanche has. this weekend, avalanche had a scaling function called a subnet, and gaming companies launch on the subnet. transactions increased 25% while prices went down 20 fold. there are more transactions on avalanche on a daily bases then ethereum. with the merge, we will get to a place where layer once are at. >> i should say is that 1:00 p.m., my bad. speaking of avalanche and the ability to make it through the

downmarket, i am wondering as things are cooling down, but do -- what do you take this time to do? john: take this time to focus. again, the good companies that have a good balance sheet have the ability to gain share and continue to build. instead of thinking about 18 months or 24 months, you want to be frugal and last for 24 to 30 months. with that said the ones with the , good balance sheets and good products should go out and innovate and take some share. that is how avalanche is treating this downturn. taylor: such a pleasure. present of avalanche labs, joining us for the crypto show as she does is always. coming up, we're going to end the show on a fun note. going back to the movie theaters, or are we?

that is a big question we think about streaming. "dr. strange" topping the box office. is the theater business back? is it back for good? we will debate. this is bloomberg. ♪

taylor: "dr. strange" topped the box office, underscoring the appeal of superhero films. the theater business is struggling to come back. let's get into this with lucas shaw. could this be seen as a bellwether for the way the industry is recovering? lucas: the performance of the movie is a good sign for the business. it's outperforming its predecessor by quite a bit. it is a way grossed more than in a couple of weeks.

that being said, the comic book movies, we know people are seeing comic book movies. the most recent spider-man movie is one of the most successful movies of all time. are people going to come in between? i am not sure of dr. strange helps us answer that. taylor: interesting. i am also thinking about a picture about what we learn from netflix and the decline of stay-at-home, streaming at subscribers, is that a sign we are not watching it at home but thinking about going back to theaters outside? lucas: people are definitely going out into the world. i am sure you guys have had folks on tv talking about hotel stays are pretty close to normal, people are going out to concerts, theme parks. i don't know that movies are everyone's first choice. the movie business is on track to do better than 2020 and 2021, not saying all that much. it is still well below right now the numbers from between 19 --

2019. taylor: that is not saying a lot, as you appropriately put. talk to me about netflix. taking advantage of the reopening, they have not really done that before. what is that telling you? how do you gauge the success? lucas: netflix has released movies in theaters but not globally in major chains, they have had to pick off smaller chains and independent theaters. there is a desire in certain corners of netflix to take a handful of titles and give what they think of normal releases, a real marketing campaign so people come out, netflix often saves marketing for after a title is out. the big question is whether people at the top want to do this. movie theaters want fresh products, they would love to get their hands on netflix movies. for all their talk about how

netflix is killing their business. but, they are only going to take those movies if netflix commits to marketing. specifically those in theaters. i am hoping we will see some resolution on this in the next few months, i know netflix is exploring, testing big titles in the fall. the sequel to knives out, there was a huge hit a few years ago. we don't know the resolution just yet. taylor: just about 30 seconds. if you were to see consolidation in this industry, who do you think is the most right candidate? lucas: theater chains. there is a sense there could be more consolidation there. there are a couple of big media companies, nbc universal, lions gate, but those have been tossed out for a long time. taylor: really appreciated, lucas shaw joining us. that does it for this edition of "bloomberg technology." do not worry we are back , tomorrow, live from boston. starting with a close, 2 p.m. eastern i'll be joining us, that

will take you through triple take and finishing off with the triple threat. it will be 2:00 p.m. to 6:00 p.m. live from boston, make sure to check it out. check out our new podcast, you can find it on the terminal as well as online. on apple, spotify, i heart. this is bloomberg. ♪

manus: this is "bloomberg daybreak: middle east." your