>> from the heart of where

innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. >> i am ed, in for emily chang, this is bloomberg technology, coming up in the next hour, tech humbles, retailers take stock, over concerns of anxiety, we talked to a seasoned investors sees opportunity in the drop. it is not just tech stocks, cryptocurrencies are in the gutter and the mill time -- meltdown shows no signs of easing. elon musk is at it again, twitter's board says it is committed to the billionaires original takeover deal despite

the concerns, the ceo using the social media platforms event -- to vent frustration about the ev maker being gained from an index. let's look at the markets, painful stocks, the s&p 500 suffering its deepest one-day drop animals two years. where the cook, consumer, retail, tech, all in the red. >> today has been nothing short of brutal when you have the s&p 500 closing down 4%, the nasdaq 100 100 being weighed down 5%, apple and others being down today and 5%. we did have lower yields today on the 10 year, it was down 11 basis points. that really not helping the markets out today as we saw that flight into safety and treasuries getting a bid. we talk about the risk off

sentiment we have a talk about bitcoin, below that $30,000 threshold. when you think of bitcoin, may alone down 20%, that collapsed last week no recovery. today at least, the selling pressure really accelerated after those target earnings. a miss on those analyst expectations, and that profit outlook being cut to 6% from 8%, this number out sales, this is not about revenues. it was about higher freight cost, higher inventory levels, all of that weighing on the stock and there was a similar story with walmart, walmart stock down over the past two days and target having the worst day since 1987. we talk about margins of those coming out of pressure let's talk about the cisco earnings we got aftermarket closing. plunging down 13%, they got hit

with the china covid lockdowns, supply chain issues coming to the forefront. they also got hit by the russia ukraine war and inflation playing a key part, will it on customer demand? a real setback on cisco earnings. >> cisco a real bellwether of corporate spending, thank you. i want to bring in mel, she is the ceo that has more than $14 billion in assets under management. you have seen a lot of markets, what do you make of a day like today? >> i think we are going through a paradigm shift. a regime change, the markets are getting used to the fact that the very drivers that drove this fantastic investment environment the last 10 years will not be here anymore. we will not have low information -- inflation, low interest, globalization, we will not have a very benign geopolitical are get. a lot -- market.

a lot of things that lead to wonderful markets over the past 10 years will change. people are try to figure out what the new paradigm will look like in the next 10 years. >> looking at the chart in the bloomberg terminal, evaluations on the nasdaq 100, we are getting nearer to the 10 year average on the price projected profit and to nearer pre-pandemic levels. do you sense opportunities in days like today? >> absolutely. a lot of the things that are warring the corporate scum a lot of the supply chain issues, lower profit margins, inflation, how would you solve it? you will solve it through technology. the name of the game is productivity. what will drive productivity? technology. i think there is tremendous opportunity happening right now. >> you are the former ceo of jp morgan private bank, your been in the market for a long time.

the inflation, the outlook, supply chain issues, china, i could go on. what is driving the psychology of the market? >> i think it is inflation. for those of us that remember, and i do remember, once inflation starts it is hard to get under control. we have been blessed with this unbelievable investment climate over the last 10 years. i think we are trying to figure out how we are able to bring down inflation, level look -- what will it look like? i am more of a long-term investor so i really look at the next 10 years. >> if you things caught my eyes, the opportunities in particular subsectors, talking about artificial intelligence, cybersecurity, those longer duration software stocks. where used -- where do you see the opportunity specifically? >> when you think about all of

the areas that productivity will change in the new paradigm, it is going to be, for example, the health care sector. take a look at the demographics of the eyes states, the technology will make a huge difference -- the united states, technology will make a huge difference. you have to play it in venture, growth, private markets and public markets. yet the plate across the board. same -- play it across the board. same thing with cybersecurity, artificial intelligence, the cloud. >> cisco down 30% in after-hours, saying it is impossible to catch up supply given the current situation. there exposure in the semiconductor space and the exposure in china, you see opportunity in semiconductors. >> we do see a lot of opportunity. new factories will have to be

built, there will be tremendous demand, we are going to this adjustment. that is where the issue is, we are going through his adjustment that is taking down a lot of great companies that i think will emerge stronger. they will emerge different as a result of this. there is tremendous opportunity in that space including companies like cisco. >> we have seen this underperformance of the nasdaq 100 relative to the roderick market. -- broader market. the sensitivity of tech, going forward what is the key data that we are looking at? do we track inflation, assess the market fate that the fed can handle inflation without causing a hard landing? >> it is pretty hot right now, it will take a bit to cool down. i think that -- the consumer is still spending, even though you are seeing walmart and target

results. the economy is strong enough not to have a recession this year. i think we might get a recession this year, but i do not think it will be long. >> final question, you also see opportunity in private market, talk to me about that. >> we see lots more opportunity in private markets than in public markets, i think it is a tremendous amount of money to work, i think that exactly what is happening in the public markets will bring down valuations and create fantastic opportunities in the private markets. across the whole spectrum. >> the whole spectrum indeed, mel, thank you. coming up, he might not like the terms of the deal, but elon musk twitter take over is very much on track. bloomberg john joins me a talk

by the lakers -- this latest market drop and why he is warning against buying. this is bloomberg. ♪

ed: elon musk continues to tweet and tweet and tweet his concerns about twitter spot problem, sources say his deal to buy the platform is still very much going forward, for more on what is -- where things stand, i am joined with the technology editor tom, i will start with you. where do we stand with this? >> twitter, they think the deal

is going forward, as our colleague michelle broke the news yesterday, twitter's board came out and said they will enforce the agreement. they have the agreement in place where you are musk will pay the company and we expect that deal to go through. all this talk, all this background noise about bots, deals on hold, which is not a thing by the way. not a thing. twitter is like, the deal goes forward. ed: michelle obama get the inside scoop from you -- michelle, i want to get the inside scoop for. >> i think twitter has had so many challenges over the years, which is why you see ceos come and go, move around, while you are seeing what is happening with elon musk right now. unfortunately, it feels like elon musk is a cat playing with

a ball of string. ed: a cat with a ball of string, what you are feeling -- hearing is in the background it is business as usual. >> everyone that i have been talking to is under the impression that the deal with proceed as planned. one big sign of that is that the proxy filing hit yesterday morning. that is the big document that explains how the deal came together. it is under that is put together with coordination of the musk camp and the twitter camp and is something musk would have personally had to have signed off on before was filed. it is a proxy to outline the deal. it is a clear indication that both sides do see this deal going forward despite the tweets we are seeing on twitter. >> i have a question, all of

this chatter, all this noise in the background about bots and whether or not he had all the information he needed before he agreed to this deal. what happens if he decides, i do not want to pay 5420, what does he have at his disposal? >> a lot of people talk about the fact that the deal has a breakup fee. people say he could pay this billion-dollar breakup you and walk away. that is not true, it is seller friendly, and includes a legal provision, it basically means that if muska decides to walk away twitter can take him to court and get a court order that he has to come up with a financing and paper twitter. -- pay for twitter. other options you can take, if you can show that there is a material adverse advent -- event, some change to the business that materially, for a

sustained. of -- period of time would change the outlook. he would have to show this, he would have to say, twitter, i'm not going to this deal until you prove to me that bots make up fewer than 5% of account. he also waived his right to due diligence when he was going about this deal and presented that as something that was a vote in favor of the deal. he said he would not do due diligence, he does not have a leg to stand on. finally, twitter is made public disclosures about the fact that estimates bots makeup fewer than 5% of account. insecurity filings have said, and most recent one, that the number could be higher than that. the people that i talked to say a judge would be hard-pressed to agree with musk on this. what could happen, he could try to walk away, twitter could take

him to court, and then in order to avoid a lengthy protracted court battle there could be a scenario are the two come to some settlement. at this point, from my understanding, twitter does not have any reason to renegotiate a deal. the contract is in their favor. it seems like the deal has to go ahead on last -- unless musk and prove -- can prove that there is some kind of material adverse effect. >> the twitter stock accelerated with the broader market, basically the skepticism from the market, that big four dollars 20 cents materializes, meanwhile he is tweeting a lot about his political affiliations. we wonder if this is him getting ahead of the scrutiny of the deal, getting allies from d.c.? >> he talked about

disillusionment with the democrats, how the next election he is voting republican, this is apparently the first time he has done it, i have not seen his voting records. you have a couple of things going on, this is a guy who's market is moving, shifting. he started in california, his company started in california he moved into texas. he is shifting towards wanting to sell trucks, a different constituency. the market for electric vehicles in california's is saturated. a different constituency than the californians who by ev's. the other side of the equation, as you pointed out, there's a lot of scrutiny around this deal and tesla and his management of tesla. whether it is the sec looking at things he tweeted about sales of tesla stock and reportedly the

sec is looking into the timing of his disclosure around the twitter stake. the government is already scrutinizing a lot about elon musk and what he is says about potential manipulations of securities. this could be him getting ahead of it. saying look, i told you so. we knew this is already happening, we did not need you want to tell us, these agencies have already been doing it for months. >> five seconds, what is the probability of this deal happening? >> i cannot tell you. >> tom. >> at $54.20 i do not think it is happening. they go to court, he negotiates the price down. ed: wait and see, executive accurate or -- editor for bloomberg technology, coming up with we dig deep into the selloff as investors assess the

impact. this is bloomberg. ♪

ed: let's get straight back to the selloff in the financial market. all corners of the equity arc it sold off with -- market sold off. opinion columnist, john, on a wednesday like this where you see the red across the bloomberg techno -- terminal where do you look? john: first of all this is one of those days they go back to the synchronization. when you look at how bond yields have moved, have oil prices moved today, both rose until about 8:00 or 9:00 in the morning. tested new levels, decided they

were not going there, and fled the rest of the day. basically, stocks have fallen in line with the oil price. and with bond yields all day. very coherent bets actually against inflation. it plays back into target, although it has a huge impact on the whole of the tech sector. it ties into the belief that inflation might be bitten off by companies having to swallow the bad margins. ed: these are big declines, you wrote this fantastic column on tuesday about the dangers of buying the dip. you basically talk about have fund managers are sanguine about stagflation or persistent inflation. you look at the outlook for rates. all of these players, they are underweight tech, walking to that one.

john: tech has been very sensitive to rates. at the moment, when is more of a straightforward player and might come to will being in stocks or bonds, do i think there is going to be inflation and stagflation or session? at this point at that you have to get back to the victim that is asked why he robbed banks, he said that is where the money is. if you want the profit of the moment, get out of the equity market, the most liquid stocks, where people are sitting on profits will be tech stocks. ed: come into the bloomberg terminal, take a look at the chart, we talked about pain and certain pockets of the market. they are seeing big declines, at the same time, we have seen five straight weeks of flows, it will

drop off of that. what is the psychology here? john: i fear it is a lottery ticket five. -- buy. you might as well shoot for the moon, the only way it will make a real difference is buying something that will rip higher. they have lots of publicity, people like to invest in something that is a little exciting. those stocks are, whereas the likes of target and walmart are not. i think that is a disconnect between the retail market and the broader institutions that are mostly behind what is going on today. ed: when i was a kid i was obsessed with dinosaurs. i am a londoner, i went to the national history museum and looked at the skeletons. going to the bloomberg terminal and i see your bio i see the word brontosaurus.

>> i was also a fan. the brontosaurus is a reference to yet another british guy germany, who in '07, the housing market had already turned, subprime mortgage dealers had begun to go bankrupt. i asked him why the stock market is still holding up so much. he said the stock market is basically like a brontosaurus. if you bit it's tail, the nervous system, brain is so limited, it would take a long time to know detail have had been bitten, to feel the pain. in the same way the stock markets takei -- take an extremely long time. ed: i have always wanted talk about dinosaurs and financial markets. you have made my day. bloomberg opinion columnist john

arthur. thank you so much for your time, coming up we continue the market volatility coverage. future fed rate hikes, have we seen this before? that is the big question with the next guest. this is bloomberg. ♪

ed: welcome to "bloomberg technology" i am ed ludlow in san francisco, shares of retailers have plunged wednesday as the u.s. retailer giants cut their growth outlooks. which names are watching? >> yesterday was walmart, today is target having its worst day since 1987. it was a mess on the earnings, cutting the profits outlook from 6% a percent, it's not about sales, it is about inventory levels rising in freight costs. it was a similar story that we saw from walmart yesterday that is also down in the session today. it is not the traditional retailers being hit today, is extended to some of the e-commerce stocks, etsy, wayfair, ads -- ebay.

supply chain issues, inflation, on a year-to-date races getting hit even -- basis getting hit even harder. when we talk about these e-commerce stocks, these were the pandemic darlings, that started to fall when you got the reopening. stay home began to suffer as people got back out there and started shopping in brick-and-mortar. when you look at the selected e-commerce index it has given up half of the peak of the pandemic gains. when we talk about shoppers changing is not just how they shop, but also what they have been shopping on. consumer discretionary really getting hit. those stocks down in the past month and a big way, key part is inflation, wages are rising, but not keeping pace, a lot of the optional spending dwindling particularly as food and fuel

prices have been rising in a big way. that is a key thing we are seeing retail earnings. ed: thank you very much, let's stick with the market selloff, lots of big-name tech companies feeling the burn of higher interest rates, continue crisis of a war with the, domestic inflation, and the pandemic well into its third year. let's talk about how the market is not just affecting public markets, but later stage startups and companies. alex, the day like this, red everywhere, anxiety everywhere, what is your take on it? >> thank you for having me. definitely a tough day for public market investors. as a venture capital firm with over 20 years of investing history and the private markets we have a different perspective. our companies generally do not have the pleasure of being

marked every single day, they can take a longer term view. allow these companies take -- raise money in 2021, and the prospective is a lot of the companies will come back into the market in the next couple of years and not face the same cheap capital environment. we are expecting that what the public company see right now will triple -- trickle back down into the private in a time. there is a lot that private can do in the intervening period. ed: you have the experience, of course, to look into your portfolio. some of those companies in the past of gone public. look at this chart. you want to make a key point. perhaps we have seen this before. what we are seeing on our screen is that there is a single metric that josie magnitude -- shows the magnitude of the current

downturn, the revenue multiples of a specific part of the technology market. amazon, i hand side shop i -- right hand side shop of i. >> we are always looking at the multiples that apply to revenue, we invest in growth assets that are not profitable. i think, in the days where you have ascendancy's of deplatforms there is a lot of -- new platforms there is a lot of enthusiasm. it can create asset bubbles that is common in financial markets. some of what is happened in the last two years, in addition to being pushed on by the pandemic, parallel to what happened in the dot-com bubble with some names that have benefited from the shift e-commerce. another thing to consider, amazon is still around and a viable company. it saw its way through a 96%

share place -- price collapse in the dot-com bubble. we also believe that it is a very durable business. the chart tells a few different stories at the same time. we to give your of optimism. the speculative bubbles come and go. some of these businesses are building real value for the long-term. >> some of the pain in technology shares over the last seven days the likes of apple, microsoft. i am fascinated with the private markets. we broke the story on tuesday that spacex is raising more money at a valuation of $125 billion. it was valued at one been -- how do you assess valuations now and what to valuations look like in the coming months especially with the backdrop of the feds raising basis rates? >> the conversation we have a

lot internally and with other firms. there is a big valuation reset that is happening right now. not in the public, these are not publicly traded securities. the private market always looks to the public markets for guidance on valuation. essentially, for a lot of businesses the multiple has been cut in half, maybe three x by the last month. those businesses will have to get back to par before they go out and raise again in this environment. we are stressing the importance of cash flow and becoming default alive. that you can ratchet up and down the marketing and maintain a relatively modest burn while the volatility plays out. we expect volatility to increase before decreases. >> the share performance of airbnb, uber, the last couple of

years, these are names that work created in period of stress. i am thinking back to the financial crisis, that would be your advice to the founder right now with the markets that they are? >> absolutely. the first thing is to stay optimistic. while it might be difficult to do if you're looking at your own personal stock portfolio, the reality is the downturn in a capital constrained environment often produces the best companies. they can focus on what they are great at, talent tends to stick around longer, people are not choosing between as many jobs we can keep them engaged longer. you have the time to hone that business model because you have to to survive. we invest in all cycles consistently. i do also think there is advantages companies can have during a downturn assuming you can get control of your business decisively. ed: giving us the private market

taken volatility -- take on volatility thanks very much. >> he plans to wind down the capital management after billions of dollars of losses. details ahead. this is bloomberg. ♪

ed: time for our crypto report and has been a brutal market selloff, before we get to digital assets i have to ask you about melbourne -- melvin capital management plans to wind down. >> the poster child here of that

game stock short squeeze, even after recouping some of the losses that it got early in 2021 is now down again for the year and telling investors that he is returning money and winding down funds. this was after he tried to reboot the find in a different fashion, scrapped those plans, i have to say i've been on wall street for a while now, and the casualties in the hedge fund industry starts here. ed: give me a quick update on the market. >> something interesting here, even though you saw that brutal selloff today in the market, more largely in the nasdaq 100 with a 5% selloff. actually seeing it coined trading below that already -- below that level, only falling 3% in the 24 hour. you are also seeing it hold steady as opposed to other coins in this downturn.

we look at bitcoin, to what extent is it the relative safe haven compared to the other digital assets? ed: stay with us, we'll bring in our next guest of the cofounder and ceo of a 21 shares crypto exchange product. it is marking its u.s. entrance. simple question to start with, why is the u.s. ok with etps but not etfs? >> thank you for having me, i am really excited talk about our launch into the u.s. market. we are launching a private funded space. we are working on an etf in america and as public as well, nothing is been announced yet. we are working very closely with the regulators on that. >> why is that this is the time to launch new products and a down market?

especially when there is an a lot of questions about how comfortable institutions we get with such a product in a downturn? >> there are a couple of reasons. when we first launched in 2018, the first physically backed crypto etf on the stock exchange it was a bear market. i remember that the initial seed capital a 5 million went down to 3.52 days later. it turns out that building in a bear market if you're focused on the long-term is a pretty good bet. the other way of looking at this, nothing fundamental has changed with any of the underlying technologies. we are seeing this across the board come across every crypto asset as well as more institutional investor interest. one of the things that should be very comforting, despite the arc at selloff and were happy with the -- the market selloff of

what happened with the terra soft last week, it is been consistent. >> how has what happened more than a week and no -- a week ago now really drawn to question the broader ecosystem and the place of other coins -- stable coins and ecosystem -- in the ecosystem? >> we had the world largest etfs listed on the european exchanges including switzerland. we have been following them very closely. on the product itself, considering that luna is operating intermittently we have considered closing the product, however there seems to be a potential rescue plan to keep it up and running while a monitor that. it is important to take a step

back and really look at terra for what it was, a grand experiment supported by some of the world's largest and notable investors in the crypto space ant financial space to build an algorithmic stable coin. it was a worthy experiment to build a vibrant ecosystem with a lot of risks. research has shown, there risks where there, as well as the opportunity. ed: we see on our screens that you are in florence, italy, lovely it is a wonderful place. in the heartland of the european union, the key talk about the regulatory landscape? the difference between doing business in the europe -- in europe and the u.s.? >> it is different, geography by geography. what regulators are looking for

and what populations are looking for can be different.

>> this was a grand and very noteworthy extremity run. >> cofounder and ceo between one shares, my good mate, over in new york, coming up and for tesla, by the ev maker lost its spot in the index, what the world's richest man has a say about it, that is next. we will be looking at shares of

cisco and after hours, down 12.7% of the company talking about struggles with the supply chain, china, warned ukraine ultimately cutting its sales forecast. we will keep an ion it -- and eye on it. this is bloomberg. ♪

another crazy day? of course—you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business, with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want—your team, ours or a mix of both. with the nation's largest ip network. from the most innovative company. bring on today with unbeatable business solutions from comcast business. powering possibilities™.

ed: this week, shares of tesla dropping wednesday, the ev market -- maker also lost its spot on the s&p 500 index, citing working conditions and pressures -- elon musk reacting to the news tweeting that it is rated top 10 in the world for -- tesla is not making the list,

esg is a scam that has been up and eyes by phony social justice warriors. his words not mine, joining us, who leads coverage not just on tesla, but everything elon musk. tells the news. >> elon musk new this was coming, he was raising concerns about ratings for several weeks now he does have a point. what are the metrics and why they always changing? for passive investors the rankings are important. he would argue that we make electric cars, how can we the rank less than oil companies? >> the mission statement of tesla is to advance the transition to sustainable and -- energy. we assume everyone knows what the company does. >> tesla makes electric cars and energy products, solar roofs, batteries, they have contracts,

they have been doing quite a bit by workforce issues in the fremont plant, sued for blatant racism against black workers, the sec is investigating them, there are some problems there. the board of directors have been doing quite a bit for overlapping duties. they have been under pressure to diversify their board that they have done. ed: i am looking for stock your to date on the board, down nearly 30% caught up in the selloff as all stocks were. what is the story of tesla rhino? -- right now? we are so focused on elon musk we buy tweet analysis of the twitter deal, i feel like we are not talking about tesla. >> production in china took a hit when the factory in shanghai was shut down for almost a month because of covid. now is being brought back online, there still supply chain issues, it will be a hard quarter for them, a lot of macro stuff, they hold bitcoin, it has

seen a rough ride of late, there is not been any new product launches on the horizon. musk says there will be an ai day in august. what will we see their? more promises about self-driving? this is a weird year for them they didn't have new products brought to market. ed: the column, the hyperdrive, retake a step back and talk about the world of ev's and tesla, wednesdays column is about insurance. >> this is the big passion project of the cfo, they are trying to find new revenue streams. they say they are a software company, not just a car company. they want to have a captive audience with their customers, you buy a car, the solar roof, get the power wall coming miles well by the insurance as well. because they have so much data

they can monetize it and offer you a premium based on your driver skills. other company's have tried to do that, and -- >> very quickly, what is the next thing to look forward to on the tesla calendar? >> in the tesla calendar we will have second-quarter delivery figures in early july. an annual meeting on the fourth. >> elon musk reporter and cheap, that does it for this edition of "bloomberg technology", we are back tomorrow it will follow the s&p 5 -- 500 biggest drop in the most to years. do not to forget to tune into bloomberg studio 1.0, emily chang speaks exclusively with the ceo and cofounder about the online gaming platform's explosive growth and cultivating a civil digital community.

that is tonight. this is bloomberg. ♪

so... i know you and george were struggling with the possibility of having to move. how's that going? we found a way to make bathing safer with a kohler walk-in bath. a kohler walk-in bath provides a secure, spa-like bathing experience in the comfort of your own home. a kohler walk-in bath has one of the lowest step-ins of any walk-in bath for easy entry and exit. it features textured surfaces, convenient handrails for more stability, and a wide door for easier mobility.

kohler® walk-in baths include two hydrotherapies— whirlpool jets and our patented bubblemassage™ to help soothe sore muscles in your feet, legs, and back. a kohler-certified installer will install everything quickly and conveniently in as little as a day. they made us feel completely comfortable in our home. and, yes, it's affordable. i wish we would have looked into it sooner. think i might look into one myself. stay in the home and life you've built for years to come. call... to receive 50% off installation of your kohler® walk-in bath. and take advantage of our special offer of no payments for 18 months.