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. this is "bloomberg technology." coming up, tech tenacity. stocks end the week on a high with shares snapping a seven-week losing streak. that pun is intended. i speak with the ceo of solarwinds two years after the nightmare hack that started with russia and blindsided customers. making money in the metaverse. we will sit down with the ceo to

talk about the weird, the wonderful, and the lucrative as the platform looks to build a digital but civil community for kids around the world. we will get to all of that in a moment. stocks climbing after another volatile day. tech stocks in particular bouncing back. ed ludlow, how are you making sense of this? ed: there is evidence big institutional investors started putting money back into stocks, equity-related products. i noticed that reference. did you come up with that yourself? emily: you know we are a team. even though there has been a lot of green on the screen, it has been a rough week with a lot happening in global markets. snap revised its guidance. that upset a lot of stocks. the s&p 500 had its best week since november 2020. the nasdaq 100 leading the pack

in terms of the tech heavy indexes that outperformed. on the chart, finally after seven weeks of declines on the nasdaq 100 and s&p 500, we have some green on the screen. look at the right hand side. a big gain. for the nasdaq 100, the biggest jump since march. there has been a lot for investor to judge i just -- to digest. dell up 12%. it had been up as much as 19% in the session. showing strength, good management supply chain. according to sources, the chinese bank will take a stake in didi, boosting the semiconductor space broadly. i was on television at 9:30 eastern on friday morning. snap was falling off a cliff, down 15%.

it was halted, madness. we close up 4%. i respect your next guest, somebody i like and follow. i don't want to end on a downer. yesterday, the nasdaq 100 massive underperformance. we have had a good week. we have a lot of ground to make up. emily: thank you. let's stick with the market and moves intact this week. mark, thank you so much for joining us. how are you making sense of all of this? first, the bottom falling out from under us and now suddenly investors are ok with it? >> the nasdaq climbed 1000 points off the bottom at about 3:00 east coast time left friday. today, it is almost a 1000 point

rally. that is historic. it shows the amount of pessimism that was in the market. look at what happened in the week. rates have stayed relatively tepid. we have had some earnings revisions that have been somewhat negative. i think the market has seen those and said they are not as bad as i would have thought. we have seen the consumer slow down a little bit which may be assigned runway inflation is tempering. i think companies are getting more realistic and companies are getting more realistic. that has amplified. we saw some m&a this week. i'm not going to predict another 1000 point rally on the nasdaq, but we came so far, so fast that we needed some good news. this week, even the more moderate news was perceived as good news. that is a great sign. emily: let's go back to the pun.

is the snap case isolated to snap or social media stocks and not potentially an indication of a broader narrative? >> i think snap's overzealousness of the last quarter is reaping some of the downside this week. they put our terrific fourth-quarter and the stock zoomed up, no pun intended, to a much higher level after that. when you saw the tempered note about the rest of the year, the stock got punished greatly. some of that irrational exuberance from before, they are paying for it. when they did not put out a good report, the stock was down 5%. on a day like last week, it would have been down a lot more. when you see companies putting out more tepid guidance and the stock is not getting creamed, i think that is assigned investors

are getting comfortable with multiples and maybe the worst is behind them. that is a good sign. the fastest way for things to go up is for things to stop going down. i think we have seen some of that this week. i think this is an interesting point. the consumer is slowing down. the high-end consumer still has ample capital and i think the market reflects that. emily: we saw one of the biggest tech deals in history sealed this week. we have seen some big deals the last few months. microsoft-activision. elon musk buying twitter. are these unique or are we going to see a trend in m&a? >> i think you will see more. i will tell you why. companies have balance sheets that are fortified. you are seeing big tech have balance sheets that are fortified. you are seeing capital on the sidelines for interesting deals ready to get deployed. when you announce it to the market, stocks are working

because they see the combination of those companies working. we see some other things in the m&a world with twitter that are different. when you see that kind of activity that we have seen earlier this year, those are signs there's lots of capital on the sidelines and valuations are getting to the point where they like it. that is another sign there is lots of capital out there and at these prices, buyers are going to show up. emily: if you are looking at the numbers right now, what do you think are the biggest risks? what names do you see as most risky? what could potentially be havens? >> i think profitless tech continues to be a place people are worried about. every board room, every venture capitalist, every private equity person has told the companies,

show me the path to profitability now. that is showing up in the board rooms and in investors' psyches. it is showing up in private valuations, too. when you stay private, you can tell anybody what you think you are worth in the last round you raised. that was probably inaccurate in 2021. profitless tech with no path to profitability is worrisome. i would point towards some of the darlings last year that are not darlings this year. i would point to some of the ipo's of last year. legalzoom trading at three times revenue, having much easier comparisons the back half of the year that is more reasonably valued. is a smaller israeli company. israeli companies were darlings of the market last year. almost 40% of the market cap is in cash. airbnb falling greatly from the april highs. just because it has fallen does not mean it is cheap.

it is part of the leisure economy that continues to grow. we like it at jmp. those are durable companies we think will be around going forward. if you cannot find the path to profitability, you will have a big problem. emily: we will see what the next week brings after the holiday weekend in the united states. we will be watching crypto trading through the weekend. mark lehmann, great to have you with us. it was the worst nightmare of hacks unleashed by russia. a routine software update from coming call solarwinds that impacted customers. what do we know two years later and what can companies do differently? the ceo of solarwinds will join us next. this is bloomberg. ♪

emily: hear the name solarwinds, and many of us might think back to the cyberattack that originated from russia. they gained access via a software update. nearly two years later, the company is sharing more information about the massive breach and its new approach to preventing it from happening again. i'm joined by the solarwinds president and ceo. thank you so much for joining us. solarwinds does not sell cyber security products but i.t. management software to hundreds of thousands of customers. how is your new approach different from two years ago? >> thank you for having me here.

you are right, we sell software support that impacts more than 300,000 customers worldwide. as we came out of the cyber incident and learned key lessons in terms of how to improve how software is built today and in the future, there are some critical things we have done in the context of what i call [indiscernible] design. one of the fundamental aspects is how we build software with the key of reducing the threat window for attackers to attack supply chains involved in building software. emily: what do you mean by that? >> every software product such as the ones from us or microsoft or whomever involved the compilation of the large number of files. many times, we use third-party

software in the building of our products. let's say you build televisions with parts from various suppliers. you're doing the same thing with software. at every point, there is a potential for security threats and hacks. what we have done is build a unique model of creating software which involves built-in systems. it is built in three different locations. at the end of the process, we check the integrity across them. an attacker would have to know these locations and attack them consistently making it more difficult for them to attack. emily: aside from building the software in different locations, a year and a half later, what would you do differently now when you look back? >> i would not call it so much doing it differently because the

security posture and investment solarwinds makes. maybe some key reinforcements. first, i would say you cannot do it alone. security breaches, no matter how big you are, you could be microsoft or solarwinds, you are not immune to it. the notion of public and private partnerships are incredibly important and critical. that is an area we have been working on as well. we see progress but we are not where we need to be. the second thing is transparency is extremely important. the sooner we identify and report these issues, the sooner we inoculate and the less the damage. oftentimes, people tend to not come out for fear of shaming and not address the real issues involved. the other piece in addition to

collaboration is humility. it is not if i should say but when. emily: let's talk about the when. i'm curious if there have been updates to the investigation. is there new information about when the hackers first breached solarwinds? >> we largely concluded our investigation last year and reported our findings. there have been no new findings since then. we have focused on redeveloping our focus on how to build software the best possible way and engaging with our customers, partners, and employees. emily: there are still plenty of things not known about this incident or understood. there has not been a public accounting of what happened by the government, for example, and most of those in the private sector. what questions should we be asking of government and industry officials about it? >> the key question to really ask is, what key improvements in

information sharing between the public and private have been created and proliferated? that is still a very asymmetric relationship at this point in time. as i placed, we are driving a greater level of transparency and collaboration with government authorities. i would also say it is extremely inconsistent. i will give you one statistic. on a recent survey, more than 19% of responders said public- private relationships are open to addressing security issues. however, about 30% said these are suspected today. this wide discrepancy between what is perceived and what is there today. emily: it is formerly known as the sunburst attack. a lot of people know it is a solarwinds attack.

would you say the company has fully recovered? are you still recovering from this? >> we have done a lot to recover. i don't want to take any recovery for granted. as i said, it is a matter of when and not if. humility is what is driving us forward. in true business terms, we have recovered. our customer retention is back to historical levels. we are gaining strength in every geography including the public sector and federal segment specifically. in many businesses, we have recovered and are accelerating. emily: thank you for sharing some of those lessons learned with us. coming up, if your kids are playing video games, they are likely on roadblocks -- roblox. my conversation with the ceo.

this is bloomberg. ♪

emily: is the online platform kids are going gaga for. i spoke with the ceo about the ends and outs of building a digital community while making money and scaling a future metaverse. take a listen. david: it goes back to how exciting it is to have a company in this space that i think has so many years of growth to it and is a new category following other types of technology. there is still so much innovation to be done. there is so much invention to be done in this category that it is mind-boggling. emily: critics think metaverse the term is just marketing. how do you respond? david: this type of technology is much more difficult than the net or the web which was another huge thing we saw predicted that has started to come.

i think we are starting to see early signs of it. emily: when mark zuckerberg announced his plans to own the metaverse and change facebook's name to meta like it was something new, did that bother you? david: of course not. it is really hard to predict in 10 or 20 years where the companies are that figured out. there are so many elements of innovation needed. having a ugc community is one of our strengths. we are early in our quest for innovation. emily: roblox built a huge business selling robux. does this evolve into a larger marketplace? david: the idea that people could make a living started the currency. we are a systems company, and utility. it has formed a robust economy. it allowed us to keep it free for the vast majority.

emily: would roblox partner with other companies like microsoft? david: the core technology of how we will support 50,000 people in real time on the phone, going to a concert together, i think that will be a lot of engineering work that each company will be working on and will be really hard. as far as ultimately, can an avatar go from one place to another, i think there will be lightweight ways of starting to think about that. emily: what role do you think apple and android should play in the metaverse? what policies need to change to support this vision? david: the biggest thing we would take advantage of if it were to happen is a change in the store fees. we stay out of it and let google and apple run their businesses. when we think about more developers making a living on platforms like us and having to build stuff, if those fees were

to change, we would move most of that money back to our developers. emily: your goal is to build a new category of human experience, the next phase of human interaction. how do you moderate that on such a massive scale? are you doing a good enough job? david: in the third week when we were live, imagine eric and myself back in our small office. eric and i said, my gosh, safety and stability is what we have to do. we had 100 people chatting on roblox. we saw a few early signs and made the call that this is going to be the foundation of what we do. in the early years of roblox, as we have gotten bigger, we have gotten to the point where there are thousands of moderators. every image that goes on our platform gets human reviewed. we filter text very stringently,

especially for 13 and under players. we use a lot of ai and ml to do this. we are always getting better. it is a key thing for us. emily: how optimistic are you about ai and tech able to do that? david: i'm very optimistic. we would never compare to the real world because our standards are more stringent. i believe this will keep getting better and better. i think, over time, it will get to the point where if a six-year-old on our platform, it is literally as if the parents wanted to be there watching them, we will be able to offer that type of thing. emily: a lot of parents are terrified of the future metaverse. they don't understand the parental controls. do you understand that feeling? david: we do. i think it creates a higher standard for us because we cannot assume every parent is going to get that involved with their kids. emily: there have been serious content challenges, stories about roblox being a playground

for virtual fascists. there was just a story about kim kardashian's own child seeing an ad for a game that claimed to have a sex tape of her. what happened? david: that was very unfortunate. there was a text blurb up very shortly that very people -- few people saw. we moderated that user and they are off our platform. that video was never on our platform. there was no imagery on our platform. it was a short mention. very unfortunate. our vision is to be the most civil place for everyone. emily: you can check out the full "studio 1.0" on bloomberg or listen to the podcast. later, the company partnering with roblox on a new fda approved video game tell kids with adhd. that is up later in the show. andy pay equity -- and the pay

equity company backed by steph curry. ♪

emily: welcome back to "bloomberg technology." i am emily chang san francisco. one of the biggest stories, the bid to twitter by elon musk. shares rising for a third day in a row. $40 a share. closing that gap. getting closer to $54.20 offer from elon musk. in another twist, regulators are looking into how he went building the stake in the company. what are we looking at now? >> they are looking at april 4, the date he first disclose his stake in the company.

they are asking him for information. why did you use this filing type , for passive investors, but he had a more than 5% stake, activist intentions. there is timing, when you build a state, you have a window to disclose it. the reason we care, this is serious, the sec taking a real look at this deal. emily: what could the consequences be or the follow-up be? >> did elon musk breach security laws? we don't know. that is the question. emily: you were at the agm earlier this week. one silver lake board member does not get the vote to stay on the board. he resigns, but twitter board member does not accept his recommendation. this is an ally. >> there was a vote whether he

should stay on the board or not. he did not receive enough votes. those who voted against him said he is on too many boards, six public company boards. that is too many. twitter cited the bylaws of the company saying we did not accept his resignation and we are keeping him on the board. it is as simple as that. emily: what is the point of shareholders voting? >> it is a good question. they basically said he had exceptional history, skills, adds incredible value, understands the industry, is an asset. that is the matter. emily: is there confidence regarding the deal and whether it will happen? >> twitter did not follow the selloff in stocks. why would it? it is up for purchase.

the deal has gained some confidence. the spread between where shares are in the offer price -- i don't know if we have a chart on that that we can show quickly? elon musk took out the margin loans to fund the deal secured against his tesla stock. that is gone. it is a majority equity financing deal. maybe jack dorsey will participate or rollover shares. we are moving towards a place for the deal could happen. emily: we will see. thank you. instacart, paypal, microsoft announced this week they are cutting staff or slowing hiring as part of a larger trend across tech as companies prepare for a prolonged downturn. i want to talk about this with the ceo of the company that helps companies identify and address and resolve pay disparities.

it is great to have you on the show. you have a unique window into how companies are navigating major cultural shifts, the move to work from home, great resignation, now this downturn and perhaps some rethinking of the potential to resign. how are companies navigating this? >> yeah, thanks for having me. it is a great question. we are seeing an interesting trend started to unfold. if you look at what you reported on today around microsoft, you see it clearly. microsoft just 2x-ed their comp to keep their workers. they also announced or slowing down the rate of hiring. there is this interesting environment right now, particularly in tech, where founders, entrepreneurs, ceos are thinking about cash preservation, runway, optimizing

efficiency, but we cannot lose sight of the fact we are still in a very tight labor market. how do we keep the focus we fought so hard to get into our companies there? emily: how are employees approaching it? are some employees rethinking whether or not they want to make that job change now given the layouts and hiring freezes? >> we are not seeing but yet among our customers said. we deal primarily with fortune 2000. i think we will. i think what we will start to see is a wait and see mode from employees. we will see a continuation in employee demand that employers to make sure they want to know why are you worthy of my labor? if i'm going to make a change in a market that might be a little more volatile, i want to make sure i'm going to place that was stick. emily: how much progress are companies making on pay equity? there has been concerned that

women for example might be backsliding in the pandemic because companies are prioritizing staying afloat and not thinking about these things. >> it is a good point. i think the pandemic is the key data point in this. we went backwards. we were already making some progress against closing the pay gap, then covid disproportionally added a number of years to our progress, so it made it worse. there is a real danger that the same thing happening among colleagues and friends that are black entrepreneurs, people of color, who are concerned that people will start using the recession as an excuse to go away from some of these commitments towards diversity, increasing representation, committing to pay equity, but on the flipside, this is an opportunity for companies. there is no going back in terms of what employees want, and with legislation accelerating around pay transparency, california

just passed a state bill tuesday, and this will continue, so companies that are progressive and thinking about how we can maintain progress against these initiatives, they are the ones on the talent side that will win out on the others to visit. emily: california just overturned a law that mandated that companies add women to their boards. here we are moving backwards. what, what happened there? >> it is interesting. the acceleration has been on the pay transparency side. california joining washington state, new york city, new jersey, colorado, passing laws that require companies with over 100 employees to post the range of salary for particular roles. you have that happening on the employee side, and you have the backsliding on the board piece,

but i think that will be a bump in the road, particular because you will continue to see institutional investors like goldman sachs to push for more diversity on boards. they have expanded from saying one board member has to be from a diverse background to two, so even as you see things like the board decision that wishes overturned, you will see institutional investors, a continuation of activist shareholders, in addition to hearing from employees who really want this. emily: speaking of investors, steph curry is one of your investors, and the warriors just made it officially to the nba finals. yay. >> yay. emily: how involved is he in the business and how has activism around social equity made a difference? >> it has made a big difference.

we are hearing more from other sports figures weighing in on this important topic, not just pay equity broadly, but particularly in sports. we are starting to see the fruits of that amount. what is great about steph curry is he was in this game literally and figuratively long before it became the cool thing to do. he wrote an article about pay equity as far back as 2018, when he had his daughters and was trying to start to think about the type of world he wanted to invest in an order to create a better environment for them. what is great about steph curry is he is not just performative, he does what he can to help others. emily: the head coach of the warriors made an passionate remarks on the day of the

shooting. i would've take a moment to listen to what he had to say. >> i am not talking about basketball. nothing happened with our team in the last six hours. we will start the same way tonight. any basketball questions don't matter. when are we going to do something? i'm tired. i am so tired of getting up here and offering condolences to the devastated families out there. emily: what do you make of those remarks and him using that moment to say what he said? >> emily, you have four kids. i have seven. i think what is happening now, and it is critical leaders pay attention to this. the trust barometer just came out this week saying that workers have the most trust in business they have ever had, the highest amount of trust over

government, media, google, which is new, and with the trust they require transparency and want ceos to speak out about what they believe can be done on some of these issues. when you look at starbucks shutting down stores in ukraine, dick's sporting goods saying they will stop selling weapons in certain stores, the pressure for companies to start having a voice on these things is going to increase. i also think just the human side of this, what he did that is so remarkable is he showed his humanness. in that he gave other people the right and ability to be vulnerable and to also show their humanness. if you are a leader, your people are struggling when they see people look like them killed because of their race, striving when they see people with the same age as their own being slaughtered, so we have to start thinking about not only taking a stand but leading with empathy

and understanding that we are all humans and this is tough stuff to process. emily: indeed. mom to mom, thank you for sharing your humanness with us today. >> thank you. emily: thank you. we will be back with more after this break. this is bloomberg. ♪ ♪ ♪ the lower your drag coefficient, the more efficient you become. such amazingly perfect shapes run throughout the natural world. and can now be found in the automotive one. the world's most aerodynamic production vehicle. the eqs sedan.

emily: well, crypto had another

bad week. it may only get worse. joining me now is the chief compliance officer and general counsel at that wise -- bitwise. bitcoin $29,000. tech stocks bounced back. why not crypto? >> well, thank you for having me. despite the volatility in prices, trip to is that volatile, risky asset. it will be affected or impacted more than the general market, but we have seen the pullback in the stock market and the pullback in crib you as well, -- crypto as well, but we have had a number of pullbacks and crypto since it started, and it has survived each one in continues up into the right. my messages keep calm, carry on, look at the long-term horizons. none of the business essentials

have changed. we will look at this and continue. emily: what do you think will be needed to turn crib though in two a true inflation hedge -- crypto into a true inflation hedge? >> what we have seen over this year, what i call the year of the definition, we are getting into the mainstream, pushing into institutional audiences. fidelity has added bitcoin as an option in ira accounts. this is huge. this is not going away. we are seeing more crypto education this year. i just came back from the d.c. blockchain conference, and what was really positive and compelling was seeing members of congress who attended the event and were engaged, talking about learning more, engaging in person, which was great to have that in person with members of industry saying, teach us more.

we want to learn more about these businesses. and whether they were taking the approach of cory booker, who was taking the approach of my constituency needs access, and this technology will give my constituency access they have not had from a number of financial intermediaries that have shut out of the financial system -- them out of the financial system, or you have those saying this is innovative and we have to keep the business on our shores. the messages we need regulatory clarity, and we have a number of folks pushing towards regulatory clarity, looking forward to seeing the gillibrand bill coming down the pike, and all of these are pushing the deer of the definition where needs to be , more regulatory clarity, which is what the space needs. emily: teach the audience, this

terra situation, what will happen? >> it is a pets.com situation. emily: that is helpful. >> it was a risky investment. what it is is one of the headlines i saw spoke to me, the ground shook, but the foundations are solid with regards to the crypto ecosystem. it had its impact, and we learn from that. we learn from what happened with this particular digital asset, and the people who made that investment also learned, ok, this is very risky. did i do my homework? did i put it in the correct category? it is not backed by fiat currency. there are other stable coins that are much less risky, that are pegged one to one with real assets. algorithmic stable coins are not. it is backed by code.

if you're looking at something backed by code, you have to look one step further, ok, what are we looking for? if you look and cannot figure it out, one gentleman at the conference had a great line. he said, you know what, if you can't find the yield, chances are you are the yield. on the go forward, we learn from this example, and for every pets.com, there are hundreds of amazons. emily: interesting. i appreciate the crisp comparisons. it helps us to better understand it. thank you for sharing your definitions with us. coming up, treating adhd with a video game. my conversation with the ceo next. this is bloomberg. ♪

emily: for most videogamers,

it is a way to unwind or connect with friends. for some, it is a medical treatment. there is a game, endeavor, being prescribed for kids with adhd. the company behind the game just announced a first of its kind partnership with another company. explain to me, what are the mechanics of this. how can a videogame help cure or treat adhd? >> sure. no problem. thanks for having me. this is a digital medicine. that is what we have spent the decade building. it is built on another decade of research on the very specific sensory and motor stimuli that stimulates the part of the brand that controls attention functioning and other related cognitive issues. we coded that into an environment that looks with

deals, acts like a videogame. you can think about this is underneath the hood, there is strong neuroscience that is patented, taken through trials, the fda, etc., but we feel this can fulfill the need in a marketplace, medicine that is not scary, but can be fun, so we decided to deliver this through a videogame platform. emily: what do you say to the skeptics that more videogames means more screen time they could fuel more addiction to games, which is not necessarily good? >> it is a fair point. skeptics are therefore reason, usually because people have been burnt. you have kids, i have grids. we see children play a lot of video games and were probably nervous what they're doing to their brains. there is a little bit of research on what they do to their brains. our point here is not to significantly increase random screen time.

we know parents understand there are good and bad screen time experiences, and can be good and bad experiences with phones and , and in our cases is the only proven prescription videogame, so you're thinking of offsetting the screen time people might take for other things, youtube, etc., and using that when you have a condition like adhd and you need help. emily: you are working on applying gaming to long covid in addition to this roblox partnership. tell us how that will work. >> sure. this is not a technology approach based on any single game or population. this is a new way to activate neural networks that control attention. we feel like one of the largest needs and central nervous medicine is cognitive functioning, how the brains

processing information on a second by second basis. that has been pushed aside and treated more as holistic medicine or occupational therapy. we think that is wrong. we think it is something patients deal with on a daily basis, and that is true in adhd, where we have a first product fda cleared, but it's true with depression, multiple sclerosis, autism, and long covid, areas where we have completed or have ongoing clinical trials, because it is an attempt to create a new business specializing in the most effective and safe way to intervene in cognitive function across different ages and diseases. emily: absolutely fascinating. we will keep watching. thank you. that does it for this edition of bloomberg technology. wall street week with david westin is next. we have a great round of guests,

including larry summers. never weekend everyone. don't forget to check out our podcast anywhere you get your podcasts. you can catch that foe roblox at bloomberg.com. ♪

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