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 exactly where it started what does it mean protect valuations? we will discuss. could online data be -- online dating be the one market that is spared? companies like bumble, tender and hinge are recession proof. from when the next covid wave will hit to just how fly -- how high inflation will go. the new predictions market will let you bet on anything. we meet an controversial exchange that is actually legal

-- for now. since the supreme court blocked a texas law that could transform twitter and meta. all of that in a moment but first, a look at markets. tech ending may almost exactly where they started. ed ludlow here with the latest. what was all the fuss about? one of those days were you just rip up the script. here as prepared, i had this whole spiel about how the nasdaq was higher tuesday, headed for its fourth straight day of gains. nope. in the last when he minutes, we are down .3% on the nasdaq 100. inflation fears starting to creep in. a big jump in yields coinciding with that. yields on the 10 year treasury at 2.58 percent. the only upward trajectory being bitcoin. they traded over the long holiday weekend from $29,000 a token to around $31,000.

the month of may. let's take a look at where we ended. i have seen this a few times in my career. the s&p 500 up 0.01% in the month of may. this is exciting stuff. this is what we are here for. a different story in the tech heavy nasdaq 100, down 1.7%. mega cap heavy index down 1.6%. semiconductors -- there are still concerns the bear market we see in technology stocks have more legs to run. we are focused on inflation and focused as well on valuations even though if they come down. are they too high? salesforce in with earnings rising in off the market trading. raising its eps target, now up 7%. bullish signals that software is intact. two quick stories to tell you about, u.s. listed chinese tech

companies having a great day tuesday. china painting a much more positive picture, signs that covid restrictions are easing. alibaba and jd.com both showing gains throughout tuesday's session. a very quick programming note, we got news after that the parent company of facebook will change its ticker do nine, premarket from fb to m eta. just one for the calendar. emily: we have been waiting for that. i want to stick with the markets and specifically talk tech with michael wolf of activate. always good to have you with us. what do you think all the fuss is about? we saw the ups, the downs, then we are back where we started? >> part of this reflects that investors are concerned the growth rates are slowing. it as -- it is not as if these businesses are growing quickly and yes, they are concerned

about rates but to a large extent, this is a correction. not a bubble bursting. when people keep making this comparison to 1999-2000 and they are saying oh, it's another wave of this. in reality, we have companies that have real profits, real businesses. in the tech bubble of the early to thousands, what we had was business plans. not a lot of revenue and certainly not earnings. emily: here is the question, is it overvalued or not? if so, what is overvalued? >> we saw a right and left the market caps of these companies being driven up almost illogically because they were looking at tremendous growth rates. if you look at netflix, which is down over 60%, but netflix has

over 200 50 million paying subscribers. yes, we are seeing a correction on the value but this is a substantial business and we are going to expect to see it continue to grow. shop of high down by two thirds. this is an amazing business that will continue to grow and deliver. there is a difference between market valuations and expectations. emily: you've got folks there comparing this to the dot calm bust. do you think that is totally overblown? >> it is totally overblown. the reality is that these are substantial companies. they have had substantial growth. they are leading and in a lot of cases they have moats around their business which makes it difficult to compete against. it is a totally different situation. if you look at the 2008-2009,

you see a number of companies that were started in those days and it gives you the sense -- if you look at venmo, square, airbnb, uber, they were started in that period of the last recession. you should see a lot more activity. these companies are substantial. and they are going to stay substantial. emily: what do you think about the m&a market? we have seen this amway are deal, is that in a league of its own? twitter is also a unique situation, but are we going to see more big time mna through this tumultuous period or not? >> to a large extent, it is going to be different. one of the places where we should see a lot of mna is an

enterprise software. if you look at the mcafee, salesforce, slack, those are the kinds of acquisitions we should continue to see. one of the things that is also different is we are likely to see more private equity deals. we have -- at $16 billion. we have other businesses like -- purchase of proof point. we are going to see a lot more because we are seeing capitulation in terms of pricing and this is the moment private equity firms can russian and they can find businesses that were away overvalued versus a year ago. emily: michael wolf of activate. always good to have you. thank you for giving us the silver lining on some of this stuff. taiwan-based iphone maker -- expects supply chain disruptions

to gradually clear up as shanghai slowly opens to trade after months of lockdown. the chair told shareholders they are more upbeat now on their sales outlook than before. hon hai is apple's largest assembly partner. coming up, the startup that lets you bet on everything from awards shows to covid waves. my interview with lawanda lopez laura next.

emily: from the outcome of the grammys to the next covid waves, you can bet on -- bet on all of these things with a controversial new type of financial exchange where people can place wagers tied to outcomes of real-world events. try to me now luana lopes lara. thank you for joining us. first of all, some folks have been trying to push forward these kind of financial markets for years but it never happened. how did you make this work? >> thank you for having me. we get this question fairly often. the answer is not what most people would expect. we just have more patience and resilience. we push through longer. it is a regulatory process that takes a long time.

especially in the derivative space. there's lots of new risks we need to look to and regulators are looking for. and we -- to work with all of them. you can think about surveillance, customer protection, contracts, things we have to work for and we really work hard for two years and did not give up to get it through the finish line and launch the exchange last year. emily: for example, the fed has another decision coming up and you can make a bet on what you think the fed will do. what are your markets showing about the fed? >> i guess to backtrack and explain a little bit how the markets work, you can buy yes or no physicians on whether something will happen or not. the -- goes from zero to one. if your position is correct and because the price is from 0-1,

the price of 60%, $.60 means there's a 60% chance something will happen. you can directly translate the price to the probability. with the -- markets, we have different markets for every fomc meeting. for 25, 50 or 75 basis point hikes, our markets safer to we will be seeing a 50 basis point hike with a 95% chance. the markets are also saying the july meeting will see another 50 basis point spike with a 90% chance. across the whole year, markets are expecting fed hikes versus a couple months ago was predicting around seven. definitely a lot of hikes coming. emily: president biden in veiled his whole plan to keep inflation down, what do your markets a inflation is actually going to do? >> we also have arc it's on

inflation from 0% to 1.2%. rockets are saying the next inflation trend coming out next week will be around 0.65% local remotes. or over the whole year, 8.2% inflation. actual markets have predicted seven of the eight -- correctly. our traders have not been surprised at all to see the high inflation numbers. it is important to say that for the rest of the year, the markets are expecting around 4%. which really is around normal levels. really expecting inflation to go back to normal. emily: regulators initially said no to an exchange like this but recently changed course. isn't this gambling? why should this be legal? >> great question. we are an exchange the same way that the cme or new york stock exchange are exchanges.

you treat events on our exchange the same way you trade stocks. we are basically just the trade matching engine that matches different people to different positions. if you take our fed markets, our markets are a way to trade, hedge or get exposure through sediment the same way interest rate are designed to do. but hours are -- acceptable and simple way. we really think that people have actual risk associated to this. if you have a student loan tied to the treasury or are trying to refinance your home, you have real risk and you should have access to the same types of benefits that wall street does. this is not gambling, this is finance at its best. this is about getting exposure. you face risk in your everyday life. >> i want to learn more about your personal story. i know you are from brazil and you studied bolshoi ballet.

how do you go from becoming up professional ballerina to going to m.i.t. and launching a markets start up? >> great question. i definitely have an unconventional path. i used to be a ballerina, i would train eight hours a day and i worked professionally in the bolshoi for little bit. that made me who i am, i have discipline and sacrifice and i look to more long-term payouts instead of short-term payouts. i was always fascinated by math and science. at the very beginning i was financed -- i was fascinated by market structure. i worked at a couple of hedge funds but i really wanted to make a mark of my own. the -- problem, which for us really is people should have the

same access. every day businesses should have the same access institutions have to hedge. you think rates are going to go up. we want to bring this to everyday people and have the same bit it's -- same benefits. emily: what is your position on crypto? isn't that a market that is already pretty well-established where you've got high-risk-high reward? why not put your money and crypto instead? >> great question. crypto has wiped out a lot of people. i think it needs more regulation. a very small portion of crypto markets are regulated nowadays and you see a lot of scams going around of easy 20% yields or something like that. it is people's savings, there

are actual victims to this. it needs more regulation ended needs to be brought into the regulatory oversight in the u.s.. with us, you could also make money and lose money but the difference is this won't be systemic risk. regulation brings -- thing which is customer protection. the crypto industry really needs that going forward. emily: luana lopes lara founder of kalshi. thank you. texas has blocked a law that could transform twitter and meta when it comes to hate, extreme speech and more. this is bloomberg. ♪

emily: the u.s. supreme court has blocked a texas law that critics say would fundamentally transform twitter and meta by requiring them to allow hate speech and extremism. greg, give us the context on this texas law, which has been moving through the courts and went into effect in texas this month. >> social media industry has been very worried about it. the appeals court did not give any explanation about letting the law take effect end of the social media companies said the impact on them would be tremendous. they would have to radically change their operations. to remove the ability, or to

make it so that they could no longer moderate content. the supreme court let that lower court ruling stay in effect for a couple of weeks and now the court is going to block that law again. emily: is their reasoning as to why they are blocking the law? what does it mean? >> not from the full-court. we did get a dissenting opinion from three conservatives and one liberal justice. the three dissenters said this was an affront to state sovereignty. blocking the law would let them -- but the court, we didn't get any explanation. emily: is it the end of the road for this law? does it still have an opportunity for another life? >> this just blocks the law while litigation goes forward. that litigation will global -- will go forward before the

federal appeals court. there still could be serious fights on the hands of social media companies and their trade groups which were the ones who sued to challenge the law. one other thing to know is that there is another law a lot like this in florida. that one was also blocked by a federal appeals court last week. emily: gives this -- give us an example of what twitter and facebook would not be able to do that they do now? >> the law says you cannot engage in what is known as "viewpoint discrimination." you cannot say that is hate speech and because it is hate speech we are going to take it down or block it. this social media companies are saying, we would have to allowed neo-nazis, anti-gay screeds, and really would not have the

ability to serve as traffic cop on their platforms. emily: greg stohr, thank you. we will continue to follow that law. buy now, pay later is a popular option for the younger generation, but many are struggling to repay these small loans. joining us now, see a period -- cfo of of her. >> it is important that investors, media, the users of our product understand just how different we are from both traditional financial institutions to offer credit products and we are different from the vn pl competitors that are being poked at. sonali: a lot of those competitors have never seen a down cycle and we are about to experience something like the sword.

you think they are going to experience a washout? >> you are already seeing pressure on a lot of these players. people like our firm -- whose mission is -- makes it so we do not charge late fees, do not allow deferred interest. these in our business have made it so that we do not have a choice but to underwrite very carefully. we have no way to support -- you don't pay us back. [indiscernible] 70 basis points ahead. we stand out amongst the other players pared some players are doing headcount reductions to save costs. we are in the opposite position. we are front fitted. we are adding to our team because our new units are in a especially strong position. we have the build back based on

our -- based on how our business model evolved on the first day. emily: you are in a position to grow from here even in a tough environment. what kind of hiring plans could you have a head especially as you see some of your rivals? >> we like our position in the market. we saw earlier this month we hired a bunch of engineers from a company that was having a hard time. this is one of the better markets for labor right now where we have a strong need to build great products. we are not constrained in terms of opportunity. we helped enable the world's fastest-growing payment method and we are in the very first innings. we need a big team of engineers to tackle that opportunity and we are excited to aggressively grow our business responsibly. emily: much more ahead. this is bloomberg.

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♪ emily: welcome back. it is another day, another delay for elon musk and spacex. the federal aviation administration expects to complete an environmental review of the rocket maker's texas facility in mid-june. another pushback which intentionally delays the timeline for task -- musk's mars moonshot. for what it means, ed ludlow is here. so, is the faa time? ed: it's impossible to know. i was waiting for this because this was the day they were do to make a decision. i wrote it down on a piece of paper and i am not embarrassed, they have delayed it five times. the last time we were waiting for this was -- and they delayed until may 31. this is important because spacex

cannot make progress until they get clearance from the faa. emily: if you work -- you were on the ground and elon musk wanted to -- ed: he expected this environmental review to be done in a couple of months per the hardware would become ready in a couple months and had an even bolder prediction as to what would happen. take a listen. >> there might be bumps along the road, but it will work. i feel at this point highly confident we will get to orbit this year. ed: classic musk. but, we don't know where we stand because this key piece keeps getting delayed. emily: where do we stand with starship? ed: you have seen the video, the explosion, the successful test,

they have only really done hops off the ground and what they need is an orbital test flight. that is the milestone moment where it breach -- reaches earth's atmosphere. the president and coo said it could happen in june. it does not seem like that if the faa decision is not due now until june 13. emily: meantime you've got space x generally going from strength to strength, pulling off a lot of successes. ed: as of friday, star link, there -- service is available on all seven continents per they expanded to africa friday. that was quite an achievement. today, this is an important day. 10 years ago, the first unmanned dragon mission to iss. they are dominating this industry. it is the -- of the moonshot. emily: keep us posted.

today marked the first day on the job for the new ceo of match group. he is leaving zingo where he has been president since 2016. he is taking over for -- you has been there for 16 years. it is a pivotal time for dating apps especially as we move brown barbara -- emerge from the pandemic. -- published a deep dive, what you make of this leadership and coming from the gaming space to online dating, is that a good thing? >> we will have to see. he has done a good job, but also similar in a lot of ways. there are two things that are good, i think. one, there is some single -- there are similarities in his portfolio of assets under global business. both in favor of what match strategy is. the other thing is good is that

-- is not really leaving. she will be working as an advisor to bernard. and also, it is not that the ceo change is not a turnaround story. it is not like peloton where you have to rework everything. this is a functioning business, a strong leader in online dating and he is going to come in and it is going to be business per usual for the near term and as he settles in he will throw in his own strategy as he gets comfortable. i do not think there will be huge turbulence in the business. emily: let's talk about your new report. you are basically saying you think online dating and market volatility is recession proof. why? >> largely recession proof. the challenge of being in consumer internet is that none of our names are recession

proof. there certainly impacted by inflation but when you compare it to the rest of our coverage, yes, they are largely resilient. our survey shows that almost 80% of those who are actively looking for a relationship are going to use the online dating apps just as much or more over the next six to 12 months. that tells me that usage is not going to change. the second readthrough was that if there is inflationary pressure and recession in the next six months, most of our survey respondents say they would be willing to pay 17 months on average for an online dating app. that is where we are today. the question is, bumble is likely more expensive than -- i don't think so. there are several different tailwinds. emily: when you look at online dating and the options out there

, bumble or hinge or match, are they more or less equal in your view or do some standout over others? >> some standout over others. our survey also shows that bumble is gaining market share. one of the biggest investor questions was, where is the market share? is bumble gaining share from tender? something else? tinder continues to be the leader in the market but bumble is gaining share from plenty of fish and eharmony. other apps that have already been around but may not have been as powerful as bumble. in the u.s., our survey shows tinder's number one, bumble is a clear number two and hinge is gaining ground to number four back from number seven last year. not all apps are created equal, even though the target market may be slightly different

depending on your background. match and bubble lash mumble are superior to some of the other apps. emily: engagement is one thing, but getting people to pay is another. which of these do you think is the best at generating revenue and getting users to pay for something that many think should be free? >> great question. almost all of these are freemium models at different price points. surveys show that most users are willing to pay for tinder, eharmony, match, bumble and hinge. these are the top five apps and some of the reasons for eharmony and match are the demographics. all of the older age folks who may have greater savings and are more serious about relationships. at the same time on average, our survey shows it is about 30%

conversion, which may be a little skewed because i know that bumble's conversion rate is slightly lower. the point still holds there are long-term waves of growth and the potential there is that they could convert. the other thing is it is not always subscription. they are now adding a la carte features. you can pay for a feature instead of a monthly subscription. that is also gaining share. emily: what are the risks? >> the risk is that reopening across geographies is not the same. the pan is the number two market for match and that has been very slow in terms of reopening, people actually meeting in person. -- are really big in japan. one of the biggest risks is this

reopening curve across different geographies. the second risk is that -- is that not all demographics are the same. if there is inflationary pressure, it is possible some apps may lose share over others. that would be a question of which ones people decide to keep versus let go. emily: shweta khajuria, thanks for joining us. coming up, the crypto winter continues. is it time to get out or doubled down? we discuss.

emily: bitcoin higher for a fourth day. bouncing back above $30,000 and then some after a sharp decline. it is still down 16% for may. sonali basak is here for more. when you look at the broader equities picture, what -- we are kind of back where we started. but with bitcoin, still significantly down. why? sonali: it goes around and around. on one hand you have a lot of people saying it is time to put our heads down and make projects that will last long term. where are we? bitcoin over the last week has not risen past 32,000 but it is

of $30,000. we are down on the months 16% per the s&p has not moved much. questions moving forward will be about correlation paradigm want to draw attention to ethereum. why? ethereum is also down not just on the month but on the week as well. you have a -- you have seen a divergence between the largest cryptocurrencies. how will they react in relation to each other? reaction to the crypto universe? reaction to the macroenvironment? we have been talking about -- and how they deploy money in this down market. emily: we will hear more on this from police could lead at the bitcoin focus venture firm still mark. we talk about this and more with matt miller and kailey leinz. take a listen. >> bitcoin companies have really thrived in crypto winters. it is a time to build and a time

to -- and bitcoin is that. >> we have seen bitcoin move back towards the lion's share of market. it is fascinating bitcoin can be 45% of the market cap of all crypto. we are talking 20,000 some coins. this is not an existential crisis? >> for crypto? >> for bitcoin. >> bitcoin's mass spot is the honey badger. what that represents to the community is that bitcoin has not cared about what is happening around it. it operates independently and that is the purpose of the protocol. bitcoin was invented, emergent of two decades of work on how to build an open and fair financial system that could serve the under banked and the un-banked in the same way it served the

wealthy underprivileged. bitcoin and bitcoin builders are generally heads down. something interesting happening today you see in the bitcoin market as well as the broader macroenvironment is a collision of two things. bitcoin is cyclical. its cycles have been historically driven by -- and we see a three to four year cycle for bitcoin which has an impact on the rest of bitcoin. now we see a macro economic downturn. as a risk on asset currently, that will change but today that is the case. these forces are at play at what we see happening for coin volatility. if we look back historically to 2008, and another example of a challenging macro environment, what we saw then was that new

paradigms introduced by cloud and mobile were powerful tailwinds for fledgling companies. >> are we going to see any new way of -- is proof of work going to be a thing of the past? is it still the only trustworthy way to maintain the blockchain? >> proof of work is the thing of the future. it is the only way to maintain fair payments in a financial system. the economics of mining, the economics of proof of work incentivize major investment in sustainable energy. we know that today, sustainable energy represents about 58% of all energies for mining. that is a 60% year-over-year growth, 60% increase from q1, 2021. the fact that bitcoin mining has been able to transition to a

sustainable energy source as its dominant source i hope will be an example for other sectors to follow. emily: police calin -- coming up to macleod growth. how market volatility is impacting the cloud and the next big trends with our partner jerry chen. this is bloomberg. ♪

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that's decision tech. only from fidelity. >> we are seeing -- volatility in different parts of the world but technology is seen as helping organizations address supply chain shortages so

customers better get online digitally. demand for cloud remain strong. emily: google cloud forecasting growth in the midst of choppy market conditions. 2021 was a banner year with total funding hitting $50.3 billion for our next guest has a forecast for where all of that will go. i want to bring in jerry chen from gray rock. share your forecast with us. >> thanks for having me back. in a volatile market, cloud actually is going to see increase both in market revenue through all of the big buyers, but also from startups. we are seeing $50 billion plus last year and cloud investment by vc's. but the emphasis you see going forward is a lot around two areas. security continues to be a big

deal, and cost savings. as we seek governance and data tools all grow, we are focused on how to -- the customer. emily: how do you think market volatility will impact the broader cloud landscape? it's hard not to believe this is not going to impact how big customers spend their money. >> i would say -- about the big customer will continue to spend. the -- we are seeing around security we saw -- go to security startups. they cloud customers -- security companies. [indiscernible] cloud customers tend to spend money on things like data.

snowflake continues to do well in the public market. game breaks continues to do well in the private market. increasingly, data breaks in the ecosystem will be focused on how to save customers money around data costs. i think security and data and ai continue to grow but increasingly, a focus on customer spending and enterprise spending and how to reduce cost and the next two or three years. emily: how would you characterize vc sentiment? we have been hearing batten down the hatches, you may have to take a valuation haircut. you may not trade the next round when you thought you would. how would you characterize your sentiment broadly and then that sentiment when it comes to cloud? >> if you look at the data -- other data sets out there, valuation is down from a year ago. series c financing is down from

a year ago. for sure we are seeing a tightening of the market towards a bunch of ideas. but my personal gridlock sentiment is look, if you have a distinct value, a hard return on investment or cloud company and that is either securing the company through security products or firewall products, improving the digital business end of the business with ai or machine learning, or saving your customers money. if you can reduce cloud spend and reduce storage spend and reduce data spend as a startup, you can have a -- and you are going to pop the top of cios wishlist. in the past two to three years, we have seen a lot of great ideas out there but in the next two years, we will see fewer companies focus on saving money, improving the digital economy

because if you are doing well in this market and showing really hard roi, you are going to get more budget and more awareness from customer. great companies will get more of the customers spend and the tier two companies will struggle to raise because they will have a hard roi from customers. emily: would you say that trend also extends to hiring and playoffs? we have seen hiring freezes and layoffs across the board. >> a lot of companies are looking at the burn rates, realizing there economics were upside down. the burn rates are not sustainable -- aren't guaranteed. they will either raise up a valuation or flat valuation. we are seeing company say hey, i would rather be slightly conservative, save my money for two years of runway until markets get a little more predictable.

just like public stock market hits maturity, private markets around venture company startups also hit uncertainty. a lot -- until we have more certainty, startups are going to be more conservative. that said, if there is good roi on their spend, they are going to continue to hide all of -- higher sales reps. i think we just need more clarity on where the market is going. emily: jerry chen, great to have you back. thank you for giving us a view on the cloud ahead. that does it for this edition of bloomberg technology. we will be back here tomorrow and i will be joined by the founder of girls who cope and david kirkpatrick to talk about the supreme court ruling on the texas social media law tomorrow. this is bloomberg. ♪

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